ecb is playing the part and helping out. it is extremely positive.is not just an easing money policy. there.ill leave you let's carry on with that conversation throughout the hour . let's talk about oil now. >> it is doing something it hasn't done in years -- selling bonds. talk us through this option. this is just the start, right? enough to buy a few more back scratches for the royal family. cass reserves of almost the same amount. not a huge amount in the grand scheme of things. why would they be doing that? well prices. thes having a big impact on economy and their reserves as well. involvedsaudis being with the fight against the islamic state as well. they're trying to maintain lavish spending. it has got a lot of needs for cash. it is not a huge amount. it does represent a start. the could be something in the region of almost 20% this year. >> they could manage it a little while. arabia is trying to open up its economy more. that was back in june. it has sold at a shorter term. get in.s investors to provide some kind of wrench mark. allows them

so it does not go into default against the ecb. it doesn't mean the money has gone through just yet, last time they made a repayment it did take a few hours to be confirmed by the greek authorities but this is what we understand is happening now that greece has given the order for this repayment to the ecb to be made. do we take greece off the worrying shelf? or is it perennially on the were a shelf? -- worry shelf? >> i would say meeting up perennially but it will be important to greek taxpayers. mark: this is the latest hurdle overcome but surely there will be more in the months and years to come. >> i am with christine lagarde from the imf on this. the quantum of debt is unsustainable in terms of a repayment plan and it will probably have to be some debt forgiveness in the future. mark: thank you for joining us. simon nicholas will stay with us. coming up -- fed info. minutes indicate concerns over low inflation. we look at whether the markets are pricing in a rate hike. the bailout approved. greece gets the green light and we w

this comes a day ahead of the 3.2 billion euro greek payment to the ecb.he german bundestag is debating the deal as we speak. the german finance minister -- the central bank of vietnam has devalued its currency for the first time this year. it weakened the reference rate by 1%, citing the devaluation of the yuan and concern about the impact of possible u.s. rate hikes as reasons behind the move. carlsberg says it anticipates profits to continue falling as western europe and russia weigh on sales. it is the biggest brewing company in russia in the stock is down by 7% today. glencore's first-half profit tumbled the 56% compared to a year earlier as the commodity price that it. saying it currently is the worst performer this year -- let's bring in jesse respray. you have been speaking to the company's chief executive -- what did mr. glasenberg have to say today? jesse: as usual, a fascinating conversation -- it was most interesting when he talked about china and the impact of their demand. can do it right now it is a very difficult market. he said the country

coming up comic ecb says it is gotten more aggressive.to you which tools mario draghi is making use of. ♪ anna: welcome back. you're watching "countdown." here are the stories we need to know. shares in china are trading up ,'s switching between gains and losses. in the last few minutes, trending down again. traders have been waiting -- have been weighing interest rates. they shanghai composite has lost half its value since the middle of june after a four-day equity plunge. within the last few minutes, paddy power have at -- have announced an agreement of a possible merger. it would bring together one of the u.k. and ireland's leading leadingf the internet's gaming exchange. the nuclear deal with iran, saying it is a historic opportunity to resolve issues. the iaea says to run has just says tehran has -- supporters of the deal has seen growth of acceptance. japan cannot guarantee -- japan -- as demanded by the international olympic committee. after inception costs ballooned to $2 billion. world's biggest advertiser just reported a dividen

is the ecb prepared to do more. it will dictate market sentiment into early next week. >> financial volatility combined with greater political uncertainty, will that have an effect on consumer confidence going forward? >> we'll have to see. at the moment the flow for europe and the u.s. remains positive. for august it was surprisingly robust but that was all around services. the recoveries we're seeing are around business services which are less impacted by everything going on in global trade in china. so just be interesting to see how much we can see them continue to lead. the ecb will have to respond by doing more at some point. >> keep european stocks afloat despite the volatility in the last couple of days. >> in theory they should and ecb is doing qe so very different than the u.s. and the u.k. if anything they'll step up the bond buying program and money supply growth in the euro zone remains robust. we saw that yesterday in the data release from the ecb. by later this year, the broad measure will be growing 1

that is when they have to repay that huge chunk of change to the ecb.e of syriza in doubt. clearly it is all coming to a head. the situation in greece, another situation we need to discuss is turkey. it looks set for its second general election of the year after coalition talks collapsed. the turkish lira tumbling to a record low, then another record low. this 11 to watch in the fx market. elliott kotkin has been in turkey for the last election. will you be going to turkey for another election soon? elliott: i'm not packing my bags yet. ordinarily speaking, it takes another three months for an election to happen. of course, all of this uncertainty is unnerving investors further. the lira touching another record low. i don't know how many times it has hit a record low this year. this won't be the last. some analysts recommend it could go all the way down to three against the dollar. you've got this uncertainty regarding the current situation. if you have new elections, why should the result be any different? open in polls suggest the ruling party would h

you talk about the ecb rate, the change on thursday.easing has been there three or four months now. should be about five months. we still do not know. no one in the world knows how positive the effect of quantitative easing is. what we do know is that without it, we would have been in serious trouble. asking how you extricate yourself from that, i do not know. my colleague last week was talking to caroline and said that instead of hiking interest rates, the bank of england has 17 billion pounds worth of treasuries that will be renewed. try to cut back the 375 billion little by little. i think that is the best way. we could not take too much in this country. the american economy might be the same. guy: it has been a pleasure. thank you so much. david buik joining us. stay with us on "countdown." we have a busy week ahead. tomorrow. ecb on thursday. u.s. jobs on friday. an awful lot of data that needs to be digested. the central banks still very much front and center. then we go to turkey on friday. we have wolfgang schauble and jack lew.

