how much of it will be exacerbated if we have further monetary easing out of the bank of japan? cts it to rise to 1.9% next year. we think it is a little -- it takes a little bit more time for the kind of structural change that the boj is pricing in right now to take place. perhaps 2016 and this of course means the boj will face some achieve theorder to objective for the next year. we think the earliest time in the boj can ease additionally will be this october when the boj makes an assessment of the price and growth outlook. >> you know, what more can it'd do? if you have further easing, the policy is not working? well, the policy is definitely working if you look at cpi. it is well above 2%. what i was just saying for the boj to keep credibility, it may showto do something to that it is committed to achieving its 2015 target. if you look at the economy, it is doing well. if you look at long term, they are reading quite high. easing ismonetary feeding into a broader category in my view. >> some of the economic data points that are coming out and we look at any inflation number w

the bank of japan maze today and tomorrow. wth forecasts. 1%.kospi up by one third of australia and new zealand looking like this. david jones, the majority 84% backing the takeover. thing -- thelked kiwi topping australia as you can see. singapore straits is declining as opposed to the rest of asia. yellen will be speaking tomorrow and the next day. the beginning of the mumbai session, as you can see, clearly, the budget is still very much on investors minds even though it was last week. india's benchmarks may triple in the next three weeks. this estimate comes from blackrock. blackrock fairly optimistic. the big budget announcement overhang that we were watching, we did not see too many new announcements. modi has definitely laid the groundwork for future expansion and expecting growth to next five 7% in the years as growing business confidence leads to spending. corporate earnings growth will probably climb to as much as 20% from the 15% that we are at the moment and there is a high probability that the sensex could double i

they could be the first central ecb.out of the the bank of japan. the bank of japan. they meet today. today could be the last time that we do not get a rate hike. 1.71.ne is who puts their hands up and asked for a higher rate in the next couple of months? >> interesting to listen to them talk about the rates and the productivity story. we will have more on that. let's bring it together and get a sense of where they are. central banks and markets. the executive director at schroeder. thank you. let's talk about central banks and the u.k.. -- the u.k. you do not think the bank of england is in a rush. >> i do not. kid havence i was a been a subject and people say that we need to cool the housing market. comments intelligent when they say that the bank of england cannot build houses. it is and of the day, factor. sure. like any market, profits get high and they come to bear. we are seeing that now. i expect to see that cool off. many houses as they can. there is a shortage of labor. all the results are coming out and they are good. if i am mark carney, i look at factors.

now the bank of england has stopped its quantitative easing the federal stops in but the bank of japan is doing it and some people are now urging the e.c.b. to use it as well so what's the empirical evidence that kiwi has actually been effective as a monetary policy tool and the us britain or japan. well honestly i think the evidence is still coming in and we can't rush to judgment but what we do know i think does point to the possibility of q.e. doing a lot more than it's been done so far at least in the u.s. and the euro zone japan fed me taking a very different path then the other major central banks is committed to a permanent go into the monetary base is going to raise its inflation target from zero zero percent to two percent and the fed for example never made any of those commitments all the fed said is we're going to temporarily increase our balance sheet now that temporaries been within a few years but even though they were projected to bring it down and if someone came to us say hey i'm going to give you a thousand dollars next year and i'm going to pay me back it's really no

today is the first day of the bank of japan meeting. rebound asia, for stocks, declines come to an end. china has security concerns that apple denies. four weeks, 64 games is all over. germany celebrates a fourth world cup. [laughter] first, let's get the latest on the markets. a lot of celebrating. >> just look at what happened over the last week. 7, markets were on a six-year high. then they slumped to april lows but now they have rebounded. take a look at the numbers today. rising on the word that the chinese government will increase the fuel efficiency of its fleet. telecom shares, china unicom rising. mobile, the world's biggest mobile carrier, up 2% today. singapore responding to the latest gdp report, the surprise contraction, shrinking of gdp, and you see stocks declining on that. cbc and kepler corporation, they are advancing. the taxi operator of 2% today on the straits times. the asx 200 in australia rising as well. commodity producers doing quite well. japan returning to the business from the lunch break. >> the nikkei and t

