francine: strategic reviews. ubs's profit has doubled. the omission scandal spreads. they will look into more vw diesel models. the spotlight hits worship. druggie celebrates four years in charge. we will talk monetary policy. good morning. this is bloomberg surveillance. tom keene is in new york. we're going to look at for

exchange. it's quiet in the markets. you are looking at euro sterling, how important those dynamics are. are you making a prediction of parity? francine: we have a great story. this is not u.s. versus europe, this is japan versus europe. david is in new york. david: big job cuts are on the way at the british bank they will get 15,000 jobs after reporting a surprise loss. they will raise $5 billion in a write off. reverseer is trying to costs. that russian plane that crashed in egypt had a prior damage linked to other crashes. in 2001, it's great to its tail on a landing and needed to be repaired. it could lead to the sort of midair breakup that occurred on

saturday. part of the tail section was found away from the other wreckage, indicating that it had broken off. bow tos refusing to pressure to shut the country's borders. they are trying to figure what to do with refugees. they have taken up to one million refugees. she says closing the border with austria is not the issue. oscar pistorius will know if he is going back to prison. the second bid to convict him is underway. he was convicted of the lesser charge of manslaughter. he was released under house arrest last month. the president says u.s. or's will not be on the front lines in syria. the president spoke to nbc news. 50 special ops will go to syria. it's only an extension of what they are already doing. that is the first word news. we've got auto sales coming

up today. the jobs report is coming up. other important labor day will predict zambia is out with interest rates earlier. they are really manipulating their rate. futures are at negative three. other than that, it's quiet. for a weaker euro. i will look at dollar yen. he is writing about the future of japan. i thought that was very important reading overnight. let's go to the bloomberg terminal right now. i did this just for you, francine. how many places can you look at swiss hungarian foreign. this is the stability of that experiment in eastern europe against switzerland from 1999

out to the beginning of the crisis. you have the strength of the swiss franc. huge strength. you have the weakness of the hungarian. that brings the income destruction, the wealth destruction we are seeing with so many in eastern europe. i know we will get that later. was that of steering up? francine: i don't think it was a sphere. -- obscure. this is the message that whatever the swiss national bank does, it's containing the rise. they plan to cut 15,000 jobs by the end of 2018. the winters said the challenging firemen has led the bank to of disappointing performance. joining this is edward.

we will talk about it. bench in ceo this charge for five months. these are legacy issues. how does he fix this? >> he's got to address capital. that the been saying controls of the lending want there. loans of been extended. they need to get to the bottom of that pretty quickly. what do they need to raise western mark francine: you are our green has been too slow. he started in june. we have a capital raise today. he should have been more aggressive? >> it was clear at the very beginning. they needed to raise capital.

credit suisse has already gotten out of the gate and said we accept that we need to raise capital and we are moving quickly. she has been a lightning rod of criticism. i would suggest miss whitney nailed what we saw in global banking. you are our guy on this. you have a working number of the percent of job shrinkage? globallymber of bodies that are going to go out of the banking business western mark --? >> i think that's anybody's guess. europe, the business model is completely challenged. today, seeing tanks, ubs coming up with numbers and saying we think we can achieve this. i understand morgan stanley

is going to lay no one off whatsoever because it's such a well oiled machine. i was taken aback. 17% at standard chartered, that's a new percentage adjustment. francine: it's huge. we keep forgetting that these hugeanks that have had share slides. they have half the value in two years. it was always going to be a radical decision. job losses were expected. >> this is a bank that has been through a decade of growth and record-setting property cheer. we are seeing that. it expanded. this is a natural retrenchment. you are one of the great thinkers. when you look at the banks, what they are doing is trying to look

at the macro economy and say emerging markets are not where i am going to do as much money as i thought i was. is this a bad move? are you expecting emerging markets to come back? >> i think it's still a very good one. to understand that many places have developed a significant credit cap. you look at the gross rate of credit and compare that to the long-term trend of credit green --. this is what we saw in 1997. what we have now is a return back to the close rate area that means you need to look into the area from a debt perspective. we have to see where it has degenerated. what you do see in emerging markets is the corporate sector

raising that. the corporate sector was increasing supplies. it was increasing capacity. the housing sector was using this to invest. unsustainable. let's say america is going to increase interest rates. you have to understand that this is part of what i call the the dollar bloc is 60% of the global economy. you have the core, the united states. the core has to run very low interest rates. funding costs are way too low. you get a sharp extension of credit. given all that, thank

you pay and is not going to move at all. tom had a great chart. into the nextok months, you have to look at qe. japan,mmunity outside they are following their traditional way of doing it. you see declining export growth. inflation is low. is easier than people think. there is a progress the country paidone in respect to -- --. doj's reactione is not as trigger-happy. they are focusing on fiscal policy. they have plans of 3 trillion.

that is a substitute for monetary policy. easy ecb with a more hawkish japan. want to talk to you about negative interest rates later. is your world stable right now? expressedilibrium through a deep for exchange market, is it stable or is there a cadence to it as you await her the news? >> you have a different volatility. i think it will increase. coming back to your question, we are heading towards an environment of volatility. emerging markets are far from complete. we called for an emerging market correction. it is playing out. we have limited links to go.

