portugal takes control of banc o espirito santo. on thers left cease-fire. we are live in tel aviv to see how a key israeli industry is coping with the gaza conflict. and out of control. becomes thetbreak deadliest ever. we are going to weigh the risk of doing business in west africa. ♪ >> good morning, everybody. welcome. you are watching "the pulse." we are here in london. i am guy johnson. what do we have coming up? ready for recovery? legal woes may be a thing of the past for hsbc. the bank reports results in about 15 minutes. we will bring you those numbers as we get them. ppi could still be a big problem. we are going to talk about that. we are taking you to our top story. portugal is taking control of boko a spirit of center -- banco espirito santo. mark is here with the details. a lot of money. how is it being spent? >> it is being spent by the bank of portugal, the central bank. up resolution fund was set in 2012, financed by the country's 84 banks. they will take over the bank as a whole. suspended shares on friday. it will move most of the assets

late sunday portugal's central bank unveiled a four point nine billion euro or six point six billion dollars rescue plan for bank of spirits of the central bank revealed the plan to rescue the country's second largest lender by breaking up the bank and pumping billions of euros worth of state money into it as santo provided loans to its parent company euro fin holdings which is a luxembourg based conglomerate which is run into some trouble lately after an auditor accounting irregularities last month and the bank also sold billions of euros worth of debt to its own customers now under the four point nine billion euro plan depositors and senior bondholders will be sparred while the banks non senior creditors and current shareholders will have to absorb the losses now most of the banks deposits branches workers and operations will be transferred to a new entity or a good bank controlled entirely by the bank of portugal called novo bank now while bank asparagus problems those problems assets they'll remain with the bad bank and losses will be absorbed by shareholders and subordinated cre

lisbon p.s.i., portugal's main stock index ended almost 1% higher. let take you through a few other story that's we are keeping an eye on for you. the big of the bank warned of overzealous regulators. there's a risk that bankers become too willing to please regulators and conform to them. that includes a $9 billion fine in the u.s. for french bank bill apass. they dropped below analyst expectations. order russians are feeling a bite of western sanctions as well as 27,000 russian tourists are reportedly stranded abroad. this comes after the russian tour operator went bust over the weekend. and fluctuations for the ruble and what it called negative political and economic situation. at the same time though russian investigators stay they're looking into possible fraud. and general electric says it will invest $2 billion in africa between now and 2018. it includes a in facility to manufacture and assemble machinery in nigeria. africa has become ge's most promising region for growth. the announcement was made in connection to a summit that sees more than

first up we're talking about debt in all its forms and glory today the good the bad and the ugly of portugal's the banco spirit to some resolution plan is a top of the deck and what the rest of the eurozone can learn from it then william white is on the program the former chief economist of the b. i asked and current chairman of the economic development and review committee is joining us live on the show today. to discuss ultra easy monetary policy and whether public and private debt is still a problem they post crisis now also in today's big deal edward harris and i are going to be sticking with this whole debt he will be looking at public and private forms of it and again how much of it exists post-crisis you want to miss a moment actually gaps in that it all starts right now. with. our lead story today debt more specifically debt in the context of portuguese bank spirit. now late sunday portugal's central bank unveiled a four point nine billion euro or six point six billion dollars rescue plan for a bank or a spiritual song to the central bank revealed the plan to rescue the country's secon

is gettingito santo a bailout from portugal. profits fell by 12%. that missed analysts asked him it's -- estimates. let's figure out what is going on. jonathan ferro and manus cranny are with me. bes, it looks so simple. >> i don't think it is that simple. you have a bailout. you have some money left over from the bailout support to recapitalize the banker in that goes to read capitalize the bank. are going toeople bear the brunt like the shareholders. a lot of analysts are saying. my take away is within two share price has dropped 70%. you have seen a bailout. this has played out in almost no time at all. this is just before those stress tests later this year. >> despite the fact that there is a clear sovereign link, this money is coming from the lens of -- resolution fund. how is the fund being funded? by the government. offhis bank will get spun and people will get shares again. >> it will get sold off. >> let's just hope there is not another one. i am being my usual miserable self. there is a bank in transition. profits are down 12% as you said.