managers at companies across japan are feeling less positive about the state of the economy. they responded to the bank of japan's latest takan survey of business sentiment. their answers reflected a change in mood after the consumption tax increase in april. bank officials measured the percentage of respondents who are optimistic. first those who are pessimistic. for the first time in six quarters they found respondents were less upbeat. the index slipped 5 points to reach plus 12. managers at nonmanufacturers are feeling less positive. that index fell 5 points. managers saw the increase in the sales tax hurt car sales and sluggish exports didn't help their outlook. but managers at large manufacturers are predicting better times ahead. they expect conditions will improve this quarter. bank officials say many managers believe the effect of the tax hike will be temporary. >>> the latest data out of beijing indicate that china's economy is picking up steam. business sentiment among chinese manufacturers has improved for four straight months apparently due to government stimulus measures. china's national

officials at the bank of japan have released a report showing that managers share that sense of optimism. bank officials check sentiment every three months. managers have revised their investment plans upward from three months ago. the officials say that is true for companies of all sizes. . they say higher corporate earnings are making business people more positive about prospects for growth. major manufacturers plan to invest 12.7% more than what they invested in the previous fiscal non year. leading non-manufacturers plan to increase 5% more. >>> tokyo shares opened higher. japanese stocks are extending a month-long rally. car makers are among the biggest gainers. the nikkei up .5% at this hour. >>> currency traders are buying the dollar and selling the yen on signs the u.s. economy is recovering. the euro is straightly stronger. and let's see where the yuan is trading against the dollar. the dollar has been weaker against the chinese currency but is stronger this year. as for how china's stocks are starting the day. shanghai is trading higher and hong kong is up more than 1%. and ove

the bank of japan decided to maintain its current stimulus program that has slightly cut its forecast for the current fiscal year. the bank believes inflation will approach a 3% target next year. the bank of japan thinks the pain of the sales hike will continue going forward. >>> beijing steps up efforts to pump more money into its banking system and pressed banks to loan more. that figure, nearly 20% more than the market was anticipating. but investors remain cautious about the world's second largest economy. direct investment did rise in june, but barely. up just 0.2% from a year earlier. let's give you a look at what's on the agenda in asia tomorrow. lots of data out of china. we'll get q2 gdp figures, retail sales and fixed asset investment data. over in australia, keep an eye out for rio tinto's outlook in the second quarter and this should help reflect on the health of the economy. >>> and it's off, the last cabinet reshuffle, prime minister david cameron will make before the general election is under way and it's causing a bit of a stir. william hague has stepped down from the

they're saying it's too early for the bank of jo pan to openly debate the purposes. and the bank of japan's 2% inflation target will likely head to april of 2015. let's take a look at today's other top stories. carlos slim is ready to break up his american movil empire in the face of sweeping government reforms in mexico. it will help prevent america movil from being designated as the dominant player in the seconder which would force it to share infrastructure with rivals for free. the company controls 80% of mexico's six line market and tensil which controls 70% of mobile. >>> citigroup and the u.s. just department reportedly is nearing a settlement where the bank would pay $7 billion to resolve charges related to the selling of bad mortgages in the run up to the financial crisis. the two sides have been far apart, it seems, just weeks ago, but are now putting the final touches on a deal that could be announced as soon as next week. reports say the justice department demanded citi pay $10 billion while the bank was seeking a fine of $4 billion. let's give you a look at what's on today's ag

trust so what we have then but nothing right every single central bank of the world's been co-opted by the federal reserve bank bank of japan the bank of england the other major ones they now want the european central bank which let's face it is the old bundy's bank the old german central bank to expand their balance sheet go to quantitative easing and they're going to say no we're not it's about a fact why don't we just take over your economy and don't want to just bring in the fourth reich you fricken losers and you know what they could do it they've got the firepower they've got the intelligence they've got the leadership something american the u.k. has no leadership whatsoever and then the other line of the russia it was aligned with china and around so hello twenty first century. so you got up ok go make some friends stayed there for the second half got an interview i did earlier with arian camp out. there. this is what we do we kill people and break things we can see something is simple as people playing a soccer game you can see individual players and you can see the ball. you can almost see a spatial expression you

