some of us still remember that in the 1970's most central banks, not the bundesbank, most central bankspolitical control and obliged to follow short-term oriented policies. 2000's,he 1990's and the importance of credibility was increasingly appreciated, and evidence mounted that independent central banks with a clear mandate delivered much better economic outcomes than those under direct economic control. the result was a revolution in central banking. today, most countries' central banks are independent, but subject to a mandate drawn by the legislators who in turn hold the central bank to account. , communication of monetary policy has become much more transparent. second dominant feature of the paradigm prevailing before the crisis was its focus on nominal wage and price rigidity. models including these rigidit ies had greater explanatory power than previous models and were more in line with policy practices at the time. price stability emerged in both central-bank mandates as the overriding objective. the central bank should pursue in order to maximize social welfare. in the words o

tweaking the mandate of the central bank could be a positive. y market reaction to the proposal wasn't really positive and we saw the report a few weeks later to look at privatizing the bank which is now being backpedaled on. with theturbulent week vote of no-confidence so this is changing something considered to be the bastion of the economy has not been received well. this is an economy that is in recession and it is very important to see that the central bank will remain independent. yousef: when people hear central bank independence, they shrug. it's a very sensitive subject. in what sense is this politically motivated? >> we are looking at the leadership contest in december. this could be seen as a move by jacob zuma to push forward his move of radical economic transformation in the run-up. it has been a turbulent time, and you have seen that there has -- this could be seen as a move i him to push forward. his supporters say that the central bank has seemed to be on --ant to loan to back and itk-owned businesses could be seen as quite a posi

a quadrillion worth of yen in bad bank that they didn't really understand how fraudulent these central banks were how complicit they were and the bell out of their friends at the regular banks and the complete repudiation of free markets and a continuation of the pension collapse wage collapse job collapse. wife you know death death and destruction that they fan the flames and mortality rate is increasing mortality rate is eight degrees thing. is for bad behavior there's no penalty there's no deterrent i mean if i don't get arrested if i will go into a liquor store kill people and steal money i'm going to keep doing it right well this what i'll respond to say well maybe it's time to remove the punchbowl well yeah it's like ten years too late you're frickin and it so i do want to mention on the central bank front of course in the past week it's emerged that i think it was the swiss national bank has paid a billion dollars in interest on negative interest the swiss banks have so on these negative interest rates after swiss national bank there's no deterrent yet they get rewarded for criminal b

the reason why interest rates are so low is because alan greenspan's buddies there at various central banks have been buying or monetizing those bonds that debt to keep the zombie banks from having to declare a solid c. even though h.s.b.c. j.p. morgan goldman sachs citigroup b. and b. are technically insolvent because their balance sheets more debt than they could ever possibly pay interest on or make good on. nevertheless they are engaged in this massive fraud now there are many people we've had on our show for the last five six years that have said this is the end of the bond market bond market is going to fall interest rates are got to go up and they've been wrong every single time for five or six years starting in the two thousand and eight financial crisis when the world was flooded with chileans of dollars of bailout money many people came out and said was this is inflationary bombs are going to fall but that never happened because they didn't understand that the european central bank would buy hundreds of billions and trillions of dollars worth of bad bank that that the federal rese

we got a story talking about other central banks that could express concern. ey are not all going but to some central bankers can's -- anchors could express concern. it here concerns about strength and currency from these central bankers. how did the market react there? really with the market wants to understand is what you are going to do? have cause i pegs -- quite as i pegs. their hands are tied. they can use the media to add to the private conversations they have to express their frustrations and their demands and try to influence policy. liepower of the decisions within the european central banks. these outlets will be used to try and express policy desires. the impact they can have. manus: draghi coming he didn't just draghi, he didn't really take the reins. the market itself is paying a huge premium, three times the amount. this is your dollar won -- this is euro dollar won. indeed, dollars turning. -- dollar sterling. how real is the risk? ben: in the business of building balance portfolios, we lean portfolios on the basis of how we assess the risk. , i

