francine: global stocks selloff as glencore drops i a record in hong kong. it has bounced back in europe trading. manus: surprise flash. enda curran's -- india cuts benchmark rate. global economy is weakening. francine: in a bloomberg exclusive, matteo renzi talks china, exports and why the west these to bring russia back. >> russia is a great country with a great history and future. a future without russia is a mistake. ♪

francine: welcome to "the pulse ." i am francine lacqua. manus: i am manus cranny. with a globalay commodity crisis which is dragging marcus later across the globe. -- markets later across the globe. we will talk about the struggles of glencore. francine: we are looking at it from all angles and also a qatar wealth fund which launched $6 billion in three days. first, how the markets are affected with mark barton. mark: let's start with the epicenter of the global selloff, glencore. shares catching up with what happened and london shrinking by 20%. in hong kong. after london fell 29% on monday.

the biggest decline ever. the intraday, weapon open for one hour in shares are up by 7% and has been as high as 10%. today, 74 white stuff the value of the share price. off of the share price. we have a fight to safety boosting the u.s. treasuries a european government bonds. japan is a haven of choice today. let's look at the bloomberg world mining index. that encapsulates the biggest miners in the world. 2015 and you will see clearly what is happening. day,rs falling for an 8th the longest stretch since earlier this year. glencore is dragging down the sector and at the lowest since

2011. you know why. a deteriorating chinese economy leading to the 15 month selloff which is followed to the lowest since 2008 since reaching the high for the year earlier this year in may. it has followed by 41%. the stoxx 600 today closing in on a bear market, a decline of 20% from the highs in april through today. roughly 18% lower during that period. thisndustry group in benchmark index, you know who they are. miners. let's finish with india. china slowdown, a slow down in commodities, dictating policy by the reserve bank of india today. surprisingly cut interest rates by more than expected. 50 basis points to 6.75%. it is rebounding after the surprise move only one of 52 economist and a bloomberg survey

predicted today's move. it comes to commodities. francine: it does. thank you. conversationhe back to glencore, the collapse in the company's stock price highlights the threat of prices and china's economic slowdown. joining us are commodities javier,s jesse and thank you for joining us. one of those who speak on a regular basis. the starting point, is it a systemic risk? reporter bank a very good question and somebody is making the comparison to lehman and 2008, very early to make the comparisons. glencore is one of the biggest players and have parties all over the world and states in junior mining companies and deals. it is a risk but we are not

close to a yet. javier:- hobby year -- the comparison to lehman is attractive. if glencore went under tomorrow, it would not pull the global economy at risk like lehman brothers did. it would be disruptive for sure but was the other commodities of the last 20 years going under without particular problems. in commodity trading house 2001 and most do not remember. another went down and nothing really happened except for a few disruptions and the gas market. we can go to the 1970's and 1980's of trouble but not a systemic impact through the global economy. manus: it is having an effect for the qataris. in terms of those i do glencore. one is out saying take the company private.

to do that, the speculation is eisenberg what need to get together with qatar's. is that what is causing this frenzy in terms of speculation about taking a private? jesse riseborough: first, the market would appreciate to hear from glencore. we have not heard anything. that is a big driver in dallas -- a big driver in the stock going down. elements of the plan yet to play out. and the idea that citigroup posed about take the company private is a fascinating one and one i do not think can be discounted. you could talk about the equity -- that is aning idea that eisenberg would think about. avier, yesterday, it was down 30%. what is going on? people are fearful on glencore.

how much does it have to do with glencore and we have not heard from management and we do not know what we are looking? javier blas: probably half of it is due the commodities rout and we do not know what is going on in china. the fear that the chinese have lost control of the situation. we have seen other companies hit significantly. yesterday, anglo-american closed below expectations in london. boom of theodities last 16 years did not even happen. probably half of it is due to glencore. it is more difficult company to value. sometimes -- i struggle to understand how the company makes my -- money. probably management not been up to the task. a few bucks ago, -- a few weeks

sse and i were talking. a few weeks later, guess what? they have to come to the commodities market and raise money. i think it's one of the biggest factors and what we saw yesterday, pure panic. manus: data level of flip-flopping was reassuring people and then the market questioning the debt pile. the critical point he the market is not a. -- the critical part, the market is not up. worth $11 billion. it is about relative to their peers and the data load and services the debt. jesse riseborough: if the plan is a announced was supposed to be bulletproof to the balance sheet. -- the plan as they announced was posted be bulletproof to the balance sheet.

debt is massive. still outlining -- yet to outline their ssl and the -- asset cell and the business javier discussed. manus: not the best market to sell? francine: thank you. lumber commodities reporters jesse riseborough and javier blas. is the seniorrar independent, nonexecutive director at glencore. francine: india's central bank has lowered interest rates more than expected. r.b.i. cut it to 6.7% from 6.25%. it was for by only one of 52 economists in a bloomberg survey. -- predicted by only one of 52 economists and a bloomberg

survey. capacity, more domestic demand is needed to substitute for weakening global demand sold the domestic investment cycle picks up. manus: the crisis in syria has dominated proceeds at a you in general assembly -- u.n. general assembly. syriancking point is the president, bashar al-assad. american say he must go. other say must be part of the region. francine: [indiscernible] the german carmaker admitted to cheating on emissions test. hybrids and electric cars have struggled to gain traction. the growingng diesel scandal. manus: focus wagon cheated --

volkswagen cheated and the stock market will be removed from the dow jones sustainability index. rank the companies best in terms of reputation. it will be at the close of trade on october 5. francine: scientists say that discover signs of water on mars. do not get too excited. does not last long on the martian surface and evaporates quickly. a huge discovery possibly for humankind. manus: we will take the stories for what have we got? that how department store on the china slowdown and carl icahn's view a low interest rates. you do not want to miss it. ♪

