francine: selling sterling. continuing to punish japan. a asian markets rebound along with commodities. breaks theancellor three-day in silence and says stay calm but expected volatility. david cameron speaks at later today. and, what is legal, what is possible, and what is desirable. can merkel hold the center and for a hasty divorce.

we need to spend some time on the banks. berkeley, rbs was halted because they fell from 11% to 13 percent. david on put it very simply, what brexit will do is put the spotlight on an already weak dollar. tom: to me it is the idea that 45 minutes ago we were doing what we thought was a fairly stable show in the deterioration of the banks went into debt. it was remarkable. you mentioned the united kingdom tenure going under what was it 10% -- 1%? francine: yes. i have a great chart showing up. this is on brexit. whether there is uncertainty about the world economy.

first let's get straight to the bloomberg press reviews. here's taylor. taylor: british prime minister even cameron addresses parliament today. he says he will leave office in october following the u.k. vote to leave the union. he is leaving details of the british exit to his successor. and boris johnson says consequences are wildly overdone and is being over it ignored. is trying tor reach financial markets in the wake of the brexit vote. he says plans are in place to shore up the economy before the vote. osborne stands by his warning that says the u.k. is an eight position to confront. of coming to the rescue banks. the italian bank has 44 million dollars of capital to put it to some of the banks. a selloff of monetary and

lenders already heard over concerns over bad that lines. and the brexit vote has led to widespread turmoil in the labour party. jeremy corbyn's senior team, seven of them, have quit. the revolt was brought about by corbyn's decision to fire hillary. -- to fireized hillary ben. they criticized him. and prime minister marino rajoy consolidated his appointment in the general election. it surprised the poster with an increasing parliament. it was a present the voters backed away at the last moment. global news 24 hours a day powered by more than 26 hundred journalists, analysts and more than 120 countries. i am taylor >>. this is bloomberg. tom: thank you for all of your comments about the way we are doing our data checks. data check.assic

i know francine really wants to bring it up-to-day. and i walked in the door in washington, lower yields. euro is weaker. oil holding up pretty well. that is the correct banner. by brexit what you need to know. on to the next screen. this is pretty did. 24 point 82. i think that would be a 26 or 27 right now. sterling boyd still trying to find a bid. we have ¥101. francine, what do you have? francine: still trying to figure out the most important snapshot. overall, down 1.8%. i want to show you going because it seems to be rising. . want to show you the banks this is one of the wake spots. the banks were hammered on friday. ugliest down.

you have a lot of the periphery as well. tom: think of the litmus paper of exit trend and date surging remain before the historic moment of a referendum. this is euros sterling. i left where we were. that yellow curved line is sort of before the remain enthusiasm as a euros sterling broke down. strong sterling, weaker yen. then the complete reversal. aviation's.rd that is my thermometer for chancellor osborne and prime minister cameron. francine: i am sure glad we heard from george osborne. he said, i am still here. at least different from him. this is what i chose for my board. i was going to look at currencies but then i decided to go for u.k. tenure yields. u.k.,n see the purple german and blue, and white is japan. yields below 1%

for the first time ever. let's get back to some of the corporate news. british banks being hit hard by exit. the lyrics michael moore is with us. and the head of global and medical smith. with asset management. thank you. michael, i will start with you. it is unfair for the banks to take such a hit. we are worried about brexit? does it have to do with interest rates remaining lower for longer or does it have to do with the recession? >> it is a little of all of the above. they are getting hit on the revenue side. bringing down the revenue estimates both for the lending side as you have rates possibly getting lower for longer and that on the investment, banking, and training side with the turmoil being called off. with fewer ipos. so it is all that and then on top of that, the potential cost for having to restructure set up more things on the continent.

francine: we're looking at some of the trends today. barclays, most of the banks. they lost half of their value. is there anything they need to do either verbally or restructuring that would make their shareholders feel more at ease about what is going on? >> i am not sure there is a whole lot they can say because a lot of it is out of their control. , some of thenomy broader forces here. there is not too much they can't say. they have kind of been saying, we will be patient. not rush to any actions. see how things play out. there is not a lot they can say. tom: michael, i look at the bloomberg and look at book values. as you know, you can do anything you all at the calculation of bayou. and matters to banks. what is our experience of lower and lower and equity prices and eight book value under 30%. 20 some percent. 23% for a

struggling credit. when does somebody say ouch? >> i think they are already saying ouch. these are historically low book to value ratios and so i think, you know, one of the main issues you have with that is if there a -- if there does become capital concern, if there is a need for more capital, it becomes very tough to raise capital at those valuations. unicredit plunging down because of michael moore's comments down to new lows. this is really something. i look and i see you are with j.p. morgan and you have a resurgence on how you can badmouth the banks but this is getting pretty ugly. what is the government solution to assist banks? >> the banks need access to capital. moreng stock prices mean

expensive. people believe they are going to lose capital and trying to raise capital. gets more expensive. that mitigates against the interests of shareholders. the hope is the government will be able to do something. we have a special purpose there. so far, i think it is not big enough to address problems in the italian banking sector. thecine: we understand group saying italy is injecting $44 billion bank injection after brexit. it is a little but soon, isn't it much more to talk about brexit? is this just an excuse overall? we know the banks will be much more in focus. you cannot blame brexit two days afterwards. banking system has been looking at measures for months now. if we look back at the inherent problems there, yes, there are a lot of nonperforming loans on their balance sheets.