debt so central banks are smoking their own belly button lint they are the economy we are an empire that it makes perfect sense that the end of an empire of debt the central banks which are the you know basically agents of the empire are left holding the bag of all their own debt yeah they own a lot of stocks so what is national is ation what happens when the government buys back companies on behalf of the government i mean why do people think that venezuela is a socialist pit oh they know they nationalized the energy companies there their nationalized stuff walk on the u.k. doesn't have a functional railway system oh because it was nationalized and then we had to take it you know what private it would privately sold to private contractors who then turn it into the worst transportation system in europe with the faint elitism delays aplenty. so this idea of nationalization gets a bit rough but what is it when the swiss national bank is such a bunk and other such all banks on behalf of governments are now the biggest owners of stocks when japan is the biggest owner of exchange traded

what is it when the swiss national bank the subtle buying and other central banks on behalf of governments are now the biggest owners of stocks when japan is the biggest seller of exchange traded funds that's called nationalization that's socialism combined with the central bank the polling bureau that is fixing the price of money it's not a free money market for money and combined with purchases of open houses and nationalizing those assets that's a pretty good call it is and that's nationalism that's why the job global economy is shrinking because the social breakdown of what danny blanchflower power says they're not operating in ways to free markets. hi linzi francis is broadcasting around the world from washington d.c. knights wall street reacts to president trump claims that the government will shut down unless it builds that wall between the united states and mexico adding to it is his statement about scrapping nafta also the time warner mega merger faces pushback in brazil we've got details on that also it's been a wild a year for airlines from talk of privatizing air traffic contro

on the mind of mario draghi as president of the european central bank, if he sta rts the european centrald see the euro strengthened and that could be a problem for the european exporters. for the ecb, compare to the us fed, they are behind. they are not reducing the amount of assets, they are thinking about reducing the amount day at every month. the euro has been one of the strongest performing currencies over the course of the year and it could affect big exporting nations like germany who have a lot of revenues coming from abroad. watching that currency will be very important. stick around, we will talk to you about the papers later in the programme. still to come, this week's digital takeaway. technology correspondent rory cellan—jones will chart a path through all the big tech stories of the week, including the news that estonia is looking at launching its own bitcoin—like digital currency. you're with business live from bbc news. now, big brands influence what we buy through clever advertising on billboards, tv and social media. but in an increasingly crowded world, how are they go

i think that is the dilemma of the world's central banks. we have gotten to where we need it to. from an inflation front, we haven't. the risk is very much there and central bank policy has to be there. jonathan: it is the rapidfire round here at one question to each of you with one word answers if you can. we begin with a conversation about credit. it is a buy and hold story. you are not allowed to sell. you have to hold to maturity. similar maturity for amazon or tesla and you have to buy and hold. i know you are a rates person, but you have to play. so, buy or hold? amazon or tesla? >> amazon. >> amazon. >> i will go for tesla, it is wider here. jonathan: if i could give you a speech now, would you take yellen's speech or draghi? >> draghi. >> draghi. >> draghi. jonathan: who is at jackson hole next year, chair yellen or chair cohen? >> gary cohn. >> gary cohn. >> gary cohn. jonathan: that was an easy one. it has been great to have you on the program. thank you very much. from new york, that will do it for us. we will see you next friday.

all this debt by the central banks. deal with any future crisis? —— is ita deal with any future crisis? —— is it a problem in terms of their ability. >> ten years ago, we had the worst financial crisis that has hit the world for decades. it was an enormous problem and they had to be things done to get that back. —— ten years ago, we had the worst financial crisis that has hit the world for decades. —— it was an enormous problem and they had to be things done to get that back. the number is astounding. 46 trillion dollars in debt. the federal reserve in the us are currently looking to start to remove some of that. they want to pull back on some of our balance sheet. but that balance sheet is $4.9 trillion. that is amazing. not only do the us owned $4.9 trillion of us government debt, they also own $2 trillion of eurozone government debt. why does this matter? why could this be a problem? there are two reasons why this could be a problem. number one, at the market does not necessarily run the way it is supposed to. the go

i think that is the dilemma of the world's central banks. we have gotten to where we need it to. importantly from inflation, we haven't. the risk is very much there and central inc. policy has to be -- central bank policy has to be there. jonathan: it is the rapidfire around here at one question to each of you with one word answers if you can. we begin with a conversation about credit. you have to hold to maturity. amazon orturity for tesla and you have to buy and hold. i know you are a rates person, but you have to play. so, by or hold? >> amazon. >> amazon. >> i will go for tesla, it is wider here. jonathan: if i could give you a speech now, would you take yellen's speech or draghi? >> draghi. >> draghi. >> draghi. >> he was there next week, yellen or cohn? >> gary cohn. >> gary cohn. >> gary cohn. easy one.that was an it has been great to have you on the program. from new york, we will see you next friday. it is "bloomberg real yield ." ♪ got you outnumbered. the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashi

