is it even a tougher job than deutsche bank? lionel: i don't think so. nally is still punching its way so that it can exit in countries and sell assets. it has an say that good corporate bank, a good retail bank, too. it can be simpler, even though the banking sector is in a lot of pain, in a lot of trouble. unicredit has the story to tell. tom: thank you so much. lionel laurent, thank you so much. brian: at the end of the day you can believe the cash there. tom: they are not going to do a cash call? brian: they are increasing dividends, and we are getting back to what angst are pretty good at. , buyingther banks stocks, and creating dividends. i have never seen the contrast between european and u.s. banking like we see this summer of 2016. chief investment officer, look for him in the not :00 hour this morning. from london and new york, this is bloomberg. ♪ francine: i am francine lacqua in london. tom keene is in new york. we have talked fed, asset markets, but let's talk corporates with the "bloomberg business flash." taylor: europe's largest airline s

and deutsche bank.it seems like the question for apple is are we going to see a move higher, is the worst over? matthew: it looks like apple's business is stabilizing. expectations were low this quarter and they exceeded, so it seems that stabilization is the way to describe this business. alix: what is the key metric to look at for next quarter? their fiscal first-quarter is the december quarter and that will give us a iphone what they expect seven to do. alix: to look at the services side of the business -- matthew: i think tim cook has not set a whole lot you and it is getting worrisome that he is sticking to the status quo whether -- rather than trying to find things driving us higher. he has been throwing out the same metrics for a long time. alix: michael moore is joining us on deutsche bank. it was a different story, particularly when you look at the u.s. bank. michael: deutsche bank was down 20% in the debt trading whereas all the u.s. banks were up. you are starting to see the restructuring hav

deutsche bank, up .3%. john cryan saying deutsche bank needs to accelerate its cost-cutting. costs and trading area,n as a weak especially in comparison with what we saw from the united states. by 2.6%e-klm is up deutsche bank going unchanged there. 4.3%.s up by those were impressive according to analysts over at barclays. some breaking news, caroline. caroline: we have been obsessing about this nintendo stock. pokemon go has been fueling some appetites, and some concerns. for the first quarter, we have not seen the implications of the pokemon go of session. we had first-quarter operating losses of more than 5 billion yen, double what expectations were. the expectations called for a 2.1 billion yen loss. first quarter sales came in at 62 billion yen, again shy of estimates. and they are booking an fx charge of 55 billion yen. they are not yet able to show the positive reaction from pokemon go. we will see how those shares trade because it has been on a roller coaster since pokemon go has been obsessing the market action. anna: let's talk about the banking sector, but this tim

deutsche bank reported as one of the first banks in europe and we to weak earnings compared your u.s. reporting. after that, we take an investment decision. mark: thanks for joining us today. union investment portfolio manager is one of the big 25 shareholders and deutsche bank. want to reiterate the news that crossed bloomberg. management has asked employees to stop work on integrating the brewers operations. as i was saying, the move comes as ab inbev raised its cash bid for the british group to take into account the plunge and sterling value since the brexit vote. we did hear from aberdeen asset management, the sixth biggest andeholder in sab miller, it sent the revised proposal undervalues the company and remains unacceptable because stockholders are not being treated equally. bloomberg has called up ab inbev and sab miller. both have declined to comment. we will keep on top of the story. this is bloomberg. ♪ vonnie: is time now for a global that all the charts where we take a look at some of the most telling charts of the day and what they mean for investors. you can access these

deutsche bank up .7%. re seeing a lot of shift and focus on the banks and it seems that what brexit has done is put the spotlight on some already weak markets. ♪ francine: i am francine lacqua in london, tom keene in new york. let's talk about u.k. politics or shakespeare. my morning must-read comes from the financial times. forget winning elections, all that matters to the labor grassroots is that mr. corban believes in things on which he will not budge. the conservative party could be about to make the same mistake. he is talking about the fact that there is a leadership contest and you have number one theresa may in the lead and then andrea leadsom number two who is pro-brexit. that they will choose someone for brexit just for the sake of it, even a she may not be the best person to negotiate with the eu. i do not know how do you look at this political risk. it seems like italian politics and politics in countries which do not make it to the nci index. steven: i think it is pretty clear what the curis th