pathologically recognized and quantified. the issue that faces the market is a buzz market. so the gap needs to be bridged and that is why we need some injections. francine: i know you can't talk about banks i won asked about banks but we are looking at currencies and whether they can make money at currencies. if there's too much too much volatility there will make your job so much faster. currencye more trading. more volume, more revenue but it equally needs more certainty and less act of trading itself. so although we have seen large currency moves, the actual volumes are much lower the end expected. people are staying on the sidelines. and so at the moment at least, it is not leading much. is a reflection of uncertainty which is necessarily bad for banks.

tom: in washington, we are in the shadow a the andrew mellon museum. in jim millen had to deal with combinations in the late 1930's as secretary of the treasury. when do we begin to see the combination, when do we begin to see forced mergers and acquisitions? government effort to bring banks together? are we near that or do set wait for another month? >> the long-term in europe is to increase. if we come back to take a case in point, the voting structure has been reformed by the government specifically with the intention of facilitating mergers between those entities. if you think longer-term, the intention is to reduce reliance of funding for banks. to this intermediate banks if you like. the intention is to have a europe of banking sector less

important. the issue is timetable because i think the volatility around brexit and the move down in quite book value means the contract was going up the whole time. i do think that what you are saying at the moment as an initial reaction to what happened and markets are not having fundamentals. this vision markdowns taken place of the next 3-6 months, fundamentals will reemerge. tom: thank you. assets manager with j.p. morgan. we will continue. coming up from washington, i'm here with michael mckee. joining us will be alan greenspan, the former chairman of the federal reserve in a conversation, a most timely position with madeleine albright, the nation's former secretary of state. from washington and london, bloomberg surveillance. ♪

♪ are continuing to look at the implications of britain deciding to leave the eu. we are in washington dc with important interviews today. let's now had two downing streets where in a edwards is standing by. the cabinet meeting started about half an hour ago. what are we expecting to come out of the meeting? anna: thank you. in the last half-hour, the meeting started. we saw the members of david cameron's cabinet arriving in the door the high me. this is number 10 downing street, of course. the residents of the prime minister. have you got a plan? are you going to stand for the leadership? the extent of the unknown around

the government at this time. one of the key questions, the fate of george osborne. he spoke earlier on today and said we find out a little bit more about his plan, personal plan, within the dates and ahead. we'll see what comes of that. we know we'll hear from david cameron mid afternoon london time. tom: anna, to me what is most fascinating is what we call in america lame duck. president obama is a lame duck president on his final victory lap after two terms and eight years. tell me about the prime minister. already said he is going to go. he said that on friday. he said he would be gone by october the because that is when we get a pretty conference. he is going to leave all the negotiating to the person who takes over after him. there is a debate going on here over who that will be.

while brussels and voices within europe continued to ask for a plan from the british or they ask for the british to trigger our article 50 to start the process of leaving the european union, it is hard to see how that will happen a times in one we do not have a leader in place, at least not a prominent fixture in place at the top of government. so jeremy corbyn on the labor side under increasing pressure to resign his post as well. everywhere you look right now, we see political vacuums will stop francine: thank you so much. anna edwards there in front of number 10 downing street. direction the pound seems to be heading. which is down. let us get the board up. i think it is at 133. greg's i think the pressure is downwards for sure. i think a move to 115 is unlikely at this time partly because you have to look at the currency. the $. ?ill the u.s. like it so much

with the u.s. rates is still very low although the fed is hiking rates. i think for it to go down towards 115 you really do need the u.s. aside to be much more favorable. most pension to research at no. and i quote, divorce is quicker then remarriage. really? tell me how the divorce and remarriage we will see here works? now that the baby is smarter. [laughter] you have to invoke article 50. once you do that, it takes two years for u.k. to leave the eu. but the process to renegotiate all the new trade agreements within the various countries our most likely take for five years.

so the divorce as two years, the remarriage is five years, and that creates this high time of uncertainty where once the u.k. leaves the year you then have a three-year. of uncertainty about what the new trade agreements are which is a thing really weighing on the market as a whole. tom: and i don't want to give you the drama of sterling being like the bank if not but nevertheless, british pound in search of a bid this morning. we will continue with this important monday for the united kingdom. part of that in the commodities markets. be joined by the energy administration. from london and washington, this is bloomberg surveillance.

♪ francine: this is a special bloomberg surveillance. i am francine lacqua in london. we are talking brexit ending u.s. politics. the u.s. bankers are in portugal for the annual form. mark carney was due to appear but it is suggested he will not appear. paul gordon that joins us from portugal. he is head of global strategy. paul, thank you for joining us. mark carney will not be at the meeting. i imagine all the talk will be on brexit and how they can mitigate effects from this uncertainty. -- paul: a guess.