the u.s. is doing better economically, it won't mean higher rates. that is bad. america would not do better, that would be bad for emerging markets because they could not utilize excessive capacity. both sides are under pressure. francine: very good. tom: we will continue with him throughout the hour. we need to say thank you as we see news is morning, difficult news. we've got a treat for you. when james wales will join us, the pride of auburn university. you know him from wikipedia. he is always controversy all. we will talk with him about what is changing his world and your world, that would be the facebook news feed. ♪ this is bloomberg surveillance. ♪

tom: good morning, everyone. it's bloomberg surveillance. history oferesting sir. that shot is taken from the older part of zurich. that is across the river. francine and are looking forward to thomas. our business/this morning. at: volkswagen plans to environmental accusations. the equipment that alters omissions testing results. activision is buying the maker

of candy crush. they will pay a $5.9 billion to king digital. they are the biggest videogame maker in the united states. third quarter profit doubled it ubs. year'sh back next ability target by year. the goal is 15%. ups shook up its management ranks. they replaced the cfo. that is it. tom: i spend hours on call of duty. don't let might see me. i am playing call of duty. during the show. there is another bank challenge. francine: this is my call of we spoke to the ceo talked

about the challenging conditions facing the bank. the journey of growth and wealth creation is still intact. it's clearly more volatile. i feel very confident that we will continue to have a substantial start -- part of growth from asia. it's going to be a more challenging environment point forward. we are well prepared. francine: manus joins us. what is behind it? they have softened their target for profit ability. : if you think about the news, but drives the numbers is a tax credit and the legal charges they are going to take. wealth management, the core of established, it

is the return on equity of 33% which brings me. he is resisted calls to destroy the investment bank. that posted the numbers. he has delayed that return on equity targets. back to you. manus, in terms of ubs , they started the so much quicker. is there any place for a big investment european bank? manus: the debate is there would be consolidation. they say there is a place for a super national bank. i think the critical thing is that the markets focus on is return on equity. that target they will make this year.

we look a little bit further forward. are you going to miss it or are you just delaying? >> the response will be to say -- wee are likely to beat believe the 10% will be beaten. we will be close to 15%. i think we are not delaying it. our return on a be targets. i think targets are very important. byse adjustments are driven external factors. interest rates. : they are 1.9 trillion euros of negative interest rates in europe. that is an outlook that is 150 basis points below what everybody thinks. this is a reality check.

back to you. francine: we are behind a lot of the u.s. ranks when you look at the maturity of the u.s. banking model. we are trying to play asset during tom: manus is out in the trenches listening to the message from ubs. i think this is a highly massaged message. they are going to come in and try to straighten out what seems to be the future which is wealth management. i don't know how that plays versus the u.s. banks. there was a lot of mystery today. francine: i think you hit the nail on the head. ubs came out with this model. when you see berkeley possibly allg same thing, they can't go for the same segment. tom: i think this bears a lot of

scrutiny. let's come back to this on banking and we will do that to the week. coming up, the morning must listen. this is the one that conservatives love to hate. he has written a liberal manifesto that everyone must read cover to cover. we will do that next.

francine: i am francine lacqua in london. the fog has left. we continue talking about the rexit.r of b mr. osborne is giving his first wager speech today. tom: it's a must listen. yesterday, what a joy to talk with joe stiglitz. he is talking about the rules that were broken. these are the rules were broken decades ago and how we need to fix it now. reached -- it would be best if we all got together and said let's rewrite the rules. things of not gone well. productivity has continued to grow since the 70's and wages have stagnated. that is very unusual historically. we rewrote the rules allowed that to happen.

tom: it's a blistering manifesto. there is one chart on the financial business and the growing size of finance within the world economy. let's call it financial engineering. it sells a lot of bloomberg terminals. francine: this is the new normal, where you have a huge qe and you just think outside the box. he spoke on the turmoil that is out there. coming up, jimmy wales of wikipedia. we will talk about mr. zuckerberg newsfeed. stay with us. ♪

tom: go rangers. new york city. that is so over. we say good morning in november. for the firsta,

word news here is david gora. david: a british bank will cut 15,000 jobs, standard will also raise money in charter. they're trying to fix problems caused by the ranks expansion in markets. george osborne is making his case and taking it to germany. he will push for closer integration that has caused strain between european nations. david cameron has promised there will be a referendum in the year by the end of 2017. the german prime minister will try to avoid a revolt over refugees. he is refusing to give in to pressure to close borders in the middle of the biggest refugee crisis since world war ii. germany will take in as many as

one million people this year. the u.s. stop the flow of millions of dollars to iraq this summer. all of this is according to the wall street journal. the dollars are flowing again after the iraqi officials agreed to put in tighter officials. volkswagen is cooperating with thecials over saying environmental protection agency says that those with larger also cheated, the w is rejecting those claims. tom: thank you so much. here is the pop quiz. where is the risk free rate? everything centers off its anchor of the risk-free rate. i don't know where it is. hans redeker doesn't know where it is.