second half of the show, how low will deutsche bank go. we'll take you behind the eyebrow raising trade that points to double digit declines for the bank in the next month. plus, after a slow start to the year, the market is heating up. we'll give you the names you need to watch in a special report. be but first, start off with the trapz ports entering the dreaded death cross today. the space is down more than 4% in just a past month. hi, dom. >> motoring melissa, whatever you want to call it, we're tryinging to keep an eye on some of the hot and cold spots. the story is is both hot and cold to a certain degree. the hotter side of things, it finished pretty much in its wos, got a bit of boost. median turn down trend in the transportation index. really, it's idea that it entered into this death cross formation with a shorter term average price drops below. doesn't necessarily mean worse times ahead, but something traders are watching. there are 20 members of the index and over the past three months sh it's been very clear what's been trading

some pretty major lines coming through from deutsche bank. 2016 will be the peak restructuring year for those are the words of the ceo. futures in london indicated up 1/10 of 1%. this is bloomberg. ♪ e anna: welcome back. this is countdown. you are looking at a live shot of the tokyo imperial palace. the time in london is 6:30 in the morning. 05.53. a move of 8/10 of 1%. weaker on the yen, stronger, all over the place. given the numbers. and the connection with abe, when the stimulus package will come and how big. we have heard a range of corporate. manus: this is the chemical company, going after monsanto. billion, the estimate was 2.96. this is excluding certain items, 3.05 billion. a comfortable beat.they actually raised the forecast for the year. beat.e top line is the revenue coming in at 11.8 billion. the market was looking at 12.1. a bit of a mess on revenue. billion.e 1.38 they just raised four-month average do a share, that was last week. so a nice little bit of a beat, those your numbers. let us talk about daybreak. now available on your bloomberg, on your mobile. your ego. an

have such as deutsche bank come through slightly below average. s at the moment look slightly above expectation. amanda: walk us through how the results of the stress test will be used. the european banking authority will apply them and look into what each bank should do on a case-by-case basis, but none of these recommendations are binding, are they? elisa: not quite. there is no pass or fail mark. no one has been shown to have a particular shortfall of capital. the ecb will use these findings to determine just how much capital each individual bank is going to need for next year. it will be a process that is tailored to each bank and there is no visible fail mark. joe: what do the stress test results mean for deutsche bank? that is a stock that has done horribly and people keep watching and grinding lower all year. where are they? to -- we have been able not been able to get many reactions yet, but i believe the indication would have to be showing further difficulty over capital buffers, as you said. that is part of the reason that the shares have

deutsche bank down 45%. royal bank of scotland down 42%. bank of italy, i know it's not a household name is down 75%. one of f the biggest banks in one of the biggest economies in the world has lost three-fourths of its value in six months. first of all, for folks in tv land, i didn't hear anything wilfred said. >> deutsche bank is up a couple of percent. >> your point is that look, a lot f these banks need capital ch if i look at the italian banks, would i want to own that? no. the simming risk around the world with largely backstopped by central banks, so what's the call here? it's we're trying to look at where banks have stressed in the ambulance sheets. u.s. banks have better balance sheets than they've had if ever, certain ly in decades. i'm not sure, this is anticlimactic to me. nothing to traden here. i wonlt buy european banks. i think there will be equity. >> even though there's 50, 75% decline, tim is not buying these bank stocks. zpl gl the quarter i think on july 27th wus a disaster. unmitigated disaster is the word i would use.

tom: i am going to put that out on twitter, deutsche bank is a boutique bank. -- nandini ramakrishnan was staying out of the conversation as much a she could. up 10.ard, s&p futures dow futures up big as well. ofomberg "surveillance" course we are live. ♪ francine: tom keene is in new york. we are going to the bank of england governor mark carney who is giving his testimony to lawmakers. the boe saying they were concerned that reducing banks' buffers would mean that a lot of the institutions would give back to shareholders instead of banking, giving more lending to the economy but mark carney says it is a way to stimulate the economy. in ays the u.k. is different situation from the financial crisis but still worries about brexit. tom: is this a chat or a q and day? francine: it is a chat. they take it in term. sometimes it can be a robust chat and it just depends on the lawmaker. i am looking forward to the best-known brexiteers who always gives them a tough time. difficult.an be his father was much softer and individual. francine: very diplomatically put. seem

deutsche bank really the clear proponent of that. ourse as we approach the stress test results on friday in europe. just a reminder of the struggles the banks face. >> is there more faith in the europe stress test yet. >> in terms of credible. >> i think they are credible. the difference with this one is we're not going to get a clear pass or fail. it's going to be important. we'll keep looking ahead to those on friday. >> more stocks to watch today, akamai rose, but the company warns third quarter results could drop at its big silicon valley customers invest in their own infrastructure. >> analog devices is buys lin r linear. it's a 24% premium to monday's closing price. >>> match rose 41% p. online dating site was boosted by more users signing up for premium paid services. wilfred, buffalo wild wings, reporting a third quarter drop in same store sells. earnings matched forecast as the decline was offset by higher revenue thanks to the opening of new locations. sally smith will be on "squawk box." that is a first on cnbc interview at