officials a t the bank of japan have set an inflation target of about 2%. managers at many companies expect consumer prices to rise more slowly. the central bank asked about 10,000 businesses in its latest quarterly survey what they think the rate of inflation will be next year. their average projection is the same as the previous quarter at 1.5%. the forecast doesn't include the impact of the con us sumpgs tax hike in april. bank officials are pumping massive amounts of money into financial markets to try to end years of deflation. they've set a target of 2% inflation for next fiscal year. but business people project that three years from now the rate will be 1.6% and 1.7% in five years' time. >>> all right. let's get a check of the markets now. investors in asia showing increased risk appetite. here's how major boards end the region and finish out the day. record closures on wall street boosting market sentiment. sydney and hong kong posted a solid gain of more than 1%. nikkei climbed to a one-week closing high. added .3% today, 15,369. that's a gain for a

trust so what we have then but nothing right every single central bank of the world's been co-opted by the federal reserve bank bank of japan the bank of england the other major ones they now want the european central bank which let's face it is the old blunders bank the old german central bank to expand their balance sheet go to quantitative easing and they're going to say no we're not is about fact why don't we just take over your economy and don't want to just bring in the fourth reich you fricken losers and you know what they could do it they've got the firepower they've got the intelligence they've got the leadership something american the u.k. has no leadership whatsoever and they're not a lot of the russia it was aligned with china and iran so hello twenty first century. so you got to go ok go make some friends stay there for the psych about got an interview i did earlier with arian compound. i marinate join me on. impartial and financial reporting commentary interview and much much. only on the bus and on the. right to see. first street view and i think you're. on a reporter's twitter. instagram. to be in the limo.

members of the bank of japan's policy board met over two days. they decided unanimously to keep buying billions of dollars of assets every month. they are trying to get more money flowing through the economy. consumers across the country rushed to buy things before the sales tax went up three months ago. the policymakers noted a dent afterward in consumer demand but they have seen improvements in employment and income and they say personal consumption has been resilient. they said business investment is also rising moderately along with corporate profits. board members have set an inflation target of 2%. but they kept their price forecasts unchanged from three months ago. they project inflation will reach 1.3% during this business year. 1.9% during the next. and 2.1% in fiscal 2016. those figures do not include the effects of the tax hike. >>> on to the markets now. investors in asia seem to be encouraged by recent global stock rallies. some shied away from aggressive trading though turning their attention to federal reserve chair janet yellen's c

policy makers at the bank of japan say the increase in the consumption tax is partly responsible. the sale tax went up in april from 5 to 8%. officials at the center bank say the cost of kormt services is also going up. it increased in june by 3.6%. the officials pointed to a labor shortage. they said it was becoming more expensive for manufacturers to hire temporary workers. they said the government is spending more on public works and redevelopment projects and they said that it is adding to labor costs. prices for corporate services have gone up for 11 straight months. >>> let's take look at markets now. investors are buying stocks this morning and the nikkei is in the positive. people who track the market say investors are encouraged by signs of recovery in the european and american economies. manufacturing figures for the euro zone and jobless claims in the u.s. both released on thursday were much better than expected. analysts say they are buying on hope of higher profits. they sayment optimism on the american dollar is causing them to buy the dollar. that's up from mid 101 y

>> well, millions of tourists flock to japan every year, wander through the ancient sites of kyoto, wonder at the cherry blossoms and gaze up at mt. fuji. tour operator ares are banking on a government plan to draw more visitors and they're coming up with new ways to welcome their guests. >> reporter: this shrine is located 160 kilometers north of tokyo. it is registered as a world heritage site and is visited by 220,000 foreigners every year. in april, the shrine introduced a new guide service for foreign tourists. >> the gate is the most important front gate. >> reporter: simply touch the pamphlet with a special pen and you can hear the names and explanations of structures inside the shrine's precincts. this pen and pamphlet rental service costs about $5. there are translations for english, chinese, and other foreign languages that can be added. >> you learn a lot more about the site than you would otherwise. and it makes it a lot more relevant for us as tourists. i have to say it is fantastic, really, really good. >> reporter: the system was developed by a pen manufacturer in tokyo. the company has been manufacturing fountain pens for more than 100 years. so far i

