president trump's proposed rollback of the dodd frank act is also on the agenda. about stanleynd what he said over the weekend. reporter: he said something that is echoing other beneficial. we will get the same kind of remark on janet yellen on tuesday and wednesday. aboutportance for the fed the fiscal uncertainty. >> i don't think anybody knows what is going to come out of the process which involves both the administration and the congress. on fiscal policy any variety of other things. at the moment, we are going strictly according to what we see as our responsibility according to the law. betty: according to the law, the fed has a dual mandate. it has to ensure that inflation does not get out of hand, and it has to make sure that jobs grow. you're looking at the bloomberg chart now. unemployment is down to 4.8%. this is close to the most optimistic fed targets for the year 2017. is much closere to the 2% target than it was. stanley fischer was also asked about donald trump wanting to roll it back. that is one of the main pillars of dodd-frank, reducing capital requirements.

manus: thank you for joining us and have a great conference at the morgan stanley conference. franks the head of multi-assets portfolio management at union investment private funds. we are minutes away from the start of the trading day, gold on the move and equities set for a lower opening. we will tell you some of the main stocks. and we will nip through some of the numbers. details next. this is bloomberg. ♪ manus: 7:55 a.m. in london, 8:55 turning and on turnin the mainland. we have some estimates on our map. billion -- $150 billion, barclays estimate ensured it could be $130 billion. intax profit up, the highest nine years and barclays also on track to deliver $3 billion pretax profit. it is a beautiful day. summer is back. ♪ manus: less than 60 seconds to go until the start of castrating. mr. putin and mr. moon are speaking. putin has denied he is going to recognize north korea in terms of their position. he has continued the diplomatic efforts on north korea. 7:44 is what time that hits. they condemn the north korea nuclear test. european equities are set for a lower opening.

frank. we heard from stanley fischer over the weekend. we have an update on stronger growth.umbers tell you? >> if i am the governor, i can still say that confidence moved forward -- see that confidence has moved forward. into the bloomberg chart. gdp.n look at japan what we had here was peace in exports, capital spending, expansion -- that turquoise line is japan's gdp. it is not growing as fast. our tracker suggests that we could see more deceleration. let's look at what happened in the fourth quarter. consumer spending unchanged. i think the governor would like to see people pick up their spending, but there is still a little more uncertainty about the future. business spending up a full percent. these are quarter on quarter numbers, not yearly. exports were- net up 2.2%. is the japanese economy has grown four quarters in a row. a weak ego -- and then there is a weak yen. with this much growth, no chance of easing. at these weekend talks, shinzo abe and donald trump are knowledge aimed that japan is going to maintain its monetary policy easing commitment. no pushing back a

solomon stood out, he was pretty frank saying expect more cuts, don't expect big bonuses. and morgan stanleyith 1600 job cuts. that is a reversal from 2021 when banks were falling over themselves to hire. so the mood has shifted. tom: interesting from david solomon, given his team expects 35% chance of recession, the last i saw on that estimate. but he thinks it is baked in. and we heard from bernstein as well, recession concerns leading to job cuts. we've talked about this before, it is not the end of layoffs. >> the message is 2023 is looking grim. the bank of america message was nuanced, we are trying to manage our headcount. read between the lines, expect cuts. francine: in 2023, are the markets impacted by the economy or is it underlying with you concerns -- underlying liquidity concerns? >> in the u.k., it feels like you're already there but globally speaking, that seems to be what's happening. analysts were saying in terms of timeframe, expected to be volatile the next few months until this gets priced in. early next year will be still pretty painful. tom: that is the lookahead as we

matthew harrison, morgan stanley's head of biotech research. up next, we speak to frankino from connect one bank about the fed decision tomorrow and his outlook on interest rates. this is bloomberg. ♪ matt: this is "bloomberg markets ." the fomc began its meeting today. investors are awaiting tomorrow's decision in the fed's timeline for tapering. joining us to discuss is frank sorrentino from connect one bank, a leading commercial u.s. regional bank. thanks for your time this afternoon. what do you expect from the fed and what would surprise you? frank: great to be back with you, matt and amanda. what would surprise me? a rate increase would surprise me. i do think the fed has been data-driven. i think the data is starting to focus on more tapering, speeding up the interest rate hikes, maybe earlier four 2022. that is pretty much the consensus today. the liquidity in the market today has to be soaked up a bit. there is a lot of money chasing assets which is creating inflation. amanda: one of the reasons it is so helpful to talk to an organization like yours is you are o