a series of academic topics. on financial and academic architecture. they'd knowledge the exit discussion on the sideline will affect. mario draghi will give welcoming remarks this evening. speechwill give a dinner as well. draghi's keynote speech will be tomorrow morning. you can expect them to do what is needed to save financial and economic stability. tom: business as usual is what you just described. when does the panic set in and which set of banks are the most focused on? the ecb ofey here to course in particular is to just make sure they can you back to their inflation goal. just under 2%. that is effectively their main

mandate. easily the most important, financial stability coming second as well. that is to ensure that funding does not dry up for weaker inks theh means the one in -- ones in the southern european nations. but there is weakness across the whole sector, including germany. they have to make sure the banks are fine and the same will be ok bethe u.k. and it should because ill liquidity is sloshing around the euro area. that is not the immediate problem. francine: what will sell out? janet yellen, expecting her to say and portugal that she needs the whole operating. isthe most important forum on wednesday afternoon when draghi, yellen, and it was also supposed to be carney would be having a chart. draghi's predecessor. it now we know carney has dropped out. as far as we know, yellen will still be there.

that will be closely watched, to see what yellen will say and about this affective tightening or it has come to a halt or not. there is got to be something on the mind of central bankers. tom: tom gordon, thank you so much from portugal. i am in washington and conversations between madeleine next.ht an effective brexit. the changing of the politics in europe and america. from london. from washington, this is bloomberg surveillance. ♪

morning, everyone. francine lacqua in london. i am tom keene in washington

today. right now, the banks with a modest aid. a glimmer of hope. we will take it. really, that is the headline item. right now let's get to the first word news. taylor: british chancellor osborne is trying to raise markets. he says that contingency plans are in place to shore up the economy. >> i want to assure the british people and the global community that britain is ready to confront what the future holds for them from future of strength. governmentause the and the british people have worked hard to rebuild the british economy. we have worked systematically -- today, british has the strongest most advanced economy in the world. he admitted it would not be smooth sailing in the days ahead.

in spain, the incumbent fortified his position. in sacramento, california, 10 people were stabbed and beaten when a group of white scuffles with protesters. hillary clinton has released a new television ad blasting donald trump for his position on the price it vote. -- brexit vote. it shows the likely republican nominee at his golf course and scotland. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i am taylor breaks. this is bloomberg. much.ne: thank you so

we just had some breaking news over the last couple of seconds and minutes. the town weakening beyond the friday two-year low. you have to look at the correlation. of course, it is a different correlation with the euro. let's get back to affects and also back to politics. this is something that pours johnson wrote in the telegraph. he is really good person in the spotlight after winning this brexit vote. he has not really spoken to the people, the citizens of the u.k., that much. says, that those who voted to leave our turbine bite zaidis about -- anxieties about immigration, i do not believe that is so, i can tell you the number one issue was control, a sense that it is democracy was being undermined by the eu system. that was boris johnson.

this in about 25 different ways. first of all, why does he choose an opinion piece rather than addressing the nation in a more normal weight? what i can ask you if is a british recession unavoidable? >> i think it is unavoidable. there will likely be back to back negative quarters, which is the technical definition of a recession. there will be in effect on housing prices -- all of this a recession. it is very likely we see a recession. tom: we have been moving around on brexit on the themes of politics, investment, economics. what about america? inree joins me

washington. note.d your >> this idea that trump is definitely going to lose runs in the reality in washington, pennsylvania. i think the same voters in those states could make this a close race. willwill they do a george -- he is an esteemed conservative thinker and writer of essays for the washington post. he has worked with fox. what an uproar. he switched to being independent. is that a new trend? >> it could be. the former treasury secretary is done to think hillary. hours, bernie sanders voters are moving quickly to embrace hillary.

trump was expecting to get a lot of these voters. if he loses badly among the sanders voters, that really hurts him. francine: how does the brexit play out on the u.s. presidency? first of all, trump was in scotland on friday, but then hillary clinton slammed him for brexit into the debate. >> i think the fact that he was promoting his golf club probably did not help him. he hit on a real theme. that is the resentment against elites, i can spend establishment. as he showed endorsing his golf course, he is a flawed candidate. francine: he is the elites, is that he? i don't understand -- i understand why hillary clinton is seen as an elite, but he flies by private jet, he is not bernie sanders. >> i think he has more than two

suits. i think bernie sanders has only two suits. resonate,e seems to especially, i think, in the rust belt. tom: if you listening to his advisers? i do not perceive he is doing that. he is out tweeting a storm. within your history of covering politics, should we have candidates tweeting a storm? >> no. what you have in this country and may be in the u.k. as well is buyers remorse. i think a lot of people are feeling this is really a deeply flawed candidate. maybe some were thinking buyers remorse as well. tom: reagan was a democrat, and his work was to get disaffected

democrats and independents and pull them into the party. what you see in those key states? what is that great middle going to do? >> there is a good column this morning by fred barnes. he writes that in cold water, in 1964, there was the same mistake, not unifying the party. francine: how do you look at this? we were looking at dollar strength. how does a possible trump presidency win? trump toeral, were win, that would be negative for the dollar. just as a general rule, it affects the dollar. he has been quite vocal about

changing the u.s.'s relationship with the rest of the world. orther it is trade agreement security arrangements around the world. that goes back to how the u.s. fits into global economic system. he talks about massive trade agreements, and so on. we will continue -- markets, equities, a little deterioration right now. later this morning, a conversation with the former secretary of state. madalyn all right. ♪

francine: we are talking brexit, the referendum, and impact this .ill have on the u.k. market a little bit later on, an interview with madalyn all right. for the day.. let's look the banks. a huge beating. rds. of pressure on this is probably the asset class hit the most. they're getting attacked on all sides from shareholders possibly worrying about the cost of relocation. thursday, of course, the specter of a possible recession. onto yields, therapy driven the referendums.