officials at the bank of japan say the increase in april in the consumption tax pushed up prices on a range of products. and the fighting around oil fields in iraq has driven up the price of crude. so businesses are paying more now for gasoline and diesel. bank officials looked at what prices would have been without the hike in the consumption tax, and they found prices still would have risen 1.7%. many companies pass increases on to consumers, so people could soon see some changes when they get to the checkout counter. >>> now despite that news, japanese shoppers seemed to feel that the economy is recovering. consumer sentiment is up for the second straight month. officials at the cabinet office say the condition assumer confidence index stood at 41.1. this survey covers 8400 households and asks consumers about their spending outlook for the next six months. officials attribute the rise to an improvement in wages and the job market. the cabinet office revised upward its overall assessment of consumer confidence from showing signs of recovery to recovering. >>> let's get a check of th

japan's government-affiliated bank and thailand's largest con glot glom rate are joining to push for expansion. the bank of japan and the c.p. group will each contribute about $2 million to set up the fund by september. the thai corporation has more than 200 companies in its group. it operates a wide range of businesses that including culture, food and retailing in thailand as well as in other asian countries. the fund will use the thai group's net worth to help japanese firms and it will provide financial assistance as well as support in procuring raw materials. the fund will also try to find customers like convenience stores and supermarkets. >>> the people who make home appliances in japan say they're struggling. they say they're feeling the effects of the increase in the consumption tax. officials at the japan electrical manufacturers association have been tracking demand for air conditioners, refrigerators and other products. they say in june, domestic shipments fell nearly 7% from the same month last year. it's the second month in a row shipments have been down year on year. their members have been r

asian stocks finished mostly higher ahead of the bank of japans's decision on the stimulus program. tokyo's nikkei added 0.5%. >>> president obama will talk about transportation funding. the president will travel to a facility in virginia that tests new technology for highway transportation. in his remarks, he'll push for congress to keep highway and transit aid flowing to the state. the white house said it would support an $11 billion proposal to finance transportation projects for nine months. >>> citigroups will pay $7 billion with a deal with the department of justice. the agreement will settle an investigation into the bank's handling of risky subprime mortgages. the company admit to the deception that attorney general eric holder said shattered lives contribute to the worst crisis in decades. >>> and the world cup was a big hit in social media. month-long event in brazil was responsible tour 3 billion interactions on facebook. 2 triggered 670 million messages on twitter. and sunday's world cup final also set a television record of 26.5 million viewer it's in united states. ann

policymakers at the bank of japan say the increase in the consumption tax is partly responsible. the sales tax went up in april from 5% to 8%. officials at the central bank say the cost of corporate services is also going up. it increased in june by 3.6%. the officials pointed to a labor shortage. they said it was becomin for ma hire temporary workers. they said the government is spending more on public works and redevelopment projects, and they said that's adding to labor costs. prices for corporate services have gone up for 11 straight months. >>> and the labor shortage is hitting restaurant chains in japan. sales fell in june for the first time in four months. some pubs were forced to close because they were unable to find enough staff. officials of the japan food service association say sales at major restaurant changes last month slid 1.8% from a year earlier. pubs and taverns reported a decline of 7.6%, and fast food restaurants a 3.2% drop. bad weather in early june also contributed to falling sales. >>> japanese government officials have released a report saying the countr

i think there is a definite case for intervention like the bank of japan and the bank of england.rventions into the asset markets tend to distort the signaling and -- >> the signal to noise ratio is the moment. something has to come out of this. >> and is a function of the data. you will have the ecb going into will be as and this pricing mechanism. >> what you think about russia playing in the story? they say it will be a problem. >> so far, i have seen no problem at all for the race and i do- rate markets not think that we have any pricing of russia and european markets. factored in at this stage and if there is a material impact with european growth, that is not priced in. >> there is no impact in energy prices and we have not seen that in inflation markets. >> that will be significant. >> it depends on which way it comes. you can say it is higher inflation in the future. >> it is love growth. >> exactly. couple of days, i am intrigued to hear you say that. if you would see a slowdown in german growth, say it is off of gdp, how do they respond to that and that changes the dynam