francine: welcome back to "the pulse." what effect will china slowdown have on europe's exporters? italian up prime minister matteo renzi gave us his take. next year,ter renzi: we could have problems with china, yes. export, if youur

think about exports, you have to make one example. exports was in the provision of classn, statistics were three and in the first among, we are more than 6%. i think it will not to be a problem through the exports. manus: let's bring in jonathan bell. she manages around $9 billion in assets area great to have you with us. matteo renzi said our numbers are not that bad and he does not sound that worried about china, a wonderful phrase. we are up maximum in regards to china. how do you look at china in terms of the investment case at the moment? jonathan bell: in terms of the impact of china on the world, china is having a impact. to look to export numbers and

they are all down. they are falling. certainly in impact globally of china slowing down and bringing in a lower and having an impact on the outside. if china is slowing down and i think china is slowing down, the impact of china slowing is going to ripple through to the markets. it can be european countries with a 1% fall in china hits european growth. there is a ripple effect. francine: how concerned are you that stocks will go down? we were looking at glencore and now it is the perfect storm. it is the perfect storm of the end of cheap borrowing coming to an end and commodities slumping forward. yeah.an bell: different markets started falling. u.s. seems to be the last market to fall area almost in a bear market in europe down 20%. we had in chinese equities, down

45% what have you. the u.s. is only down 10%. the u.s. i think is overvalued and needs to follow. we are going to see further fall. that has ripples elsewhere in the world. other markets have fallen already. we have seen the fall. manus: we have $8 billion globally -- billion globally wiped off in one day. manus: we have a release from carl icahn, the man who has warned the markets. rates and almost a rhetorical question. so many reasons as they should raise rates because low rates -- almost by definition of building bubbles, real estate bubbles, building bubbles. question, he is

talking about high-yield being junk. he is warning, warning. a bear market in europe and globally $800 billion wiped out yesterday. our markets already pricing in the end of quantitative easing and the cycle in rates? jonathan bell: they should be. there are 2 things. rates in the u.s. and in europe. they will remain low in europe and it will be extended. europe, low rates for a long time. u.s., if you look at the economy you would say words should be going up. good economic growth and low unemployment and hardly any inflation. the fed has a target of a moderate rate, it should be higherthey. should be raising rates and they would have if it was not for the

chinese crisis months ago. now the question is still can they raise them? i think it's a are desperately looking for opportunity to raise rates because they need to start. the economy can survive. francine: are you expecting a rate hike this year? when you say the markets are -- should be, are they? jonathan bell: i do not think the u.s.. the u.s. has a few problems. no earnings growth. i suspect it will be december. if not december, spring next year. you have a wish is that that are high. as waste with our earnings growth is something that should concern you. have earnings growth with out higher rates and that's

something that should concern you. the bestere we'll be opportunities in a moderately slow rising rate of the united states of america? you mentioned high-yield bonds and that is one you can look at. an high-yield bonds, you can look at where for rates have been low. i suspect they will remain low and using can gay yields of 4.5%. that should be something i am comfortable with. the problem you forgot is credit risk and maturation risk. that may prevent you from going too far on high-yield bond. francine: what is your favorite place and all of this? you were talking about treasuries. india has not been doing badly. interestit is a key rate today. it is not really suffering from outflows. and the indian

market has not fallen this year where asian markets are off 15%. you have growth of 7%. at the beginning of the year, 7.5 percent growth and by second quarter was 7%. we were working if it would fall more. there are all of those concerns. if you think where it is cheap and expectations are low, i would say europe. who is expecting a good recovery in europe? that is where you should look lowgrowth and the boost of inflation and quantitative easing. francine: jonathan bell. up next, obama opens the door for russia. can differences between the 2 of al-assad be overcome? ♪

francine: welcome back to "the pulse." beat: world leaders up and about how to end carnage in syria at the 70 -- 70th un general meeting. putin asked for a sock to fight -- assad to fight the syrian rebels. president obama: to step out

isis but a managed transition away from assad into a new leader. president clinton: nobody -- president putin: nobody but assad's forces are fighting isis. assad cannot be part of the solution. chilcote joins us. the deal is we do not have a deal in syria. ryan: we do not. the sticking point is when do immediately-- goes, or at all? president obama would like him to go sooner rather than later. putin thinks he should stay in power throughout. even in the lead up, i think president obama made it clear that a return to the status quo

was unacceptable. one big sticking point is where the endgame looks like. and the other as i like to put it is holding do we bomb? that russiagreed which has troops on the ground in syria and damascus and places like that is cool to go after the islamic state militants in syria. the difference is the u.s. is a bit concerned that president putin and the assad regime may do find the islamic state more broadly and go after people posed to the assad regime but not necessarily not a moderate as the u.s. would view them. to gof sticking points forward. francine: thank you. ryan chilcote with the latest. breaking news on rbs. talking at the moment saying the bank will need to take out and willosts

have plenty more with mark barton. manus: exposure is over 3 billion pounds we will talk labour party conference. ♪

♪ francine: welcome back to "the pulse." i am francine lacqua. manus: i am manus cranny. glencore shares dropped to a record in hong kong tracking the losses in london yesterday. asian stocks headed toward almost a three-year low. up nearly 9% at the bottom of your screen. francine: india's central bank cut interest rates more than expected.