portugal putting 4.9 billion on the table to rescue santo. ebola outbreak threatens to overshadow president obama at the first african summit. >>> berkshire hathaways profit rose after a stock swap deal earlier this year. revenues rose to nearly $50 billion. operating profits urged berkshire to pay more attention to including swings in the value of investments and derivatives rising 11% beating forecasts. berkshire ended with more than $55 billion in cash. berkshire class a shares traded in the german market session higher by 41%. >>> hsbc is facing unprecedented demands on staff and regulatory reforms. shares are trading lower by just shy of .50%. we have seen it pick up now. hadley is joining us again, what are they saying? >> on that point of regulation and excessive concerns, they were saying there's a creeping concern that staff are increasingly worried about the penalties when things go wrong. we are many the business of risk taking and in the firm that's what we believe, but there's a sense that regulators have a zero appetite when it

this is the former largest lender and portugal. -- in portugal.o cost taxpayers nothing. with us, charles calomiris and hans humes. it is free. it will cost taxpayers nothing. [laughter] >> no downside. deal the problem is there might not be any upside. thank you for putting this chart thank you for putting this chart up. good bank-bad bank. now they are separate, except, are they really? charles, that is my question. >> that is a pretty special case. >> yes. >> i think one of the constructive things to say about it is to construct it with the cyprus bank. catastrophic was because they went after the wrong parties. they went after the depositors. here, it is going after the junior debtholders and the equity holders. that is what i think the formula is for the future. showing that you are serious by recognizing problems, isolating them, imposing hits on the junior people. it sounds like a good formula to me. >> does that sound fair to you, hans? >> yes. i think the cyprus situation showed a dysfunctional decision-making can be in europe. they were

the plan in portugal proved successful we'll just have to wait and see. now to get a better feel of what's at stake here we wanted to talk debt with william white so white is chairman of the economic development and review committee of the organization for economic cooperation and development or o.e.c.d. now he's also the former economic advisor of the monetary and economic department of the bank of international settlements and just a bulk of his resume a little because it doesn't seem bulky enough white also served as an economist at the bank of england pretty impressive stuff now with monetary authorities engaged in this ultra easy monetary policy the question is whether public and private debt is still a problem so here to answer that question i turn now to mr bill according to your former employer the bank of international settlements the global economy has shown encouraging signs over the past year now they're worried is that the forces that led up to the great financial crisis are still at work so here's my question do you share these concerns and

>> portugal pop central -- or to build central bank takes control. bankll find out when the returns. understands. the earthquake struck the southwest of the country. a very good morning for you both. virus continuing to strengthen. why no cure? we will be talking about where there are positive moves to be made. >> we expect litigation costs to fall. number should occur. >> we are going to focus on it in just a moment. now isu need to k portugal's central bank has taken control. israel has announced the seven hour cease-fire with gaza. this follows yesterday which included chilling of the united nations shelter. the cease-fire would occur from 10:00 until 5:00. portugal's central bank has taken over. amounting tos 5 billion euros. it is still a costly venture for the country. essentiallyit works. the portuguese central bank is taking control. this was financed by its biggest bank. then when they are ready they the juniort. bondholders have those parts. it is an empire a compass thing -- encompassing so many things. positive is that it has been sorted

portugal sought bailout money three years ago.ood bank with healthy assets and a bad bank with risky assets. it's the first time european rules are tested to make sure taxpayers most directly deal with the fall out when the bank fails. just start with viewers around the world a little about this bank. it's a private bank run by a family. >> yeah, it was founded by the family about 100 years ago. the family only controlled 25% of the stock. that's now down to 20%. they have to sell shares to cope with their own financial problems. the bank itself ended up lending money to other group companies. the the fact several group companies are now in protection from their creditors in lucksingburg means the bank was liable for billions of bad loans. that led to this rescue. >> is this an isolated case or wider sign of troubles with portuguese banks? >> it does seem to be a specific case. as i say, it's a family controlled group. it seems the family was very keen to try to hold onto control of the bank. as a result they did not take advantag

