will get reports. pocket, will air that mean more stimulus? ♪ david: welcome to "bloomberg ." 8 stephanie: we have a big banking morning, we're been talking about banks all morning. we are brought in an all-star cast. the one and only christine harper. ahead, a big show including an exclusive interview with the ceo of the dell with our own emily chang. forward to that,

but let's start with the first word from vonnie -- bonnie. bonnie: paul ryan says he is willing to run for the speaker of the house. he is the chairman of the ways and means committee. >> this is not a job i have ever wanted, i am in the job i always wanted. i came to the conclusion this is a dire moment for our country. i think our country is in desperate need of leadership. change to thets a conservative threats. u.s. and russia are pledging to avoid accidents. the pentagon says it only covers technical issues and is not cooperating with russia on targets or operations. russiale, a meeting in it is the first known for an

visit since the war broke out in 2011. that have been some major positive results. now here's a check of the market. we have futures up across the board after a slight to drop yesterday. the dow jones and the nasdaq are doing just about the same thing. yahoo! came out with disappointing earnings compared to the estimate on the street. a little bit lower than the street was looking for, yahoo! will talk more about their growth plans on a conference call. fourth marissa mayer's year at the helm of their, i cannot believe that. chipotle was also a disappointing showing.

shares are down 9%, taking a beating this morning. will begin trading this morning, that is the ticker for ferrari. they had more than 17 million shares, 19 million if you count the overallotment issue. take $3.2 billion out of the company before they's and it off -- spin it off to shareholders. stephanie: i think you would have gone down either way just to see the cars. matt: exactly. i think it should have beenenzo. stephanie: how about harley davidson? hog, that's an excellent one. now to break company that is not done it right for many years.

this on the heels of a drop in shares this morning following and earnings miss. our own francine lacqua law just set down to get details about the new strategy. she joins us from zurich. it seems to be more important with the earnings actually are. what did you learn? down, and heet gave me a half an hour of this time to talk about strategy. the strategy is very clear, we were expecting it because there have been a lot of leaks from the press. 6 billion is what he is aiming for. the cost cuts are a little bit bigger than what we were expecting. also, he is streamlining and we organize in the bank. hoping to ipo the swiss bank in 2016.

i tried to push him on whether and it comfortable, really tried to push on whether he was sure this was the only safety cushion he needed. is always there, because you have to be efficient, no matter what. we believe that taking the is a veryith regard serious decision and not something we do lightly. we would like to keep that at a minimum. self-help, wel are rightsizing, we're cutting macro by 72% in terms of labor. that will free up a lot of capital, we reduce the capital consumption, we are cutting 0.8 of that is

already in the bag. initiatives,ng new all i can say but these numbers they arere an outcome, not in ambition. we afford very hard, these are prepared -- plans proposed by our own teams. ideas.ve very specific francine: you feel comfortable that with these figures that you have enough for a safety buffer? thiam: i believe we have enough for a safety buffer. a 12.2 and will be we are at 3.5% of leverage. compliant.

you're comfortable that will be smooth? way to test that is to do what we did last week which is to take a number, and try to do a preemptive prompt. that has been highly successful. from a firm commitments bunch of very very good names. i think that should be well received. francine: you were mentioning the share price on the back of the earnings and strategy. you're right, it does have to do the earnings because it was much worse than expected. it is also a lack of detail. analysts say sure they want to cut after asia, he wants to

down on investment banks, but we don't know how he has been running portfolios. noticede: one thing i was the word client. basically, every bank ceo we have seen has really beat this drama of clients first -- beat clients first. does that mean they will simply say goodbye to them? me, but: he did not to he did mention clients when talking about investment banks. there was a very different situation to the banks in the u.s.. share prices are doing very well on the back of this. they're taking a little bit more time. they arehat retrenching in the investment bank, but he still wants to focus on the client. he wants to go after the wealthy clients that would use the investment banks for operation.