the deutsche bank ceo signals another round of belt-tightening as trading slumps. learned that italy's largest bank, unicredit, is considering a $5.5 billion stock sale. we have the latest. mark: have aoo

deutsche bank as well. egulators give to the bank. theapital guidance regulators give to the bank. there is no action to take from it, but we are expecting to see how they perform in the crisis and what the banks come out and say in reaction to those numbers. whether they will talk about the actually have already taken to boost capital and whether they will say something or forward-looking. michael: what about -- what about the brexit impact? what it would take away from ceo comments and conference calls about whether they are planning to make new headquarters in certain cases? michael: a lot of taken away and see approach. but is what john cryan was saying yesterday, it depends on what clients want. -- the ceo of credit suisse as well. you can talk about the economic seeing itu are affected on the capital side. there is a number of different ways it is affecting the banks, but right now it is out of their hands. it is in the politicians' hands, so they are kind of at a standstill. mark: you alluded to this

there is a read across to deutsche bank. deutsche bank might fall at the open as well.o focusl be on. not as much of a drop as your commerzbank story, but 1% lower in the market. this stock, if you go to top live, you can follow everything. jumping in with their views on the upstream, the downstream, the numbers. the stock was one of the biggest losers yesterday on the ftse 100. santander has cut the outlook to bp for neutral over the last 12 months. net income comes in at $720 million. that is a miss. the market was looking for $820 million. production will be lower than the second quarter. that is what is causing a little bit of pressure. refining margins remain under pressure. i love top live go. there is a lot in there if you want to be on top of what is happening. caroline? caroline: good pitch, manus. keep an eye on another key u.k. trade for stocks, ab inbev o and sab miller rising about 2%. why? because ab inbev will be offering more. 45 pounds is the new price. for sab millered . they are offering that from 400 pence. factor.a brexit this is the pound slumping.

you sit at the heart of deutsche bank, and you're extremely critical of the whole project. you said four weeks ago, the bank has correct, and the mass bond buying. it is in itself in your words threatening the entire european project. >> i tell you this, when you look at the continent that now for a number of years, 20% youth unemployment, 10% unemploy mebt a ment stress all around, and you ask yourself something is wrong here, so the current policies just don't make it. i don't fault them for that, it's a thing they do. but, it hasn't solved the problems in the last six years, so why would you want to persist with it. plus, in the process of doing that, you've destroyed the ability of the banking system to -- to act as a channel for credit into the sme sector. >> and the relative escape people watching this, that you work for deutsche bank, the imf said recently, it was probably the most important net contributor to systemic risk within the sector. i don't ask you about the business, but being in that position, it must have been formed the view that you bring to the table?

here is deutsche bank, down down down. the critical news is that deutsche bank has rolled over.ack to mr. gundlac comments late in the week. trend is there this morning. oh, francine, please. francine: deutsche bank is probably the most important chart. it goes back to brexit and the volatility. keep an eye on that story. right now, to our first word news. >> british home secretary theresa may is laying out a different kind of conservatism as he tries -- she tries to become the u.k. prime minister. she promised to put workers first and make shareholder votes on executive pay binding. she also says that monetary policy has helped homeowners at the expense of those who can't afford to buy. more than a thousand british lawyers say the government must consult parliament before there leave theision to european union. they say last month's referendum was not legally blinding -- binding and parliament must vote on the issue. germany will take on increasing greater military leadership in global conflicts, according to plans for the country's first overhaul of its security policy in a de

fx strategy atof deutsche bank, thank you for coming in. at the staggering amount of bad debt in italian banks. we have a chart you cannot miss. ♪ ♪ matt: i am matt miller. "what'd you miss?" staggeringks reach levels of nonperforming loans. it is truly unbelievable. you read it, the chart is shocking. this is 1907 in a bloomberg charts library. i compared it to what it looks like relative to others, to the u.s., to the u.k., and germany. all of these other national banks have less than 3%. ,e are looking at only 1.5% nonperforming loans relative to the entire book, 1.4% in the u.k., and germany 2.3%. italians, 18% of all their debt is bad. joe: scarlet: that isn't urinary chart. matt: i know. more about to talk u.k. property. take headlines in the last few days have been about these funds trading, halted the halted redemptions. it makes sense because you are offering daily liquidity, but you cannot sell buildings in a day or two. it takes time, especially like now. a closed end property fund. the s&p 500 commercial property, it has a lot in