. >> and business news before we go -- portugal's largest lender has gone bankrupt. the bank hit rock bottom last week after a series of financial scandals. >> of the country's central tank is coming to the rescue, shutting the bank down, spinning healthy assets off into a good bank and should inc. the toxic acts -- toxic assets. >> the bank posted a first-half loss of 3.5 oh yen euros, the largest ever in portugal's history. that sent shares plunging by more than 70% to just 12 euros cents stop now the head of article's central bank has announced the government will rescue what is left. they will pump up 4.9 billion euros into the healthy part of the bank. >> the solution adopted by the bank of portugal has many concerned with the preservation of financial ability and the interests of depositors. it is a bank of great importance for small and medium-size enterprises was our aim is to ensure the continued financing of the economy. >> the european commission has given its approval to the bailout, saying it is in line with eu competition rules and would help reestablis

more than 500 firefighters battled the forest fire on monday in central portugal. the temperature was around 36 degrees celsius at the time the fire broke out. now the fire is under control, but there are other blazes out of control in the southern areas. of the country. well, not just portugal, but also parts of california are dealing with some blazes due to high temperatures and windy conditions. but quite heavy rain is falling across the western areas over the sea, this is due to hurricane named marie. marie is staying over the waters the next several days, continuing sending dangerous surf conditions for western areas of the baja peninsula. so watch when you go to the beaches. now across the opposite side of the u.s. there's another hurricane named cristobal, a category 1 system, a stationary system, will likely get close to bermuda within the next 24 hours. moving to the northwest. dangerous surf and rip currents are going to be happening over bermuda as well as the atlantic coast of the u.s. for the next several days. there's a line of thundershowers extendin

international a continuation of our investigation into portugal's banking system is teetering on the brink again the details next. during a press briefing president barack obama said something very unusual and used a certain term you almost never hear from a government bureaucrat he told the audience that in the immediate aftermath of nine eleven we america did some things that were wrong we did a whole lot of things that were right but we tortured some folks here it is a rare thing to hear someone in the white house admit to torturing people after nine eleven but the question is why did he say this now please allow me to suspect first obama is the teleprompter master since he loves to read off a screen i doubt this was some sort of slip up this was probably done consciously but why well it always helps if you look good by condemning the moral failings of previous presidents liberals and democrats love to hate bush so this could be some kind of pandering or trying to look good by comparison headlines like obama condemns torture sound nice and drown out the fact that he sure approves

to portugal it's probably systemic. >> portugal's gdp half that of north carolina. >> in terms of sizeemblematic of something larger in europe? maybe. a lot of analysts who have been looking at europe for a long time say they have not come to their day of reckoning when it comes to bad assets on banks in europe. we are getting to that point because they're going through an asset quality review where we're likely going to discover there's other banco espiritos out there. that's an issue. is it a regulatory failure? people are saying how did this bank exist when you look at the relationships all over the place between this family when you read the bank of portugal releases they come close to saying fraud although they don't use the actual word. how did this bank exist? there are going to be questions about whether there are others like it. i will tell you, regulators in europe absolutely believe there are other banks out there like this. this is why they are trying to go from countries regulating their own banks which start to get politically interconnected, and then having the ecb take

particularly because i think people didn't understand that portugal is loaded. >> i thought portugal couldn't handle this. what happens if another one goes down? >> the problem is, i think we all forgot, the european banks never did the stress test. when you see what is happening in russia, i think russia is the approximate cause of our decline. i know people want to focus on the fed because it's so much easier to talk about and so much accessible. but a european slow down is going to be quite evident and i think it's going to hurt the banks there. >> by the way, you have the efo institute in germany saying that the sanctions are going to push german growth to zero. >> exactly. >> does the u.s. follow that lead or do you think people start to buy in after we have a selloff? >> the president not complaining to the business people. i think the sanctions that the europeans have embraced is when it gets colder than gas prongs, i think that's when the europeans are really worried about you a he think that would dramatically cause a huge gdp growth going negative there because they rely on

talk of what's going on in portugal.o contribute in recapitalizing this bank who else will be on the hook if needed? one source of concern this morning. >> one of many concerns, of course. we want to talk about the s&p and nasdaq, too. both are actually still up about 4% for the year. as we start the month of august. the dow turned negative yesterday but those indices are still in the green, if you're counting on a year to date basis. >>> meanwhile, the votes tallied and the time has come to crown this week's "tech crowd" leader. the two crowd funded projects facing off, a smart home security system called blink and personal assistant robot jibo. when it came to where you put your money, semiconductors came out on top with nearly 79% of the votes. joining us now from boston is the company's co-founder don schultzinger. good morning and congratulations. >> thank you very much. nice to be here. >> it's good to have you. media's background is in semiconductors and chips. how was that the natural segue to make a smart home s