hans, i have never seen it before. what is going to happen when we migrate from negative rates into positive territory and reestablish a true risk-free rate? there has been a debt buildup and you are increasing funding costs. long, whenns of a you look into a euro denominator, that is still 2.5 trillion euros. so if you're normalizing interest rates, you have certain stress points for those areas. in: you have robbie feldman asia. what an advantage. when i see the debt buildup in china and for much of the tiger -- the tighter economies,if your

environment, that could change. but the more important point i would like to raise here is the difference between the core and the peripheral of the dollar bloc. you have too much capacity, too much debt, and therefore funding costs in the core does matter. not going to be a small event as many people are suggesting. would turn against those people who say that we have a thereforehike, and the u.s. dollar is going to sell off, i cannot believe that. the environment is so much different. i can give you two numbers. now 9.6 trillion

out of the united states. francine: we have to give a shout out to hans redeker. he comes out every week over whether the fed will raise the rate. the u.s. economists to be fair. tom: wait, wait. hans redeker had nothing to do with this. let's get that clear. hans: absolutely. let's get that clear. francine: it's the house. it is the house. a one house person. i like unity. hans: actually, we are known for unity. francine: when you say that this will be bigger than the market expects, so what we have. we have a fed rate hike and what happens? markets don't get that they are looking at a rate hike?

hans: there are two other factors there which make a difference to 2004. you had emerging markets with a higher return of investment. now they are lousy. secondly, there was a low term premium historically. so that means when you raise the front end of the market you cannot have lower bond yields. bond yields will rise. and then you have to think about how that impacts emerging markets. we have to analyze that and what we found out is that it does matter in respect to finding funding conditions for emerging markets. if the return of investment is lousy, then you have to pick up the market or the alternative to that is to write it on. francine: let's get back to negative rates in europe.

does that terrify you? i have a great inflation chart. mario draghi has been in charge for two years. you can cb redline on the chart, it is the average of inflation. he having a tougher time? or do we need to give him another four years? hans: no, you would say if it is his fault, -- you cannot accuse him of that. the europeanng central bank as a totally different one. we came out of where we had built up gigantic balance sheets in the peripheral of europe. and that is now creating deflation. that has caused a credit multiplier. you cannot accuse mario draghi. but tell me how you

have stability within switzerland as we go through a sovereign full faith in credit deleveraging? hans: you are absolutely right. am much closer to what mr. stieglitz has to say. but this is force used for funding purposes. but the balance sheet of swiss banks became too big and therefore you have to move close to parity. land, it can create a significant problem. therefore, the process of normalizing is so much more difficult than the process of

adding liquidity to the market. tom: thank you so much. what a treat this is. will be here later today. mr.nt to talk to him about packard. what a time to talk to him. with a new business plan in hp. look for that later today. ♪

francine: welcome back, this is "bloomberg surveillance," i am in london and tom keene is in new york city. it is a good time to reflect on what china's president has been saying. policymakers will accept slower

growth but not much slower than 6.5% that we have had so far. so what that means is what we are trying to figure out. the vw scandal is widening. they have widen the --estigation to include saying that they have altered their system. hans redeker has joining us from berlin. whethero soon to say volkswagen will survive this? >> we have new allegations from the epa. what they're saying is that the software they installed, while they were at adequately describe to regulators, they didn't violate the standards in the same way that the other devices on the other volkswagen's did.

i think we are in a dispute over what they were saying in their application process to the epa to make sure they get certification to be sold in the united states. only about 10,000 vehicles are affected. affected, and up until this point, they had not been. earnings thiswith morning. a little bit better than they expected. in china, they were lagging. hans: right. they have a new offering for consumers in china. china is at 25% for the year. right now, bmw looks like they will be in first place for the luxury auto title. but they do have a lot of new models that is popular and the slowdown has not affected your cds in china. thank you so much. i have two hans.

when you look at when the scandal first broke, people said it might have an impact on europe. the safety image that it had might lose out. are we still in danger of seeing that a fact? hans: it is the only going to take some time, but i think that be -- that what i am focusing on with this is it may be a changing in the way that transportation will be done in the future. so it may be discrediting the diesel technology. what this means is that in 10 years time, it will have any credible part of the car being electric. but the cars are sold rates are significant but from a

very low level. in a few years time, there may be new technology. of the be an energy mix grid, so it is an electric energy mix and in europe, we have countries where we have 35% by -- andrgy driven take that on top of what mr. carney was saying, if you want to keep the temperature increase then weo degrees, cannot use them or run it. have a significant impact on the traditional oil industry. that also explains our negative core influence on old -- on oil companies. francine: thank you so much. hans redeker is staying with us. , i'm am looking forward to this interview.

we will be talking about some of the iconic cars, such as the pickup truck. also, this is another industry in transition, and a lot more of the asian makers are taking a piece of the pie. this is "bloomberg surveillance" streaming on tv and radio. ♪

tom: good morning everyone, washington, d.c.. i the ever going to take the scaffolding down? i hope not. the capital is under construction. capital hasf the the original supreme court chamber. it is very cool, i can barely stand up in it. d.c. after daylight savings time, shrouded in black. right now we are shrouded in the business flash. activision will pay $5.9 billion for king digital.