move was predicted by one of 52 economists in a bloomberg survey. manus: and an exclusive interview with matteo renzi, he's at the china slow down could have a 2016 outlook but the contrary can grow exports. he made clear western leaders trying to end the carnage in syria must accept a central role for russia in world affairs. francine: another -- -- russia's afor great country with a great history and future. a future without russia is a mistake. for the bank another high profile italian has spoken at the end of midline fashion week. -- milan fashion week. ferry, 40 years, you will remember our money and i will you -- and i a

will not to be here. [indiscernible] this is independence. doesn't hurt for while i am alive, i think there will be independence. will prepare the ground for type of independence more measured him a more controlled and we will need to see that times at what will happen to fashion and its hubbub in which we find ourselves. will talk at the labour party later in brighton. and straight talking on politics and the theme on the main stage about arguments and the party's direction. we will cross over later. anna edwards has been covering it. i love they came up with the

tagline, he and his deputy finance minister, shadow chancellor. and ane: he is hard left lot of people in the city of london and across europe were concerned corporate what -- corbyn would take politics more to the left. -- figurest like a and now he is much more moderate. for more on this, straight to anna edwards at the conference. anna? anna: thank you. good to see you. our next guest is richard murphy. he joins us and more famously, interestingly known as the man known behind -- thank you for joining us, are you please where or too muchesented? away from the policies? richard murphy: i did not spot any of the policies disappearing.

i am not really worried. it is part of the strategy of what we did yesterday was the start of a new era of economic thinking. what john mcdonald has said is start from the foundation. that is the right place to start. he has time on his side and the way he can deliver policy over the next few years through the treasury and through the bank of england. make sure he has the foundations right and build policy from there on. anna: the leadership of the party and talk about wanted to overthrow capitalism. is it still a goal? a different language. richard murphy: i will not be talking about overthrowing capitalism. it would be unusual to do. i am not talking that and i do not think john and jeremy are talking about that. playingy are doing is they believe in a mixed economy.

where the state is the proactive partner of private enterprise to do well. that is a really big message over the last 20-30 years. state is walked away from issues and said the market knows best. what people have to decide is whether the politicians can when the market fell stand at his itse -- fail, stand in place. anna: people are trying to grapple with with the labour membership is work out where the priorities will lie if they dated to power. one of the key topics. seems they do not want to talk so much. you've written a book. how much a joy think this leadership would find in tax? richard murphy: my thesis is tax k used to shape society we want.

-- tax can be used to shape society we want. there can be more equality. both demanding that governments around the world have equality. there's no doubt a labour party would be wishing to do a more redistributive tax than what we have now. that is good for the economy because of those were at least spent most of their income. those who have most spent the least of their income. we will need more spending to keep the economy going. the goal is to create growth for which everybody will benefit by redistributing from some too many and unashamedly doing so with the intention of building. anna: do you think the leadership would be better to acknowledge there are groups as that will have to pay more taxes and do it in an open way? go after big companies that do not pay enough tax and john mcdonald and others.

really that much fun collecting taxes were other governments have not went after it. richard murphy: i think there's been big progress on big companies. and on record, country by country but the focus would have to be on tax evasion instead of tax avoidance. we have to have more resources. i'm hoping to review announced after the tax authority will address these fundamental questions of the issue including tax. there has been a lot of debate. i am the person who said 120 billion pounds and that is comparable. only if we put 20,000 pound more taxes to collect the data money. i believe that is important for business. a level playing field where the chiefs are removed and they can be sure they can invest for the long term and recruit people and

create apprenticeships. i see that is pro-business policy. i would say that is really important. but at the same time, john said be taxingthat he will the 1% more. he used the language which would be popular here in the occupied movement which was 1%. i think it can be more than 1%. 5% will be prepare more taxes. anna: thank you. richard murphy, director of tax research. manus.d manus: thank you. anna edwards per we will tell china slow down. first up and the devaluation of the yuan and the apple watch. manus: we will speak to jean-claude biver. stay with "the pulse." ♪

francine: welcome back to "the pulse." gotkine prime minister matteo renzi said despite china slow down he is confident about his country's exports. he spoke in new york. prime minister renzi: 1% of growth is ok. and the provision that imf was

0.2%. so the provision of the italian government for the first time worst. usually a italian government very optimistic, exactly. every year we have a great to great and not results. for the first time, our provision was at 0.7%. and i think we will conclude 0.9%. i do not know. absolutely by the provision. next year, we can have some problems with china, yes. maybe. because our export is good. if you think about exports, you have to make one example. exports were in the provision of werean, the statistics

.37% this year. in the first months, more than 6%. i think it will not to be a problem for the exports. italy loste -- confidence. 2012, 2014, from savingse an increase of thanivate savings of more 350 billion euros because the people were worried. if we give the confidence i think that next year, we got absolutely achieve great results. reporter: your talk about increasing, leading the deficit go up to 2.6%. is that part of the optimism?

something mrs. merkel, not that was a generous lady? if youinister renzi: look this year, you can say they u.k. at 5% gdp. and the last few years -- john: the economy is growing quite strongly? prime minister renzi: i am happy for that. i use of the deficit, u.k., spain, my economy grow. i have a problem. the problem is the debt. the debt. we can combine together a very great attention and for the first time in 2016, this increase in italy. it is crucial for us. that was the at how prime minister matteo renzi speaking to john. how is china? the slow down, the devaluation

an, how is affecting the swiss watchmaker's? let's ask of the ceo of hublot, jean-claude biver. great to have you with us. the rising swiss franc, devaluation in the yuan and slow down in china. how does it impact hublot nine months into the trading year? is there any and insight for this purpose to -- end in sight for this perfect storm? jean-claude biver: after nine months, hublot has a growth of two digits. two digit growth. certainly not impacted us as much as people would think. nevertheless, it has an impact on certain points on the margin.

