and that's what volcker's referring to. in the old days, those guys would sit down and hammer out agreements. one of those agreements, bretton woods, lasted half a century or something. we need to do that. we need to do that. right mow it's just war out there. -- right now it's just war out there. yes, sir. >> what's your thought on artificial intelligence and the increased productivity effect on middle class jobs? >> i mean -- >> i think the only way we'll know that the economy is incapable of creating a lot of jobs is if we have very low tax rates and really strong current i and little regulation. until we get those circumstances, we should not look for other causes of our unemployment problems. so i fully expect there to be an abundance of jobs with the full technological revolution when we get tax cuts and -- [inaudible] >> yeah. i mean, there's an argument floating around about this that i just don't like, and the basic argument is that advanced high technology breakthroughs along with the automation that goes along wi

we will hear from paul volcker, the outgoing ceo of nestle. they have had to cut her outlook.s is one of those bond proxy socks that we have been -- stocks that we have been hearing about. the other stock we are talking about is norwegian. we are going to be hearing from volker andwell, paul others. all the numbers next. ♪ guy: welcome, you are watching bloomberg markets: european open. i am here in the city of london. caroline hyde is in frankfurt at the ecb. clear moments away from the start of european trading. caroline has your morning brief. caroline: i do, indeed. a showdown in sin city. the market barely budge after last night's debate. fullylinton victory priced in? qe questions. well draghi keep the markets in suspense about the stimulus program? and emerging markets take a bite out of nestle. the world's biggest food company cuts its forecast as inflation sees emerging markets bolt. ceo changee incoming the recipe? guy: that's the big question. we will hear from him later on. european markets are just opening up, expected to the upside. let's find out exactly what th

that is directly related to the volcker rule.e extent they are taking inventory, that is how you would make money and profit back in back in-- money in prop the day. citigroup is trading moreover the day. i think they carry some position overnight, it is a much more higher volume, higher turnover business. >> as opposed to the goldman sachs stories, which was one of the most read stories instantly. a traitor was buying junk debt -- trader was buying junk debt. that sounds like less of a servants to client and more of a bet for the bank. >> city derivatives -- they hold those in inventory. to the extent she could hold those as the market went up over days or weeks, he made money on that. him, certainly if you are with the new york fed, this would meet near-term demand for clients. citi'se got guys from interest rates -- making a profit in the closed -- in the post volker world seems like it is still possible. is it a matter of stretching the rules? here,ant to be careful but what you are seeing is the fruits of years worth of rest

former fed chairman paul volcker understood this well.he experienced first hand how public pressure can be exerted on a central bank when it must make unpopular decisions that he and the fomc judged to be in the long run best interest of the economy. in a 1984 speech he noted the important role of the structure of the federal reserve system in supporting the central bank's decision-making. he said, it was all quite deliberately done by men of political imagination, designed to assure a certain independence of judgment, continuity and professionalism in staff, a close contact with economic developments and opinion throughout our great land, and a large degree of insulation from partisan or passing political concerns. to that end, i extend a personal invitation for any of you to visit the federal reserve bank of kansas city to see what a regional federal reserve bank provides in support of the central bank's objectives for economic stability. thank you. i look forward to taking your questions. >> thank you, ms. george. mr. jones, you are re

we saw that with paul volcker. it is for personal reasons, it's obviously not his -- there's athen lot of talent at the bank of england or externally if they want to go there. i don't think if he stays or goes is driven by those personal factors. it shouldn't be critical for sterling. i caught up with adam pozen from the peterson institute on friday. we were chatting about what the realistic level is on the uplift for inflation. what do you guys pencil in for inflation going into 2017? the other thing, cable has done , moste aggressive lifting of it, and pozen suggested there was much more to come on euro-sterling than there is on cable. would you concur? >> on inflation, i think the rule of thumb around the world really has been that you should probably expect less pass through to inflation from currency depreciation then you might have historically. the global factors are so strong. while the sterling fall has been spectacular, the pass-through to inflation won't be that remarkable. oil will help headline inflati

a big day for them. ,ednesday brings important news expected to announce plans to coproduce paul volcker'sreported robust sales, especially for the suv and hatchback. slice of to take a china's rapidly growing interest in hybrids, which could rise to 20% by 2025. finally, we will keep a close ta on friday when it releases full-year results. takata said to be considering bankruptcy protection in the u.s., although no decision has been made. ramy: a quick check of the business flash headlines. the u.k. business secretary has confirmed nissan secured post-brexit assurances to keep manufacturing there. promised nissan the government would negotiate to keep terror-free access and the eu and offered support for training and innovation. they announced a new investment in the u.k. after warning it could move its european manufacturing elsewhere. shanghai electric will pay $1.8 billion for a controlling stake in a pakistan electric company. it gives the chinese utility access to 2.5 million clients in karachi alone. is purchasingric the state from a group that has held that since 2009. singapore an