we were few minutes ago talking about the earnings report from deutsche bank earlier today. when you look at junior -- ofties of union being european banks, do you see anything attractive there? david: u.s. -- u.s. banks, u.k. banks and swiss banks. our philosophy is simple. we are looking for where capital's highest and most robust. we are looking for the strongest asset quality. and organic profitability. one thing about u.s. banks, which is why we are favoring u.s. over europe, is you're looking at the big four -- jpmorgan, city, wells fargo and bank of america. they will make up to $25 billion. the interest margins of 2.4% to 3%. they make so much money that unless you have a significant housing correction they will organically build capital overtime. tier one capital ratios in u.s. banks have doubled in six years. because of much lower profitability in europe and much weaker capital, you cannot grow capital organically near as fast as in the u.s. and is why we're favoring u.s. markets. go back insideto the bloomberg terminal a look at the lending rates. it is external fa

look at what deutsche bank is doing in terms of a new level of sweat. u tell me the italian banks are not affected by a pan-european crisis? the deutsche bank has some structural profitability. know, the, you balance test. it is a liquid instrument. i care more about the funding cause. tom: fair. >> the beauty of the funding cause today is because of the lower rate environment, the refinancing the bank, the pnl of deutsche bank is not going to be affected by the price. we're talking about limited liquidity. it is good for a chart. there is no quantity behind it. thanity matters more little price. tom: i will go with that but i want to bring it back to the discussion we just had on the italian banks. in chicago, making clear the government could literally fall off of the italian banking crisis. you seem to be the polar opposite of that belief. what is your optimal workout for the major banks in italy? >> i think the optimal workout first, for the last seven or eight years, they have been slow as selling nonperforming loans. most importantly, that limited

, deutsche bank trust did not pass.is misleading. toronto dominion. that is not deutsche bank. that is a tiny part. michael: that is the clearing and of wealth management. that -- handle michael: according to deutsche bank, it was 5% of their balance sheet. they said they were going to fail, but they are still working on their risk controlled systems . both of these are going to be folded in two separate holding companies in the united states starting july 1, it is a new fed requirements. they will be stuck with all of the other portions of that instance in the u.s. starting next year, in 2018. if they don't spend -- pass, they cannot send private spec to their home country, because they have to retain some of them to meet their capital requirements. >> so the stress test, they can pay out dividends. >> the u.s. banks actually do really well. after years of taking up costs and cutting capital, they can withstand some pretty severe stress tests. from a credit quality perspective as a bond investor, they look pretty attra

reporter: this comes to us from deutsche bank.s we moved into the referendum, you saw it increasing. you sell people purchasing downside protection had developed. once we had developed, we saw a stunning collapse and that surge and this poses the question of whether the equity market rally is something fundamental based just the unwinding of downside positioning. markets aret of the on their head at the moment. the other chart that you found interesting, this shows a five-year inflation expectation crossed with the s&p 500. reporter: if you wanted to find one chart to worry about, this is it. this is inflation expectations implied by the bond market versus the s&p 500 index. we have seen a rally in bond market. normally, when you see expectations falling, you would suggest a lot of nervousness about future economic growth. at the moment, we are seeing a disconnect between stocks and what is implied by the bond market suggesting that people are piling into stocks because they seem more central bank using coming along. you have a di

guy: according to business insider, deutsche bank expects the u.k. past fording rights, which allows banks to sell their services within the eu. they might get an advantage by moving back to the eurozone. the managing director joins us now in the studio. good morning. european banks have been the eye of the storm when it comes to brexit. how much more trouble is there still to come? >> i think, it looks up a moment that it is a slower burn. the panic that some feared initially has subsided quite quickly. but of course, the deeper economic effects are still ahead of us, both in the u k and the fallout -- guy: what is the bigger risk, the brexit or what is happening in italy? >> well, the brexit is an unknown quantity still to a large extent. so, i think it is a big issue. italy has current challenges, which are live and so for now, italy longer-term could turn out a brexit. guy: let's take this a little bit slowly. deutsche, is there an advantage? do companies have an obligation to look at the options now a walking away from london? otto: i think yes,