you can see the heels below 1% for the first time ever. tom: and the german two-year breaking down nowhere near the lows we saw in the shock of the lease victory. nevertheless, breaking down. michael mckee is with me in washington. we have been flying around in different airplanes, surveillance rule -- alan greenspan has not been as cautious as he has been. >> he was talking about this back in march. he was talking about how we have a demographic problem, clashing with austerity governments and falling productivity. in that sense, brexit is a symptom, not a cause. we talk about falling incomes here in the united states. let's talk about what is happening in europe.

you talk about perhaps the next countries to exit. since the beginning of the euro, there has been a rise. the netherlands france not seeing any real cane and incomes either. tom: what is your question been on policy? he speaks specifically about the fed, but we have to speak about ?op pot, don't we chuckle >> >> the real question becomes how .o you convince them to do it we have an aging society in the u.s.. iny have an aging society europe. you look at france. the retirement age is going straight up. not when you're from now, this is the next 10-20 years. they will have more people

hitting retirement. there is no more money to put into equities or incomes. agingne: i like this workforce chart. it shows the need for structural reforms that are just not there. if you go back to the euro-dollar or euro-pound, how be when theyill it realize how much of a bad shape the eu economy is? when the focus starts to broaden out away from the pound, people will start to see the euro going much lower. i think we could go down to 105, if not lower. the european economy has had some nice work in q1 this year. we obviously have the banking sector -- all of the factors together will push the economy

when the focus startslower. tom: there is the market reaction and the litmus paper. looking at the 10 year yield, 10 basis points, a little bit of enthusiasm on friday. correct with us. there has to be an independence of the fed. what will be the relationship of the senate and the house with the chairman? >> there a lot of people who want to curb the fed's authority. ?om: to have a voice chuckle > >> they still have a voice, by think they will go nowhere if hillary clinton wins. if donald trump wins, they could have a life. tom: how can you tell me mr. trump has a chance of winning? a narrow electoral

college past two to 70. obviously she is the favorite, but he cannot be ruled out. tom: what we listen for from alan greenspan? do, but theyat to will not do it. how do you convince washington to actually act fiscally to go >> the idea runs into the house of representatives. they will not agree to more spending. the only other option is an across-the-board tax cut. that is nowhere near close to being imminent. francine: how much do we believe what the polls are saying? what price it fundamentally showed is the polls are fundamentally flawed. t?ll it be differe

>> it is a deeper issue. if you hold unconventional controversial views, do you want to admit that to a stranger? i think most people don't tell poll takers what they really think. tom: let's leave it there. conversations, marilyn all right and also alan greenspan. we will do that in the 9:00 hour. from washington and london, this is bloomberg surveillance. ♪

tom: good monday morning, everyone, from ours to do's and -- our studios in london and washington. right now, on this monday, a bloomberg business flash. taylor: a british airline says the brexit folk will hurt its earnings this summer. it means that easyjet's revenue will probably drop by a single digit percentage for the second half of the fiscal year.

a new study. two companies face more data debt from the inside than outside? ofe than two thirds companies reported data theft or attempts by insiders. waterrk's landmark walde for story hotel will close next summer so that the owner can tovert most of the rooms condominiums. there will still be about 300-500 hotel rooms. francine? francine: thank you so much. this is the picture for the swissie. we want to talk the yen. some people will say it will market is trying to resolve.

if you look at this chart -- this is dollar-yen. we really see it taking a leg down in the last two weeks. what are the chances it goes through 100? is it ever lower? >> there is a good chance that touches 100. we hit below the 100 mark last week. in the coming days or weeks we will once again test below 100. i think the important level will be around 95, or so. that is where we think fair value is. it depends on the pace -- it was interesting they did not intervene at the end of last date.while the swiss there was a difference there. at the last teeth meeting, the

jeff and he said that they could have justification to intervene. tom: are we so floating now that we have taken ourselves away from coordinated action? courtney action works in a fixed income space. can we not do things when things get ugly? >> i think that if we were to fromlobal contagion grexit, we could see courtney action. the way it is an fully at the moment where certain markets are affected more sharply than others, think we will see more unilateral action by other countries. the other issue is there is a higher level of difference of use on what to do right now. consistenty would be -- consensus in terms of buying

liquidity, but there is no consent on who should intervene. that underlies the problem. the campaign going on. we are little distracted. how much of treasury and state house?out of the white we all agree that jetblue is beyond confident. if he has to deal with the issues, then speak of -- if policy being run out of treasury or out of the white house ? >> i would say treasury. they are all looking at their screens, or will be. tom: excuse me, they're looking at their bloomberg. >> at their bloomberg's, that's right. you cannot rule out the fed. i think they are very anxious. francine: who has the toughest job?

i think kuroda has a very moment.t job at the it is fiscal stimulus. tom: i'm looking at this. thank you so much. do a data check. we have markets moving. i love the screen are teams of putting up. you see the 10 year yield well under 150. what do you see on your bloomberg in london? francine: i think we need to spend more time looking at the banks. we will be joined by michael moore. this goes to the heart of the brexit problem.