that is the operation he sees for his wealth management with these entrepreneurs in asia. francine makes an interesting point about private wealth management. as i read the release, they did not do so well in this earnings release. >> across the board there were disappointing. private manager was also affected. and away, they're lucky they have a new strategy to unveil. we saw some family results earlier this week and they were very terrible. they're able to say we are shaking things up. and the thing that is interesting is the swiss bank they will lift this was bank and raise them capital that way. they talking about being a consolidator. switzerland, asia, private wealth, and the emphasizing

things like servicing hedge funds and macro trading. that's contributed to the problem. stephanie: francine, can you speak to the ipo is little bit? what part of the bank will be ipo'd? where is the ipo going to be held, and will it benefit from it? they feel that about the earnings, and the outlook. do feel bad about the outlook. this i guess was the main surprise in the strategy just because it was not leaked. exactly -- i tried to push him on saying where is the market, we've seen volatility, but he was talking what unlocking value. sometimesis difficult to cut through the jungle to

understand this is a huge bank that first services swiss clients. ipo is i like about the you put a price on it. banktically, the universal has to be on a high multiple. to haveto get that is market pricing. doherty -- put a minority into the market. francine: it was clear that this was a comprehensive plan that he has been working on for three months ever since he was appointed ceo. investor still want a lot more details. avid: thank you very much for timely interview. we turn to you, we have seen

several bank earnings come out away from trading and into wealth management. how do you rank this? is this more detailed, more specific, more hopeful? >> i think it is similar to other programs we have seen. what you are seeing across a realignment of the banking industry. david: i will it emphasize the difficulty these guys face because of the poor european economic background, and the uncertainty over the regulatory environment. they don't really know what kind of regulatory environment they will be working and. that makes this task difficult. stephanie: in the talks were journalists, he said he expects the swiss to raise the ratio, we broke that news last week that is with the swiss regulators are likely to do.

that will be a factor in their need to raise capital. david: thank you very much for being with us. clive, please stay with us. up next, is japan ready for a new round of stimulus? ♪

stephanie: we have breaking news, we were just talking about the turnaround they're planning a negative getting. moody's may not have very much faith. they are downgrading the sweeps in the long-term ratings.

the both make semiconductors which are in demand. is only place where uber almost as big as the u.s. is china. about 30% of the rise takes place there. will expand operations. and, federal prosecutors are already taking on the online poker business. now he is going after fantasy sports. this is according to the wall street journal. now every day we bring you stories around the world. now we are heading to beijing. much of the focus in asia today is on japan, but it is fitting your in beijing, it looked like

this had to do with exports to china. indeed, they declined through china as with a lot of the other major asian economies. the top line number of the .6% compared rose 0 to expectations. .olume wise, it dropped 3.9% what this shows, it adds on to the jitters in the market from bad data out of germany. and, of course, china as well. the stocks in japan, they hit a seven-week high on expectations that such a bad data would lead to the bank of japan easing policy. the bank of japan will meet next friday at a policy meeting. it is not such a clear-cut decision. only 42% of economists expect

some form of policy adjustments. but that was done before today's data. they had the most in a month led by a small amount. to interruptrry you, thank you. stephanie, one more instance of bad news being good news in japan. if you look at what is happening, chinese stocks have dropped the most they have in over a month. the uncertainty is causing such a massive overhang. david: not good news for exports to china. young,to welcome ernst & a vice-chairman welcome it is good to have you here. you are seeing disruptive companies pushing forward as markets falter. tell us about that. it is interesting

that disruption is what every business is worried about because business models are being disrupted. but you look at china, and i think it was over the reported 30% of its rights are in china. those disruptors are not waiting for governments to get permission. they're asking forgiveness as they go in a very disruptive way. those markets a very attractive. it is an interesting force. stephanie: do we really believe, we love the word disruption, a good example. i am sick and tired of that word. as the to look at uber model. everyone thinks they're the next coming, could we see a pullback? regulation has been in place for quite some time. not every company is the disruptor that uber could be.

are we overstating things? beth: i don't think so. even the smallest companies are embracing the disruption. to disruptying themselves, it is the technology and the forces of change -- you cannot, if you ignore it it is at your own peril. has been a little different story in china because the government has held off the foreign disruptors while they have grown their homegrown disruptors, like facebook. isn't that right? beth: it differs by industry. i think the market are attractive, people are driving, -- david: it is almost like capitalism is going on in china. this extraordinary influx of new this is how capitalism is supposed to be.