deutsche bank is one that even deep cuts may with required. revenue slump by 20% due in part to last month's brexit vote. opened the door to more, quote, ambitious and intense restructuring. >> speaking of the bank s santand santander. the fall was mainly due to extraordinarily charges linked to restructuring efforts. nonperforming loans dip to almost 4.3% at the end of june. increased slightly and the bank is saying it's on track to increase the cash dividend by 10% in 2016. speaking to cnbc earlier, cfo was cautionly optimistic on the bank's eu stress test. >> in the previous stress test conducted two years ago we were the bank that had least in stress. this exercise is different. new methodology and new risks have to be taken into account, for example, conduct risk. we clearly believe we will be among the least affected. >> portugal's bank are among the most weakly capitalized in the area. that's according to moody's who saves it doesn't see room for improvement over the next year and a half. added the weakness of the banking sector was a pe

the chief of commerce at deutsche bank called for a bailout of europe's banks.here was a concern over a number of toxic lenders weighing down the system saying, quote, europe is extremely sick and has to deal with its problems extremely quickly or there might be an accident. he doesn't expect a sudden shock like the 2008 financial crisis but a slow long downward spiral. >> head of daniel stuart is here. what do you think of that? we've got stress tests later on this month. 150 billion euros. >> the stress test coming up again. will it look better or worse than last year? i think it's not hard to take a view. the italian banks clearly in the news the last week or so. had issues with deutsche bank earlier in the year. >> ongoing issues are deutsche bank. i mean, ubs credit swiss all at record lows. >> not going away any time soon, particularly with deutsche bank. 150 billion euros to help capitalize the european banks. in this week's economists suggesting that some people believe the italian banks could do with 200 billion themselves to recap tal lies. >> why are

that is not deutsche bank. that is a tiny part. at is the and wealth management part of the bank. according to deutsche bank, it was 5% of their balance sheet. >> 5%. michael: they said they would knew they were going to fail and that they are still working on the risk control systems. both of these are going to be folded in two separate holding companies in the united states starting july 1. it is a new federal requirement. they will be stuck with all of the other portions of that instance in the u.s. starting next year, in 2018. if they don't pass, they cannot send profits back to the home country because they will have to retain some of them to meet their capital requirements. francine: so the stress test, they can pay out dividends. we know there is no systemic risk? >> the u.s. banks did do really well. after years of taking out costs and cutting capital, they can withstand some pretty severe stress tests, so from a quality perspective is a bond investor, they look pretty attractive to us. david: take us through this settlement

that will affect merkel and deutsche bank. she can't have that on her watch. melissa: steve, do we care banks in italy fall? >> we do. it is essential to get our own economy in shape. sadly what we heard last night at the democratic convex was just the opposite. more tax, higher capital-gains taxes so you have weakness around the world that will have ugly political consequences. that is the what we have to worry about more than particular banks what it is going to do politically. these things have ugly consequences. melissa: charles, what do you at this of that? we know allied irish banks did poorly as well. what are the implications of all of that given what steve said? >> we don't have to go back that far, used to wake up at least i did, i wanted to know how greece was doing. melissa: right. >> think about it. less than half of 1% of the global gdp we were on pins and needles. i don't know the contagion is there but possibly there but there will be major intervention. i love what steve said, cautionary tale is important what we're been told we can go further

thank you. >> recession and eyeglasses there at deutsche bank.sharp dressed man. >> always. >> jb number this is week. what's, right, so if you anything 160,000 and unemployment goes town to 4.6, that paints our federal reserve into a corner that gets continually smaller and smaller and one which they cannot eradicate themselves from. >> if you look at copper prices, they've never recovered. if you look at the flat tenning of the yield curve, no guy's point, that's the biggest number. everyone's discounting that. if it's a trend, the market's in deep trouble. >> still ahead, oil is getting crushed today. the xhcommodities king says it' got further to fall. he'll tell us how low he thinks it can go. plus, nike and under armour finding a new place to face off. the biggest stars are now on the same team. much more "fast money" straight ahead. ahead. >>> welcome back to "fast money." crude oil on one wild ride stins brexit vote. straight down. hi, jackie. >> good evening, melissa. since the uk referendum, oil prices are lower, on thursday, june 23rd,

deutsche bank is too important to say, we will keep going and it will take two years. ink shareholders may put pressure on it. >> three big banks today out with better estimated earnings. what was the reaction? lloyds, alle, falling after announcing cost cuts and struggled to boost revenue. why did the shares decline? >> it was a tale of lowered expectations. slightly against those lowered expectations, but there are still issues of off the board -- still issues across the board. >> let's get back to credit suisse. it was an unexpected profit. on one side of the ledger, he is starting to make progress. he talked about it being a first step. on the revenue side, it is a tough picture. >> do these results mean we don't need to raise capital? can those rumors be laid to rest? >> we have been very consistent in saying we do not need to raise capital. we have been very clear. we have raised $6 billion. that we can pull many levers to drive that forward. look, you never want to -- [indiscernible] >> the bank of japan keeping key monetary talks -- >> it is going to be this rev