if they need to leave the u.k., it will be costly. you need to factor in the fact that negative interest rates will also hurt them. all of this uncertainty -- i do not know what is legal, possible, or desirable on how to deal with brexit. tom? tom: looking at the data, unicredit under two euros is really shocking for the italian banking system. on the next hour, we will be joined from the energy administration. double be in the 6:00 hour. bloomberg surveillance. ♪

morning, the

pound-sterling continues weaker. again, stronger. european banks, a very difficult morning. what really rest you it's very difficult banks? selling forbe plain the chancellor -- finally, u.s. shouldat the do. a conversation with madeleine albright and alan greenspan. we are live from washington and blended this june 27 grade i am tom keene. european eggs flat out front and center this morning. francine: you still tried to frome out the aftershocks thursday. markets across the board are little bit lower. certainly, it is the banks being hit the most.

tom: we are really watching take tick.ake -- tick by right now, first word news in new york with taylor raikes. : british prime minister david cameron addresses parliament today. he says he will leave office in october following the vote to leave the eu. he is leaving details of the british exit to his successor. boris johnson says that fears of the consequences are wildly overdone and of sites are being ignored. says contingency plans are in place to shore of the economy. butays that he stands by the uk's in a position to confront the risk. according to people familiar

with the matter, the italian $44rnment may inject million of capital into the banks. the brexit vote sparked a .elloff by italian investors the brexit food has led to turmoil in the labour party. seven members of labor have quit in protest against leadership. the roof what was prompted ty by corbyn's decision fire hillary byrne. in spain, the currently did consolidate his position in the second election in six months. voters suggest that backed away from its urgent parties at the last minute. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. this is bloomberg. tom? tom: thank you so much.

i want to get through the data check quickly. veryencies, commodities -- simply, futures, a little bit of deterioration. s&p, futures down. that is a data board, not picking up yet. futures on s&p is negative. screen, if you would. sterling, 132-77. euro-sterling as well. francine? francine: i'm really happy you looked at swissie. i want to show you what the pound is doing. you can see, dropping to levels down in february. pay her back down. i also want to show you cold. -- gold.

what is ugly is the banks. this is a picture, the quick board, barclays down 7%. deutsche bank down 6%. the banks clear that are dragging the rest of the wards. down wit what is going on? >> it is across the board on the revenue side, everything is working against the banks right now. the only thing moving down is analyst target for their share price. that is driven by fears and the concern that a lot of this is out of their control. as: i look at deutsche bank a proxy. so should think is the major thing. tell me what they do given

equity price action. >> i think he has to hammer home position and confidence in that position, given how hard it will be to sell assets in this environment morep the environment for capital. tom: who regulates the banks in europe? >> you have ecb and the bank of ofland and a couple regulatory bodies. francine: even if you have some ak banks, unlikely that you get across the board consolidation. as much asn, but not others. why? >> the shares were getting killed earlier this year for having exposure to china and

being asian focused. they are not being hit nearly as banks. the u.k. focused the u.k. exposure is a real benefit. tom: thank you very much. this will be a continuing story through the morning. he is simply the civil engineer from cornell. it is wonderful, in washington to be joined by adam sieminski. it does not begin to describe his ability to parse demand. he did this for years at osha bank and now leads the charge at iea. cut to the chase, to know what the supply dynamic is right now? >> we think there is still too much supply. we are at least half a million demand a day over what

is. that means that inventories are still building slightly. this is just on the cost of changing. we will see supply and demand cross. are the optimists supporting prices, $10 or higher. tell me about the gloom crew. >> there is always a case for something. use.ve a range that we .e use the markets between $20 and $90 per barrel. tom: what you just heard is the absolute most important thing. when you do the clock work on the price change in oil, no one has a clue. nobody has a clue. francine: that is probably a

technical term. i'm sure people will trade on the back of it. when you look at gasoline demand, it is booming. what is driving get? employment is up, unemployment is down. prices are lower. gasoline is still less than it .as last year at this time that is still a pretty good deal for consumers. car buying is up. all of that as of two improvements in gasoline conception. we are certainly seeing that in the u.s. and around the world. that is eventually what will rebalance the demand that tom was talking about. what surprises you the most about the rebalancing? how much does it have to do with much better consumption in the likes of the u.s. but also india and other emerging markets? right on. it

we have problems in nigeria. there could be problems in venezuela. that could pull oil off the market. then, we have the canadian fires up and alberta. that took a lot of oil off the market. that is beginning to take some of the excess supply of way. growing demand globally, that was virtually bring this around. tom: is russia a mystery? years ago, it was always a mystery. >> russia is suffering a bit from sanctions. supply is maintaining. that is a surprise. that is mainly because the ruble has fallen so much against the dollar and other currencies. they get dollars for what they sell them for on global markets. the cost in dealing with rubles is pretty good for russia.