are world ofles warcraft and call of duty. -- plans to cut 1/5 of the senior level workforce. activist investor carl icahn has taken a 2% stake in the company and is urging aig to break themselves up. -- teaming up on an asian investor media fund. on thentended to cash in surging mobile use. that is the bloomberg business flash. i won't even talk about mr. yeti right now with candy crash this morning. i know in united kingdom you have an important speech today. we do. a is a certain dance between

chancellor, he is taking his case to germany for european reform. he is going to spell out with burton is looking for in his relationship with the eu. let's bring in hans redeker. what is unclear to me, and i live here, and i brees the internal thoughts of a lot of british people, how much does this renegotiation matter? they come back home and they say, we are going to stay within the eu. think the risk in the market is underpriced. when you look at the relationship between the u.k. and germany, you will find that germany is a natural ally when it comes to reform of europe. but germany is currently dealing with the refugee crisis and the

focus is driven away from european reform. the you have to think about upcoming french presidential -- in 2017.2016 it could be incredibly unpopular in france. the two other moderate candidates and parties there. theou give too much away to u.k., it could strengthen the position. nobody wants that. so i'm afraid they could get into a position where the u.k. negotiation position is not that strong. and when that happens, you will love the referendum where people are just pointed about the results. and when that happens, you think about the effect on the exchange. francine: i am very big on modeling. how do you model a british exit out of the eu? will it go up or down? the cfo has to think about

where are the biggest positions. ,hen you look at the real money it seems to me to be an easy that. you have two very different central banks. the central bank of england, so you have mario draghi preparing for trade. but then when you get to the exit, you may have to liquidate the positions. the euro sterling upside. tom: what i find important is the reality. when i see a headline come across the terminal that says blah, blah but there is no inflation. what has changed, february? aren't these institutions that must wait for visible data

identified inflation? hans: well, ideally. the point to make is that inflation is the lagging indicator. gametry to be ahead of the and look at other indicators. but what we have seen in the past is that inflation continue to surprise on the downside. there, there is not that much right. so the central bank has to be cautious. they will the u.k., look over the channel. they will try to see how the test balloon is going to develop in december. maybe when the fed raise rates. it is a testdrive, simply because under those circumstances, sterling would get so much -- through the later,that a few months

there would be so much financial tightening in the economy which is unwanted. ,om: let's bring up a quote this is from harvard. the fed communication breakdown and thed one small hike fed owns every bad outcome, no matter what the real cause. any central banker will to you that they get 99 requests for interest rate cuts for every request for a hike, regardless of the situation. that is the political reality that they face. yes, that is right. there will be a lot of resistance. therefore, they will think twice before he pulls the trigger. but this economy seems to be leading in respect of retail sales. look at domestic demand conditions, even manufacturing yesterday came on the stronger side. .ages are growing

that means that they have all of the reason to be more on the hawkish side. the question is, does he like to be hawkish? given the exchange rate and the low capital market. look at theen you aussie dollar, extended recent gains today. this is not coming that you would find? hans: absolutely right. as much as the u.s. dollar and the australian dollar may be supported in the short term by this outcome of the central bank communications -- and you have to look at what we find in australia. the housing value is overvalued. that in thed is commodity sector, you have a significant overcapacity asking

for disinvestment. and then you had to ask the question, how has it been funded? so the australian dollar has short-term upside potential, but then in the next quarter the australian dollar could go south again. francine: thank you so much, that was hans redeker. we will continue and speak to jimmy wales. ♪

tom: ubs and standard chartered are staring at the future. ubs is giving guidance and it is lousy. they will cut 70% of jobs. it is a tuesday of jobs week. the auto industry rooms. the clear reality of

facebook's news feed. we will speak to jimmy wales of wikipedia. good morning everyone, this is "bloomberg surveillance," i am tom queen -- tom keene. the number of the day is 70%. the cuts at standard are substantial. goes back to, it the models of the european banks. and the share price that keeps on sliding at standard chartered. a lot of investors are saying he should have done more. distinction the between barclays and ubs's business plan? francine: we don't know because there is a new investment banker, he is american. expecting -- we

that is where we are expecting the major cuts to come from, investment banking. let's give him two months. tom: it is the season. here is david gura. new reports say the russian jetliner had suffered fire damage. the tale of the airbus was repaired 14 years ago and part of the tail section was found miles away, indicating that it did break off. germany's chancellor won't give in to -- because of the refugee crisis. they are divided on what to do about the crisis. but merkel says that shutting the borders is not the solution. president obama says that u.s. forces will not be on the front line in syria. the president spoke to the news for the first time since anouncing that this is

current extension of the activity there. balcony lastm a night at bank of america and stadium. tom: they learned to do this on wikipedia. david: they say that they are hoping to build a gas line. those are your top headlines. tom: are you kidding me? how do they get back up? i have to go to a data check. futures as negative three. there is some scrutiny here. maybe we will look at nymex crude. american oil, 46. everything is in spaces -- in stasis. let's go to the terminal. thing, wee obscure

hungarianok at the formats. here is the stability that used to be. andhere is the weaker -- this is the wealth distraction in europe. the challenge that you have seen over 4-6 years. it looks like zurich and budapest are the links. this is going to be a lot of fun. jimmy wales of wikipedia. let me explain what he has done. i couldn't do this show without him. it is that simple. when emily and i invented how to put the sausage together every day, wikipedia was the foundation. year, the year or twice a wikipedia doesn't screw me up and i have to write a note.