francine: are you worried about central-bank communication? no, i think it has come such a long way. it is far more detailed, better than it was 30 years ago. i agree with what larry said about the bank of england and would add, this pickup inflation you are pointing to, the mostly reshoot one, is structurally different from the other two in 2007 and one in 2011. namely that the first two you are referring to were reflections of a poignant isnomy, where is this one the reflection of a tumbling pound and england having the world's largest current account deficit is adding insult to injury. inflation -- and it is one of the reasons the bank of england will be in no rush to preempt it. francine: thank you both for joining us. cio at credit suisse. we speak exclusively to prudential's ceo here in the studio. this is bloomberg. ♪ ♪ francine: this is bloomberg: surveillance. i'm in london. the insurance and investment giant prudential has released its latest earnings. operating profit came in at 2.36 billion pounds. we are joined for an exclusive int

support of central banks is a big problem. in terms of the dependence on central banks.t are the other big problems? gillian: one of the big issues is cybersecurity. the entire modern financial system is dependent on cyberspace and cyber links working. nobody has yet to work out what would happen if -- charlie: why did they do that? i do not understand why, as smart as everyone is, why they can't figure out what to do if there is a hacking of some significant financial institution. gillian: there is a very unequal power balance. the banks are doing a remarkable job in the west and getting better with cybersecurity problems. charlie: there are attacks all the time. gillian: absolutely. but the reality is the world is becoming a lot more unstable politically, and we should be grateful there have not been more shocks. the other big question is what on earth is going to happen if we see more geopolitical instability? equity markets are discounting that. we have a soaring stock market. charlie: explain that to me. all these things you're suggesting are there and very, very di

support of central banks is a big problem in terms of its dependence on central banks. what is the other big problems. >> the other issue which is still very much out there is cyber security and the financial system is dependent on cyberspace and cyber links working. and nobody has tried to work out what would happen. >> rose: why did they do that. i don't understand why as smart as everybody is why they can't figure out what to do if there is a hacking of some significant financial institution. >> because it's a very unequal paradigm. the banks are doing jobs in dealing with the cyber security problem. >> rose: there are attacks all the time. >> absolutely. but the reality is that the world is becoming a lot more one stable and frankly we should be grateful there haven't been more shocks thus far. the other question is what is going to happen if we see more geo political defragmentation. it's entirely discounted and we have flowing stock market -- >> rose: explain that to me. all these things you're suggesting are there and very very dicey. the stock market is explodin

treasury has said that the quantitative easing policies that the central banks have undertaken since the two thousand and eight financial crisis has been like heroin for the economy do you think that with companies currently depending on central banks to cheap money for things like stock buybacks and mergers and acquisitions that it's an accurate statement or is it just hyperbole. well go back a year ago watch two thousand and sixteen you had the dallas share richard deficient former fed chair saying that the rally was driven by quote coach k. and jack it's not the. everybody knows about this what's going on but they don't teach you this in economics one o one there's never been a thing called negative interest rates zero interest rate policy and quantitative easing they've made it all this stuff up and all it's done the facts are there boosting the equity markets and they don't know what they're doing don't believe me go back and asked spend bernanke you back in two thousand and five if there was going to be a housing bubble and he said no go back to two thousand and seven when the

banning it hsbc is considering it and goldman sachs is under fire for having done a deal with the central bankth of bonds back in may. the idea is that these banks and traders are helping the government really keep people under heads of the government to make its debt payments. the actual citizens of venezuela are going hungry. you can see that chart if you want to see that chart at 9374. nejra: a little bit of pain on a friday. the winner is dani burger. we talk so much about the vix and that's a great chart. coming up next, "bloomberg real yield." you do not want to miss this. this is bloomberg. ♪ got you outnumbered. the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. find your awesome with the xfinity stream app. included with xfinity tv. more to stream to every screen. ♪ scarlet: i'm scarlet fu. l: i michael mckee. jonathan ferro is off today. let: for 30 minutes dedicated to fixed income, this is "bloomberg real yield." ♪ gundlach saying the time to reduce risk is now. and he u.s. infla