we are still double-digit growth and we believe we can keep this growth to the end of the year. the problem may be next year. probably see a more difficult year than 2015. not only for us but also for the whole industry. end as know 2015 might another record year for this was industry despite all of these problems which shows you how strong this industry is and how the we are prepared to problem of the currency. the swiss franc has been the problem for us says the last 40 years. you closed -- francine: you close the tab for your store, will you -- tag haeu r, will enough to close more? you are taking steps to ensure

that growth continues. jean-claude biver: yes, you know the problem in china or hong a problem in hong kong. also a problem in china. what we sometimes forget is the chinese consumer and the chinese consumer buys in china and overboard. buys in france and england and korea. t the total sales to chinese .eopleag might be the same what is different is we sell less in china but more outside of china except hong kong. hong kong, so much in secret and the government gave instructions so somehow hong kong is afraid. other countries, this morning from finland we had demand from

finland where we never sold watches. because some chinese customer is going to finland. we see that consumer from china are traveling all over the board in every country and buying outside of china. we knowean-claude, we're expecting to see your smart watch you developed with the google and inte -- and intel. when will we see it? what will it have? to make me spend $1200 or $1400? tag? the price tax -- jean-claude biver: you will see it on the ninth of november at 11 a.m. in new york. we will have a huge press conference where we are going to present the first swiss connected watch that could, from

the quantity and from all of the applications be similar to the apple watch. google,e with intel and we have the best possible. what will the want to look like? it will look like attack for watchatch -- tag haeur and what you cannot see, a connected watch. that will be our biggest challenge how do we make a connected watch as that looks like a normal watch it dna of swiss watchmaking? --ncine: told us about app talk to us about apps. and when can we buy it? a specific date? jean-claude biver: specific date is 9th of november. we will like to have it in our

shop office avenue at tag heuer at the same time to press conference have we will like to have it at the same moment at 11:00 a.m. and want the watches to be in the shop. we want to have a similarity. we are announced the watch is in the store. manus: tell me this -- traveling to finland, you have got to in 2016.e tourists where will we see you allocate a new shops? where will you allocate new resources? you said it will be a tough year. will you open any new shots in 2016 or off the agenda? jean-claude biver: of course, it is in our agenda to open new shops when there are new opportunities. i just mentioned finland. see a huge number of chinese going. we're looking for another shot

to open on against our. -- ginzar. we're looking one in melbourne and sydney. touristsge chinese going to australia. we will follow the chinese customer wherever he goes. we want to be present and we want to offer him the possibility to buy one of our watches. francine: jean-claude biver, chairman of hublot joining us from switzerland. we want to follow the chinese customer were ever he goes and get his business. manus: the other top stories. blatt said he did nothing wrong and will not step down after an investigation was opened. blatter said he is cooperating. run for also derail a the seat the presidency.

at a $2 million payment received from blatter. francine: india has made another step to be a major player launching at conservatory. on starcollect data systems. the rocket carries satellite. joined an elite club by sending an orbiter to mars. i love the space. manus bet you love the water on mars. speaking off mars, scientists said it they have discovered water on the red planet. water is essential to life as we know it. do not get too excited. the water does not last long on the martian surface. thevaporates quickly and to surface. francine: things are going from bad to worse for vw. the money set aside for provisions do not include legal

fees. german -- of manus: it translates -- francine: more from hans nichols. we knew 6.5 provisions may not be enough. hans: we didn't know it would not be enough. we did not know it would be clearly's designated for the tactical fix and not the legal aspect in whatever financial finds volkswagen made face in a variety of jurisdictions. with peopleorting familiar, we have not matched it. a variety is facing of situations across the globe. sweden announced they may be starting a criminal probe. japan said they may reconfigure how they test. some models in spain will not be available for cell and volkswagen will be introducing

their own investigation into india. a quick tour around the globe. every time we look, another country talking about some kind of investigation and some kind of questions. has 11 million vehicles out there affected. another side, the entire german auto industry. a report yesterday that said on average, it was daimler that inflated miles per gallon by 48%. that was their average. the most interesting thing is the average for all automakers was 40% inflation. 8%t a few years ago, it was in 2001. it gives you a indication others may be fudging more as we get more regulation. thank you for the latest all volkswagen. hans nichols. iran moves closer to having

finches removed under of our deal. optimism is rising. -- 211 sanctions removed under the nuclear deal. this year alone, more than 10%. visited the outside currency in hran.>> this is the currency force light wall street in america. the center of trade in politics and economics. n gatherown tehran, me and money is piled high and they trade. you find informal currency market. if you want to know how much sanctions has affected the spending power, go ask traders how much of the dollar has depreciated against the rupiah. after sanctions were put on the economy, teh real lost nearly

2/3 of his value. the government have corrected down on informal traders and they do not like being filmed. one trader great to speak to us. >> i have been trading currency for 25 years on this street. reporter: when the currency depreciated, what was the atmosphere like? >> it was very busy and everybody was frightened and started buying dollars needlessly. some a guy sold his house and bought a dollars. reporter: says as a deal was struck, optimism is high. -- since the deal was struck, optimism is high. wings.hope, two h to quotehigh enoug

shakespeare. francine: a second hour of the pulse is coming up. we will talk more about glencore hopeslabour about what he to hear from corbyn at the labour conference. ♪ hublot ♪

francine: commodities crash and shares drop off. the share price has bounced back in london trading but is it a temporary repreeve. a surprise crash. the global economy is weakening it's been said. and the prime minister matteo renzi talks china and the west and why russia needs to come back from the cold. prime minister: russia is a great history and future. a future without russia is a mistake.