wikipedia has changed technology. forget about technological process, it is this. i want to go back to alabama. you were just on stage with jon bon jovi. tell me about auburn university? jimmy: it is such a long time ago now. even always a tech geek though it was majoring in finance. i was a futures and options trader. i was always drawn to technology. i started learning how to program even way back there. tom: can you survive the next digital innovation? on theia is print screen. are you going to be around in 20 years? jimmy: i think so. reading is not going out of style. mobile usage is huge. you a reader perspective,

are reading about what is going on in hungary and you can look it up very quickly. as we see people coming online in the developing world for the first time, mainly on mobile, it is a challenge to help them get involved and contributing. francine: the most googled wikipedia search right now will be the piano bar. lastyou look back at the years, is there something that you would have done differently to make sure you won't be disrupted? was it mobile that you should have gone heavier with format? i think we probably, like many players, they spoke was a little bit late to mobile and we were too. but now we have a great team. the outlook is improving all the time. but all of the content is freely licensed. if you people have put out their own apps to distribute on mobile

that was kind of decent. tom: when you look at the editing of wikipedia, give us an update on the quality of the editing? i have complained to you personally. give us an update. to increasentinue the strictness of the standards. it is harder to contribute these days because you have to follow all of the rules and have references. it is more well and more complete. there is no easy, low hanging fruit. we take it very seriously. tom: i was outside our new european headquarters in london on saintet smarter stephen's church, but where do you go? you go to wikipedia. that is the reality. francine: right. i also use the bloomberg terminal for that.

that is another show altogether. what is it? is there a branch of maps? when you look at what is available, do you need another leg to your wheelbarrow? jimmy: a big part is mobile. two maps, there is something interesting going on there. on the at, you can say, articles near here. wikipedia havein coordinates. jimmy wales do with twitter right now? jimmy: good luck. tom: why do you say that? fairlyi think i am a typical person in the public eye a little bit.

on my facebook profile people can follow me there. many people as following me on facebook as twitter without even trying. so when people, celebrities who are the red rock of people going follow, those you people are going to move. if kanye west wants to speak to the largest possible audience -- good luck. i am not bullish. but who knows? a creative and innovative bunch of people. you never know? francine: is that right? it might be easier to put advertising in there because the people who are on twitter tweet more than people on facebook? jimmy: yeah, i am just not sure. francine: it is not a model you are interested in? no.y:

i have other cool ideas. tom: tell us about the people's operator? what is going to replace twitter. i wasn't going to come right out and say it. this is funded by mobile phone , 10% of your bill goes to the cause of your choice. 20% of the profits go to charity. we do that by not paying for advertising. he will can get on the social media network and share. tom: that was awesome and shameless. jimmy wales is with us and we will speak about facebook and the newsfeed along the way. coming up later today, alan patricof. this is at 7:00. i want to talk to him about mr. hewlett. stay with us in london and new york, this is "bloomberg

surveillance." ♪

francine: welcome back, this is "bloomberg surveillance," and you are looking at live pictures of st. paul's cathedral with the millennium bridge. -- is meeting with angela merkel. he is trying to spur support for renegotiating with the eu. let's get the bloomberg business flash. david: the big story today is sweeping layouts on standard chartered. they will cut 15,000 jobs. that is 70% of the workforce.

is denying the latest cheating allegations. audisa says that vw's, are affected. buying candyn is crash. for will pay a $.9 billion king digital. that is the latest bloomberg business flash. tom: confession. i went to wikipedia to learn call it the clash of economic left's. three of the top economists are in a spat over how to fix the economy. now on improvement. >> larry summers took on paul

krugman. and joe stiglitz was tough. tom: he was tough. >> it was the arrest that paul krugman was wrong. if you lowerthat rates, you can fix the economy. summers said that it seemed to be a classic economy example of a can opener. radio, we were told that summers is right. >> paul has often talked about the fundamental problem. can'the federal reserve lower interest rates below zero. they have kept them at zero for a very long time. and if we could have a negative interest rate, the economy would recover. i think that is wrong.

-2% interestve, rates.ecause zero and it hasn't helped a lot. if you think about whether we went to a -4%, would it make a difference? it would make it little difference, but not a big difference. the big problem is that people don't have income and when they don't have income they don't spend. and that is the trap we are in. >> over the years, he has told us that the rich has gotten richer. it is about wages. -- calls it wages stickiness. joe stiglitz has a whole

description in his new book. a map of the stimulus program from the government in the structure spending. francine: when we are looking here at wage growth in the u.k. and you speak to baruch nielsen, he says wage growth is going up a little bit. inflation is low because people still have purchasing power and that is underlying the recovery. >> it is the same story here. it's that people are spending more money and they are not picking up credit. not spending up, they are spending the fuel bonus. not taking a chance on spending because they are not sure about their income. tom: should we go to wikipedia? we could go to wikipedia on money illusion. on stabilizing the dollar. see how i did that?