that is something the ecb should like.eve the commodity is a single test signal for deflation. it is not the signal for deflation. i think europe is on a good this is 1.6 is a decent number. caroline: should the bank of england not be worrying as much? didier: there was good inflation and bad inflation, now be of the bad deflation. if the core inflation rate that is creeping up in europe and in the u.s.. the headline inflation coming down. it is creating a round of purchasing power. that is feeding in the consumer demand. caroline: you are an optimist. she is going back to brussels. a reminder, france missed, stagnating on a quarter on quarter basis. still slightly lower than had been expected. looks onoming in, he the your on your number which is 1.6%. u.k. labourhe party's leadership kicks off in earnest today as ballot papers are sent out to supporters. usher in a new era of corbinomics? ♪ theline: welcome back in 7:18 here in london. stagnated inomy the second quarter. gdp was unchanged. in germany, the economy expande

ordered to pay the ecb.emerging market rout deepens. ♪ manus: good morning to our viewers. welcome to those waking up in the united states. i am manus cranny. francine: life from bloomberg's european headquarters in london. manus: coming up, the strong frank. johann schneider-ammann. that is an 10 minutes time. janet yellen and other officials are concerned about low inflation. as we indicated, a improving job market is bringing them closer. manus: bloombergs economic editor is taking a closer look. mike come it is about inflation now. when fed officials met three weeks ago, most judged the conditions for policy firming had not yet benefit -- had not been achieved. they noted conditions were approaching that point. what was missing? confidence. prices would continue to move up. some members continue to see down risks to inflation for the possibility of further dollar depreciation. in addition, several noted labor markets have not pushed up wages and prices. they agreed to continue to monitor inflation of ele

so weak economic growth despite ecb policy. of course being that dominant force.n line with expectations year over year 0.2% although depressed given the lower oil prices. of course that's been something that investors have been having to factor in, what lower oil prices mean for the inflation picture here in europe. in the meantime, investors have been trying to understand how to digest this recent bout of economic data. what does it mean for markets? we're mixed across the board. slightly higher up by around 6 points. in france we have now turned into negative territory. we were holding on to a gain of around 15 points. now down by 2. how do you make money in these markets? here's what investors this morning have been telling us. >> i'm worried about the technicals and u.s. stocks are in lala land. if you compare u.s. stocks to emerging markets, i would rather buy asian stocks today because their valuations are much lower than u.s. equities. much lower. >> shorting u.s. equities i don't think you're going to be burned by that. just because they're so expensive.

fed and the ecb.ng at fundamentals, the current account is in the current level in the trade surplus situation is record high. on that side i think support for the currencies is still there. i don't think we will see a lot of short-term developments from here. jon: it seems the equity market is divorced from the economy. they're slowing down because they are cutting rates back in november. there is so much activity or so make policies around to support .t china's equity market has performed quite differently. , thee short-term deleveraging and the corrections of the china-asian market is not complete. in the next couple months we will see some overhang effect. i think the market has been momentum driven already. moree long run, we are optimistic about china's stocks, or even new york trading exchange. there are much less bubble situations. there has been a lot of talk that the pboc is supporting chinese equity markets ahead of a parade this week. what is the discussion inside china? do we just assume

in the coming days, at jackson hole, we will have more information from the fed and the ecb. it is important to see how it will react to the situation, and i think it is delivering qe, that is important. regarding -- i'm sure that the ecb will take all the depth is measures to accompany the eurozone growth. jonathan: i'm pleased to say we are joined live from paris with caroline. amid some pretty high expectations, and the work performed got thrown around -- how are his plans for reform going? caroline: well, when you look at french growth, it had zero growth in the first and second quarters, .7% in the third. very sluggish growth in france, but just one year after his nomination, macron wanted to resonate within the business community. have the loveou but you also need some proof of love. he is referring to his activity law that just passed in july. it was forced through parliament. hollande had to force it. i asked him what was next on his agenda. >> first, we will open -- today's labor market in order to make it simple and more adaptive and flexible. thisve to think about

but the ecb is keen to make sure that that doesn't lead to expectations. that they would cut the program prematurely. so they'd run their course. we think still the inflation picture is to weak they'll have to do more qe so continue beyond september 16th. >> another factor, now investors are trying to understand the move by the pboc to devalue the currency or let the currency weaken as some would say, what it means for oil prices because a weaker yuan makes commodities more expensive. >> yeah. true. i think the key issue is to understand domestic demand in china. is it weaker than what we think? or what official numbers say. and one has to be a little bit careful with the devaluations because especially against the euro. we had a massive appreciation of the yuan over the last year so the latest move is quite small. the other thing is if you look at trade linkages it's small. europe exports 5% of total exports to china. so that link is not so strong. the issue is whether it has repercussions on the rest of the emerging markets, on the u.s. and having a bigg

