this has a cost, and so q.e. needs banks that can transmit q.e.onomy so we can make loans and give you a mortgage and fund a startup. because regulation has still not been implemented in many aspects -- i think i was told in brussels a few days ago there is still 300 pending pieces of legislation in banks. i heard the number 400. let's say it is between 300 and 400. this means that banks are going to be holding back a bit, even though we are increasing lending. for example, we are increasing lending in spain right now, but i think there is a drag effect because of this uncertainty and because this regulation is still in the process of being implemented. francine: you mentioned the u.s. there are concerns around the u.s. because the feds failed the stress tests on santander. how are you addressing it? ana: i want to say it is not just the fed, we need to meet our own internal standards. we are working very hard. the first thing we did was change the team and the governance, so we have a new board in the u.s., a new chairman at the level. and a new

he can always extend q.e.alk about the deposit rate, we talk about credit look at how it has been used elsewhere in switzerland, denmark, sweden. the negative deposit rate is being used to affect the fx, to smash down individual currencies. the weaker euro, that's a negative rate there. tom: i sent got good news. i'm going to radio. and i will be joined later by jon ferro. and howard davidowitz. vonnie: tracy alloway and caroline veins from capital economics. tom: somebody knows who i'm talking to. theie: howard, jon, join in discussion. i want to wrap this up with black friday shopping and the consumer because we have been talking about economic data in europe. we have a consumer confidence rating that was high. consumer confidence is healthy in the u.s. as well. is it that consumers are not buy as much stuff in stores anymore? howard: i think that is a piece of it. i think millennials are different than they used to be. but i think this -- i think if you look at our economy, gas prices are 25% lower than the

pastid that q.e. will run september 2016 if needed. aredownside economic risks visible. his comments had driven the euro lower against the dollar, sterling and yen. the fed is, as expected to hike rates, widmark the first time since 1994 there was monetary policy diversions between europe and the u.s. back then, janet yellen was teaching at university. mario draghi was a senior civil servant in the italian finance ministry. europe's benchmark break was set by germany. that months, the fed boosted benchmark rates to 3.5%. the buddhist bank cut its discount rate by half a percentage point. cut itsundesbank discount rate by half a percentage point to it who better to discuss these issues then my guest. the founder and managing director. richard jones is in the house, from the bloomberg "first word" team. we heraard from you before. you are listening to draghi. nothing new but dovish. that is what we wanted. >> completely in line with what -- the next 12-18 months. we have seen signs of revival in europe. if you look at credit cycles and headwinds from fiscal policies waning

will extend the q.e..you took some profit on one of your positions and we move into the december fed meeting you don't think we get more volatility into the close? patrick: we put on the short vix when people were panicking and it fell 20% after we took it off. he vix has fallen low. this is negative bond. of rillion euros, a third the bond market. this is a huge issue for draghi and the market and the fund managers. patrick: i suppose draghi is creating it with the e.c.b. buying bonds and the 0% rate policy and created the phenomenon of negative interest rates. it's not a healthy long-term or an aequilibrium environment but the trust we need and this monitor stimulus creates some inflationary hope anyway. francine: patrick, thanks for all of that. investment manager and chief investment manager at patrick armstrong. now let's get to one of our top stories, turkey, the r.k. party swept back into power with the surprise election victory and boosting stocks and the lira higher. for more our reporter tom mcke

where is the transpacific partnership, trade deficits, q.e. 3? except for auditting the federal reserve, nothing. john: they talked about the tax code and i have it here. pat: but the panel was defirst quarter. john: marco rubio and bush and chris christie. previously proposed cutting current tax rates to 8% to 35% depending on the bracket with various reforms to marriage and child credits and capital gains, corporate and estate taxes. carson and rand paul said they support replacing the current tax system with a simpler form of a flat tax. pat: they are but nothing like that is ever going to get through but they all have their tax plan. the major issue coming up is the transpacific partnership trade deal. bernie is against it, trump is against it. a real conflict there and a great issue. they didn't even bring it up. eleanor: even their tax plans they all highly reward top earners when the big challenge facing the country is income disparity. i don't think anybody out there is screaming they want more trickle-down economics. clarence: at one poi