talked about this conference wants to focus on, things like regulation and are there things the central banks can do to stimulate the economy. janet yellen took a little bit of a step back though she was pretty pro regulation, she also said hey, there are tweaks that probably can be done, because of the interrelationships of all of these different regulations might actually be hampering growth and maybe we should look into that and i think mario draghi might come from the same type of approach. jonathan: martin, for investors, how have you prepared for the removal of accommodation in europe when central bank

the central bank says 99% of banned 500 and 1000 rupee notes were exchanged for new money. this for us. why did they ban certain banknotes, and now it seems they are all back in circulation anyway? in november last year, this was a surprise decision by the indian government, where they decided to ban 86% of the currency, all high—value currency notes to be banned overnight, and the reason for that was they wanted to crack down on black money, money for which a taxes not been paid. they wanted to crack down on tax evaders and corruption. internal estimates were that about $60 billion will not come back to the system, and this will be regarded as black money which was floating in the system. but now the central bank has come back and said, actually 99% of those notes of comeback, and that means that a nalysts a re comeback, and that means that analysts are saying the policy was a failure, because if 99% of the notes are back, only $3 billion were recouped, and that is not worth it for the problems it caused. that is an interesting story on why sometimes that just doesn't an i

have a financial system that has become addicted to incredibly cheap, if not free money, from central banks is unclear how it can go back to anything resembling normality. the financial activity is not happening in banks, it's happening outside banks. hedge funds and the like. gillian: it is still a very distorted financial system. with theuestion federal reserve raising rates is what on earth is going to happen as rates begin to go up and normality returns. landing,e be a smooth or will we turn around and discover actually the whole system today is propped up on confidence in central banks? monday chairman of the ecb made a famous statement, we will do what it takes -- they gave confidence to the system. years, that last 10 confidence turned out to be more durable than the confidence in private banks a decade ago. charlie: china is a big problem. support of central banks is a big problem. gillian: one of the big issues is cybersecurity. nobody has yet to work out what would happen if -- charlie: why did they do that? i do understand why they can't figure out what to do if there is a hackin

me directly @carolincnbc >>> still coming up, kansas city fed president esther george says the central bank is well set up for a rate hike. we'll have plenty more from jackson hole and plenty of discussion in the studio after this short break did you know slow internet can actually hold your business back? say goodbye to slow downloads, slow backups, slow everything. comcast business offers blazing fast and reliable internet that's up to 16 times faster than slow internet from the phone company. say hello to faster downloads with internet speeds up to 250 megabits per second. get fast internet and add phone and tv now for only $34.90 more per month. call today. comcast business. built for business. >>> welcome back to the show the dollar has edged higher ahead of a gathering of the world's top central bankers in jackson hole, wyoming. janet yellen will have a speech at 16:00 cet in what could be her last fed watchers have indicated her comments could outline a course-charting path for a possible successor with a focus on how the central bank plans to unwind its balance sheet ecb watchers ar

more, from frankfurt, team leader for our european central bank coverage. how hawkish is hansen? bly the most hawkish on the council, right? >> he leans toward the hawkish side. he's also a respectable academic economist and central banker of estonia. although that is a small economy, he does carry some weight on the council. jens weidmann spoke in a separate interview, giving the same argument, that he sees the euro strength as a sign of recovery, and he is not concerned. they may well reflect the prevailing mood on the governing council. francine: the idea is that basically ecb needs to tie forward guidance told measures rather than focusing on interest rates and bond purchases. how difficult is that? >> very. he said he doesn't know exactly what design the stimulus package will look like, but it is not going to be easy. easingward guidance, the , is centered on the asset purchase program. he wants that to shift. he would like to see the easing bias linked to all ecb measures. wideis easy to say in a ranging discussion, but you need to pin it down into policy statement that tell

on,son hole, central banks well, diversion paths. sydney.m haidi lun in changing channels, cbs agreeing to buy 10 network, saving the struggling broadcaster from collapse. this is "bloomberg markets: asia." ♪ rishaad: right, well, banks reporting out of china this week. note onjust seen a nonperforming loans. people keeping an eye on that. this is an alarm bell for the amount of debt they are caring. showing what 9438, is happening. out of all of them, it is agricultural bank of china which is the worst. it's nonperforming loans seemingly worse. all will be revealed this week, the big four out with earnings and indeed these numbers as well. haidi: absolutely. a lot to digest when it comes to the asian open. we are getting the washer from jackson hole, more what wasn't said by janet yellen and mario draghi, the latter refraining from commenting on monetary policy or the strength of the euro. the dollar lower on the account of janet yellen sounding more dovish than expected. we had saber rattling out of north korea, and the big calendar when i