ecb payment --es greece's ecb payment. monday morning treat, they have are you -- they have reunited us for two minutes only. go. microsoft. --athan: he is the deputy manus: he is the deputy leader. what are the issues? we know the dissent. we know that merkel changed her schedule. to back this bailout for greece. hans was just saying i'm a look at a six-year extension. they mayas just saying look at a 60 year extension. it would be good news for everybody. just after the start of 9:00 a.m. mark: you want to stay alive for the second day. it seems that some currencies are feeling the brunt. story there's a great that the challenge of george sorrows, which is the hedge funds trying to better the currency. what they did then in terms of capital controls. companies.article on they are going to know when we are stressful and how we talked to one another. olivia is going to join us. she is an economist here and bloomberg. this is the first of her innovation pieces. mark: a check in on european equity markets. here is what is ha

in the next two weeks before another bill to the ecb comes due. ahead of the open the futures in london are up a little bit high. are we going to get a higher open? let's answer that question. caroline: after a dale of selloff in europe, could it be back into the green? we have the same breaking now and later and the eurozone at 9:00 a.m.. it's basically flat to on the green side. there is caution when it comes to china. the imf saying there is still more work to be done. if you want a reserve currency. everyone is focusing on what the federal reserve will do come september. will we see a rate rise? we have seen dennis lockhart playing into that voting member on the federal reserve saying he will only endorse waiting until december if we see a significant deterioration in economic data. we get the new jobless -- the new job claims tomorrow. and in the payroll will we see a third month? we're up 0.3% in france. later today will see how greece will handle it in two days. all eyes on the dollar. we saw the wall street journal coming up. that statemen

to see about the ecb -- we will have to see about the ecb. it is august 31. end this month in a bloody fashion. at the levels you are seeing now , the s&p will have the worst 2012. since the dow jones will have the worst august since 2010. the worst in five years for the big blue chips. but authorsly down session lows. the dow was down 100 points and we have been down 175. clawing their way back into the midday. take a look at crude oil. it had been clawing its way back. it had its best week since 2011 last week. it is back down again today, more than 2%. almost a dollar a barrel. that is why we see energy stocks losing so much today. if you take a look at the imap i have on my terminal, you can see the energy stocks are the biggest losers. we have a sea of red across the board. with the exception of a couple of stocks. gm is gaining so you see a little bit of green in consumer discretionary. some retailers are up like .ignet you see green in health care. in general, energy stocks are doing poorly today with the exception of phillips. phillips 66 getting anot

to allow the country to meet an ecb payment due on that date. joining us on the phone is francesco papadia, former director general for market operations at the ecb and chairman at prime collaterized securities. thank you for joining us. much appreciated. now, we've reached a deal well before a deadline, which is certainly very refreshing when it comes to greece. but in your eyes, how significant is this deal in terms of helping greece turn a corner meaningfully? >> well, this is an important hurdle, an important obstacle that has been surpassed. but of course -- and it shows the great determination on both the sides of the creditors in greece to go forward. but of course, there remain important further hurdles to be surpassed. first, whether surplus will manage to continue support in greece for the agreed course of action. the second is whether the macroeconomic trauma that was caused by the election and action will be surpassed and greece will get back to growth. and the third one is whether the creditors will comply with their promise to redu

ecb had to put those rules under their constitution. sooner the creditors and greece find an agreement, the sooner the ecb will be able to release the capital controls. i do think the ecb should be able and should ask for the advice of the professionals of the greek stock market. hans: we are down 11%. ranges yout within would have thought? >> sure. hans: outside of the banks, is there any sector you think is going to go up today? is there anything you think is a real buyers opportunity? >> i think there are a lot of sectors that should go up. but when investors have the market closed for one month and suddenly they open, there needs may have changed. maybe that will pressure even the sectors that would help go up. hans: which sectors was that be? >> all the public utilities. all the companies that do a lot of exports. hans: thank you for your time. with that, jonathan, back to you. if you want to buy shares in public utilities, that is your advice. we are live outside the athens stock exchange, which has just opened after 25 days of be

where you could have confidence in the ecb and fed to act a certain way. it is coming from the emerging world. the market has to regain its own footing. ist today is going to do make the crowd hesitate and bring out some more sellers. alix: it's hard to not think about what happen in the 1990's. goldman sachs had a great chart that charted what happened in 1998 versus now with stocks. the s&p fell 14%. do we see a repeat? guest: we could. 1998 was different. the cumulation of the asian crisis into a russian default. contained,efault was then you could move forward. what i'm worried about is the economic issue. .his is harder to call i think the u.s. is fine but you just write out dramatic numbers in terms of the emerging world. they had become an important implement of growth. financial look at disruption to the economic performance in the developing world. joe: i want to talk about this split view of what is going on. there is a possibility of a september rate hike. the fed is getting different signals. there is financial market indicators that are tighte