jimmy wales is making me smarter on money illusion. what am i doing next? ,, on bloomberg michael milken will be on at 7:00. this is very cool. we are looking forward to that. stay with us. this is "bloomberg surveillance." ♪

tom: good morning everyone.

city,n pupil new york there is the sunrise, it has daylightecause of the savings time. here are some of the great stories this morning on our website. the german chancellor, angela merkel, not backing down despite critics asking her to shut down borders. this is because of migrants. shell says its record take over will save $1 billion in operating costs. bmw posts surprise profit increases. at of those are out bloomberg.com. let's get to the morning must-read. francine: whatever the for theion, the message fragile -- if you want to keep growing, you better hope americans keep buying stuff they don't need.

and this is what really caught my view. people buy stuff they don't need. just at the time here in the u.k. where we talk more about increased capitalism. are we buying too much stuff? it does mean that growth is picking up in the longer term. i didn't agree with the thesis that much but i like the chart that came with the story. i urge you to look at the chart. we are moving from essentials over to grander consumption. but i really wonder if we could make a judgment off of it? the consumption of technology -- one of the raging debates is access to wi-fi and technology. where are we going to be on that in 10 years? jimmy: i am a huge optimist. tom: in london, you see that? jimmy: also across the world. the amount of bandwidth going into africa has skyrocketed.

it is working its way into retail across africa and india, china -- the next one billion people coming online, cheap android phones under $40. it is a revolution happening. government policy to give us wi-fi everywhere? jimmy: i think they are doing it. and the ongoing march of technology at the drop of prices is having a huge impact. still don't have access to broadband at home in london. francine: what do you expect to be the game changer? is there another game changer? it was so fast paced, the change over the last five years. can we keep up? jimmy: i think so. one of the biggest things is fiber to the home. i have that in the u.s..

that is spreading, it takes some time because you have to lay cables, that i think that will continue to march forward with bandwidth. francine: do you believe in -- wearables? -- [laughter] alphabetoogle becoming ? how does a company like google sustain innovation? what is the best practice to move things forward? is a reallynk this good move, the alphabet. people whoe talented need to see some upside. and at google, if you are part of a huge company, nobody thinks google search is going to go -- from where they are today. tom: have you ever been offered a takeout of wikipedia? jimmy: no.

because we are organized as a charity. if someone offered you a gazillion dollars -- mr. murdock? jimmy: we are set up as a charity. , the redlike saying cross is a great brand. somebody should buy that. it is not going to happen. tom: are you there, francine? francine: i am on wikipedia. when you look at the next 4-5 years, and you look at the new website, can you marry business and charity? ammy: basically, we are mobile phone company where 10% goes to the cause of your choice, 20% of the profit goes to charity. we support that, it is an

interesting model. we have seen warby parker by doings say that something good, people have the ability to spread it out. will come back with jimmy wales and talk about facebook and the newsfeed. coming up, we will talk to bill ford. i would talk to him about pond hockey. he is addicted. he is facing a cold winter. stay with us. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity.

we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. tomfrancine: this is "bloomberg surveillance." you are looking at live pictures from hong kong. it is a nice atmosphere out there. it is the first time in six days the chinese stocks rose. it is all about the fed outlook and what that means for emerging stocks. let's get the bloomberg first word news. did a failed repair caused

the crash of the russian jetliner in egypt? the tale of the bus was fixed. it has been linked to other crashes. indications it had broken off. the crash saturday killed 224 people. the u.s. reportedly stop the flow of billions of dollars to iraq this summer. there were fears that money was ending up in iranian banks and possibly reaching islamic state. the dollars flowed again after iraqi officials agreed to tighter controls. a newspaper reports tax authorities raided the offices of the german soccer federation in frankfurt today. ubs' authorities wants to know about its sagging relationship with fifa. credit suisse reveal it is being questioned in the fifa corruption scandal. in her workbe more -- there could be more scandals about the inner workings of the catholic church. suspected ofare

releasing -- one year from today, americans will choose the next president, but today marijuana is a major issue on off-year election day. ohio voters will decide whether to legalize marijuana, and if so, who should grow it. colorado voters are trying to figure out what to do with the tax windfall. s has 5 million followers on facebook. 5 million. ok, wikipedia -- jimmy wales is with us. we will talk with him about the absolute juggernaut. where will the newsfeed be in five years on facebook? my: a lot of the brands

are concerned about -- it used to be that everything you post it went to your followers. that has been eroded over the years. that causes a bit of concern for people trying to participate there. i think facebook is a fantastic platform. they have been nimble over the years. they have become part of the infrastructure. and should news media enjoy embrace the newsfeed, or is their fear of all content with no profit and no revenue? jimmy: like many of these things, it feels like you need to be there to get the traffic. on the other hand, what does that do -- london two weeks ago with francine, and all the news was "the guardian" was down 20% on print. it is a train wreck out there.