francine: welcome to "the pulse" live from bloomberg's head wars if london, island francine lacqua. wall street waking up to the huge sell-off and politics in the mix. manus: of after the fireworks of mr. putin and obama causing the gridlock that they did yesterday in manhattan, we move on to the commodity meltdown. i know you're focused as well of the stunning rate cut in india we saw overnight. francine: that's one of our big focuses today and of course what it means for central banks across the world. thom, i'm looking forward to the congress and we're getting breaking news out of the euro area. september confidence, 105.6. when we look at commodities we'll be looking whether that has an impact on what the confidence comes. i think the september figure was before the v. scandal and may have an impact

going forward because people get more jittery about what it means for germany p.l.c. we start with the global commodity tries dragging markets lower, during the inseptember struggles of encore we'll see how it has taken a other we'll look at the shares. we'll see how the markets have been affected with mark barton. it's an extremely volatile stock, up 8% today. mark: the glenn core data, 10% higher and up as early as 11.5% earlier and fell 29% yesterday and biggest decline ever, before today's session this ear, 77% value wiped out glenncore shares and falling 28%. glencore effect ripping

through asia. and soaring to a november 2012 low led by a 4% decline in the nikkea. glencore shares are surging. let's put in perspective the target at 75-p today and the most bearish is patrick jones whose price target is 120 pence. every analyst surveyed by bloomberg has an estimate higher than today's share price. the average price target is 198 pence over the next 12 months. let's get it on. i want to show you the bloomberg world mine index from 2008 to 2015 despite this rebound in glencore shares. this index which is a gauge of global mining companies is sinking for an eighth consecutive day and is the longest losing stretch since

early july. glencore, the lightning rods of all the concerns in industry, high debt, slumping metals prices and a slowing chinese economy right now. this index is at the lowest level in seven years. i want to talk about india because slumping commodity prices are weighing on inflation in india and is less of a worry and consequently we saw the r.b.i. cut interest rates by more than a expected 50 basis points to 6.75%. only one of the 52 analysts forecast the sensex rising and consequently is the stock 600 going to fall into a bear market today? it was a whisker away earlier and now is 18% below the april high helped by that rebound in glencore and mining shares. francine: thank you. mark barton with the markets. our next guest is tim crawford, from the management company.

also joining suss javier. thank you for joining us. tim, $800 billion wiped off the markets yesterday. how concerned are you that this commodities route that's been lasting for 15 points will continue into something much deeper and more severe? tim: i think we definitely are concerned about global growth which is slowing down and i think it's really the commodities nations being hit the most. most the focus has been on china and if you look at the producing countries, we're more worried about countries like brazil and is being reflected. there's a massive fear going on. i think some markets still have a bit to go but some markets have probably overshot and are being driven more by sentiment and fear rather than actual underlying fundamentals. francine: jump in? tom: how leveraged is everybody to commodities and when do the margin calls start?

we know when we see a implosion we see a lot of margin calls. when do they start? tom >> we're seeing some of that by glencore. the big problem we are beginning to see as you well pointed, the impact of the margins across companies, across the equity sector and until now the study of commodity prices going down was mostly about the actual commodity prices. now we see that effect on equity markets and we saw alcoa and angelo american and glencore. tom: seeing a lot of mergerses in combinations under the gun as well. tim, when you look the a the commodity implosion, you and i know there are other glencores out there, are there commodity shops in asia, brazil or 45 feet from you down bishop's gate in london? tim: if i had a crystal ball, i

probably would be making money on that right now as we speak. they are going to be further blowups without doubt and more pain on commodities. it's imtobble to call an end to this. looking at glencore, half the business is from commodity trading and they're obviously going to have inventory on their books which will cause a vicious cycle for them. the flip side is they are consumers of commodities and they will benefit from this and have a better time when all is falling in price. but yes, i wouldn't like to be exposed to any of the miners right now. francine: a wise investor told me prepare for the worst and hope for the best it. is glencore systemic. and if we prepare for the worse is it systemically important to the markets? javier: if glen core goes under would it be a problem?

it would be very disruptive and they trade more corporate than anyone and trade a significant amount of oil and wheat and would be a big deal for the commodities markets if glencore goes under and means another lehman brothers for the global economy in the financial system, vule not. glencore is not systemic to the global financial sector as was the investment banks. tim: i think that's fair. it's definitely true. as i said, it's systemic if you are a commodity producing nation and not an issue for the global economy. francine: thank so you much. the chief energy correspondentant from javier and tim with the investment management stays with us. here's a look what's else on our radar with manous? manus: rate cuts. india central bank lowered the interest rate more than expected and the rmple b.i. cut the benchmark purchase rate to 6.5% from 7.25%. the move was predicted by just

one of 52 economists surveyed by bloomberg. >> with weekly global activities since our last review, commodity prices will remain contained for a while with low industrial capacity utilization, more domestic demand is needed to substitute for weakening global demand so the domestic investment cycle picks up. manus: the royal bank of scotland said the company is on track to deliver all it's 2015 targets. however, speaking at a conference this morning, ross mckuhn admitted costs at oster bank and the banking business was unacceptably high. r.b.s. is looking to cut costs by 800 million this year. the crisis in syria has dominated proceedings the u.n. general assembly. barack obama continuously cautiously opening the door to collaboration with russia but the second point, it is the

syrian president bash are al-assad, the americans insist he must go but the kremlin says he must be part of the olution. and they'll hand over the first of their sport utilities and comes after a sweeping volkswagen german car company admitted to cheating on emissions test. hybrid and electric cars struggled to gain traction with the mainstream consumers and lower petrol prices but tesla may be above the growing dieselgate scandal. in france scientists say they've discovered sipes of water on mars which is essential to life as we know it but don't get too exite because the water doesn't last long on the martian surface and evaporates quickly into the atmosphere. francine? francine: i adore this story. it's huge. and we should be thinking about what that means a little bit

longer. coming up, a bloomberg exclusive, the italian prime minister renzi talks china. and we are warned of danger ahead. details later in the show.