it's clerar that central banks want to taper. they just don't know how seriously to take the lack of inflation pressure. we are moving into a tapering environment and we look at smaller increases. we will see progressively smaller central bank activity and quantity of easing for the ecb. francine: let me bring you over to my ecb balance sheet chart, thank you, hillary clark. there's a breakdown for the different asset classes, marginal lending. how much does he have to taper because there are not enough of the german bunds to buy>? >> the either have to taper or change the promoters of the policy to find other things to buy. our view as a house is we think when they extend it, they will extend it to a smaller amount. they will extend it over the first six months of next year. then, they will be a further extension of the program in the second half of next year. yes, we will get tapering. they think even without, will have to be somewhat imaginative in terms of the program, in terms of the flexibility and in terms of buying and mo

think about central banks locally and liquidity pumped into the system.e're talking about $9 trillion in global stimulus. at the pace, even though the of $200 ling back, billion a month being inject globally, and primarily b.o.j. and e.c.b., so you have all this q.e. and this liquidity injection and very little inflation. meanwhile, employment is coming up, especially in the u.s., now down to 4.3%. so people talk about the phillips curve and what is the fed really focused on, and reducing macro volatility has been a side effect of all this stimulus. so is the fed ok with lower inflation and employment continuing to tick down? they're going to be very careful about how they implement the unwind of the q.e. but i will say, last thing, this remains an open question. how all this q.e. globally, what will the unwind of all that policy action do to the markets? and i think all central banks, fed included, will be very careful about how they unwind all of this. david: so i think all of us can agree there's uncertainty about the unwind. does that mean we're bette

everyone likes that and says oh my god those people are anti-capitalist they're evil but of a central bank prints money and buys back controlling interest or huge swathes of stock as in the case the swiss national bank or the bank of japan isn't that nationalization myth. yeah of course it's nationalization that they don't want to call it nationalization and you've got the european central bank has bought you know we have a chart actually that we can go to that will show you what their balance sheet looks like their balance sheet is exploded i mean it's five trillion euros in debt i mean italy has already said they're not going to repay the debt but getting back to your point of nationalization what's happening is they're buying all the corporate bonds they can buy some of these bonds are probably joke these bonds are not called junk or high yield reason it's because they have a higher probability of default to the only thing that low interest rates and we will see zero interest rate policy in many more countries to come is that it keeps alive design zombie institutions for a longer period

what is it when the swiss national bank the central bank and other central banks on behalf of governments are now the biggest owners of stocks when japan is the biggest holder of exchange traded funds that's called nationalization that's socialism and combined with the central bank of poland bureau that is fixing the price of money it's not a free money market for money and combined with purchases of open houses and nationalizing those assets that's pretty good communism that's nationalism that's why this isn't just global economy is shrinking because the social banks amount to what danny blanchflower power says they're not operating in ways to stow free markets. and book a queer little place called the gay police a key to keep. the us there. was a lot to. get in we were going to commit there were feared and i think. the last one for the whole saga of such was when did one of the joyful for the what he said i feel we should i should think almost as you pull thank you for such. a big gun. hoover faces accusations of stealing trade secrets that duped government regulators along with numerou

to raise the central bank is holding regular meetings with monitor. they are encouraging banks to bu , resulting in a further depreciation of foreign-owned entities. talks resume in a big pivot discussion towards the trade deal. willsa may's government publish five new position papers this week. yesterday they declared they were stepping up pressure on the block to shift the terms of the association away from the t alks. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. i'm nejra cehic. this is bloomberg. francine: we are getting less take shares of, i believe, beginning to gather some steam. and believe that is the interviewer. we should see the chancellor there, there she is, starting with her first or second question. we will monitor that is a lot of breaking news headlines will probably be crossing the bloomberg terminal. president donald trump will make a primetime speech about what asia later southeast as he looks to get his presidency back on track. the directs all department of ste