and on the banking side and political side, tempers are rising. >> deutsche bank had a really interestingr the weekend that shows banks claims on italy. france's claim is about $300 billion, meaning is not an isolated event. all of europe needs italy to stabilize. >> and if we compare italy to the u.k., and the u.k. his strong financial links, eurozone countries are more tightly integrated with each other on the trade side and the financial side. any major issue italy has is undoubtedly going to spill over to many of the other countries. >> i don't understand why it's so difficult to fix the italian banking system. is a problem they don't actually understand some of the nonperforming loans? is it the political system not dealing with it in the right way? >> this is a very precarious situation. it requires lots of attention and flexibility in approaching this. that has not always been there the last couple of weeks. basically italian banks anywhere -- but tie-in banks are sitting on anywhere between 300 million and 400 million francs and nonperforming loans. they are in desperate need of c

deutsche bank saying it is going to be fed policy that is going to drive dollar yen. talking earlier this me. bank of mitsubishi, they know a thing or two. whether you look at currency markets or equity markets, there expectation around what the boj can deliver. we were talking about markets going higher. now as you say we've got these comments coming through suggesting if the boj does not do much, it is the fed that steals the headlines, then that really puts that transpacific jo divide on the agenda. rate story is driving new zealand dollar. all the way up the hill. there is ang, article this morning. it suggested potentially you will see a stimulus of around ¥30 trillion. nearly 30% more than the market anticipated. if you think of what has happened overnight, record after record in the market. will the fed go with another hike? will we have that moderate htening in america, versus what happened in the rest of the world. what happens with the fed is going to dictate what happens elsewhere. the s&p, up 18% from a 22 month low. 45%: there is currently a chance of a f

deutsche bank is too big and important to say, we will keep going and it will take two years. think shareholders may put pressure on him to act sooner. mark: three big banks today out with better than estimated earnings. what was the reaction? shares of bnp paribas, credit suisse, lloyds, all falling after announcing cost cuts as they struggled to boost revenue. why did the shares decline? >> it was a tale of lowered expectations. they beat slightly against those lowered expectations, but certainly there are still issues across the board. credit suisse was 1%. lloyds, still under 10%. mark: let's get back to credit suisse. it was an unexpected profit. is the tijane thiam turnaround bearing fruit? >> on one side of the ledger it is. on the cost and capital side, he is definitely starting to make some progress. he talked about it being a first step. on the revenue side, it is a tough picture. francine: do these profits and results mean we don't need to raise capital? can those rumors be laid to rest? >> we have been very consistent in saying we do not need to raise capital. we ha

we continue with david from deutsche bank. team have been overt and aggressive about a solution for italian banks. let me bring up a chart of the animal spirit of italy. throw this up on the bloomberg surveillance wall. gdp in italy is not getting it done. growth is not there. how do they do a bailout, how do they do it bail in, how do they cram down these losses to the italian public with an economy flat on its back? david: they cannot and they should not. you have to recapitalize the debt. there are three ways of doing it. one of them under the current directive would be the bank resolution recovery directive, the banks need to be in default before you can actually put in public-sector money. the government wants to avoid that. it also means that you can't put in money without being in violation of that directive. there is no way you can do it bail in right now with the current situation in italy. the debt of the banks is widely held. it is essentially retail that. to turn to the public and say you have to give up 5%-20% of

it will have a market value of $29 billion, larger than the market value of deutsche bank. entity will have one of the largest pool of assets in the middle east. this is all part of an effort by abu dhabi to diversify its economy in the face of lower oil prices. they want to create a national banking champion that can better compete in emerging markets and even on the global stage. the way this is being done is through a merger of equals though it is a share swap. holders will end up with about 52% of the combined entity. the nbad name. guy: what is the reasoning behind this? what reactions are there to it? reporter: you can pick it down to wider trends. we have lower oil prices. abu dhabi still generates the vast majority of its revenue from oil and it wants to move away from that dependence. on the ground in although debbie, there is a lot of talk about more bank consolidation in the works. we have seen some analysts single out some banks including an abu dhabi commercial bank and union bank as potential targets for other deals. their shares were up yesterday. clearly a l