that is the day of the ecb payment.us: chinese yuan has halted a three-baseline after the central bank raised its reference right. the pboc also said it would intervene to prevent excess of swings in the currency. francine: let's check in on the markets. mark barton has the latest. we are getting portugal gdp expanding 1.5%. : we've got the eurozone gdp in roughly 29 minutes. the forecast is for a gain of 0.4% because of the mrs. from three big economies. if we get a positive number, it is going to be the ninth consecutive orderly increase. we will bring it to you live here on bloomberg television. it is not just the eurozone today. i want to talk about the asian currencies. it is not going to be the dollar-yuan. what a week it has been for asian currencies. we've had the yuan devaluation, we've had vietnam widen its currency band, the malaysian ringgit up there in the controversy. look at the movement in the dollar against malaysia's currency. earlier today at about 4:00 a.m. local time in london. 2.9%ollar rose as muc

. >> the ecb told the bank, i want you to reduce your leverage. any a company goes into bankruptcy or has an issue, the ecb forces you to take a hit to your capital. you got to take a $.50 into your capital. it is better for the bank to end up selling that loan at $.70. they are only taking a 30% hit. >> given the fact that a chase in the quantitative easing, any thoughts on the equity market? >> i think it probably makes sense. you are going to have this qe1 or qe2 out there. to generate an equity return. >> be looking at any chinese debt that could be more opportunities out there? >> there is. the opportunities there is you have got to buy. you are buying from those state owned enterprises. state owned bank. you' re buying the debt of the state on enterprise. we buy that debt after it has defaulted. able to recover. >> that is the essential question. >> we are comfortable with it. at the end of the day, china has one of two choices. have got to follow the western legal system. if they decide not to come no one will invest in china. >> your quest

>> draghi has already highlighted that the link -- the ecb is keep an eye on this story.f anything maybe it slightly increases the possibility of qe being extended but so far the slowdown has not been great enough to alter the plan of the ecb. jon: thank you very much for making that down for us. the market has been one of the most volatile in the last five years. do -- tanvirn sand sandip. we are watching the vicks of vicks. talk to me. what is going on? >> couple weeks ago we had the biggest reversal followed by the biggest rally since 2011 which is why you have excessive volatility. if you look at the volatility itself that has risen to all-time high and typically it situationreverting that eventually grinds lower. we are living in a world of predominant volatility that will remain the typically what they puts that have longer they grow by shorting other ones. the look at the vick which is a cost different majority it has significantly converted so you would be selling the shorter data to fund your longer data and equity portfolios generally have that on continuously.

ecb long redemption.onathan: talk about details, ask me a question if you hours ago, reported that details still need to be ironed out. do they still need to be ironed out? it seems asamanis: they are. we walked only be speculating about the small details the finance minister talked about. we have information on the bigger hot topics, the energy front seems to be agreement with greece and creditors. 35 prior know there is that greece needs to undertake immediately. and the larger pension refund and further tax increases that need to be seen i october. we have agreement. .25% that is for this year. agreed of the surplus for the next year. 1.75% form sorry, 2017. you should take a step back. fromu think you're safe the greek headlines, it is greek media reporting on the greek elections as early as next month. greece will remain a hot topic. jonathan: vassilis karamanis with a reality check. negotiations -- and develop a national hurdles within your and most notably with an germany. elliott gotkine has more.

it gets to some of the challenges that the ecb is facing.hen you take a look at what the abs program is compared to other programs, this is a small fraction, about 10% of the covered bonds. so far there have been 11 billion and purchases, about 3% of the total bond buying program. while we have here is an attempt to revive this market, it it really does -- a lot of this started in june, so this was before the market volatility really took place. but it shows you some of the challenges they are facing. jonathan: hans nichols, thank you very much. i want to get an investors take now. he is a hero and founding partner of the house management. great to have you with us. hans nichols was talking about our london reporters. a story about the 15 major central banks that have hiked rates -- they had to reverse the decision. the ecb was one of the central banks. people look at that as a ridiculous move. now they think, what is the policy response if they have to do more? what can they do? >> they have to continue with quantitative easing, what they h

mark: and that takes a question -- for how long, and what should the ecb do?re is talk of extending the duration, broadening the scope of qe. what could and should happen? azad: for now, i think they will maintain the current pace of purchases. they are aware that the amount they are buying is very significant for the price of the market, so it's already having quite a big impact. there are still low impacts on government bond. from that perspective, it seems to be working. with interesting is that the euro has stopped behaving in a way that we normally expect. we are still seeing a little bit of strength out of the euro with worse news from the macro side. mark: is that a hazing thing? -- a haven thing? people sort of forget about the euro? azad: no, i think there has been a change in the behavior of the euro, because of how low interest rates are. the euro has become a funding currency. what we are seeing is as emerging-market currencies are selling off, they are having to close their short positions in europe. think about the way the japanese yen behaves. m