it is weird to see that kind of vitality, and that's turmoil going on in a supposedly non-capitalist economy. things are much lower in europe and the u.s.. david: does not pose particular challenges? clive: no question, especially those aspects of the technology revolution. they are ron social media, that poses problems for the chinese authority. regulatory fragmentation, the different aspects run the world, it is tough to be a global company today with all of the fragmented regulation. we need to harmonize regulation. david: people have been saying that for a long time. stephanie: good luck with that. we want to go over to the united kingdom where they're considering staying in the

european union is worth it. the bank of england has gone so far as to study about what it would mean for the british economy. you are working on a piece right now, let's talk about this. clive: i am more sympathetic to the case for brexit then perhaps i ought to be. the rational part of my mind says this would be a disaster for the british economy. i think it would be a bad bad thing. but, it was so much wrong with the european union, and so many of the brits criticisms, there was so little will to fix these problems, that the question does arise. to you want to be part of this project going on? david: i would ask you first not to use the term brexit, because

give gone enough -- gone through enough. i have the raft the number of british lending institutions and foreign owned subsidiaries in the you can't. you can see they are already exiting the u.k. as far as moving to ireland or the continent or elsewhere. as far ass already on banking getting out of the u.k.. the question is, how much of that continue if they did leave? is any of this talk about leaving, it is great for business, but does any company want to talk about it? how realistic is this, really? beth: why was the eu formed? it was formed to create a powerful trading block. mind, itthose goals in is in the uk's interest to be

part of the eu reform, to be part of making it a success. i think companies generally are supportive of that. david: i wonder whether the eu -- it was originally a trading union. it was to eliminate tariffs and boundaries, a common market. then they went into monetary unions that england state out of . i wonder if they overstepped. is exactly the problem. if europe confined its vision to not just free trade, they could've enhanced free trade, but the euro was a massive step in the direction of political union. it was not popular, it was not defended, it was forced on them. it is gone terribly wrong. stephanie: can't we blame

evolution on that? who keepmericans taking us back to the constitution. the world changes, so maybe they have to change with it. applaud that idea, it is there for a reason. one of the reasons america has been a successful as it has been it's because of the constitution. europe's problem is that it does not have a constitution. we are just getting warmed up. inn we come back, earnings just a minute. we will be breaking it down on "bloomberg ." ♪

stephanie: welcome back, you're watching "bloomberg ." is clive with us again

and beth. thank you for joining us. so, let's get the first word from bonnie. theie: the president of european commission is calling an emergency meeting. leaders will meet in brussels, one major topic is slovenia's request to help the refugees. time in 11rth months, a new york city police officer has been killed in the line of duty. suspect was wounded in the leg and has been arrested. the deadline to act it in just theweeks, john boehner said government will not default on the dad.

matt miller is now looking at general motors. matt: we have general motors and boeing right now just blowing away estimates. we were looking for a dollar 19 a share. it also beat on revenue. gm doing very well, they also margins of the 11.8%. this company had targeted margins of 10% in 2016. it has eaten those targets by more than a year. ating, we are looking .32ing by a long shot or cents. transportation companies are doing incredibly well in this

economy. it is not a new story, but this is further signs of strength. julienie: let's bring in to dig into these numbers. coca-cola putting big plaster on their non-software businesses. we have seen stagnation in the beverage market. coca-cola coming out with declining earnings, but not as much. overall itssaid revenue was down by 5%. excluding the effects of , the company also saying if you look after the effective currencies there was positive revenue growth in all of the operating groups except for asia-pacific. it gainedy said global shares and nonalcoholic,

ready to drink, beverages. the company also saying that this year its net share repurchases will be $2.5 billion. that is something to consider as well. behind me, the shares not reacting much. stephanie: looking for a bump, david is here with a diet coke after the show. who is next? matt: yesterday, we told you they were going to buy sandisk, it is now confirmed at $86.50 a share. it will be a $19 billion acquisition. they are moving down in the plea market. they were already getting a

strong bump. out of this acquisition they will raise about $18.4 billion to pay for it. stephanie: i want to go back to coke for a minute. it is not just an bout the consumer, it is commodity costs. they have an impact across the money industries. i'm just guessing you're not a cherry coke kind of guy. ted: i did not have a dr. until it was 25 years old. clive: did you have a second one? ted: no, that's the key question. everyone is trying to figure out how to repackage water and make money at it. cash, theday, used to idea of that is changing.