other central banks have participated in this.not selling these securities. we are simply not replacing , andities as they come due we will do this in a phased in way. we have articulated that. market participants are well aware of it. we have not seen -- if anything and10-year have done this we do this in a way that minimizes the impact on the mortgage-backed securities market and i think this has been a plan that has been well communicated and i think it should be effective. not know what mario draghi is going to say but the ecb has said that they will stop buying at the end of the year in their qe program. how do you think the combination of the fed and the ecb will impact bond yields? do you have any forecast? so, there is no textbook for building up the balance sheet and there's no textbook for winding it down other than what i tend to look at with treasuries and mortgage-backed securities, what is the daily volume and what is the size we are talking about running down as a percentage of daily volume? to my eye, this is very

collapse of the part i like about it i mean wealth comes and goes by watching central banks crawl into their desk and pee themselves and cry that's what i like. this photograph is gone viral it's a striking illustration of moral strength and fortitude kid you can see the students of ruin does one only class gold ballet school. controls to the country's brutal history and nine hundred ninety four about one million people were killed in rwanda just one day. soon so by the neighborhoods. in. rwanda some of the trauma and brutal violence of into tribal conflict today just over two decades own the nation has recovered to the point of becoming one of africa's most peaceful countries children now attending ballet classes. it was managing. him for to know. where. he was it may be cold caroline he she was a teacher. teacher and she opened her own school so she continued in two years ago i think. and then she went back to the us and then i needed to. go to our story that's pretty. positive on kids so she. is a company and we did receive this for how those are on for the proposition of havin

debt so central banks are smoking their own belly button lint they are the economy we are an empire that it makes perfect sense that the end of an empire of debt the central banks which are that you know basically agents of the empire are left holding the bag of all their own debt yeah they own a lot of stocks so what is national is ation what happens when the government buys back companies on behalf of the government i mean why do people think that venezuela is a socialist pit oh they know they nationalized the energy companies there they're nationalized stuff walk on the u.k. doesn't have a functional railway system oh because it was nationalized and then we had to take it you know one private it went private was sold to private contractors who then turn it into the worst transportation system in europe with the fatalities and delays aplenty so this idea of nationalization gets a bad rap but what is it when the swiss national bank is such a bank and other such all banks on behalf of governments are now the biggest owners of stocks when japan is the biggest owner of exchange traded

the central bank has also been tasked with the stability of the banking system. , the boj has done aping the banking system on track. in australia, they are mandated to look after implementing growth, but it has of third little-known tenant, to look after the welfare of their citizens. china just not just boost growth and look after inflation, but liberalizing financial markets and a rotor role in opening up the economy, so these egg centralbanks -- big banks don't just have a strict purview to look at price stability. they have a broad mandate to look at the economy through a much wider lens. is key as we look at the implications for asia as the fed begins its unwind. we could get that from janet yellen this week. shrinking of the fed balance sheet will be one of the biggest in maddux for the global economic debate for months. is a feeling in asia and emerging-market asia that there is wrong ability, especially when you consider how volatile currencies are in this part of the world and how auto capital lows are. -- capital flows are. is why these mandates are so important, being tas

the central banks oh i mean people say oh my god look at communism in cuba there's food shortages and rationing well look at communism in in britain in america there's credit shortages people can't borrow credit to open businesses and be entrepreneur because credit shortages because of central planning because of the polperro of central banking around the world that operates the global finance community like socialist and communist operad jacks from a different era a different century and those very central banks the regulators the governments are trying to force everybody they regulate out you're not allowed to invest there you're not allowed to compete there and we see this we see the demand the hunger for investment opportunities in say the initial coin offering and crypto currency markets there's an explosion of investment in stuff happening because the big banks haven't figured it out yet and they are entering it but you know the fact is they were too late but there could be a million startups all over america creating ten million twenty million jobs if the banks were lending mon

them -- czech central bank.accelerating. i wouldn't need to look into the data harder but it is a possibility that you have those eastern european companies doing quite well. a lack oflso facing labor supply because a lot of people have moved away. i think this relationship stays strong but isham look at what german companies have been doing -- but it should look at what german companies have been doing the last two years. francine: thank you so much. from bank of america stays with us. if you have any questions for gilles, logged on to bloomberg. you can ask the guess the question a you can stea -- and you can steal some of these charts and use them for yourself. this is bloomberg. ♪ taylor: this is "bloomberg surveillance," let's get though bloomberg business flash. jeffrey goldilocks says risky assets such as junk bonds and emerging-market debt is overrated. he said he is reducing the positions they in their place, gundlach will invest in higher-quality assets. the danish jewelry maker pandora plunged today.