i thought no bank could have a lower ratio than deutsche bank. e bank of monte paschi is in white. you can see that deutsche bank is in green. they are trading at less than 1/10 of their book value. they have been bailed out three times i the government. why doesn't the government take this bank and nationalize it? michael: i think there are political reasons. certainly, it is at extreme distress levels. among all of the banks -- deutsche bank you mentioned is trading below the price-to-book ratio than it was in the 2008 crisis. a number of italian banks are below that. we are seeing unprecedented levels. that is why you are seeing so much chatter about potentially the state stepping in. shery: michael, great to talk to you. michael moore joining us from london. matt: still ahead, grappling with the brexit all-out. where opportunities exist amid this volatility. this is bloomberg. ♪ matt: this is "bloomberg markets." i am matt miller. .hery: i am shery ahn the fallout from brexit, the british pound drops to 130 for the first time since 1985. they

francine: i would put deutsche bank, the more you have central bank action, unless you have structuralorm. the more difficult is it for the markets to price things right. isabelle: there is some logic to that. central bank policy can carry on is inhis -- the problem europe it has been difficult for people to agree on fiscal policy. now, you are going to add a layer of complexity, because with brexit, the u.k. can do more stuff on its own to remain. the pressure -- not to want to play the devil's advocate or to be a politician, if you look at what is been happening, they are trying to negotiate a deal where the major players, france, germany, holland, are under pressure with own electorate. that is going to be very tricky to get. we are going to see some tension and play. having back to your point, are we going to see lower rates for longer? if we look at switzerland, we can learn some lessons. caroline: on how not to do -- francine: on how not to do things? isabelle: negative rates up to 20 years. what we have seen for corporate issuers is the corporate spread has -- at some point inve

in all time low on deutsche bank. as we had throughout the close here in europe. the financials very much a focus. that is the situation here in europe. talking about what you just it so eloquently, we have a bearish open for the nasdaq. basedsdaq is a bit more on the overweight the technology and the exposure to biotech. confirming this from across asset analysis standpoint, randgold resources is up 2.5%. they hit a record high today, up more than 30% of the brexit selloff. ourhe haven play, shares double this year, up 100%. pretty amazing as investors seek the safety play. of the u.s.res insulation company are suffering today. about a double on the year that melrose industries has offered by the company for $2.8 billion. jeffries says they would not be surprised to see a higher offer come through based on the firm's valuation work. alix: talk about safe havens, gold prices climbing to a two-year high. a huge run-up. charlesdevoe is back with us. us.harles devoe is with they say there is no value in gold. make the ca

deutsche bank's got a be one of the key ones to watch out for. so with the u.s. banks in that area. in terms of fixed income commodities. will you as be seen with deutsche bank. there was a 12% decline in total revenues. we're going to be speaking to the cfo of that. a large spanish bank and we are sizable them about team. the closing branches at their home market. they've been illuminating about 100,000 jobs. the city interest rate environment is free difficult for them. what impact will brexit have on this market? the worst recession in one century. clip that was a rebound in the brazilian market. it failed the u.s. stress tests. the test is for financial resiliency. that is it 1040 u.k. time. more news coming up on the banking front in europe. we'll be getting those european numbers in about a half hour's time. yusef: one of earnings are on your radar? anna: we got aircraft and technology and airbus and other second quarter numbers. passenger jet's suffering delivery delays. they're carrying a charge because of the cost of fixing all those enti

credits chris will do $2.5 and something healthy like a healthy deutsche bank or jpmorgan will do mores he managing this beast forward for merger? not sure.'m he's talked about not wanting to sell the bank and not operating under that assumption but -- wenly, we are greeted are grading on a curve. they are trading at a quarter or value.imes book so the profitability picture continues to not look good. revenue, even though they had a surprise profit for the revenue, it was down 16%. i think they are just looking for nuggets of positivity. tom: nuggets of positivity. michael moore, within the nuggets ofÑi positivity, who wod they merge with? is there cross-border mergers in mind what does the team say? michael: not someone who jumps out in an obvious point because of a regulatory question. i don't think swiss regulators would like a bigger bank. increaseen trying to capital requirements and make them less the stomach. there is not a ton of appetite there. the regulatory question is the biggest one on any kind of major bank deal. one of the questions that shareholders or analysts had is -

deutsche bank, credit suisse, big job. euan: it is a huge job and i think the banking system is under a lot of pressure. the ongoing reduction in interest rates -- the way banks need money primarily is the margin between the rates that they land and the rest have to pay for raising the capital. with interest rates going down, the basic building blocks of making profits are under intense pressure. no surprise he is trying to bring to the force some of the crown jewels he feels are underappreciated in the market with a partial ipo. manus: many people are shocked when he announced that. it is interesting that he went hard, fast on his cost-cutting ipo. it is tough to ipo anything in this market. it shows a real attempt by banks to bring forward anything that is going to value, to try and make sure they don't come under imprint -- come under intense pressure. interest rates are so low and on rising for some time. caroline: it is interesting, we had deutsche bank yesterday. many feeling the chief executive is a little bit to ope