francine: in an exclusive interview, matteo renzi says he is still confident about his nations export business. >> next year, we can have some problems for china. yes. maybe, because our export is good. but if you think about exports, exports was in the provision of italian institute of statistics, year, and inthis the first month we are more than 6%. still with us, tim crawford. he manages more than $44 billion. we are also joined by simon kennedy. thank you for sticking around. onon, you have a great story

central-bank action that ties back to china and pboc. recession, it will be up to the governments to step it. medium -- i of the medium through which they are broadcasting their thoughts. the idea that they are running out of ammunition -- that monetary policy generally is exhausted. ideauantitive easing, the is that governments will have to step up with the support of central banks. government cut taxes with spending but they do so in the knowledge that central banks will buy a bond. tom: simon, i love stephen engle ander phrase -- i don't believe that is in the cfa curriculum. when you hear the physics of coldfusion, what does that signal to you as an investor,

when you look at central banking? tim: indeed. we try to look at what companies are saying, we try to look at what fundamentals are doing, because the central bank has become such an important part of investor policy. it just becomes a much more important part of our analysis. it's something we have to be increasingly more aware of. of thehink at the end day, it will still be over a long period of time, the company fundamentals that drive equity. central banks will cause short-term volatility and noise, which will create opportunity and also risk. tom: francine, you saw the wall street journal today. rate rise this year. how many times have we heard that, francine? francine: a lot, right? in the problem is that some are arguing that federal reserve's

are taking too much. it is looking a little bit like europe where everyone is weighing in and in the focal for the fed to stay on message. are we in the area where the age of over communication? how difficult is it for you to figure out what is going on, and for the markets to say -- i want something safe? tim: if you analyze every word they say, i think it is getting increasingly confusing to understand what the message they want to drive through is. but actually, what has really changed with the fed is that for a long time it has been data dependent, and now we are looking at what international markets are doing. weather changes, it doesn't help us. it makes the message less clear. francine: forward guidance has not worked? simon: to some extent. it worked to some extent of the u.k.. mark carney got to be an unreliable boyfriend.

hot and cold on rates. janet yellen and unreliable girlfriends. much do you listen to central banks if they keep moving the direction? certainly the guidance of the last 24 hours, a 2015 rate hike is on the way. but they are a bit suspicious. tom, i have you, but not unreliable cohost. simon kennedy, tim crawford. they stay with us. up next, barack obama opens the door to russia to combat islamic state extremists. two,rences between the the latest after the break. ♪

francine: welcome back to "the pulse." tom keene is in new york. world leaders remain divided on how to end the carnage in syria. at the u.n. general assembly yesterday, vladimir putin called obama and barack francois hollande clearly opposed support. >> realism dictates that compromise will be required to end the fighting and stamp out isis. but realism also requires a managed transition away from assad into a new leader. >> we should finally acknowledge

that nobody but his forces and kurds militias are truly fighting the islamic state and terrorist organizations in syria. >> assad is at the root of the problem. you cannot be part of the solution. francine: a reporter joins us with the latest. ryan, there has been no breakthrough in the relationship between barack obama and vladimir putin. ryan: and the body language between the two of them said it all. president obama almost refused to look at him, putin smiling coyly. there was no break in the impact. the first impact is when assad goes, obama thinks he should go sooner. putin suggests he is the rightful leader of syria. he should stay on. is, forr sticking point lack of better way of putting it, who should get bombed. the russians have forces in syria and they say they will go after the islamic state, but there are people that are concerned that the russians

might go after other people, opponents to asidsad. they are not completely on the same page and that was pretty evident. francine: and yet they spoke for 95 minutes. the relationship is a little bit less frosty than it was. being veryare technical in there. you can talk for 95 minutes about nothing. most of it was about ukraine, very specific things to discuss in terms of the limitation of the peace plan. as for syria, there is still a lot to discuss. we already know that the militaries are talking to others. putin has troops on the ground and he has threatened unilateral military action, unilateral strikes against the islamic state. that require some pretty serious coordination. then of course after the meeting ended his speech as well, putin threw a rhetorical bombshell

saying he wants a broad coalition, suggesting with or without the united states. the u.s. wants to get a real good idea of exactly what putin wants and how much they want to be part of that vision. francine: tim, how do you model political risk? tim: the honest answer is that you don't. do try to avoid the elephant traps, avoid companies that are overly exposed to regions such as these. that is becoming increasingly more difficult, just because geopolitical risk is increasing, earnings risk is also increasing. your universe is getting narrower and narrower. francine: tom? tom: did mr. assad have a good day yesterday? assad have a good day yesterday? did, in the sense that he had iran and russia batting in his corner, and while president putin didn't get the

kind of rapport he might have been looking for from president obama, what assad will be more interested in is what is the europeans -- what the europeans have to say. hollande had to say would be pretty encouraging. increasingly, the europeans are imagining the situation where you can stick around longer than they would have fathomed. tom: clearly that is a game changer. this idea of the u.s. shifting our view on assad. francine: and it is funny because a lot of the european press also picked up on our interview with matteo renzi, suggesting that we should bring russia closer almost at any cost. tim, do you expect the russian sanctions to be lifted? does that prevent investment opportunities? tim: it is going to take time.

i think there is still more discussion needed. mean, the more contrarian investor may want to stick around, but long-term, the problem with russia is not just the sanctions. it has created a ripple effect now. until we see while the economy really bounceback, but from a company point of view there will certainly be valuation. i would rather stay away for now. ryan: the eu will review sanctions in january. they need consensus, and you could get using. as for contrarians, there aren't that many. francine: i bet there aren't. ryan chilcote and tim crawford. we will speak to shadow. secretary, coming up on "the

pulse." ♪

francine: welcome back to "the pulse," live from london. i'm francine lacqua. manus has bloomberg's top headlines. manus: let's kick it off with glencore, the story of the moment. recordbounded after a low in asia, closing nearly 30% down yesterday. due to as down 75%, prolonged slump in commodity prices, making it the worst performer on the benchmark index. we are rising just under 90%.