thursday, the ecb rate decision day. friday, the report that every market has been focused on -- it day, the last one before the september federal reserve meeting. friday, the g-20 meets in turkey. jack lew and the german finance minister are both due to attend. but before all of that, we will get the eurozone inflation data at 10:00 a.m. today. stay tuned for that. at 1:00 p.m., gdp numbers from india. and we will have a conversation about india, talking more about it after the break. the central bank governor warns that some assets are still mispriced and there may be more volatility to come. stay with us. ♪ manus: welcome back. we are streaming on bloomberg.com, on your tablet in your phone. bond funds and india are battling slower inflation. will that allow the r.b.i. to cut interest rates again? with some expecting a move to come as early as next month, the benchmark has been lowered by 75 basis points this year, boosting sentiment in longer and bonds. speaking to bloomberg at the jackson hole convention, the royal

, the economic shock is coming not from europe and the u.s., where you could have confidence in the ecbnd said to act as circuit breakers. it is coming from the emerging world. the market has to regain its own footing. what today is going to do is make the crowd hesitate and bring out some more sellers. i'm a little bit worried as to what the head with today's -- what is ahead with today's ugly close. alix: it's hard to not think about what happen in the 1990's. goldman sachs had a great chart today that charted what happened in 1998 versus now with stocks. the s&p fell 14%. in august 1998 before rallying 29% in the last or months of the year. do we see a repeat? guest: we could. 1998 was different. the cumulation of the asian crisis into a russian default. once that default was contained, then you could move forward. what i'm worried about is the economic issue. this is harder to call. i think the u.s. is fine but you just read the dramatic numbers in terms of the emerging world. they had become an important implement of growth. we have to keep an eye from financial disruption to the e

will what should the ecb be doing?ulus is clearly what's been helping the european economy in terms of bond buying. the ecb has been what's helped give breathing time to the spanish economy to stop the reforms. brendan: yes and no. the other side of that argument is that the super low yields in spain and italy as a result of the dragging policy are actually holding back economic reform, because why would governments go forward and make difficult decisions when they can find low rates? of course in germany, which in many ways is benefiting from the low interest rates and terms of the real estate sector which is very bubbly, there are also questions as to how stable all of that is, and whether it's stirring up problems in the future. caroline: the can say that the wrong tactic was deployed, but we are in this situation -- how do they unravel this, then? how does the u.s., the u.k. look to raise interest rates do this steadily so that we don't have a massive selloff? brendan: in my central scenario, the present central ba

just think about how ecb qe policy has been a driving force behind equities but a lot of that being unwound here. german stocks down 122 points and a 246 point move to the down side for the italian markets. i want to point out the ftse 100 which is at a 7-month low at 6,378. that u.k. retail sales number pretty disappointing. on top of that you have the mining stocks that continue to move lower. how are bonds looking? >> we saw that safe haven trade continue in yesterday's trading session even before the dovish minutes yesterday. people were buying the treasury. we are seeing the ten year treasury yield at 2.11% now. the 10 year german yield at 60 basis points so they're moving in tandem. in term of the currency markets, no surprise, big drop in the u.s. dollar index overnight on the back of the fed minutes. a 0.7% drop but this morning we're seeing the dollar index stabilizing some what. it's a little bit higher now and euro dollar is up by roughly 0.2%. the dollar is higher against the yen at 123 and still no love for some of the commodity currencies. the aussie dollar is off by 0.8% agai

here you have the fed and ecb with much more direct instruments.his time around, the contagion is coming from elsewhere. >> it's impressive if figure that the markets have handled this as well as they have and the u.s. economy still is growing. ultimately, as lower commodity prices are good news for consumers, does that mean people who might put money to work in this market are doing so on the premise that we might be okay here in the u.s., some companies might benefit from all of this? >> if you put valuations aside and that's an important assumption as well, if you were to put valuations aside, then the argument is that the u.s. would come out of this stronger economically because it will benefit from the lower commodity prices and it has much more resilience than anybody else. the issue, kelly, if you are looking to buy on the dips is the initial level of valuations. and as you know, my sense is that those have been boosted tremendously by faith in central banks and there was quite a wedge between fundamentals that were sluggish and valuations t

i think ecb today is delivering its q.e. that is very important. we have the first impact. the consequences, i'm sure the ecb will take all of the adaptive measures to accompany the european and the eurozone growth. francine: caroline: the chinese slowdown will have close to nil this year .nd limited impact he does not expect the ecb to intervene and he expects the fed to raise interest rates not before december. manus: great interview. very, very well done. is the. rugby world cup that starts in just under three weeks have you got tickets? francine: i do. a lot of tickets. more than i care to have. but we speak to one of the tournament's sponsors about what the event brings to the brand and what they hope to achieve for the association. ♪ francine: welcome back to "the pulse" live on bloomberg tv and radio and streaming on bloomberg.com. manus: the rugby world cup when england takes on fiji. ahead of it is mark barton who spoke with one of the tournament's main sponsors about what the world cup brings to the brands and the results it hopes to achieve that association. >> i