part of it is we are probably near the bottom in terms of the transition from print and the old business model print and transitioning into new digital business models. i am a big fan of the app store model for content where people on impulse can say i will pay a couple bucks for that. i will subscribe, just one but to subscribe. this is critical because apple tv is out, and tim cook has said apps win. i am curious to her that i go to wikipedia and i see your calls to give money to wikipedia, and i wonder as a veteran of public radio, a similar model, how effective that is now that the site has been up for a while. is it more robust or was it easier at the beginning? jimmy: it is easier now. we have optimized, done a lot of av testing on messaging, basic internet 101, which took us a

lot of time to learn. but we have a large body of donors, 2 million people to 3 million people year. time, i it is that always give it bit to wikipedia. i might as well chip in. but we have to take fundraising seriously. david: average donation? jimmy: about $20. the bulk of the money is $50 to $100. how does jimmy wales consume news and social media? what do you watch? what newsfeeds do you watch ? jimmy: obviously bloomberg. i use google news a lot, so i read a a lot of variety of news sources from that. my friends share content on things i'm interested in. i follow a journalists, , end upans on twitter

giving a lot of news that way -- getting a lot of news that way. tom: coming into the bloomberg terminal. are you a hipster? members of the subculture do not typically identify as hipsters. in cycle britannica never did this, did they ec? jimmy: they never did. they were very comprehensive. francine: tom keene as a hipster -- i close shop. what was the one thing that shocked -- surprised you the most? you are trying to do good for this world. when i am sitting in london and when i read "the times of monde,"and look at "le we have a crisis. do people still give to charities? jimmy: they do. the thing that surprises me about wikipedia is the number of goodhearted people who contribute their time and mental

capacity, editing wikipedia, trying to make sure it is up to date. we can joke about errors, but on the whole, the communities very passionate about it. tom: how do you get somebody's death up so quickly? what is the process to do that? jimmy: because we have thousands and thousands of people, something comes on tv and radio, and they immediately run to do it. we were quite late reporting michael jackson's death because it initially only came out in a few tabloids. nobody reputable had confirmed it. tom: so you waited. we have the same pressure as well. what is your advice to mark zuckerberg? jimmy: the biggest thing they need to do is continue to focus on fundamentals -- user experience, make sure people are liking the platform. i would not try to work too hard

to get too much revenue too soon. no reason to push it and possibly screw it up. tom: coming up later, a conversation with alan patricof. patricof, mikean milton scheduled as well. stay with us through the morning on bloomberg television. ♪

francine: this is "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. you are looking at live pictures of the millennium bridge. this week it is a big week for the bank of england as they will publish forecasts on thursday.

now it is time for the single best chart of the day. tom: they published in london. newsook business and the business is more vibrant and london than it is in new york and all of america. wikipedia bombs print back to 1997. this is a really ugly chart, the s&p mid chart. other beasts are in here as well. jimmy wales is with us, and i was stunned at the gloom in london over print. we need print. we enjoyed print. i am being told that people are going back to books, a little bit away from digital. how is anybody going to make money at this? my: one of the things that is booming is digital books and magazines. i subscribe to four or five magazines on kindle, and i have not subscribed to a magazine for that.ly five years before

i am paying for the content because it is in a form i like. ads?do people look at anti-ad in mentally digital space. when does that change? sure that does change. tune out theo standard banner sizes and things like that, but there is some progress. for newspapers, clearly there is the unavoidable fact that the revenue from advertising, from print to digital, has dropped off enormously. that is not just people ignoring the anti-digital lists. -- peopleermediation do not think of it as technology, but newspaper is technology. it was very easy to bundle in the ads. now if i want to shop for something, i go to a shopping site. francine, the acceleration

here is extraordinary. francine: to your point, i am not sure newspapers will survive . i see the way i read newspapers, i go to my mobile apps, and with my kids it is the same. when you look at advertising and something that is linked differently, it is the free data we give away about ourselves to make our lives easier. is that a game changer? jimmy: i think it will continue to be. one of the things that makes advertising work is the more they know about you, the more they can give you an ad that is relevant to you. they are saying i am happy that i have as that are relevant to me rather than the ones that are completely useless. tom: how do you embrace instagram as your friend? i have not been a user of

instagram until recently. i have been enjoying instagram. i will probably regret that i am talking about it on the air. tom: let's ruin his day. everyone follow james wales on instagram. our number three top photo of the day. david: we have henry kissinger on a visit to china, 92 years young in beijing with the president of china, xi jinping. tom: neil ferguson out with that book. i had a long conversation with dr. kissinger about six weeks ago. he is vital, vital, vital. david: unbelievable. francine: what a statesman. we need more kissingers in this world. thailand's sky turning green on sunday. a dash cam footage appeared to be -- captured what appeared to

be a giant meteor across the sky. thai astronomical society set on facebook that it was expected to be a meteor. that does not fill me with that much confidence. david: it is unbelievable. my last picture, picture number one, a photo of the international space station celebrating its 15th birthday yesterday. like many people, i follow the goings-on through commander scott kelly, who is up there for a year. he has been there more than six months. tom: they use wikipedia in space as well. david: track that. we want to know. tom: we will learn that bill ford is a hockey guy. later this morning on bloomberg television. he must speak about vw. stay with us.