the central bank struggles with inflation.he president of the ultimate fighting championship says conor shouldn't write up mcgregor's chances of beating mayweather. he will face the boxing legend tomorrow night that should set sales records. the boxing people are saying he has no shot, he will be annihilated. when two people square off that know how to fight, start throwing punches, anything is possible. conor mcgregor has knocked out power -- knock out power in both hands. he can win this fight. nejra: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am nejra cehic. this is bloomberg. francine: thank you so much. as we await for the jackson hole speeches from janet yellen and mario draghi, to fed officials are offering opposing views on the inflation to be. esther george says another rate hike is feasible this year if u.s. data holds up, but the telling has robert a different view. haven't lost faith that inflation will get back to 2%. historic cyclical forces in the

, major central banks balloons bae sheets to 13 or 14 trillion from 5, we see a peek in central bank balance sheets early 2018, then you will see recede, then none of us understand what the full implications are, we have never seen that before. never seen central banks increase their balance sheet to what they have, or roll off effect. >> unprecedented, talk about investing today. and allocating capital. you have backed off a lit large cap equities. >> well, in our asset allocation process we look at return of u.s. equity markets, and large caps did particularly well, and meaningful out performing small caps. we still maintain constructive view on small caps, and small caps have a benefit of any policy changes particularly in taxes, small cap companies pay higher tax rates, that upside we would see in small caps. >> do you think they get tax reform done? how much is priced in at-this-point, we have been talking about strong earns driving things, how much is tax reform getting done priced in to the market. >> i think very little. given policy failures over course of the last 6 or

, major central banks balloons bae sheets to 13 or 14 trillion from 5, we see a peek in central bank balance sheets early 2018, then you will see recede, then none of us understand what the full implications are, we have never seen that before. never seen central banks increase their balance sheet to what they have, or roll off effect. >> unprecedented, talk about investing today. and allocating capital. you have backed off a lit large cap equities. >> well, in our asset allocation process we look at return of u.s. equity markets, and large caps did particularly well, and meaningful out performing small caps. we still maintain constructive view on small caps, and small caps have a benefit of any policy changes particularly in taxes, small cap companies pay higher tax rates, that upside we would see in small caps. >> do you think they get tax reform done? how much is priced in at-this-point, we have been talking about strong earns driving things, how much is tax reform getting done priced in to the market. >> i think very little. given policy failures over course of the last 6 or

the heads of central banks taking off their meeting in wyoming. it is called jackson hole, and the united states might face defaulting on its debt if the cap on federal borrowing is not raised. u.s. debt will be one of the topics at this meeting a central bank leaders in jackson hole. this might even be janet yellen's final conference as federal reserve chair. president trump wants to install a new federal reserve chief, and that might be the top trump economic advisor gary cohen. that might signify less independence for the fed, but all eyes and ears will be on european central bank president mario draghi. there could be a slowing of asset purchases from the current level of 60 billion euros a month. others expect the disappointing speech with no real changes. mr. draghi has been secretive about what he will talk about. time for more analysis of the meeting of world central-bank leaders, let's go to our financial correspondent in new york. what do people on wall street expect to come out of the meeting? reporter: yellen is going to be an importan

>> the central bank has a different challenge. so different from each other, the real economies are so different, unemployment is 9.1%. hand, andthe one germany is on the other hand. europe, the challenge is in flexibility in economies, and overbearing monetary policy. it is not the monopoly of europe. the u.s. is the same. the fact is, if you want to promote investment productivity and growth, the solution is not in the hands of central bankers. policy that budget eliminate distortions and make economic systems more flexible and encourage us to think about the future. >> very interesting to see. we are going to keep getting the best from you as we continue this conversation. jacob is the chairman. we are coming back with more. ♪ >> welcome back. bloomberg television live where at the jackson lake launch, take a look at the symposium kicking off tonight. getting ready for a speech from janet yellen. joining me, someone who has been here for 33 years in a row. the former governor of the bank of israel. jacob, you are concerned abou