asian markets finished mostly higher ahead of policy announcements by the bank of japan tomorrow.o's nikkei added nearly 1%. hong kong's hang seng gained half a percent. wall street investors will be keeping an eye on several key earnings reports due to be released this week. you'll also be listening to what fed chair janet yellen says when she appears before congress. the dow ended at 16,949 on friday. the nasdaq lost 70 points for the week finishing at 4415. >>> citigroup is expected to announce a deal today to pay the justice department $7 billion to settle an investigation into the bank's shoddy mortgage-backed investments. citigroup argued that it sold only a small number of troubled mortgage-backed securities compared to other banks. the federal government says it's making progress in stopping the large number of payments made to people who should. be getting any. federal agency reported paying as much as $100 billion last year down from $121 billion in 2010. some of the improper payments are the results of fraud or clerical errors. >>> and gasoline prices have declined some

someone out there done with it now on one hand the bank of england in the federal reserve they're getting out of the game but on the other hand the bank of japan is staying the course and the e.c.b. could be joining the q.e. game in the very very near future so i spoke with monetary guru dr david beckworth about quantitative easing market monetarism and inflation he's a professor of economics at western kentucky university and a proponent of market monetarism and nominal g.d.p. targeting now i started off our conversation by asking him about conservative economic writer james had a coup because his complaint about. conservative obsession with inflation and their argument that it's under reported by the government that we're back with what he thought about this very subject and here's what he had to say. i think he makes a reasonable arguments and one that unfortunately is not always heard by my friends on the right he makes really great points if those numbers were true we would have seen a long recession i mean the implication of higher than reported inflation over the past decade means a real g.d.p. with a negative for you know since two tho

excessively cautious approach by the european central bank which mirrors the bank of japan in the one nine hundred ninety s. . and an inadequate. approach to fixing the banking system and allowing you know bad banks and bad companies to go to the wall which which the japanese also didn't allow to happen in the first ten fifteen years of their downturn either so i think in europe that's where the parallels with japan are plus it's they're less clear i think in the united states in the united kingdom although were we to make big policy errors to course that could happen as well. that was a columnist and author george magnus time now for today's big deal. big deal time with edward harris and it's tax thursday my favorite day of the week and while saturday we do have some tech stuff that's a little bit later on we're telling you about all the latest tech stories from the past week not just one but a bunch so first the department of justice is claim that microsoft must hand over e-mails stored in dublin ireland however microsoft has balked at this request so what's going on here why does m

of the people's bank of china and so on and so forth so the idea of debt in china has a different connotation it's much more akin to japan in the one nine hundred eighty s. than it is to the united states in the two thousands because in those days of course japan piled up huge amounts of domestic debt. and subsequently after the bust and that's what china is doing now having said that a lot of chinese non-financial companies private companies and state companies have been borrowing in foreign currency of brought in the last two or three years so china's debt problem is starting to go external but it's not a big deal yet i think georgia what about saddo banks what's going on there. well the shadow banking system in china is depending on how you measure it unfortunately of course the whole problem about shadow banks is that they're opaque and very difficult to measure and we don't know you know who they are what they do and what their exploit their vulnerabilities are but by by the broadest definition china's shadow banking probably is about half of its g.d.p. so that's pretty big. and of course the difference between chin

you have actual liquidity coming out of the bank of japan and the fan,ean bank very the though not withdrawing stimulus, are reducing the rate. -- and we gete more european come anastasia? >> yes, i think there is room for that in the portfolio. the stimulus package that was unveiled last month is quite significant. --tever you want to call it >> it means more money. it means more money. supply and demand. more money needs to find a home. >> credit flows. the european central bank is applying this. what they are essentially saying is capitals extremely attractive. the formula is quite complicated, but if you follow the format, all of that is to boost the growth potential of the euro area. >> we got a little bit of news from the fed today about the liquidity. we heard some indications from danielle and and president dudley that they might not change their investment policy as early as people expected. there were some four warnings of this, but today, we heard that the fed was going to wait until the point of raising rates before would stop reinvesting into securities. that means more liquidity