bank of portugal governor carlos costa said that it will stabilize the financial system. but analysts are not yet convinced they say yields from government bonds are rising. >>> trade officials from japan and the u.s. are wrangling over some details that could have big implications. they are trying to work out a this deal on agricultural tear riffs. japan's deputy chief negotiator, is spend two days in washington with acting deputy u.s. trade representative, wendy cutler. they are trying to work out a deal to push ahead with the transpacific partnership. u.s. negotiators have been pressuring japan to cut tariffs on beef and pork. the japanese want a safeguard in place. they say if they cut the tariffs they should be allowed to restore them temporarily when imports surge. the focus of the negotiations is when and how this would happen. some are demanding that japan eliminate the tariffs. they have called on barack obama to exclude japan from the talks if the country doesn't agree to their terms. >>> officials at japan's welfare ministry have shone a light on the vulnerable

with the competition for getting euros, spain and portugal have said, what products have we got?rism. those are the things we can discount. >> the discount airliners are adding capacity. that will be a feature. that is good news for the traveler, in terms of resumable he -- presumably seeing competition. peopleare seeing traveling in currently -- traveling internally. the forecast must be around 5% -7%. northern europe and southern europe doing well. western europe, not so much. if -- particularthere are geopolitical risks and areas. is it egypt and the middle east that will be unattractive as destinations? everyone's not on top destination. who will be the losers? >> you mentioned previously the kind of benchmark of the euro. as a key factor in terms of the flow of travel and tour is him. -- that is a key factor in terms of the flow of travel and tourism. how much the pound or euro will buy in terms of travel and tourism >>. that's what i mean about the robust side. they switch to the destinations less concerns -- where there are less concerns with health the political situation

>> you can even add portugal to that list too.ughter] we're looking for a lot of the cheapest countries in the world, right? and so a lot of the cheap countries also happen to fall in places that have bad gdp growth, you know, poor geopolitical headlines. but that's also where the opportunity is. so a lot of the really cheap countries, like you mentioned russia, greece, a lot of eastern europe we think sets the stage for really strong returns the next five years. ashley: but, you know, given what we know about some of these countries, how do you kind of tiptoe through the minefield, if you like, and find the opportunity? >> there's a few key lessons here, and portugal's a great example because you want to diversify. so for every market you have like portugal that's really struggle for the last couple months, you have markets like brazil that have done fantastic, and that's the best part, right? it's breadth. so you have a lot of choices. you take about 11 of those countries, we have this in our global value etf, you're able to div

yes, credit agricole has a the portugal bank.s not been reduced to zero. -- now been reduced to zero. 500 million euros in related to the losses of the portuguese bank. agricolebetween credit and banko a spirit of cento -- santo go back a while. that relationship is now over. the ceo of credit agricole said had the bank had been -- ended credit agricole's big ambitions in southern europe. today is the end of their relationship. ando, given all of that given the big write-down we have seen, let's talk about some good news here. what is it? >> there are some good news. this was already priced in by investors. investors are focusing on capital ratio. their capital ratio is much better than expected in the second quarter. their tier one is at 9.9%. that is better than estimates. investors are reassured. the bank has reduced the risks on their balance sheets. they have declined the provisions of the risky loans him especially in italy, which is one of their key markets. their corporate investment bank profit is up. good underlying per

. >>> on the "cbs moneywatch" a portugal bank bail out and a wall street messaging.gner is at the new york stock exchange with that and more. good morning, jill. >> good morning, marlie. the central bank in portugal announced late sunday it will provide more than $6 billion to revent the collapse of the bank. the bank's share price fell 75% after it reported a huge loss last week. here on wall street investoring are helping the markets rebound after the worst week in two years. for the week, the dow dropped 467 points, the nasdaq fell 96. and the s&p 500 lost 53 points, its biggest weekly loss since june 2012. >>> a war over messaging. goldman sachs bought messaging. wall street had wall street messaging buts terminal costs about $20,000 a year. users can plug it in an adapt it to their system. >>> and "guardians of the galaxy" blasted to the top. it's about extraterrestrial misfits earned $94 million in its debut. in second place "lucy" starring scarlet johan scarlett johansson came in second and "get on up" came in third. >>> straight ahead, the nfl preseason kicks

portugal actually picked up on the most recent data.d also point out, the central bank cut its rate. some signs of slowing. >> you wonder about, when does the i.m.f. weigh in? >> the i.m.f. has reduced its estimate for global g.d.p. growth twice since january, twice. i believe it's now under 3%