francine: thank you so much. bloomberg media, i'm really looking forward to this interview. tom keene will be sitting down with alan greenspan at 9:00 in new york. then, a conversation with the former secretary of state, madeleine albright, at 10:30 in new york. ♪

tom: good morning, everyone. ,rom washington and london simply, equity futures ketchup with what we see. we have futures down. just a real fragility and nuance

bid right now. i can look anywhere on the screen and see the tournament -- deterioration. now with the bloomberg is this flash, taylor vicks. taylor: more fallout from the kurdish brexit vote. some may move operations out of the u.k.. that is according to the institute of directors. billionaire george soros was long on the pound before the brexit vote sent to currency plummeting. a spokesman said that soros did not speculate second time because of his generally bearish outlook, he could then if it after the vote. a huge chinese container ship

has been the first to go through the newly expanded panama canal. they expanded the lots, doubling the capacity. that is the bloomberg business flash. francine? francine: thank you so much. we are looking at the political fallout. george osborne says that could digitally plans -- contingency , and stressedlace there would be no immediate changes to europe. there was a cabinet meeting that started about an hour and a half ago. what are we expected to come out of that? when they all drive for the meeting, around one hour and 45 minutes ago, members of the press were shouting things like

what is the plan? do you have a plan check with the dr. much of a response. some of them have left, not all of them. around the cabinet table, to have members of the leaf campaign included in the cabinet as well. they did not have a detailed plan for us at all. big questions remain. we will hear a little more from the prime minister later on today. francine: thank you so much. of breakingttle bit news from the european union. theokesperson think that person will not resign. saying thatssion is they will discuss exit at 3:00

central european time. that is one hour before we hear from david cameron in the houses of parliament. there are a lot of things going on. politicians here are meeting and the central banks of the world, except for mark carney, i meeting in portugal. let's bring in chief economic correspondence for bloomberg news. i always like your pieces. today was especially informative. we don't actually understand the boundaries of what is legal, possible, and desirable. are we confident that the central bank, whatever happens, will take care of it? >> yet again, we are a situation where the central banks are being looked to as the first firefighters, i guess. we are now going to pivot to lower interest rates to ease the market. elsewhere, goldman sachs today,

they expect the fed to raise this year, but they are not as were before.they the central banks back on the front lines again. francine: you have these headlines and you wonder how much they really mean or they're just try to talk about brexit. they are saying that they are keeping the banking system liquidity level reasonably ample , and making sure that everything works. basically are we looking at the world right -- worldwide recession because of brexit? >> that is not the forecast of most economists. most say the world can absorb this. a forecast of the other date as this knocks off 0.3% from global gdp. in better shape than before 2008. look at china and the amount of

policies china has put in place to make its economy more resilient. the central banks have low interest rates, but the debt is in better shape. there is some sense that we are in better shape. the policymakers have a playbook for this kind of situation. the first point is to look the u.k. and see how badly it is affected. francine: thank you so much. we have full team coverage and also have paul gordon on the ground in portugal where a lot of the central banks are meeting. coming up, he is usually pretty colorful one it comes to europe. ♪

tom: the word used over the .eekend was flinty we're beginning to see flinty. the headlines coming out, i guess, out of brussels. correct me if i am wrong. no article of 50 -- they need article 50. seven minutes before the headline, there is that darling -- some of the politics within the eu right now. let's look at the breaking stories. francine was way out front of this. these are some sporting charts. go.sche bank, down they

they have rolled over and they're trying to get a new bid. worse, unicredit of italy, the same idea, but a much more fragile euro. around.been bouncing energy information administration. he has aged as we have moved back up to 40. francine was talking earlier about what it means for europe. deal, it has a big got to be. saudi arabia has got to monitor, don't they? >> sure. and the whole question about doing.ey will end up

so far, the saudi's are saying the only thing that will work is a market solution. the brexit issue calls into question how strong demand will be the rest of 2016 and 2017. to thew do you respond people who say look at all of the tankers off of singapore, off of houston. >> there has been a large growth in crude oil inventories around the world. even product in the toys are higher. they will begin to draw on those inventories. still, inventories have kept growing. francine: how much do we understand about how much oil policy will change under the new minister? the new minister and the new

government has been pretty public about what their view is. forceslieve that market are what have to do that rebalancing. policy.the change in in the past, they had a different view of things. tom: look at what americans have then through. get a lesson from ?his >> i think one of the questions and lift meanr consumption? one istom line is no really sure it will increase

consumption. francine: thank you so much. adam sieminski there was some great insight into the price of andand the strength weakness of the global economy, depending on how you sit on it. coming up, an exclusive .nterview he was finance minister of france. the most optimistic politician i have seen here in europe. can he really say that europe can stay together after the brexit for. we will also be talking about the banks. ♪

♪ tom: good morning, everyone.

as we consider the markets, the banking stocks, the analyst . let's get of worthy to our first news. osborne says they contingency plans are in place to shore up the economy. >> i want to reassure the british people and the global community that britain is ready to confront what the future holds for us from a position of strength during that is because, in the last six years, the government and the british people have worked hard to rebuild the british economy. we've worked systematically through a plan that can day -- that today means britain has the advanced major economy in the world. taylor: it will not be plain sailing the days ahead.

i've spokesman for angela merkel says there will not be informal talks was britain. many european leaders want it done sooner. pollsters.rised -- voters bought ended his call not to jeopardize spain's economy. tom: equities deteriorating, futures -12. we now have down futures -100. i don't want to make a big deal about it but the vectors in the wrong direction, seeing german yields a little soggy as well as their u.s. 10 year.