stanley. they had been eliminated or heavily regulated out following dodd-frank and the volcker rule.e partnered with one saw a large l.p.'s and interesting and unique opportunity to take advantage of that dislocation. and tech ops was born. carol: what are the opportunities for you folks? are you buying new companies to add to the existing portfolio, what is the environment like? >> we are seeing a number of market dislocations across the background. one of the interesting things is that we have a flexible investment mandate. we can invest in any industry or any part of the capital structure. we are finding unique opportunities. not looking at common equity or debt, but looking at preferred or other heavily structured securities. that provide us downside protection. carol: does it matter the industry? >> across the board. ason: one of the flexibility to have is that you have is these partnerships with investors that are different, right? >> we have separately managed accounts which are slightly different than the traditional equity funds but you are right. we can hold for a longer du

one of the things we like about dodd-frank is it put everybody under the tent. jpmorgan, morgan stanleyamerica, we are all in the same regulatory scheme. there might be nuances. but shadow banking, by definition, is outside that. that can do two things. charlie: explain what shadow banking is. hedge funds -- brian: hedge funds, nonregulated lenders, hov's, things that tend to come and go. in times of stress, that causes disruption. if is very small, sort of who cares? if it's bigger, it can have a bigger impact. before the crisis in the mortgage market, most mortgage companies were not regulated. a big one being countrywide which we had to clean up. that ended up disrupting the whole business world. in the securities firm, same thing. we think there is too much going on outside and it needs to be brought back into the tent. that needs to be done carefully because some of the reason why it's out there is because the rules have to be amended to allow it to come back in. charlie: donald trump campaigned as a voice for people who did not have a voice. primarily. and he campaigned against th

stanley fischer in the u.k. over the weekend. he said he hopes the dodd-frankn't be repealed, and reducing capital requirements for big banks with make the banking system less safe. he also said uncertainty over the new administration's fiscal plans are clouding the fed's view of the economy. >> i don't think anybody quite knows what will come out of the process, which involves the administration and the congress in deciding on fiscal policy and a variety of other things, so at the moment, we are going what we according to see as our responsibility according to the law. though, he said the fed is nearly there when it comes to meeting its dual mandate of boosting inflation and full employment. he says more rate hikes are probably on the way. janet yellen also expected to defend the dodd-frank bank reform act as essential to preventing the next financial crisis and express confidence the economy and inflation are moving ahead. the big question for markets is how many rate hikes this year. consensus was for three in 2017. our bloomberg intelligence team sees only

frank bank reform act is also taking center stage. the questions janet yellen may be asked by converse -- congress were asked of stanley fischer at his e u.k. over the weekend. he says he hopes the dodd-frank act were not the repealed, making the banking system less safe. said uncertainty over fiscal plans are clouding the fed's view of the economy. >> i don't think anybody quite knows what will come out of the process, which involves both the administration and the congress in deciding on fiscal policy and a variety of other things, so at the moment, we are going strictly according to what we see as a responsibility according to the law. iseven so, he said the fed nearly there when it comes to meeting its dual mandate of boosting inflation and reducing unemployment and a saying more rate hikes are probably on the way. janet yellen is also expected to defend the dodd frank bank reform act as to essential to preventing the next financial crisis and expressed confidence that the economy and inflation are both moving ahead. the big question is how many rate hikes this year. t plot consensus was for three and 2017. our bloomberg intellige

frank. if they were not in place, would morgan stanley and banks like them because it in? 't think so. i think that is overstating it. what dodd-frank did was to over capitalized the banking system. has that taken liquidity out of the market? has it contributed to volatility? i'm sure it has. visceral, animal reaction to whether the world will be a safe place from an economic perspective. stephanie: if more investors are scared, how could that affect your business? james: it remains a phenomenal business. our revenues and profits are up 12%.e present -- up by dailyction activity on a basis drops during times of stress but at the same time we are doing other things to grow the business with banks and lending processes. erik: all of the european banks appear to be trying to do what morgan stanley is doing. toling back on fixed income various degrees, going big in equities and investment banking. what is got going to mean? in the business of setting prices in fixed income is going to be left with a smaller -- sure that itt as is as straightforward as that. talk aboutt to count

getting a change to dodd-frank through congress is pretty hard at this point. scarlet: we saw morgan stanleypond to the changing regulatory environment by saying the new rules main fixed income trading won't be as profitable or as big as it used to be. if there is a deregulation effort in washington, can you think of any specific regulation reversals that would prompt morgan stanley to rebuild its shrinking fixed income business? brennan: i don't think i count on any significant strategic change of direction for morgan stanley. there are two primary businesses -- they are pretty evenly divided. both management makes up 50% of earnings. -- wealth management. securities is the other half. now that morgan stanley has fictabilized, we've seen revenues averaging 1.5 billion per quarter. it definitely has given people confidence that that business has stabilized and it's generating at least enough of a revenue base in order to create some scale for ms and allow them to be relevant in those business lines. when they move forward, they can think about the way they want to streamline their business t