we see moderators -- modernization from the fed to the ecb.aders shifting through this, i will flow back for them for five minutes, then i will look at their paycheck at the end of the year then i will not feel bad for them. francine: that is a good way to look at it. that is it for "the pulse." stay tuned for "surveillance" coming up next. then we have a special show on super thursday with the bank of england. ♪ . . >> this is "bloomberg surveillance." tom: mark carney and the bank of england consider raising rates amid a global slowdown and a commodity implosion this morning. a delicate balancing act in london. a media meltdown as the highest of high fires -- tinkerbell comes down to earth. is it possibly the biggest presidential debate since nixon-kennedy? will the real donald trump show up? good morning, everyone. this is "bloomberg surveillance." we are live from our world headquarters in new york. thursday, august 6. i am tom keene with brendan greeley and vonnie quinn. i have got goosebumps over this debate. it is a big deal. brendan: y

no prospect of the ecb changing policy because the fed is going in that direction.rendan: is it possible to argue that european qe is working? growth in thee eurozone, we have had some better thanh is zero growth, so we have maybe 1.5% or 2% growth. solve all the debt problems, but it is better than having a recession. hans, where does the focus turned out? you are obviously here, but keeping an eye on germany always, does the next country sort of pop its head up? is that maybe spain? hans: the gdp figures are going to get bigger this week. the important thing about greece is that all of these numbers, it affects the denominator because you will have some sort of deal with the primary budget surplus. in terms of what the uncertainty about greece has done to germany and france, that is what i am looking for. do we see that germany has slowed down not just because of china, because in general eurozone? that is the thing that we are looking for this week. the great concern is the elections in france, and that is thing.rent is there a fundamental realignment of the part

we have an ecb meeting next week.a quiet week for some but there's there's a lot of news coming out. >> guy. >> great job navthing this week. not easy to do. hyg comes out. you said it before. that's the tell. i'm watching that. >> that does it for us. catch more "fast money" monday at 5:00 eastern time. "options action" begins right after this break. stay tuned. ♪ ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great. >>> we are live from the nasdaq marketsite. and carter did anything happen this week? anything we missed? while carter and brian are getting ready, here's what's coming up tonight. >> you won't believe the dream i just had. >> af

manus: that takes me to the ecb.at has been written this week is that china, exporting deflation, going for depreciation relation, does this mean that the ecb may need to do more -- may possibly need to up its game in the qe arena. which sounds like something they would choke on. >> they have been saying that they would have to continue qe after september 16. the problem for me is when do they say that -- i think that one of their issues is that if you look at the inflation forecasts, they have been telling a similar story for some time, which is, this year or next will not be great, but do not worry. by 2017 inflation will be back on target. with the new the gears for oil goces, they will have to again for 2015 or 2016. they were probably be able to dodge the bullet and say that 2017 is not going to be far from 17%. for september, it is probably ok for the ecb to say, the market has quite an to -- has gotten quieter, we're still ok. do anything.eed to especially in a situation where they have to wait for the feds to

it is expected the funds will be available to greece by august 20th to allow the country to meet an ecb payment due on that date. julia chatterley, who follows the greece story very closely, joining us around the desk. from looking at market reaction, you would think perhaps markets would be higher, but at this point, we're lower. does that perhaps mean that that greece deal is already priced into stocks? >> it could do, seema. we have been expecting this. it is, though, quicker, i think, than perhaps some had imagined. the sense over the last few days has been that we were working towards this point. i think the other thing to remember is we've only had this confirmed by the greeks at this stage, so we want to wait and hear what the europeans say later on today. and of course, if we can then get this deal agreed with the troika, there's a lot of other questions. the first thing, it has to be signed off in greece's parliament. there's apparently 30-odd, maybe more, prior actions, reform measures that need to be implemented in parliament before they can get their hands on the cash. the e

-- able to repay the ecb today.hey are able to give some money back to their creditors. he wants to tackle politics at home now. alexis tsipras has lost faith with his own party. her billion comparable happened when he was trying to get through the vote on the bailout deal. one third of his own party was revolting against him. a stand by take calling visa snap elections come hoping to rebuild strength to build aown party stronger coalition and start to get these very tough reforms through and placate and build the trust the creditors once again. pimm: i wonder if you could describe, who is in competition with alexis of risk -- alexis tsipras? is there any party leader that has been put forth as an alternative? syriza is a coalition of the left but it had this radical against itpushing vehemently pushing against what alexis tsipras was tried to do. they were the anti-austerity card, but now they are happy to accept austerity. this is what this particular part is trying to rile against. he was the previous energy mini

what does this mean for foreign investors, what does this mean for the troika, the ecb, the imf? guest: it means the greek economy will be in worse shape of the end of september and they might need to invest more money and loans available to greece. the uncertainty part will mean everything will freeze. there is going to be more unemployment, a deeper recession by the end of the year. that the real problems european union will have to face, because right now, the european union is the lender of last resort for greece. this is how greece survives with the loans from the european unit. matt: i wonder how long it will be before greece needs another bailout, or do you think we will see meaningful debt reduction before that happens? guest: debt reduction we will not see. debt restructuring, we will see, in allocation of the maturities, a longer grace period, maybe 20 years, for greece. that will work. but ultimately cut -- iternately, greece will make by reforms at the microeconomic level. are we going to allow for more competition? these will be the issues that will make the economy