include cash from citi, deutsch bank, santander and bank of america marilyn unit.ve forced pages and creditors and customers, people, who deposit money in the bank to assist in any financial rescue. we'll get results of bank stress tests in europe in seven minutes. here is something that crossed the wires in ten minutes. according to writers, this bank bmps, this will sound familiar with the lehman experience, they will call it a bad bank, they call it a new vehicle, to unload 9.2 billion euro. that is roughly $10.3 billion. remember in '08 lehman wanted to create the bad bank to move 80 billion of bad assets to the bad bank? this scenario creating a new vehicle. they will have a conference call at 4: liz: they moved it off the balance sheets but the determine mans will not stand for this. they will not offer bailouts but okay with bail ins with other creditors taking a shot of this. i think germans stand in the way of any bailout. >> you have the german finance minister and dutch finance minister not approved with a private government bailout. they have banks in t

is far and away above and beyond the likes of deutsche bank and the the europeanand banks experiencinglties. where does it end? >> the contrast there is down to a few things. the profitability outlook for the u.s. banks is a little bit better because they have fewer of the credit risks. is atment banking activity little more active in the u.s. or at least has been. you have a better profitability picture and you have fewer questions because the u.s. banks have gone through so many years because they test built up these capital buffers. whereas few questions the european sites are still talking about potential bailouts and capital questions at lenders at deutsche bank. ony are really contrasting that front but they do face a lot of the same issues, whether it is on race -- rates or the trading environment. vonnie: will analysts be interested in whether these banks with british subsidiaries will be moving those units to other parts of europe? think you will hear questions about that on the calls, but a lot of the banks have taken a weight and see approach -- wait and see approach. passpo

deutsche bank says it may lower the threshold for approval.will be reached later today after parties involved examining technical issue. investors have until tomorrow to tender their share. euro zone finance ministers meet in brussels later ostensibly to talk italian banks and the situation. but the regions finance chiefs have been in a room together for the first time since the referendum. that is the bloomberg business flash. francine: let's get some final thoughts from stephanie flanders from j.p. morgan asset management. you spent a lot of time talking about brexit. but look at italian banks. something happens they need to bail in creditors and cannot use subsidies. would it be worse than brexit? the final nail in the coffin for the eu? >> i think it is striking that the european market has fallen more than the u.k., fallen about the same as the domestically oriented index in the u.k., the 50 to 50. and that is because of concerns around european banking, particularly italian banks. you had a warning sign last year when you had a bail-in o

it is a brutal week for deutsche bank and selected peripheral banks. when do the catch calls begin?hen father of a dead soldier throws the constitution at mr. trump. we are live from our world headquarters in new york. good morning. tom keene in new york, francine lacqua in london. whatever your politics, democrats know how to put on a tv show. francine: yes, they certainly do. you have some great speeches. what i would say is that the end of this convention, tom, we have a lot more economists trying to figure out whether we will see dollar strength or weakness on the back of each candidate. tom: we have got two wonderful guests of the hour. here is taylor ridge. sheeor: hillary clinton says is ready to lead and donald trump cannot be trusted in the oval office. party'sccepted the nomination to be the presidential candidate. clinton said a man you can beat be trustedt cannot with nuclear weapons. she also took aim at the big banks. ms. clinton: it is wrong to take tax breaks with one hand and give out pink slips with the other. and i believe wall street can rent ever be allowed to m

trading revenue slumped and money was set aside for job cuts by deutsche bank.ecast a loss of 22 million euros. japan's prime minister shinzo economicnced plans for stimulus. he said the package would be compiled next week according to the paper. the yen fell against the dollar on the news. the announcement comes ahead of the bank of japan's rate decision on friday. global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. find more stories on the bloomberg at top . i am caroline hyde. this is bloomberg. puma shares are trading slightly higher after they reported a second quarter earnings beat. --joins us on the phone bjorn gulden joins us on the phone. can you keep the momentum? footfall, or soccer, and the women's market. bjorn: our business has been decent in the first two quarters. development of our plan and we see that continuing in the second half that we will hit our target. our sales have improved in all categories and we feel we are in pretty good shape for the second half of the year. francine: meaning th