jonathan: with us now from new york is betsy graseck, morgan stanley analyst. for a dodd-frankt do you think they are? i don't know exactly what will transpire here with dodd-frank. however, as a bank analyst, the way i think through it is, let's look at what some of the suggestions are from the existing house blueprint. you have that from the house financial services committee. when i read through things like is that wei expect will likely see a continuation of a path that the fed started a few months back, which is reducing some of the restrictions on smaller banks. jonathan: on the back of the rally that we have seen, does it have legs going into 2017? the idea is we get a steeper curve, softer regulation. is there enough for the rally to continue? >> it's a great question. we are overweight large-cap thanks at morgan stanley, stocks in particular we like our monte centers -- money centers, credit card names, b of a, citi, wells fargo. the reason why we are overweight and not calling it done here is for several reasons. number 1, 10 look at the rally in the stocks since the

frank and the volcker rule. if they were not in place, would banks like morgan stanley be cushioning a lot of this, protecting customersay? james: i don't think so. i think that is overstating it. what dodd-frank essentially did is recapitalize the banking system. by recapitalizing the banking system, you take away the risk of a run of liquidity. as that taken liquidity out of the market and contributed to volatility? i'm sure it has come stephanie, but more on the margin. this is a more visceral reaction to is the world going to be a safe place over the next few years from -- erik: all of the european banks appear to be trying to do what morgan stanley is doing. scaling back fixed income to varying degrees, but scaling back nonetheless, going big in investment banking, big in equities. what is that going to mean? our investment banking and equities increasingly competitive, and the business of setting prices and fixed-income will be left to a small oligopoly of big universal banks? james: they are all reassessing the business model given the changes to the industry. this industry was operating with returns of 20-25% p

jpmorgan, morgan stanley, goldman sachs all trading hybrid it has to do with president trump signing 2 executive orders, want to repeal dodd-frank the second having to do with a delay of the fiduciary rule, something intended to protect investors and their retirement accounts. the reason work and sally m goldman sachs could be up more -- morgan stanley and goldman sachs could be up more, they could benefit from the potential delay. will it last, the? 5782, this is the xlf over the last five years. we see a very nice uptrend. in blue, the 200-day moving average. for the most part it is rising good right now the xlf is 50% above the moving average, the most since 2013. we can see that this etf has had a pattern of consolidating back down to the moving average and when it has been above it, we could see the financial sector get back some of the gains in the weeks ahead. finally, one market that stands out to us, the dollar. the bloomberg dollar index is on pace for the sixth weekly decline in a row, the longest-such stretch since 2010. really big move for currency. this could reflect the fact that president trump has said he favors

frank goes too far, yes. i don't think we're there yet. one of the reasons people are complaining about that is that they are worried that could happen. amanda: that was my interview with stanleyischer. coming up, -- after millionup, dollar penalties big traders are being watched more closely and how banks are cracking down with compliance next. this is bloomberg. ♪ shery: -- amanda: this is bloomberg markets. shery: after global scandal and a 14 million dollar fine, banks are cracking down and taking no chances with compliance. some currency traders are feeling the heat and watching their language. we have reported here with this a story. how are they snooping? >> they are snooping in a number of ways, traders are being watched all the time after the scandal, emails, chats, phone calls, they are all being monitored by surveillance software. it's sophisticated that monitors for keywords, anything that talk ondicate let's private phones, or collusive behavior. they are triangulating this with trading records, if you trade at a strange time when the pricing is off, even making too much money, that could be a red flag. amanda: increasing surveillance make sense in the wake of tho

frank , the implementation is based on the interpretation. i will give you one idea -- giving credit to the ceo of morgan stanley. we don't always see i do i put on this, i agree. when it comes to the bank stress tests, continue them on the banks come up look at what happens if a crisis like a situation occurs and only after the results are given back to the banks should banks submit capital plan. right now, it is a roll the dice exercise. changes thatctical i think republicans and democrats can agree on. vonnie: and those impact european banks as well. focusi want to bring the to here as credit suisse today is the big story here. raising capital and following deutsche bank and unicredit. would you say, from where you are sitting, that european banks are addressing their capital related issues? mike: they are dressing the capital related issues eight years after the u.s. banks addressed them in 2009. the swiss banks have more capital than any bank in the equity towith the assets, they are far below where the u.s. banks are and for the european banks as a whole, that hurts. capital markets have been losing shares

traditional buyers of those assets were like the products of which morgan stanley have been sort of eliminated or out following ed dodd frank. blackstone at that point in time, partnering with one of our saw an interesting and unique opportunity to take thus, it of that and was born. >> in this environment today what are the opportunities four folks? companies to new add to the existing portfolio? what's the environment like? >> it's interesting to note that actually looks at a number of different mart locations. we're seeing things, looking at smaller growth, we're also eeing a lot of interesting opportunities looking at preferred equity in different phases of the capital structure differentiating and unique. we're actually seeing a number dislocations art across the spectrum. one unique thing is we have a ery flexible investment mandate. >> you can go a lot of different places? >> exactly. we can invest in any part of the capital structure. we're finding unique opportunities, not necessarily equity or at mon debt but really looking at sort of preferred or other very structured securities to provide us downside protection.