he would like to see this q.e. extension come through by year end.core six that make up the ecb, they are on board with this. tom: hsbc looking strong. euro barclays disagrees looking for euro to po.95. we need no disagreement. here is bonnie quintet vonnie: the euro still holding on above 1.07. city is in northwest iraq. islamic state overran the city last year and that is where -- forced thousands of people to flee. negotiations about serious civil war will restart saturday in vienna. a copy ofobtained russia's latest proposal. russia wants u.n. backing to carry out airstrikes against islamic state. the u.s. and its allies says the real purpose is to support the syrian president. african leaders are pushing it back against the european union's plans to slow migration. e.u. leaders meeting in malta rica, butore -- to aftic only if african nations take back more people. african leaders say europe could make it easier for people to live and work there. the greek unions that the prime minister and power on the opposite side of the barricades today. the

we think they will extend the q.e. program. the effects will be limited. the risk is it will disappoint markets. on the downside. in terms of rate hikes, if you use an optical control framework, it is better if they delay the hike. the risk is they cannot finish the hiking cycle before the next recession. so that is a concern. but it looks like it is going to be december. our economist says it is going to be december. i trust him. guy: you think it is going to be 10 basis point's. what would be exceeding market expectations? 20umber of banks are making basis points on the downside. some are saying it should be staggered. we end up with a danish story where they stagger the deposit rate cuts. how does it work and what does outperformance look like from draghi? >> they are concerned with cutting the deposit rate is that is a tax on banks. the last thing you want to do is punish your banks. we see credit picking up. we see a credit impulse building up. the last thing you want to do is punish the banks. and speaking to my clients, they say we have a deposit ra

if we have lower oil prices, we have a lot of -- lack of q.e., the death of deflation, that makes forretty good position for european equities. james: it is very early to call the end of deflation. what is happening in the united states. manus: i do not necessarily agree with the article. u.s.: 25 cents of inflation is traded globally. therefore, if we had 10% roughly of deflation in global trading goods and services, we need 3.5 domestic inflation to have a headline and the core equal liberating at zero. we made 7% to mystic inflation. that would frighten the -- we % domestic inflation. overall, when you look at equities, is there anything you're looking at buying into next year? james: absolutely. quality growth turns out a must-have. an opportunity to buy arm holdings. a company that has been vilified in the market actually knows how to make money for a shareholders. francine: even if it is priced in pounds? james: i do not have a problem. i hedge a lot of currencies because currencies are difficult to get right. manus: we saw a major pharma deal go through. or in the offing. let's

the same time the european central bank is easing policy and expectations are for them to expand the q.e. program and bankle england is caught somewhere in the middle here. they have a lot of similarities in terms of labor market performance and the recovery from the great recession and financial crisis. a lot of parallels with the u.s. economy, so i think that they'll largely be doing what the fed is, but they're much more sensitive to what happens in continental europe and that will slow them down. fed first. the o.e. second. david: mark carney no exception, he was asked about what he think the fed might be doing. >> it's performing reasonably well. we see them growing in the high 2s over the course of our forecast horizon. that is material for demand for the u.k. and it's one of the reasons why we see our economy continuing to progress. i'm quite confident that they will make the right decision at the right time. david: he is saying that the economy is doing well. we had janet yellen on capital hill. give us the latest metrics, productivity out today, we're looking forward to jobs tom