when we go to fiscal analysis in washington, we go to stand: dirk. we need another date -- stand colander. we need another update. colander, let me cut to the chase. everyone wants the government to act. about everybody wanting a him tom: janet yellen is exhausted. stan: it's not going to happen. the congress is so frozen, ,articularly on fiscal policy it's going to take a crisis of some kind, and economic crisis in the u.s. of sufficient quality. tom: we have a budget success. budget to gdp is in great shape. wednesday budget crisis that

makes congress act -- when is the budget crisis that makes fungus act? stan: it's going to be an economic crisis that gets congress to act. the budget doesn't start to be a real issue again until 2020, maybe a little bit after that. idea is the the politics of a republican house, republicans senate, the this, democrat that spirit does stan collendar care? stan: it will only need by one or two or three seats. there will be a filibuster on everything. look at the budget right now and the plug-ins that go in. any belief in the plug-ins that going to the estimating our budget?

what are they, 3%? stan: may be. they may go down a little. 2.5% to 3%. depending on the numbers you look at them interest rates are expected to fall. we will have a variety of applications. summit -- of implications. trump has a dialogue of a budget debate of another time and place. maybe it is part of the seething resentment that greg spoke of. does mr. trump have something that we need to be frugal, need to be austere? stan: i think the seething resentment that greg talked about is reborn i getting the bets -- the benefits they want. you get people on medicare, medicaid, social security, federal employees who are getting paid. -- peoplentractors

getting tax breaks and a lot of people think they are not getting their fair share. tom: sort of like eu people getting eu support and then voting leave. future isnote the -12. francine: tom, i know you have to go because you have a special radio show. i'm looking forward to your two interviews literature today with michael mckean and madeleine albright. european commissioners are gathering for the first median -- first meeting. let's head straight to brussels. ryan: it is a very rainy and busy day here in brussels. it is a realtor that the commissioner has agreed to join us to talk about the many issues surrounding brexit. i want to begin with the

economy. do you think brexit could push europe into a recession? >> now, i don't think so. i think we have the tools to address the situation. phone,friday meeting by we know the economy is solid in and that we have all the tools, especially with the central banks in order to ensure financial stability, to reassure the markets and to bring liquidity if necessary. there was a shock on friday. there is still uncertainty that has to be addressed. no long-term crisis. it is not a crash in the markets. so everybody can be reassured that the situation will be taken

seriously and well handled. brian: how much do you think brexit will cost eurozone gdp? pierre moscovici: nobody exactly knows. i think it can be limited. if we are capable first of procedurete a strong as fast as possible, as well as negotiate the conditions of the brexit. because today and for the time being, great britain is a member of the european union. and also defining a future relation with great britain outside the eu, of course, a european country, a very strong --tner and always wants always was. i think time is of the essence. really, i know there are some 15,tes about that, article

which is the procedures should be lost as soon as possible. ryan: which is an tuesday or even october. it's december. there are some flexibility. pierre moscovici: going quickly is the best way to avoid any kind of uncertainty. you know the economy hates uncertainty. so if you want to create predictability, which is much better for all of us, if you want to reduce any kind of problem, economic problems linked to that important political decision, let's not waste time. i think that we should not wait for too long. ryan: under what conditions do you see the u.k. maintaining access to the single market? pierre moscovici: it's too early to say that. yet even opened any kind of procedure for negotiations. when the negotiations are open, it will take some time, two

years at most. maybe more. someybe more if there is -- that's a moment. let's not speculate for the future. again come in the meantime, great britain and the u.k. is a member of the european union. question.more in these negotiations, do you think that banks are currently in u.k., and london, in the city of london, do you think they should maintain passport he writes? is that what you would like to -- -- test porting passportting rights? commissioner moscovici: we need to sue things -- we need to do things timely, very clear, orderly and but also swiftly and quickly. ryan: a lot of people criticizing jean-claude juncker

's handling of the brexit. commissioner moscovici: this is completely unfair. we did not want to enter into the debate. we were restrained. we were asked not to intervene too much. i can imagine if the same issue was there and a commissioner said every day that we want britain in, people would have said that stupid commission intervened too much and britain has to resign. i think they expressed themselves in the right moment, in the right way. ryan: thank you for your time. good luck at that first meeting customer exit of the european commission. thanks so much, ryan. it was a good interview. i was expecting him to be the utmost politician and be positive and that is exactly what he did. he was saying that the brexit situation will be very well

handled, although he won't negotiate with the u.k. until they declare article 15. he said this should be launched as soon as possible. i wonder if he is looking at the markets. the big question for pound traders may have been answered. but the outlook for the currency is much murkier. all bloomberg media, we sat down with the former fed chair alan greenspan. tom keene and michael mckee will be bringing that up. at 10:30eine albright a.m. new york. ♪

francine: you are watching bloomberg "surveillance."