portugal should grow today. and your lovely stats on greece.t growing. >> it is. .2% is where we think that number is going to come in. 24 straight months of contraction. the recession is nearly an end. six year slump. what you have got there is a huge six years. a ammassive -- >> we must not forget that greece is russia's biggest trading partner. mainly oil and gass. the europea commission is forecasting growth. it hasn't seen growth since 2007. >> russian tourists are expected to fall by as much as 200,000. retail sales fell by 8.5% in june. interested reduction up. -- industrial production up. portugal on the up. >> italy on the down. but domestic demand is recovering in spain. which hopefully will lead to a pickup in spending. pickupt will lead to a in growth. poland reports today. alex will the czech republic, as will hungary. -- as will the czech republic, as will hungary. let's focus on the ukraine story. pro-russian separatists continue to battle government troops. trucksy of 2300 carrying humanitarian aid travels across moscow towards

that is because of charges tied to its stake in portugal. eurospped to 17 million for almost 700 million a year earlier which is below estimates. agricole booked millions of euros in costs related to its almost 50% holding in banko is beautiful santo -- espiratue santo. the bank of portugal unveiled is almost 5 billion euro bailout which led to the shareholders and junior bondholders with losses. just breaking down the charges, and a 502 million euro charge to reflect share of losses in the quarter and 206 million euro write-down to cut the value of its holding 20. twoo zero. and otherthe banks one-time financial costs, second-quarter profit actually rose to one billion euros. risky loans deckline. ratio also going up as well. they say in a statement -- >> the sales as well. the background is the second worst sales -- just under one billion. just under 3.7 5 billion. overall, it is the tale. everything -- they would most exposed. they were most exposed to russia. now we understand, the french banks are significantly posed to the portuguese.

just twenty five years ago there was an incredibly potent chance for peace throughout europe from portugal to the year olds got a bit show off and shevardnadze the foreign minister were in power. h. w. bush promised that in return for the quid the reunification of germany the quote would be nato would not move one inch eastward toward the soviet union fast forward fast forward to two thousand and seven there had been ten new nato members created all to the east of germany ok now you have two thousand and seven putin is allowed to make a major speech at the munich security conference he we versus the ration of doctrine which was incidentally responsible for the invasion of czechoslovakia exactly in one nine hundred sixty eight on this day he reverses that and he warns look you have to take darshan national interests into account what happens that was two thousand and seven two thousand and eight lavrov the foreign minister now and then color ambassador in and said look we understand we understand this is early february two thousand and eight we understand that nato is about to issue a decla

now late sunday portugal's central bank unveiled a four point nine billion euro or six point six billion dollars rescue plan for bank of spiritual santo the central bank revealed the plan to rescue the country's second largest lender by breaking up the bank and pumping billions of euros worth of state money into it as spiritual santo provided loans to its parent company euro fin holdings which is a luxembourg based conglomerate which has run into some trouble lately.

>> maybe portugal's done, but i think the bank in portugal, banco espirito santo to be emblematic because we are coming up to a big event in europe where they will reveal what are the quality assets in the european banks, and we think there are a lot of problematic assets in european banks. it's why we believed among leaders within europe in the financial community that there are other banco espiritos out there and we're going to find out what they are, where they are as we go through this process, as they're forced to unload these assets. because remember, we're going through a big shift in europe where it used to be country by country that controlled the banks, and now it's going to be the ecb that's going to control the banks that's supposed to eliminate a lot of politics, kill a lot of banks that have been allowed to survive because of their connection to politicians. but that's in theory not going to happen anymore. so, there's going to be days of reckoning coming soon. >> yeah, and this one's so interesting, michelle. it's fortunate that portugal had this leftover bailout money sitt

now late sunday portugal's central bank unveiled a four point nine billion euro or six point six billion dollars.