he ordered a review of dodd-frank and put a halt to the fiduciary rule implemented by the department of labor. that day, goldman sachs and morgan stanleymore than any other bank. what is the market telling us? davide: two things. the first, in u.s. financials we are pricing basically the fed hike rates, that donald trump will bring that regulation, and we go back to what i would call semi-cowboy days. i think the fiduciary trust root is key -- route is key. when you go to a pharmaceutical shop, you want to make sure the pill they sell you does what it says. when people trade with them, they need to have fiduciary trust. i think the fed, the regulatory side will fight with donald trump. that does not mean that regulation cannot be reined back in that area. there has been too much capital put on sme loans. in america, if you do not have a 755 goes for you cannot bank with one of the top -- fica score, you cannot bank with one of the top institutions. erik: what is the bottom line, these banks are overvalued? davide: i think upside from here is very limited. erik: fully priced? davide: fully priced around that . this is not a science but

stanley head of research. would do retail banks want to hear from the federal reserve when it comes to monetary policy? connectone bank, frankorrentinoi, shares his insights. the year of the birdie. golf is the perfect activity for unprecedented times. we talked to david love iii, new pga captain, about this season in an era of covid. let's check the markets. stocks not doing a whole lot. s&p 500 is down 1/10 of a percent. lots of talk about the dollar as we have a new treasury secretary. a female for the first time in u.s. history. janet yellen, you all know her. the 10 year yield is down a basis point or two. just want to point to gamestop because it was halted again. back trading up 31%. as governments around the world scramble to boost their programs to stop the spread of mutations of covid-19, moderna's ceo tells bloomberg, do not fear. >> the south africa strain has a high development, higher than those naturally infected, so we believe it is protected right now. vonnie: joining us as matthew harrison, head of biotech industry research at morgan stanley who can give us context on those comments. what should we read fro

financial crisis in dodd-frank and all of that, there is a reason for the world at large not happy with banks and nonbanks i became bengs. morgan stacks, go -- -- goldman sachs, morgan stanley. many go through the pandemic in the banking stands up and stabilizes the economy, it goes through the regional banking crisis in the banking system stabilizes and you keep adding capital and critically -- and liquidity, you think, we are sources. the american bank industry is really a source of strength. the pendulum kept swinging. the reason it had swung, have stopped. to our industry would say, why do we have 20% more capital than we did during the pandemic, the risk isn't the same and by mathematical calculations. david: when people talk about the federal reserve, they wonder whether the fed will increase interest rates or decrease interest rates. but in the banking committee you are often worried about the stress test. you think the fed has pushed stress tests to too tough a limit on banks or are you ok with the current stress test? brian: the stress tests are publicly available and i think the first one was 2010 and then picked up to 112, so every year you could see this report

stanley with 4%. the biggest banks are on track to post their best trading year since the onset of the dodd-frank era.ail sales likely grew moderately in september as consumers in the u.s. contended with high finance cost and elevated uncertainty ahead of that presidential election. valerie, we were listening to him talking about the relative strength of the u.s. economy. is that expected to be reiterated today with the data with the retail sales? >> it's been light on the data calendar but the big one is retail sales for that reason. he gives us a glimpse into the third-quarter gdp, mostly because of this control group segment of retail sales. that is a direct feeder into gdp so the markets will have their eyes on that today. it's expected to come in the same as prior months so have your eye on that. it will give us a better reflection of where third-quarter gdp for the u.s. is heading. the atlanta fed's gdp is a real-time indicator of four where gps tracking for the third quarter. it has crept higher in the last few weeks. now sitting at 3.2% for the u.s. for the third quarter. that is the u.s. grow

condition but the most expensive stamp we have ever sold at stanley gibbons was just over half a million pounds. a terrible looking thing. stamped, frankered the because there are only seven in the world it has that -- anna: rarity. guest: exactly. mark: so there are three of these in the world? guest: this is a great example where there are only three in the world, a queen owns two and one of our clients owns the other. mark: what is it and why is it special? guest: in the 1970's it was worth 13 p at face value but one of the stands has lost its face value so therefore it becomes a way of making money through other people's mistakes. it is an error stamp and should not exist, all the rest were destroyed and now it is one of three. anna: is this a slightly eccentric british affair or a global is this? -- business? where is a geographical focus? guest: u.s. is the second biggest market and we have offices in hong kong and singapore. chairman mao did us a great favor, he banned stamp collecting as being bourgeois so the chinese seven coming back not just to collecting that investing in rare tangible assets. anna: and more since the finan