understand, by looking at the website, that the ecb has removed the fed chair janet yellen from the schedule. we found out that mark carney will probably not be joining the forum because he likes staying home right here in the u.k. to deal with any hospital brexit fallout. this was meant to be a forum where ecb officials with other central bankers had a laid-back event where they discussed the economics and theories. now let's get straight to the bloomberg business flash. taylor: it is the most hated airline in america. spirit airlines wants to fix one of the greatest grapes -- gripes a gets from customers. only two thirds of airline flights make it to the gate on time. new york's landmark waldorf-astoria hotel will close next sprain so its new owner can

convert most of the rooms to accommodate -- to condominiums. when the waldorf eventually reopens, there will still be about 300 to 500 hotel rooms. british banks are being downgraded in the wake of the brexit vote. jefferies has cut barclays to underperform and rbs to hold and bank of america maryland's double downgraded lloyds from buy to underperform -- and take downgraded lloyds from buy to underperform. francine: jane, good to have you here. we have seen this huge leg 132.02.ow it is lower than the record low last friday. jane: we have extended those losses. we just reached the low here.

if you look at the political situation, it is chaos. chaos and the opposition party. and we know fiscal uncertainty is that for the pound. has a big deficit. that means the pound is more vulnerable, if you like. we need those investments. the downside has opened up. it depends on the political the -- political environment. as long as we have this political chasm, if you like, uncertainty is open for the pound. francine: at the moment, we still don't implicate -- still don't understand the applications. jane: something we do need is a leader, a leader to take us through the exit, a competent leader to take us through what could be a messy divorce.

and we don't even have that. there is a huge amount of uncertainty. very likely we will see business confidence lower. that we seeod is investment low and that means job krishan will be lower. in the mean what -- in the meanwhile, there are they? marks. -- big question 132.17, can we touch 1/15? -- 115? jane: many people will have got used to this. in terms of the real money accounts come in terms of corporate, they are not in the market right now can they have heads to themselves and taken their positions and sat back in last week -- setback. last week, head of the referendum, any were kept out.

they will be coming back in the next few days, the next few weeks. given the cloud of uncertainty that exists, it doesn't look good for sterling. francine: it doesn't look for yen or swiss. what is your favorite pairing? jane: both of these currencies are favored safe havens. they are likely to be will supported. house -- on friday, we have seen intervention. that's going to be a really big question for the next few months. it will be difficult. we know the u.s. treasury does not agree with intervention. certainly, if we see continued volatility in the markets, they may have an excuse. francine: thank you so much. we will talk with some of the emerging-market currencies. european markets now a little bit more under pressure than they were when they started the session. u.k.ftershocks of the wrote to leave the eu are starting to reverberate across

financial markets. political turmoil and the pound extending its selloff. european equities overall drop-off in levels. look at barclays. it was halted briefly. the same thing for rbs. these banks are being downgraded. back in a couple of minutes. ♪

♪ francine: the brexit vote impacting the town, currently at 132 .10. we have seen a lot of turmoil politically and it is impacting the pound. it's selloff. here's the picture for the yen. some saying it may touch 95 coming up shortly, it is bloomberg ." david: we have three favorites coming up. the ceo of wpp. we will talk about where we go from here as far as business goes. we will also be joined by denny blanche far -- danny bench flower.

and we will have alan greenspan, former fed chair interviewed by tom keene and mike mckee. francine: after a weekend of political turmoil here in the u.k., what comes next? know leaders across the european continent are meeting in berlin can summer meeting in brussels. and we are expecting to hear from david cameron a little later on. welcome to the program. when you look at leadership, where it is it -- where is it coming from? a lot -- aside from nicholas turgeon, i cannot see anyone who is leading anything. >> a gentleman who provided some leadership. francine: he is not a politician. >> that is absolutely right. there is no leadership in brussels and less in westminster

and we will not see much of that coming anytime soon. things are looking more come. in brussels, at the end of the day, it depends on what merkel will decide later in the day. francine: what could be the best possible income? -- possible outcome? wolfango they should: try to speed up the process as soon as they can. we know on average it takes three months for the conservative party to nominate a new leader. above all, the leaders of the new campaign should get touch with reality. stillclear they are living in a -- world. francine: because they weren't expecting a win for brexit? what theyi don't know were expecting. but clearly, they did not have a plan for that. it's clear that they raise the expectation from immigration to

access the single market. now that they are trying to work back from there and it is difficult. francine: what do we need to see the down stop falling? jane: we still have uncertainty about how long brazil take. this is more than just the u.k.. there is a huge amount of political uncertainty in europe. and what are they going to do to stop anti-eu sentiment. more anti-eu sentiment in france, italy, etc. the ibex was the only market that was gaining because it seems that reason prevailed in spain. i wonder how much that was imposed by brexit. wolfango: it is difficult to say. it was last-minute. i think it is far fletcher -- it willhed to say that change its mind in a significant way. if the u.k. takes a huge amount of pain because of this

decision, lots of other accusing ye -- in the uae -- in that -- in the eu will look at this. merkel becan angela the leader for europe? have important elections next year for germany and france. this is where some of the legacy of this brexit will be played out in europe. francine: thanks much. later today, across all the bloomberg platforms, tom keene and michael mckee will sit down with alan greenspan at 9:00 a.m. in new york. i'm looking for to hearing from madeleine albright said that is a little bit later on today. ♪

brexit aftershocks. fallout continues to reverberate across the market. stephanie: european bank stocks and use lenders among the biggest losers as italy is weighing a $44 billion bank investment. jonathan: johnny from the city of london. the markets reopened. they resume the slide. after a weekend of digesting, a lot of politics. david: yeah, it doesn't look like all the time off did not enough -- did not do enough to calm investment jitters.