what will you do in the real organic plan. they are struggling to find the next plan. issue,ie: the underlying they make product that we don't want our families consuming. ted: i associate organic revenue with general electric. if the old organic growth that 7%, what would you to the new number is? 5%? 4%? they'reour point, trying to get away from the carbonated beverages. >> we been watching that very closely because it has been hit so hard by concerns of overpricing. they're coming out well ahead of estimates. it is kind of blowing away what

analysts had anticipated. biogen is doing some restructuring. at the same time, it is coming up with some trial results, saying a couple of them did not meet. resultso came out with for its biggest selling drug, sales of that to beating estimates. a rebound after it missed estimates in the past couple of quarters. david: matt, thank you as well. the good news, next hour you have the cfo on. let's get to morning must-read, tom. lesson, we gory back to one of the first people polk,rviewed, james k.

which is a few years ago. many historians say he was a near great president, like the chicago cubs. he was a speaker for two years. his later tenure was governor of tennessee was a failure. it speaks to the idea of the calculations that mr. ryan is going through. the political calculus buttressed up against real consideration for his family. feelanie: i know you connected because you are james k. polk went to high school together, but i love that paul ryan has made it very clear that a priority for him is to have family time. that is a massive shift in the way business people and leaders

are conducting their lives. david: this reminds me of the joe biden, agonizing over his son. he is clearly taking his family into account. very also saying reluctantly i'm willing to step up of the party really needs me. betterm sorry, you do it across the pond. how do you receive our disease -- excuse work weeks me, 85 hour work weeks, and if the financial raise that goes on for three years? the second of those is hard to understand. people work hard everywhere. it is not off the scale. france in august is an outlier, but if you go to london, you find people working pretty hard. i thought ryan made too much of

the family thing myself. look at the position he is running for. the question is what he owes to the country. stephanie: but his point is, what comes first? the fact that he is making a point of it and putting it front and center, i think it is important and it is making a strong statement. beth: people want to succeed by being who they are. for him to it knowledge as he has a family, that is in almost the important to people who look and say i want to succeed, but i want that as well. for the critical jobs in the country. david: i don't think he wants it at all. clive: that he should not run for it. inid: he says we are

disarray, we are headed towards a debt ceiling problem, maybe he is trying -- stephanie: in order to lead the country, do you truly believe you have to be putting in a 100 hour work week and traveling 45 but to the year? i don't know. a critical job. some of these jobs, that requires -- it requires a sacrifice. stephanie: look at all the people in politics, it doesn't seem much they are getting much done. david: this is a hard job, if he gets it. do, yout they used to move the kids to washington. tone. a different point, he has chosen to put the kids in wisconsin. what happened before was that

everyone was moved to whisk -- washington. david: that was a time when you did not have primary opponents. ted: we can go far enough back to william mckinley, another person i interviewed, who ran his campaign from his porch in ohio. , the real solution, i think they do this better in the united kingdom, is move the kids to the london. ve: a lot of people don't do that in london. here is that this is a poisoned chalice. that is what is going on here. that is why he is reluctant. that's tells you something important about the political system. eating speaker of the house is a job nobody wants.