same for the bank of japan. the fed will and tapering in october and i stick to my view of the first arise will be next march or april. monetary policy in the u.s. is moving super easy to easy and it would not be described as the end of next year close to 1% with a nominal gdp is growing by 5%. that is a very easy monetary policy. the numbers offer a disappointing first quarter the states and weaker dater in and may. april the numbers will pick up and we will see a robust of growth in the developed world in the second half of this year. >> evil will start to adage, -- even we start to hedge, want to go up at some point a user not see that the end of the stop rally? underestimating what the central bank is saying. they have a very clear message. gettingnot seem to be across a very well. the interest rates are going to go up but the pace of increase will be very slow and the increase will be very minor. a raise of 1% by the end of 2015 compared to gdp growth of 3% and installation of 2%. chrissy you mentioned the f

the governor of the bank of japan. what more can that man do?u could read from those numbers that investors do not like q.e. i am not sure that is the conclusion they're supposed to take from this. jon, they give very much. jonathan ferro in front for. up next, novartis, the profits disappointed. we will see what is weighing on the world's largest drugmaker. when we are back in just a minute. ♪ >> this is "on the move." up at the" is coming top of the hour. first up, a fragrance maker posted profits lifted by the emerging markets. the chief financial officers will give us more details. star's chief executive talks travel and the impact of the euro. novartis turned in disappointing results. appropriate -- it reported profit and sales the shade below estimates. we are joined. analysts.140 sam, what happened then with novartis? disappointed but not buy anymore just margin -- an inner misfortune. >> it is quite difficult for to look at the orderly numbers, especially for a company such as novartis which has a cross in swiss franks. and a whole host

you have actual liquidity coming out of the bank of japan and the european central bank, which is makingp for the fact that the fed, though not withdrawing stimulus, they are reducing the rate at which they are applying more stimulus. >> i think we are all a little european innocence. in, there is room for that the portfolio. the stimulus package that mario draghi unveiled last month is quite significant. --tever you want to call it >> it means more money. it just means more money. a supply and demand. >> credit flows. is applying this carrot and stick super rich to boosting bank lending. what they are essentially saying is capital is extremely attractive. the formula is quite complicated, but if you follow is tormulas, all of that boost the net lending, boost the growth potential of the euro area. bit of newslittle from the fed today about the liquidity they are providing. he heard some indications from janet yellen before that they might not change their reinvestment policy as early as people had expected. there were some four warnings of this, but today, we got the serious signal that

>> first of all, on the balance sheet, we had a comparable situation involving the bank of japan, yet took off. until recently japan was suffering from chronic price deflation. until i begin toss thissing in in reserve, produce more in terms of loan growth, chances are it will not go ahead and trigger a lasting up turn. sure, we could get a run-up by prices over the near term, but if price growth continues to outpace wage growth, chances are that will be self-correcting. we may find consumers. >> half of our audience is throwing stuff at the television at you. they say the fed never gets it right. what evidence is there? >> i think they did a very good job at trying to engineer a decline or reining in that perhaps wasn't enough. we're looking at a year over year drop-off. >> you can make the argument that maybe the fed began to taper a bit too early. right now, i don't see that in their -- in their posture. that's the problem. when bad things happen, you have to believe it. >> thank you for joining us. >> go, michigan state guy, you are a va guy. >> i am. >> guys, thank you very much.