terms of the actual euro/dollar currency, what is going to be important is to accompany it with more q.enathan: richard jones and manus cranny. francine lacqua on "the pulse," the e.c.b. will do what it must to raise inflation quickly. they are worried about it for a long period of low inflation. will it become embedded? a concern. a big question for the markets. this morning, weaker euro the story of the market. down by half of 1%. the bond market, if you're looking at bonds rs largely unmoved. the dax pretty much flat. so much to discuss in this market of monetary policies as we enter a key month for global markets. if you want to talk markets, i'm on twitter at ferro tv. best of luck for the rest of your day. ♪ francine: whatever it takes. mario draghi says he will do what is necessary to raise inflation as quickly. the euro falls on his comments. manus: abn amro raises 3.3 billion euros and it returns to private ownership. shares are trading above the ipo prices. francine: the challenge. the french prime minister once the sing in system could collapse. -- the sink -- the sing in syst

they will increase the pace of q.e. i think this is a very unique meeting and the sense that this is the first one we can remember in some time where the best outcome for the market, for, y,y, stocks generall might be they do not do anything. we have been in this environment for so long were you want this reflexive response. if we think about the challenges the market has faced over the last few months, there have been huge challenges coming from the strong dollar. it has driven down commodities, stressed emergenc emerging mark. given the data in the eurozone is ok, maybe a week or euro would do more harm than good. manus: sit back, relax, have a coffee. you will get more out of the chief asset strategist for morgan stanley. bloombergces say -- sources says that the chinese company is in talks to buy syngenta. the deal would be the largest acquisition by a chinese company of the european target. bloomberg commodity index has purged some of its earlier losses after falling to lowest levels since 1999. chinese stocks have

driven by q.e. or by the fed? derek: i think it is more driven by the fed. if you look at a chart over the last month, the big drop was on the 22nd draghi when we had the announcement from. -- when we had the announcement from draghi. if you look at the rates market, i would argue that the short-term yields in europe is more position for another cut in the deposit rate on the 3rd of december. the short-term yields in germany dropped to 10 basis points very quickly. it seems to have adjusted quite quickly. the process and the u.s. is that the longer because it is the first step from the fed. the markets believe more that draghi will do what he is saying. draghi spreadllen - moves wider than the yellen-carney spread. derek: jim to degree. the spread is telling you there is more upside for the dollar. manus: you're going to stay with us. let's hear what else is on our radar this morning. it german -- no unexpectedly dropped in september. output fell 1.1%. the drop comes as germany sealed hit a slowdown in china and other emerging markets. owner cartier richmond

the 10-year, for example, to see that the fed is going to raise rates and while europe is expanding q.e., normally you would see a lot of buying of dollars. , looksu see, the 10-year like investors are starting to pile into that. yields are down. the dollar has shown a lot of weakness. this is because investors feel ok about the fact that the fed is going to raise rates at a measured, slow pace. so, there is no reason to pile into the dollar and take advantage of rising interest rates here. stephanie: we got to dig in to this pfizer deal. valuing the botox maker as high as $150 billion. this should be the drugs industry's largest deal ever. one of the reasons -- i spoke -- this deal made so much sense for tax purposes. the treasury department is starting to look at this. is it going to block it? tried to do this deal last year when he tried to buy astrazeneca. he said, he does not see a way for a government to stop them from doing this. pfizer is a multinational business. they make tens of billions of dollars overseas. they cannot bring back unless they want to pay u.s. taxes. this gets

inflation and growth forecast in december, which gives the ecb further reason to put their finger on the q.etton. we just counting down to december 3. david: the good news is you are so good that i like talking to you even when it is red. now to stephanie. stephanie: when we return from ereak, samuel palmisano will b joining us. we have this morning's must read and a whole lot more. you are watching bloomberg ♪ i just had a horrible nightmare. my company's entire network went down, and i was home in bed, unaware. but that would never happen. comcast business monitors my company's network 24 hours a day and calls and e-mails me if something, like this scary storm, takes it offline. so i can rest easy. what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. stephanie: welcome back, you are watching bloomberg go. things are about to get exciting. we are joined by two special , ands, samuel palmisano kevin wars, former fed governor. should we do the first word? leaders arecan pushing back against european union's plans to