we have at least two dozen challenges or issues that ken weinstein and ambassador volcker and other speakersentioned. can you cite, for example, some five top concerns that the administration should consider and then, of course, the nato mini summit in brussels in early 2017 should consider. we'll start with you, maybe. >> why don't i defer to my colleagues that are not in the government. >> thanks. you and i did include that in my opening remarks. just to recap, for the 100 days i think it's important -- dan hamilton stressed this point, too, can't wait for a summit. the new u.s. administration needs to come out strongly on collective defense in article 5. i'm calling on nato to join with u.s. in doing crisis management with these major crisis surrounding nato territory, to renew a call for building europe whole, free and at peace that's inclusive for of europe's democ. and to offer to work together with russia on terms that uphold the post-1989 security order. when you come to the nato summit then, i think it should be an affirmation of all allies on those things. and i would add to that a

and maybe the most important innovation, paul volcker said this, maybe he's right, the atm machine. i don't think you approach technology as a category. you look at likes of business, figure out a specific business. what is the technology you need to have in place to best pursue that business on the most cost effective. what do they need? what are you doing in terms of delivering financial advice is very different from electronic trading, very different from the system supporting our primary business. not a generic technology category, a by business category. i think it's incumbent on the banks to understand where customer behavior is going and have the capability to deliver what their services are in the most efficient and effective way for it. some with human being, some with remote. a lot of new technologies coming up in fin tech are things that i think have low barriers to entry, functions effectively given away to clients. there are algorithms which can be written by any number of people. i'm not sure what the sustainable competitive advantage they are. i think they are minimum

on economic policy, i associate with warren buffett and former fed chairman paul volcker.f i'm interested in figuring out my foreign policy, i associate myself with my running mate, joe biden or with dick lugar, the republican ranking member on the senate foreign relations committee, or general jim jones, the former supreme allied commander of nato. those are the people, democrats and republicans, who have shaped my ideas and who will be surrounding me in the white house. and i think the fact that this has become such an important part of your campaign, senator mccain, says more about your campaign than it says about me. mccain: well, again, while you were on the board of the woods foundation, you and mr. ayers, together, you sent $230,000 to acorn. so -- and you launched your political campaign in mr. ayers' living room. obama: that's absolutely not true. mccain: and the facts are facts and records are records. obama: and that's not the facts. mccain: and it's not the fact -- it's not the fact that senator obama chooses to associate with a guy who in 2001 said that he wis

capacity for a large stimulus program, in line with what we saw in the reagan administration, with paul volckerrates through 1984, would be a dollar positive. jonathan: look at the potential downside for the cable rate, the pouncey merely has no resistance to the downside. how low can it go? >> we have looked at various idiosyncratic prices in sterling . it is the 14th anniversary of the u.k. bailed out by the imf. there was the sterling crisis and the 2008 financial crisis. on all three occasions, the average peak to trough decline in cable was 30%. we are about 19% of the way through. that is not a suggestion that it will fall by 30%. the risk to the downside to our forecast, if you project the average monthly decline in cable of about 1.5%, the average since july -- that would take cable quite cleanly to 1.05 by the end of next year, which was the 1985 low. take a very simple observation of what has been happening in the u.k. over the last several years, the pound hit a high in 2007. people coming and doing a ton of shopping. the account deficit got worse even then. why do we think coming fr

what is so interesting is if you take it back from the 1970's all the way through the 1990's, pre-volcker said, how do you know where we sit on that? is there a new realm we should i was of the tenant moves in their? kathleen: it is an important inflation point and you have the potential to get the best return. with the yields so low and the challenge around the world for how his growth going to get going, i think it gets going with gradual tightening by the central bank and allowing some inflation to help stoke the markets, and that means with low yields, returns from bonds will be poor, and it makes sense to start thinking about where you are going to get the best returns. highly it will not be in sovereign debt in the developing world. scarlet: let's talk about inflation because you say that you don't think that markets are reflecting the risk of inflation rising sufficiently. is no one position for rising inflation? the fed doesn't necessarily have to move because it doesn't top economist estimates. kathleen: it didn't happen but it was above expectations, and i really do think there

volcker was in one way. greenspan was great in ways. bernanke innovated.n has continued the qe. >> innovated herself into sub-2% growth forever though. unfortunately. >> sebastian mallaby, the book "the man who knew." >> like stimulus or tax cuts? >> how about bringing back all these millions of dollars from overseas. >> that's not what people think about. coming up, this morning's top stories. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. that's why a cutting edgeworld. university counts on centurylink to keep their global campus connected. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication,

anyone remember the volcker rule? yeah, it means the banks can't make profit from their trading. we get a big move, there's no liquidity. i'm not convinced this was an accidental trade overnight. it may have been but there are other factors sending the pound down. >> i agree with you on that, steve. absolutely. especially when you talk about how thin the trade is at that hour. steve sedgwick for us. >>> other major story impacting the market today, the jobs report due out at 8:30 eastern time. steve leisman joins us with that. >> the second most jobs report politically because there's one more before the election. but the most important jobs report before the fed because it's the last before the november meeting. we'll be talking about the potential impact of this storm on the jobs data next month. let's see what we're looking for this month. nonfarm payrolls up to 170. unemployment unchanged. that's a big deal. hourly wages up 0.2%. let's look at how the fed is going to view this number. the new issue is why the u.s. economy has steadily added jobs at a rate that most fed offici