frank holmes. follow the bank of japan and moved to negative interest rates? we have stanleyg that it can be effective. how actively should you be investing during volatile markets? according to one strategist at black rock, finding volatility is the perfect chance for managers to differentiate themselves. how long will prices last? the largest energy traders says that it could persist for a decade. ♪ back to "bloomberg markets." i'm alix steel. i want to look at the sectors i wantocusing --julie: to look at the sectors here. materials is down the most in percentage terms, but financials are down the can and neck with it. more heavily weighted, a big part of the story of the declines today. big cap banks are helping to lead some of these declines, as they have been in recent days and there are a number of different reasons why financials have been underperforming. take your pick, we got the exposure of these companies to debt from the oil and gas sector. big cap banks, you will see them pulling back today. that's another of the reasons, with what we are seeing happening to th

wire analysts like morgan stanley not saying there is a legitimate bid and we are still looking for a future in social media. why are people not taking that seriously? frank: bytedance has been playing out there legal strategy and it is coming to an end. caroline: has it been a good legal strategy from your perspective? frank: from the vantage point of looking at the legislation and how it is passed, strong bipartisan legislation, or a real national security risk. as i say it is coming to an end. now that that path is closing down on them, now they are confronted with january 19. we are talking about nine days. something has to give. either it will be shut down or there will be a transaction. that is why we put a formal offer in place. there is enough time to process that and they hope -- and we hope they do because we want to see tiktok stay alive. we do not want to see a band or shut down, just like president-elect trump does not. caroline: we can talk about president-elect trump and what january 20 means for all of this in their quest -- the request he has made from the supreme court to delay. frank: i think the legislation will operate. it is a hard a

frank. the mandatory minimum that the reserve had put out is 4%. as we go down, morgan stanleys at the bottom here, coming in at 4.9% against regulatory minimums of 4% will stop -- the regulatory minimum of 4%. they still are above the minimum, but as you can see they are flighted yellow, indicating that they are just a little too close to comfort. let's take a look at what is happening with foreign banks as well. they are doing better in terms of the range. deutsche bank coming in at 12.2 percent against the regulatory minimum of 4%. across the board, good, but a couple under scrutiny. the first ofis is a two-phase process, right? tell us what comes next. ramy: this comes up against the dodd frank act, but the next phrase -- phase is the cca are, comprehensive analysis and review, and these tests will tell us if these 33 banks have enough money to share dividends toout shareholders and buy back shares. according to analyst estimates, if they pass with flying colors, the top six banks could shell out $60 billion. ramy. thank you so much, still ahead, stairway suit. led zeppelin

stanley's ceo james gorman made bold predictions branchesitional bank will disappear and cold, hard cash, you will not need it anymore. he writes -- morning for perspective is connect one bank ceo frankorrentino. it is one of the largest banks in new jersey. by the way, i live in new jersey. >> we have a branch right near you. >> i know you do. keep it open. >> and you will keep it open. about jameseel gorman same branches like yours will turn into coffee shops, people will sit around discussing things? >> there is a difference between a worldwide enterprise and a community bank. our business owners want to speak to a decision-maker, talk to us about this plant. it is more than just about making a deposit, which i think will change over time. technology is changing the playing field. james gorman said everyone -- mobile phones and inc. and banks will be in the pocket. yous a business owner, if are making a big decision, you'll want to sit across the table from a banker. >> big banks would say they could serve that hurt this. -- purpose. >> they did not have a connection in a community like a community bank has. while the number of community banks are shrinking, and the smaller banks

historically, the traders at hadman and morgan stanley been -- and they took a large part of the bonus pool. now investment bankers say it is our turn. dodd frank not been great. we should have a greater piece of the bonus pool pie. we are seeing those fights go on quite bristly -- vigorously inside goldman. much.nk you so happy new year to you. >> same to you. >> sparkly jewels. >> just for you, erik. coming up, what is the connection between jobless benefits and the unemployed rate? we maybe it would to find out now that congress has allowed benefits for the long-term unemployed run out. ♪ >> as the ball drops tonight on the east coast, more than 50 federal tax breaks will expire as congress failed to extend them into 2014. has been looking over the list and has the details. i know that my daily train ticket commute is on their. >> the subsidy, the break for employers offered benefits on travel and transit will drop as of midnight tonight. it is about $240. it will gone down to about $130. or do you curse -- for new yorkers, this is a huge deal. it is not just an individual thing. it has a big impact on big business, which is why their lobbyi