we think look at the bank of japan. llish, powerful and you don't have the to worry about the nuances of the statements. you have a policy likely to go on for a very long time. it's much bigger than what the fed is doing as a percent of gdp. and where we're much earlier in the positive cycle than we are with the fed. >> just a question about how are you navigating the cash portion of your portfolio? obviously, money markets under pressure, yields going down and banks incentivized to lend longer term. the ability to stay liquid, obviously what you're looking to do, is becoming more strapped. what's your take on that? >> well, it's -- i think good that you raise the question of liquidity, because we are believers that many investors have a false perception of liquidity in the fixed income markets, and we've been stressing quality and liquidity for several years now, because it is our belief that a number of investors think that they're taking credit risk and duration risk as a trade, and when they try and get out of especi

adam: bill, give you the last word on this bank of japan still easing but you don't have any expectation we'll get an interest rate hike here in the states. some people were saying possibly end of this year. some saying 2015. you don't see it anytime soon? >> no. we expect it september 2015 fomc meeting. given that we look for relatively benign rate ranges through the balance of this year. my choice of a favorite asset i choose best of a host of bad choices in fixed income. i like intermediate sector of the treasury curve. cheryl: rob stein, mike harris, william o'donnell, gentlemen, thanks to all of you for being here for the top of the show. appreciate it. todd horowitz we will see you in a few minutes with the big close of the s&p. adam: you might call him a man with the crystal ball. one analyst gives us nameses that could beat earnings and some that will fall flat. you need to listen to this one, last quarter he was 100% correct on all his picks. cheryl: plus he is australian known around the world for his expertise on the u.s. economy. that's right an aussie, who loves the u.s. he

the bank japan the bank of england and the swiss national bank have policy rates at or near zero and growth just still isn't taking off is it a case of the wrong tools or are things that bad. well we're in this place because this is how governments decided to respond to the global financial crisis sort of kicked off in two thousand and seven and supposedly wound up and ing in two thousand and nine and policymakers sort of got themselves stuck let's not forget that low who are using money means that we've got low borrowing costs for

around the world, when you look at the bank of japan, the fed, they have all done this quantitative easing for not lending the money. they're sitting on access reserves. how do you get tanks to lend -- banks to lend? you promised to hold interest rates down for a long time, you charge them to hold reserves. ecb did lastthe month. >> what do you think draghi should be doing? he has a long way to go is he cup to be wonrld by the united states. >> i believe quantitative easing will not be effective as it is currently structured. raising interest rates today can encourage more lending. the reason banks are not lending is because rewards are not there. if i have superlow interest , why would a bank make a 30 year long at 3.5%? they do not do it because they're worried about inflation. here's a different way to say that. if i charge banks, the ecb is charging banks to hold reserves. those banks will charge customers to hold deposits. customers will now choose to deposits,instead of which can cause the inflation. i think the negative interest rate gambit can backfire on the ecb. >> interesting. w

think about whose now until a policy is in question, it is the fed, not so much the ecb or the bank of japan the ecb easing program will be for the next couple of years. we know what the pog -- the boj easing program will be. it is really the fed, which is a bit. more in play right now >> are we going to get some sort of speech in the second half of this year or some data point that will suddenly wake up the market, out of this though -- this low volatility environment we are in and that rates will go up in the u.s.? >> i don't think it will be one data point, but i think it is the sort of array of them. it is all around inflation, as everyone knows. the difficulty is that the fed has a few measures of inflation that it is focusing on. the market tends to key off on cpi. the fed is focused on wages. if you think how long will it take for all of those two point in the same direction, to me it is a q4 event. >> stay with us. >> welcome back. >> we are back with john normand. how long are rates going to stay eurozone?e >> we reckon three years. ecb does nothing until 2018 but it depends on the

a way around it, but -- that to say that what we have seen from the fed, what we see from the bank of japanhe ecb, and the bank of england, is working, or not working? >> well, look, from my humble point of view, absolutely it is working. i woke up in 2008 and i said thank god my father forced me to go to law school because i could always go back and practice law because the private equity business is probably over. fast forward, we are all reaping the benefits of whatever it was. employment is returning. households are feeling better about the equity in their homes. we are missing the middle class, which we have to fix. we are trying to fix health care. we are trying to adapt to school policy. businesses, corporations, the stock market has never been higher -- of course we are all scared to death. we are all scared to death because we have no volatility, corporate default rates are at an all-time low, and corporate debt issuance at -- is at an all-time high and all those things are great, but been great scares us to death. >> tom, i could talk to you all day long. thank you for joining me.