india's central bank has lowered interest rates more than expected. benchmarks 6.75%, down from 7.25%. the move was predicted by just one of 52 economists. and it was an exclusive or bloomberg -- the prime minister matteo renzi has said that china's slowdown hurts at least 2016 outlooks, but says his country can still continue to grow. he also made clear that western leaders tried to end the carnage in syria and must accept a central role from russia in world affairs. >> russia is a great country with a great future. russia,a future without it is a mistake. francine: we are covering geopolitics, and also the markets. jonathan ferro has the latest. jonathan: we wake up to so much

doom and so much gloom, emerging markets uslump, billionaire investor carl icahn warns of danger. a scary place. equity markets open much lower. the dax is down by 2/10 of 1% and just about in positive territory. ipex up. ftse in london down by one half of 1%. but the story is all about one stock, that embody so much of the global concern, a slowdown in china, a commodity rout, struggling to service. the stock everyone is talking about is glencore. glencore stock was down 30% yesterday on no news at all, the biggest drop on record today, bouncing back. glencore stock is up 9%.

but there is so much uncertainty around glencore and around the miners. we spoke to sanford bernstein this morning, looking for four nd we are still trading alone 90 pence. nobodoy really knows how to vale this company, but this morning we bounced back. it is going a little bit higher off the basis points, so the negative sentiment at the start of the morning started to diminish somewhat as the day progresses. market, euro-sterling on the five-day winning streak. we snapped that today. down, almostling 74 pence flat into a very busy 24 hours. a little bit later, mark carney will speak. eurozone inflation data -- two things to watch. finally, racing for

game against the dollar. thank you. jeremy corbyn is to take to the stage later to try and win over the 90% of mps who didn't vote for him. anna edwards is live. she joins us now. anna? anna: thanks francine. let's get some of those. we are joined by lord falconer, the u.k. shadow secretary of state. great to have you on the program. we are going to hear jeremy corbyn talk about how he doesn't see the need for top-down leadership later on today, echoing comments he has already made. -- how long can that last? come when youll a reason for why they should vote for you in the united kingdom general election, but that is not for a few years

yet. one of the recent jeremy corbyn was overwhelmingly elected the leader of the labour party was so there could be an open debate about policy, and the members of the labour party could participate in al policy. anna: eventually it has to come to the fore. you were able to serve in the position you have now because the leader was pluralistic. how do you hold together a group of people with pluralistic views? >> the labour party has always been a broad church of differing views and has always held together, because it is the center-left alternative to government and the united kingdom. differences are right out there, being openly debated now. for example, there has been a debate about whether we should hold onto tradeident, and these debates are open. people were fed up in the labour party of the leadership saying

these are the views, take it or leave it. what is now happening is that the party will be involved. we will come together around a policy on all of those issues, and then we will but that policy to the people. anna: are their subgroups within labor right now that are thinking that they want jeremy corbyn to not have the role he , or have those views been silenced? >> he won the leadership of a 60% vote in his favor. that issue is resolved. there is absolutely no appetite anywhere in the labour party or any sort of rewrite of the leadership. what is happening now is that people are concentrating on the new landscape. anna: no breakaway party? >> none whatsoever. the labour party will definitely altogether. anna: wall of the question be

that would bring these issues to the fofre? -- the fore? >> we have to come together and agree on positions. issues about syria, issues about foreign policy in the general sense. these are all issues where there are different views of the labour party, and they are now being debated. but the key thing at the moment -- jeremy was only elected two weeks ago. the general election was only three months ago. five years from the next general election. if the party can't during this. period come to any conclusion, conclusion, when can it? anna: wobble the parties a stance on syria be? you suggested a number of mps that would vote against the labour leadership on the issue of whether there would be military action taken in syria. what is the party going to be around it?

>> at the moment, the position as we are not bombing syria. is, what this parliament agreed to that. the first thing in relation to that is that the government of the united kingdom has got to come forward with the proposition as to the basis upon which bombing takes place in syria. what is the military purpose? what is the wider context of the region? once that position is put forward than the labour party can make a decision. it is possible that a position could be put forward. that depends upon the detail and there being a military and wider case for it. it also has to be legal. anna: does it have to include commentary around the role of th bashar al-assad? governments are rallying around

syria. would it have to include commentary around the role of bashar al-assad? >> i'm not sure that the proposition being put to the u.k. parliament after the commentary in relation to him is very sensible for the world community to have that view, about what has happened. isause what is necessary convincing and sustainable upon which the war in syria can be brought to an end. precisely where that needs to be part of propositions in the u.k. depends very much on what is the proposition. assaddo you think that should have a role in the future of syria? >> i think the world community has got to reach that conclusion. anna: thank you very much for joining us. the u.k. shadow secretary of state, joining us here. francine, back to you. francine: thank you so much.

anna edwards at the labour party conference. the italian prime minister matteo renzi says that despite china's slowdown, he is still confident about the prospect for his country's export. he spoke to our editor-in-chief in new york. growth is in our odds. 0.2%.ovision was also the provision of italian government for the first time was usually italian government -- exactly. every year, we have a great provision, and not great resolve. for the first time, our provision was zero. and i think we will conclude 0.9%, i don't know. better than provision. next year, we can have some

problem for china, yes. be, because our export is good. but if you think about exports to make one example, export was in the provision of italian statistics was plus 3.7 this year, and in the first month we are more than 6%. i think it will be not a problem all through export, mostly because it is very particular. in justst confidence, to make a leap of faith. italy sawto 2014, the increasing private savings 350 billion euros.