frank, they compared it to y2k comparing it with the bulking up. perhaps there would be a little bit of a reprieve when things went into place. alix: jp and morgan stanleyle. we were waiting for city to see if they had any headcount information. does that say anything to us? alison: i think the trend speaks a lot to technology, especially for bank of america. we heard from morgan stanley yesterday and we will hear a lot more about their digital strategy and wealth this coming year. bank of america is bringing down overall employees, but beefing up sales staff. have seen.rend we let's reduce the number of branches. , itou look at those costs is cents on the dollar to pick up the phone to your branch. bank planseutsche special long-term incentives for crucial staff. if you came into the office and you got the news and you were significantly unhappy, how does this involve from here? i go back to that question. do they look at the situation of deutsche bank? , youn: for deutsche bank are probably not surprised as an employee. if you think about the performance of the bank over the years and you think about morale, john cryan coming in a year ago and deliver

stanley has a side business underwriting stocks and offering merger advice. citigroup and bank of america sold off classic wall street businesses to comply with. frank -- with dodd frank." celebrity his 10 year anniversary of breaking free from the financial industry. >> ben is very smart about politics. guess what? he is wrong about this. >> wrong-o! >> just like you don't want me writing about washington -- >> you don't want him in your backyard? >> he has not educated himself about this. it is a washington perspective. the golden this is age of wall street if you can take advantage of it. goldman is how to take advantage. once jpmorgan get out of its litigation, $22 billion and counting -- >> hold on. >> it is incredibly well-positioned to take advantage of the economy. paid $31jpmorgan just billion? you cannot say this is not a hit. some level of victory for the government. erik? >> i am inclined to side with bill. i am in between. we had an argument this morning. i am skeptical that it is a golden age for wall street. i look to your point about the folks who think washington won. marketat goldman sachs's cap, they have a market cap of $83 milli

morgan stanley had a tremendous change moving into the wealth management business and there are lines that they cannot do anymore because of dodd-frankhe consumer lending area. it seems it could be a little more dangerous, but they are taking their time, they are not rushing it and they tend to be conservative. jonathan: you have talked about the cycle, but what has been the structural change? you: the security business, do not see as much and a financial asset backed securities because subprime lending has gone away. that is clear how much it has dropped precipitously from the peak in 2007 and 2008. jonathan: the amount of corporate bond issuance we have had, will that continue and how do they continue to leverage that? trading leads into ficc which is one of the areas goldman wants to try to exploit a little bit better. believe the country and world economy will continue to will always need financing and dcm is one way they do it. david: are we seeing a big structural change within the group? for goldman sachs, consumer lending is not the person who comes to mind. i think all of these companies that you are mentioning will have to

spoke to james gorman at morgan stanley him -- and morgan stanley, and he said we are done -- they are not going to scale back, even if dodd-frankdavid: both of them said they would not change their behavior. we had john allison on, and he said that is fine for big banks. smaller banks are in a different position. will it benefit the smaller, regional banks more than the big banks if regulations come back? alan: it depends how they do it. if they do it in a smart way, they would maintain strict requirements on the systemically important institutions, maintain surveillance from the financial stability oversight council, and then these up on some of the unnecessary burdens on smaller banks. jonathan: that is what you think they should do. what will they do? a place tonot think start was with the fiduciary responsibility rule. who wants to be in a situation where financial advisors can be looking out for their own interest, and not that of their clients, and for the clients not to be aware of that? that does not seem to be in the interest of the vast majority of american workers. jonathan: another change we can see is where these d

frank calderon at cisco, he has been there for 10 years through share price mediocrity. cisco doing better, he knows the pulse of our future in america. ellen zentner of morgan stanleydence that a guy like calderon will spend money? >> we are seeing positive signs that is strengthening. i would call it a small uptick in aggregate growth. there is a lot of need for companies to invest after years of not doing it. companies need to see stronger theegate demand. it is typical relationship in the business cycle. high tech is an area where we have seen plenty of cap x. about the other questions about cisco? no comeback recently, popping nicely, back up to the mid 20's range. out the other day for ibm, that was a lead brick for the investor community. what do we question about the future of the stuff you make? >> i agree that the overall economy in the u.s. has been on a slow recovery. >> absolutely. >> and i think that businesses are being a bit cautious, but we need that stimulus. we want to make sure we are investing in the opportunities for growth, but we are also .ooking for tax reform from the perspective of allowing global companies to operate in an environment whe