the ecb. everybody.he points about london housing, where are the bubbles forming? the stinging a few of mistakes that may we made in the past. >> the point you make is exactly right. on an aggregate level, the amounts of money being pumped into central banks is as great if not greater than it was at the height of fed qe. it is just coming from a different place. i think there are areas like property, some of the money sloshing around in parts of technology, where you are starting to see a lot of money around and people trying to find where to put it. there are other parts of the economy where you are seeing a squeeze on liquidity. that's why china, which has been close to a credit crunch, has had to re-accelerated. they need to do more to accelerate getting rate cuts through to avoid a credit bubble. caroline: we need to get all out of emerging markets right now? >> i think most people are out. caroline: and remain so? i think the key thing is, on evaluation basis, emerging markets look pretty interestin

todis: that is for the ecb comment.ming weeks, there will a stress test of the greek banks. can any moreat, specific decision be taken. the do you think that depositors should bear some of the burden for the recapitalization of the greek banks? or do you think the depositors a should be protected? valdis: we know that in the eurogroup statement, it is very clear that there is a possibility for a bailout for bondholders. the bailout depositors are excluded. the europeanly at commission's and ecb's insistence that this protection is an for depositors. for depositors. caroline: how will you bring in a bondholders? as i said, there is a need for the stress test before any further decisions can be taken. in any case, according to the principles of banking union, principal of bail is being applied. it is not the taxpayers who are first in line to pay for the banking problems, it is actually the shareholders who are first in line. caroline: what is your assessment and how long the banking sector will take? the greek economy is

matt: they have until august 20 two pay the ecb loan. i want to talk about politics.i lived in germany we invaded iraq in 2003, and there was a powerful bowl, everybody hated america. now you live in germany, and we have donald trump as the front runner for the republican presidential campaign. germans are fascinated by the story. they'd like u.s. politics. donald trump is an easy one to explain away. the bigger issue is the racial problem, which is real. when germans ask you questions about ferguson, baltimore, those are difficult conversations. truck you can get away with a quick. donald trump is the party front runner. herman cain was the party for run -- front runner for years ago. the front runner for the germans. doing a to go down that road gekko erik: thank you very much. hans nichols in new york city. --not going to go down that road. matt: how easy it to perform hack attack on tesla. we will talk to two guys who did it. ♪ matt: the tesla model s is the world's most connected car in also one of the most secure. after two years of in-depth research to hackers

can the imf, ecb, european commission, and european stability mechanism managed to agree on a plan as well? greece. is there for let's have a look at the euro. we are basically trading flat. expectations were 225,000 jobs to be added. 200 15,000 jobs being added to the u.s. economy. you are seeing the dollar trade flat today. i want to show you the market reaction on friday when we did see that sudden spike higher when we saw that number come in ahead of 200 thousand. let's have a look at the commodity trade. the china effect. we are seeing copper pretty much flat. not much of a selloff. we saw moves in the aussie dollar and the kiwi. when it comes to the recourses, pretty flat. copper, resilient, moving that little bit higher. let's look at what is happening in turkey. we are talking about geopolitical risks, tragic bombings in istanbul. we did see a move in the turkish lira. this is currently flat at the moment. the market taking it in stride. we have not seen turkish stocks react that wildly. oil trading lower once again. more u.s. rigs being added. still, the supply glut comes. de

hat can that be unfortunately not the fed or ecb. this one is different.his is from the emerging world. what you need is something that stabilizes the emerging markets over there. that means china. you need something credible from china to act as the data laser. like--uld that look alix: what would that look like we have seen them try different things. olivia: they have even devalue the currency. the devaluing of the currency of the time was good in the medium-term beverly that in the short term, because it added to the instability. you have to understand the regime we have been in. that is until banks repressing volatility. the minute you have essential markets doing crazy things it becomes very difficult to keep that from spreading to the system, and that is what has happened. the reason why i tell people to be cautious, because i do not think china can come up that easily with a solution overnight. they face a very complicated situation. the financial radar -- the financial economy is not the only thing on their radar. at a muchring adam oate lower leve

it comes with a 3.2 billion euro repayment to the ecb. let's get the latest from athens.nting such an optimistic time frame for getting the third bailout wrapped up? the greek government does not want to rely on another bridge loan to meet the ecb redemption next week. took, the government took in july the decision to accept the framework byn the creditors. that was a big pill to swallow. they want that pill to go down as quickly as possible so they can move on. the fear with the bridge loan, the could end up letting process dragged on for a few months. more preconditions would come into play. totead, the government wants draw a line so you do not have the kinds of crippling uncertainty you had earlier, drawling out protracted negotiations. it could also move onto other priorities, including cleaning up shop to look like. with the members of and potentialty elections that might bring. francine: markets in athens. manus: the world's biggest natural gas producer gazprom has seen a 71% rise in gas prices. a weak ruble. will kennedy is managing editor energy and commodities.