from london and new york, "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance" from

london. it is september in new york. no other way to put it. let's look at foreign exchange right now. we do that within a quiet fx mark. hans reddick looking at yen, -- eker read occur -- hans red looking at yen. he identified that as a pair that he would follow right now. right now we identify the need to listen to our business flash. here is david gujarat -- here is david bourassa -- david: half of the denon -- have the fines will go back to credit holders. walgreens says it is willing to sell up to 1000 stores to make its takeover of writing work, but country of ash company officials think they will only need to sell half that many to satisfy regulators. the $9.4 billion deal was

announced last week. chipotle's e. coli problem could be costly even though it affects only 2% of its restaurants. 43 are closed in the pacific northwest. analysts say the news could make customers nationwide wary. 22 people have been sickened. you can read about e. coli on wikipedia coming up in the next hour. david westin and stephanie ruhle are with us in the next hour. alan patricof will be in the door this morning. david: as you know, he is cofounder and managing director of gray cross. isides that, stephanie and sit down with mike milken and talk about the future of medicine. stephanie: we are going to be sitting down with tina brown and talk all things media. really go through a media report card and see how she sees the

world. i know she likes uber, but we are going to be talking to one who isbiggest disruptors disrupting the disruptor. we will find out what other towns, what their big plans are. cannot wait to see you, tom. tom: let's move to politics and the debates of the moment. donald trump is speaking up as we drive the debate forward. here is mr. trump. donald trump: to be a ceo, you have to get it done. to be a president, i think you have to get it done but you also have to have heart. tom: i happen to been on -- i happen to have been on that ice last weekend. there atreat rink central park. jimmy wales is with us as we go into the presidential campaign. the fact is, you do affect the campaign.

everybody wants to go back and fact check. you are the resource of trying to get those facts right. is there something you are going to do different for november of 2016? jimmy: we call it the silly season. people are very excited about politics. temporarily up locking candidate pages. --have people who focus on what is interesting, everybody -- the presidential election is big news, but for us, there are enough people watching where we have to pay attention and be careful with local elections, where not everybody is watching it so you have to take extra care. tom: when you lock a page, who gets most upset? i could see donald trump calling you. jimmy: we have a funny essay on the site called "the wrong version." you will definitely have locked to the wrong version.

summary will say that is not the right version and that is what we are fighting about. it is an ongoing conversation. the differencet between how you do things in the u.k., francine, versus the united states. it is six weeks, a lot shorter. and we do not have the money involved. some say it is to bank short because you literally have only five weeks to put the funds to work. my question to you is on the difference in the way we use political pages. how much data do you track? u.k., do we use wikipedia differently, especially when tracking political figures? jimmy: there are differences in the traffic. if you search for -- look at who , theading about nick clegg deputy prime minister of the u.k. until recently. most people who would be reading that would be in the u.k.

also, david cameron would be known globally. he would be read worldwide. that shows a similarity. people like to read about their local politicians. tom: do you update the debates and real-time? do you update in real time? how do you do that? jimmy: editors, volunteers. --" "marco rubio said jimmy: usually. --try to state encyclopedia to stay encyclopedic. what would be reported quickly would be the poll results. we would try to integrate that quickly. do you have some kind of ratio on the amount of population at the amount of time they look at wikipedia or a page on wikipedia? jimmy: germany.

they love wikipedia. francine: does that surprise you? jimmy: that germans like to format their information properly and are organized yeah cap no. -- and are organized? no. is wikipedia coming to some sort of revolution -- some sort of resolution with chinese government? jimmy: no, we are not. encryptedved to connections everywhere, so they no longer have the option of theyng certain pages -- are encrypting everything. they are not active in china. they operate from outside china, and i think that is a good thing. i am going to china to meet with the minister tom: in december. -- will you say to him tom: what will you say to him as

a general brief? if you say this is a human rights violation, they will not listen. the thing they listen to, it is bad for the economy of china. people need to stay up on the latest technology trends. when you block wikipedia, you are not just blocking chinese people from reading it. do you do in the south china sea and others in the pacific? how do you handle that with beijing? jimmy: we do not. we just do not. i joke we are more patient than the chinese. we will wait a thousand years. you so much, ank great briefing on something that , thanknsformed -- jimmy you so much, a great briefing on something that has transformed all of us. we want to set you up for the rest of the week on "bloomberg surveillance." we begin three days of jobs coverage tomorrow through adp and then on to the jobs report friday at 8:30.

francine lacqua, thank you so much, in london this morning. an important speech later in the united kingdom. alan patricof is next on "bloomberg ." to all of you, have a good day. ♪

stephanie: standard chartered will -- aig under serious pressure. the insured post a third-quarter loss and will cut hundreds of high-level jobs. plus, carl icahn is pushing for a breakup. and searching for a cure. my cold milk and talks about his foundation's fight against cancer. -- michael milken talks about

his foundation's fight against cancer. stephanie: good morning. hope you are ready and primed for a big day on "bloomberg ." i'm stephanie ruhle. david: i'm david westin. we have interesting and important people with us today. us, michaelh milken. and our cohost, erik schatzker. -- starting with us, alan patricof. and our cohost, erik schatzker.