stanley fischer, vice chair of the fed, raised in -- wade in on in ontential -- weighed the potential for a new look at dodd-frankyone knows what is going to come out of the new administration and congress on deciding on fiscal policy. at the moment, we are going strictly on what we see as responsibility according to the law. alix: he goes on to say that he does not believe dodd-frank as a whole will be repealed. he believes there may be adjustments. however, as a whole, dodd-frank could stay. so, what will happen? what is going to stay in what is going to go -- and what is going to go? >> no one actually knows. it would take a lot for them to repeal it in terms of the entire act. what they can do is repeal parts of it. they can also put in regulators into key positions who can change the rules, rewrite the rules, soften the rules. because of be easy, the rulemaking process in the federal government. yet the put the rules up for comment, received several comments, and then discuss those comments before they can do it in a final way. alix: in terms of the impact on big banks and smaller community banks, they do no

headquarters somewhere that will be acceptable to morgan stanley and other regulators in terms of a combined -- erik: where would it be? colm: possibly dublin or frankd -- frankford. world, what isit most challenging from an operations standpoint? colm: what will happen i believe is the euro will move in the exchanges will be moved and some of the elements of the exchanges will be moved. there are practical things straightaway, longer-term, all sorts of issues, ease of travel and so on. erik: but one of the things we continue to talk about. it is bedeviling investors. the other thing is the outlook for interest rates globally, but particularly in the united states with the fed decision last week to stay where it is, they keep pulling back rate forecast, your economist have a view but what is the prudent course of action as far as business planning is concerned for morgan stanley? what do you bake into your planning process? erik: --colm: james has been clear on this, we have assumed subdued markets for the time being and subdued interest rates or the foreseeable future. if we get improvement in that scenario, we will benefit quite well from an opera

frank gifford. brendan: that is how you want to be remembered, in your prime. is in his prime, and he is with us. we just heard from stanleye united states federal reserve. very exciting. here is what i heard. know -- what central bank in its heart of hearts does not look at production." he said in that same paragraph, stanley fischer, that with employment we are doing ok. "it is the inflation that i am worried about." carl: first of all, this is a big star in the column for the blue mandate cap of central-bank policy. he's arguing, even the inflation target of central banks follow a dual mandate. but if you only have an inflation target, like the ecb, for instance, you can be caught flat-footed because inflation is a lagging indicator. that is the policy mistake the ecb made when they tried to raise rates earlier in the cycle and then had to backtrack. the fed having the dual mandate is much more focused on the unemployment rate. even though he expressed concern about a low inflation, the first words out of his mouth in the interview is "employment is what really matters." if we look all the way back to ratereenspan-led s

stanley. president trump is expected to sign an executive order to review dodd-frank and the fiduciary rule. there's a possibility that the rules of those regulations could be removed. it's just a review, but certainly helping the banks today. vonnie: abigail doolittle, thank you for that. let's check in on the bloomberg first word news. mark crumpton has more from the newsroom. mark: the u.s. has imposed new sanctions on iran after missile test. the treasury department released 12 companies and entities. they are facing restrictions for supporting the program with links to terrorism or backing iran's revolutionary guard corps. trump said iran was "playing with fire." he is signing an executive order that will review the rules placed since the recession. they are looking at the dodd-frank rules put in place since the financial crisis. president trump spoke at a meeting with ceos. >> we have some of the friends of mine who have nice businesses that can't borrow money. they can't get any money because the banks just won't let them borrow because of the rules and regulations in dodd-frank, so w

stanley druckenmiller. he spoke to erik schatzker yesterday. one of the things he talked about was hedge funds. all bynot surprised at the hedge funds not doing well because, to be franknd of predicted it five or six years ago. certainly, this environment is aggravating it. said is there are about 10 or 15 that will do well and then there are a lot that cannot possibly justify 2/20. the greatestof hedge fund investors of all time and essentially he is saying that too many people have gone into the business. also he said that one of the reason hedge funds are not doing well right now in terms of all of this volatility -- and you expect they would be into trade off of it -- it is not volatility tried to any trend. funds the problems hedge are having is they are not able to trade a trend. lisa: just bad volatility for hedge funds. that is unfortunate, a lack of volatility, women's wages. an interesting report showing that it will take 202 years on average for women to bridge the pay gap with men. this is the chart i found most interesting. north america will take my hundred six two five years versus 61 in europe. >> definitely not an uplifting story to read. it didn't se

stanley fischer at 1:30 p.m. and you go watch a that on the bloomberg television. aim to dismantle dodd-frank.eplace it. could u.s. retail sales quite a noisy in on the back end, treasury gives up in the gains, a little bit higher. dollar back from 100. this is bloomberg. ♪ emma: coming up with the next hour -- forming ecb president. -- former ecb president. david: is dodd-frank at risk? president-elect trump has been vocal about it. what ours is plans about replacing the rules regulating wall street? we spoke to alan greenspan and gave us his thoughts. i would like to go back to square one, repeal dodd-frank and come in with a large increase in equity to asset ratios for all financial intermediaries. there is very little else you need to do the regulatory system that would not be solved with that simple regulation. still with us is gary stern, former president of the federal reserve bank of minneapolis. we have had such a run of regulation over the past eight years. what will be left of it and president trumps administration? hard torn: it is forecast how far they will want to go and how it w