>> the implication for the ecb is more important and the liquidity and being underneath the european economy. what is it? .2% of european gdp so, no, i think they're more concerned about the liquidity and the ecb doing what it takes to maintain that liquidity and i had one client a little concerned about the restructuring and as long as that gets waved through. i think that's more important but i think that gets that recapitalization and assets and that investigation takes place. >> if we think about other external factors what's top of the agenda now? >> china of course but i was looking yesterday funny enough, that china only represents 1% of u.s.'s export gdp which is fascinating. represents 20% of imports. that's good for them. it doesn't really -- even though it's a headline figure, it's not economically that important. so it's more wages, housing, which remain, you know, wage is a little bit soft but house regular mains strong. retail spending remains good. those are the sort of things they're concerned about. >> disappointing doesn't even begin to describe the recent figures o

. >> is it fair to question the pboc's credibility with the boj and ecb also intervened? of course lots of criticism thrown toward china as to whether it's starting, again, a currency war. is that fair? join the conversation on worldwide exchange. >> nestle shares have risen to the top of the twisz maswiss ma. it will be able to sell it's maggi noodles brand in the region after a round of fresh testing. the swiss giant just missed the mark but kept it's outlook on hold. >> on the phone is john cox. john, thank you very much for joining us. of course these results being welcomed by the market and we'll get into those in just a second. let's talk about the resolution, i suppose, of this issue. on the face of it, it seems like it will end up being just a small blip on the company's history. >> overall it's probably been a bit of an error on the part of the indian authorities if you look at the initial test. it wasn't replicated as far as i understand but it triggers the products or recall and ban and noodles is probably about a third of the business of nestle. you can imagin

i think the tightening by the fed will be expected when the ecb starts tightening. i think it will be later than february 2016. but it will depend on what japan does and to some extent what the people's bank of china does. i think today, we cannot avert to talk about the fact that the u.s. economy with the international currency is a factor. even if it's not the international currency. so i think there are many factors hide the decision. if i were the central bank, i'd decide to extend it for many reasons. the first is it happen the too late. and to a certain extent there are 2,000 billion euros missing today. if you look at all the savings, plus all the lack of money that has happened over the past six year, because we were were late to the qe game. we want and need more than promised so far to make sure we recuperate the pricing power. again, companies and households are not investing to the full potential. and the reason is just because of inflation and it's easier to keep the cash on hold. >> the recent bank data is suggesting that bank holders to beginning to s

the payment to the ecb is due in just a few days per those are your top headlines. want to bring back in lord robert who wrote about greece. the termaim at confidence fairy. you said austerity does not work. asserting that the confidence fairy does not change the logic of the policy. it it's here's the logic for a time. recovery may come about but never because of it. ofen that, you are a credit -- critic of austerity. and what germany is doing wrong. guest: i think what they are doing wrong is they are forcing the greek economy into greater and greater depression as the price for getting the bailout. greece will get more money. it will be able to go on paying interest on its debt but at the cost of driving the economy into greater recession. that is a self-defeating circle. the greek economy has fallen by 25% in the last five years. it is projected to go and get smaller by 5% this year. they are cutting off the real of servicing the debt. has your forgotten the lessons of post-world war ii? people talking about germany and the fact that they were supposed to get de

dollar weakens, the ecb weakens currency all the time by far bigger numbers. far bigger.his goes down 2% and it's a devaluation? come on. so look -- >> you're saying the chinese government is not that different, not that much more heavy handed than the fed or the ecb or the boj. >> they know that in a world of currency wars, that if they are going to tie their ship to the u.s. dollar, you had people in here earlier talking about this. tie the ship to the u.s. dollar and the dollar is rise and the japanese are lowering currency, you have to fight back. deirdre: you would be accretive, you would be adding now. i want to know what you think of the $4 billion buyback? stereo typically we say if a company that size with that much cash on hand isn't doing something r&d research and development internally or making acquisitions, they don't have better idea what to do with the money. >> couple things, right? i think it's a little gimmicky. it's small number, not that four billion isn't a lot of money, but relative to market cap, and here's the thing, they do have a lot of things

also seen as a vote of confidence for the ecb.ut we still need to see a significant improvement in the lending requirement here to say that qe is working. >> ben laidler has left us. thanks to ben. >>> we'll get a look at the top stories at this hour. berkshire hathaway has disclosed a 10% stake in phillips 66. berkshire once held a large position in the u.s. oil refiner but shed nearly two-thirds of it last year when it swapped shares of a chemical business that folded into its ubisol unit. it let the company disclose information confidentially so it can quietly buy a large amount of stocks. they're up by 1%. >> the italian firm eni is trading higher after finding a hughes gas field in the mediterranean. 30 trillion feet of gas spanning 60 square miles. the energy giant said the discovery will kept egypt's energy needs in the coming years. >>> and the rosneft has come in at 134 billion rubles. 20% year over year. the stock slightly lower in trade, but up by 6.6% in the last three months. >>> still to come on "worldwide exchange,"