listen, it is not a good time in portugal.he banks as we look at them right now, at least for the bond yields down seven basis points. here is the dax in germany. we're showing this could you. it is important. it is considered one of the stronger areas. as you know, in europe, but guess what? this is the fourth losing session in a row. why? concerns about bank espirito playing in all the european angst. key factor in all the selloff. vix is taking a breather today after the biggest jump in six months last week. we're looking at cboe market volatility index down 12 1/2%. it is 14.91. so below 15. again, listen we have much higher levels back in february when the russians and russian separatists were moving into crimea. that caused a lot of concern in the market. >>> berkshire hathaway of warren buffett, look at shares here. no, this is not a typo. they do cost 19 had thousand per a share. -- 194,000. after second quarter profits out on friday soared 41%. that is a new record. on the flip side, the two biggest losers on s&p 500,

so far, some of the steepest boards in spain, portugal and switzerland. you can see still sharply lower, about 0.6% off the major markets. the ftse mib off 0.3%. french, italian and german pmis suggesting a fall from the june level right across the charts. but it were a trace on the manufacturing side. to the u.s. markets, it was a choppy session statewide. the argentinean default. you had concerns around geopolitical tensions, still with fresh sanctions and then the ripple effects across markets. earnings weren't particularly strong, either. we saw the s&p, the dow and the nasdaq around n session and a jump in the vix as a result. the vix up 23%. on the data front, interesting to note, u.s. labor costs according to their biggest gain in more than 4 1/2 years in the second quarter. a little bit of sign of wage pressure starting to creep into the system. initial claims and unemployment benefits rising by 23,000. when you see more people joining the unemployment cue, you've got cost rising on the labor side. this is the jobs story today as we chase nonfarm

. >> the biggest listed bank in portugal.d ryan mccall is an interesting one and was supposed to produce a combat training facility for the russian army. the russian government change permission and cut the forecast on the back of it. that is what you see it down. the green andn they have an oilfield in malaysia and the oilfield in malaysia. they say we may get some black gold earlier than we thought. >> thank you. let me bring you the top headlines this morning. ban food going to imports from the u.s. and eu -- eu. the restrictions are for one year and could hurt the u.s. and eu food companies. problem for the man. rate is at a high for the first time since 2007 band the reserve bank of australia will cut interest rates further to spur growth. we have policy decisions from the ecb and the bank of england and both are expected to do nothing. over thed be split timing of the next rate increase. people whoring you are excited about the central-bank decision. reporteru.k. economics at bloomberg news. the video of the industry. i

how portugal hopes to save one of its banking judged by smashing it to pieces after the break. a few weeks ago we discussed detroit's plans to shut off water to those who can't pay their bills logically what a basic human assessor he could get taken away some protesters gathered to give their opinion on the issue at our plaza and what is the response from the state maybe some sort of dialogue or explanation as to why they have to turn off the water you know they turned up on the high tech quote non lethal weaponry against the protesters they used an l. red system which basically blasted the protesters with sound which sounds but intended humane until you look into it and read that the weapon can cause permanent hearing loss the company even admits this is true at less than fifteen meters we see all across the country so-called non-lethal weapons being used to very harmful and even to well we thought ns but why does this happen because they make breaking up protest easy unsafe for the cops remember in the old days when you had to physically break up protests well things like el

the successing at stories of portugal and spain. you have seen some reform, and recovery.ou've gone from current account deficits to current account surplus. that and think, the medicine is working. economist, i'm an interpreter, but that seems to be the direction. maybe we will see some praise for sport -- portugal. >> thank you for joining us this morning. up next, an icelandic volcano that i will not name could leave flight stranded across europe and the u.s.. we look at the technology aiding the volcanic disruptor. ♪ >> welcome back, coming up europe keeping its eyes north as one of the biggest volcanoes finds a life. expert can't say if another eruption is imminent but they are taking no chances. belies thelness activity happening hundreds of meters below. this giant a central icelandic is awakening. if that magma reaches the surface, or comes out of the ground, that is when we get an a russian. >> it happened in 2010. the eruption close european airspace. stranding 10 million passengers. grounded.ights were costing airlines, $1.7 billion. ash quite a cloud of high in

we have seen weakness in spain, greece, italy, and portugal. now we are starting to see weakness in germany and france. yes, he has talked about what he can do. you said it right. it looks like europe is where the u.s. was five or six years ago. we have had five or six years to sort out what to do and still have not worked out what to do. they are still working out how to do quantitative easing. with the bank of england, we knew by november we needed to do it, and we did it in march. the ecb still does not know what to do. >> michael mckee, does the topic of rationalizing bank regulation in the european union, has that come up at all at jackson hole? >> mario draghi did bring those up as part of his policy prescription, things that needed to be done. when he talked about tax cuts, he was talking about business tax reduction. some of the corporate taxes that get levied. in general, this conference has focused on the labor market so that was not a major part of the presentation. what strikes me about the whole we saw ae is in a way, lot of cordia