great financial crisis, dodd-frank, capital rules, liquidity rules, there was a reason for the world to not be happy with the banks. and non-thanks that became banks. morgan stanley, through the pandemic, the banking system stabilizes the economy, you go through the regional banking crisis, and they keep on adding capital and liquidity. wait a second, we are a source of strength. the american banking industry is really a source of strength. the pendulum kept on swinging even though the reason that it was swinging stopped. our industry was saying, why do we have 20% more capital than during the pandemic? it is just mathematical creep of calculations. why are you saying that we are going to limit your fees, charge for certain activity when it wasn't a loan? an overdraft is not a loan, somebody just saying i want to make it a loan. this idea of regulators imposing new rules, which the congress did not intend, was interesting. david: many people when they talk about the federal reserve, they wonder whether they will increase or decrease interest rates. in the banking world, you are often concerned about the trust us -- stress tests. do you think it is too tough the l

frank, and much more. ♪ >> the ecb said to announce its key decision on interest rates at 7:45 eastern. taking a look of his morgan stanleyex, the market does not expect the ecb to move in the other direction for four years, no hike for four years. joining us now is the deutsche bank international economist. treading water, is that the news conference? >> this report written by our team in london is a very good description of what is happening, they initiated a lot of ideas and have implemented some of them but some we do not know much about, treading water is the best way. we need to see more how things are working and hear more about the details. >> that chart, the idea we could be waiting for more years for rate hikes, inmate will be afte mario draghi's term at the ecb ends, what does that mean for the ecb? ultimately, a lot more work to do. started hiking now, six months ago, now having a liger for or five years, stunning, a divergence between what the ecb and the central banks are doing. it is telling you that the situation is not good. it tells you that something needs to be done. what they have done, negative inter

stanley. he's a rising star. he helped lead it into the shocks -- equity stocks globally. he moved over to run bond trading and now he's running all of ranking and trading operations. frankdie have go who has been long time in london overseeing european investment banking operations and was cohead of the investment bank. vonnie: it's fascinating. there's always two. it's like a race or a wrestling match. is that the case? there is two that were very clearly moved around significantly in this latest transition. -- rendition. now we the top right have andy saperstein who helped code lead. the thing that's interesting about morgan stanley is there's a pretty deep bench all around that today is definitely pick status shine. shery: we have one of the highest ranking female executives on wall street. >> very exciting. 2012 lead m&a in the americas. morgan stanley is actually number one above jpmorgan and now she's taking the position is head of the investment bank. wante: all of these people this. everyone wants to run morgan stanley. dealere has been a great of elevation. a lot of people were brought up at the same time today. vonnie: it seems a little early. it is james gorm

frank that has the most legs. this does not scale down to community banks. thanks with $100 million. hiring 15 people and morgan stanley a small bank. i think were going to see a change in that regulation. erik: we talked about united continental. what are they going to do because of the heart attack. the port is going to conclude its governance process today. they will release more details today or tomorrow. is a statement from the nonexecutive chairman. they know they are under pressure. they know shareholders need more information about what's going to happen. are they going to have an interim ceo. -- that'sl involving the breaking news. we have an exclusive interview with jamie dimon. stick around. ♪ vonnie: welcome back. rise oilrging opec to prices. they expect to double the oil it puts on the market when sanctions are lifted. the are brought -- buying -- that is more than skyworks solutions. 10%h winfrey is dying and of weight watchers for more than a $43 million. she gets a seat on the board. after falling at 73% this year. we are closer to the opening bell. matt miller is here. movers isof the big weight watch

stanley president colm kelleher. is billus now for more smead. let's start with your reaction. we've heard the commentary about the prospects for dodd-franknfigured. the history appears to be similar to the 1980 election. it was felt that a republican president was going to be incredibly favorable toward business and finance and cost cutting and the markets put that into price leading up to inauguration day. and then when the sausage started getting made in the first year and a half of the new term and interest rates were incredibly high, the highest and 30, 40 years, we had a garden-variety bear market that took 20% out of a very cheap market to begin with. you are talking about a market and the 1000 in 1966 1981 with 780 at the bottom. we might be getting ahead of ourselves. of treasuries shows we are getting ahead of ourselves and the movement. the end of the 35 year bull market is over, but there may be fits and starts in that. we are very optimistic about the next five or 10 years. we want to be involved in what's going on on main street. you're better off playing the things that don't require legislation. vonnie: we were illustratin