talk about toxic politics. of wanting toage be a unifier is a good message. understand, doesn't from his sources, it would be exceptionally difficult to get the conservatives to agree to the terms. paul ryan will of trouble getting what he wants. stephanie: great conversation. see, we're not just all about numbers here. thank you so much for joining us. this man has to get back to bloomberg surveillance on radio. a property magnate is joining us, what do you want to know from him? , do we dive deep into the scandal of volkswagen. ♪

stephanie: welcome back to "bloomberg ." bonnie: another big takeover in the semiconductor business. biggest and of date year on record. the european union is telling starbucks and chrysler you have to pay up. the cop the company and asomaker could pay as much $34 million in back taxes. yahoo!'s latest earnings report is raising questions about their strategy. they reported its biggest quarterly sales drop since 2009. has then trying to add services for smart phones and

tablets. stephanie: we're looking now at volkswagen'sf massive emissions scandal. we're looking at how the cheating came to life?is it possible the chief engineer said not know? volkswagen'sthough cheating mechanism was hiding in plain sight. >> in retrospect, you can see the beginnings of it when they launched the clean diesel in 2008. at the time, part of the marketing was to compare the mileage to what they could actually achieved. they said we are giving you 24% to better. then, two years ago, researchers at rest virginia started doing their own road test to see what it would really get on the road. stephanie: how can this possibly happen?

did they just think they were more clever than any regulatory body? on: the company line so far has been the bad apple, a few people know about this as far as the investigation shows. one of the nuggets of the news was that we asked them how could them,nagement, all of engineers themselves, not to get it? the response to got back from them was a little more specific. was a small did group involved in developing a. that opens a whole other issue and who might have known about it and did not raise the alarm. david: just one question, we have seen in other circumstances it is one thing to say that the top measures did not get a memo

that said we are cheating. it is another thing to say he did not want to know. there was plenty of information, but he did not want to know the details. show?s your reporting was a six-month delay in releasing these automobiles. in those six months, from what one board member was saying, they had to go back and figure out how they did not manage to meet the specifications. from that point on, reporting shows there was a lot of pressure on those engineers to come up fast, and that the managers knew how these engines worked. let's go, what is up to matt? matt: i want to show you the hubris of volkswagen. it is amazing you can find this dioxide,s is carbon

millions of metric tons him it'd. the yellow is volkswagen, the oranges toyota, you can see and now emits 9 million metric tons. these are just the factories, it is not the biggest carmaker in the world. toyota is polluting the earth more than general motors and volkswagen -- volkswagen more than toyota even though toyota is the bigger carmaker. plants, and this is carbon dioxide. it is amazing how much they pollute. stephanie: doesn't this blow your mind? beth: it does. what am reminded of the contrast. howk about the contrast and

when she came on her wanted how she handled the situation at the helm of gm. i think the contrast is interested to how this is the handled now. vwve: you could not call decisive in the way they have taken this issue. huge,k the problem is so it is hard to believe this was a couple of engineers. it goes on for years, and it supports a strategy. david: one of the big problems is when you can't afford to fail you're in big trouble. vernon, thank you very much. i'm happy to say you are staying with us. take a look at sydney australia earlier today, people making their way around the opera house. more "bloomberg " is next. ♪

david: it is time for newsish. the late-night shakeup is changing the price of advertising. demographic, we are back. just eyeballing this quickly, this surprised me. ads when for as much as a hundred thousand dollars, that is serious money. it has gone down, but they're averaging $48,000 a spot. for those who know this, you have to look at cost per thousand, because the audience is somewhat bigger for fallon. if you dig in with a digital traction he has, but he is able to do with attract advertising dollars for all of

his visual shorts. when was the last time he stayed at that late to actually watch him? beth: i don't. david: the good news is you can watch it on the social media. stephanie: i see jimmy fallon on social media thousands of times. we have a lot more to cover, we have to take a quick break, thank you both. we would love more coming up. we would take on the global outlook of commercial real estate. ♪

stephanie: lakers earnings beat estimates --automakers earnings beat estimates. anotheromy is plunging

president may be impeached. micros systems a talk about that big acquisition and a whole lot more. it is a bloomberg exclusive. ♪ welcome to the second hour of "bloomberg ." >> i am from michigan, flint. stephanie: i have to talk about the last hour. i have to talk about paul ryan for a moment. the sentiment about paul ryan, and i am not just saying this because i am a woman and a mother, but i need to know that i can spend more time with my family, saying that his massive.