that is because the people were really worried. if we give the confidence, i think the next year we can absolutely achieve great results. >> next year you are also talking about increasing, leading the deficit go up to 2.6%. optimism?rt of that is it something that mrs. merkel, not always a generous lady, will approve of? look, you canyou see the u.k. at 5% of the deficit. the last three years, spain -- >> u.k. economy is growing quite strongly, the. ough. -- ie of happy for that, am happy for that, but if i yield the deficit at a similar level, i have a problem. the problem is the dax. together a very

great -- for the first time in 2016, this is crucial for us. francine: matteo renzi speaking exclusively. up next, half $1 billion in a few hours -- that is what the moving glencore cost the ceo. more on the billionaires boost after the break. ♪

francine: welcome back. let's get you straight to some of the top stories this morning with manus. sepp blatter says he has done nothing wrong, after switzerland opened in investigation into his dealings with other football officials. blatte saysr he is cooperating fully. derail a run for the fee for presidency. there was a $2 million payment received from him. india has taken another step to being a major player in the litter get, -- player in the lucrative space market. a program that will collected data from star also carrying

satellites from indonesia, canada, and the united states. india joins the elite club of sending an orbiter to mars. and sticking with the space theme, scientists say they have discovered water on mars. water is essential to life, but don't get too excited. the water doesn't last long on the martian surface. it evaporates quickly into the thin atmosphere. rancine: you have to check out nasa's twitter feed. back to commodities. glencore's epic selloff was keenly felt by one investor in particular, the company's ceo, who lost $500 million yesterday and had seen his net worth shrink by 74%. for more on all of this, we are joined by devon pendleton. devon, great to have you on the program. walk us through his losses. this was a gradual. devon: if you look back at

last july, he was the 190th richest guy in the world, worth $7.2 billion. if you look at where he is today, it didn't happen overnight. he only lost half a billion yesterday. but it has been since january that you see the share price come down. when thisglencore -- company was heralded as the new era for the commodities boom, it made a lot of billionaires. what is happening to them? devon: well, they are no longer billionaires. nberg is the only owner who is still a billionaire and he is just hanging on, $1.4 billion today. the other executives -- you have seen their wealth come down by a third since the year began. at their yesterday alone. executives of the

both lost about half their wealth yesterday. it is quite dramatic. thank you so much. we should point out that the chairman of bloomberg lp is the nonexecutive director at glencore. a small disclaimer. volkswagen set w aside may not be enough to cover costs. let's get the latest from hans nichols. hans, 6.5 billion is being put aside and now it is not enough? the sixat is because point five we do about last week is only for a technical solution, and engineering fakes. this is what the ceo was getting out last week when he was thinking he could stay along if he could get a technical solution. they still have a deadline when the german government wants the solution, otherwise they may order the cars off the road.

-- that 6.5 has nothing to do with overall litigation costs are legal fees. what we know is that fund could be growing. there is an investigation taking place in sweden. we also have something in india, this is mushrooming. hans, is there any observation that they are selling less cars right now? they are not for sale. in spain, they suspended sales. and european countries states have been suspended. francine: can you tell us more about this criminal investigation into the former ceo? clear is thatvery the prosecutor in lower saxony wants to gather all of the facts. here is only know from the

friday meeting, the one that went on for hours. at the time, they had documents that showed that some executives were made aware four years ago. what everyone wants to figure out is who were the executives that were made aware. remember, the executive committee as well as the advisory board seem to go out of their way to not exonerate, but say that dr. martin win terkorn didn't have knowledge of it so the question is should he have? that is why these charges came, but they still issued the charges. francine: thank you so much. i want to find out what tom keene drives and whether he is affected by dieselgate. coming up, danger ahead. warns the fed is creating bubbles and we have no idea how bad it is going to be. ♪

>> why should they raise rates? it is almost a rhetorical question. there are so many reasons they should raise rates. because low rates, almost definition, build bubbles. they build real estate bubbles, bubbles in the off market. francine: bubbles. that was carl icahn in the video he posted on his website with some very nice production.

now for a look at what we are watching. let's bring back tom keene. we are focused on markets. geopolitics. tom: so much is going on. the international relations story featured yesterday is really quite something. that i agree with you -- the markets are front and center, and there are some real interesting nuances iand correlations. european stocks doing poor, a two year yield way underneath where was in the pre-janet yellen enthusiasm, but it is commodities front and center. but i would say that is more than that. francine: i know you have charts, and i love commodities. when you look at it, it has been a 16 month freefall for commodities, but it is now that you are looking at a full-blown price raise. this type back to glencore.

tom: this is going to be my chart of the year -- it is easy to make as we approach october 1. bring that chart up again -- this is the bloomberg commodity index. the bottom line is notice how we have gone below the 2008 lows.that is the mathematics of this index. thatottom line is this chart indicates all the tensions in the market of deflation and disinflation, and that includes mr. abe speaking at our world headquarters today. francine: and of course we were talking about coldfusion with simon kennedy, playing into what central banks and what tools they have left. looking forward to the next hour. keep it here. tom keene will have a great conversation about japan and an exclusive interview with the italian prime minister, talking about geopolitics, world leaders

in new york or maybe divided about the actions needed to take in regards to syria. we have a rapprochement between obama and putin, next. ♪

announcer: this is "bloomberg surveillance." india considers its new mediocre. they slash interest rates. this is the commodity -- this as the commodity implosion continues. singles --o-year

signals inflation abroad and in america. abenomics -- of prime minister abe speaks this morning at bloomberg world headquarters on deflation. this is "bloomberg surveillance ," of live from our world headquarters in new york. it is tuesday, september 29. i'm tom keene. with me, vonnie quinn. in london, francine lacqua. there must be an update on glencore. are they still open for business? francine: the main story where watching, you mentioned geopolitics. you mentioned it little bit of what is happening in terms of central banks. the markets, now the global route we saw yesterday, inching higher. we have the s&p futures advancing, oil advancing, and copper, for the first time in five days, is up. tom: