tv Bloombergs Studio 1.0 Bloomberg June 26, 2016 12:00pm-12:31pm EDT
jonathan: we are taking you from new york to london to brussels. turmoil rubbed it in u.k. politics after the vote to leave the eu. eight cabinet members have resigned as revolt against jeremy corbyn. to brusselsd live to figure out what is next. what company -- countries will stand to benefit? we look at which asset classes are poised for the biggest swings monday morning. this is special coverage from london and new york. this is bloomberg tv and
bluebird radio. let's get some news. tojohn kerry is going brussels for talks on the uk's exit from the european union. he spoke in rome with the italian foreign minister. the most important thing is all of us as leaders work together to provide as much continuity and is much stability, as much certainty as possible in order to the marketplace to understand there are ways to minimize disruption and ways to smartly move ahead and order to protect the values and interests we share in common. emphasizeretary will support for the eu. he will keep the message from the white house that the special relationship between the united states and the united kingdom will not change. in scotland, they are working on
a new referendum on independence. they want to talk with european leaders about continuing scotland's relationship with the eu. they voted to stay in the union with england. a new poll shows a majority favor independence. there is an update on the status of those injured in the orlando florida nightclub attack. eight remained hospitalized, three in critical condition. 49 club goers died. the shooter was killed by police. fema officials are in west virginia to begin assessing the damage from devastating floods. president obama has offered his condolences and signed a disaster declaration. thousands of homes and instances are without power. the pga tour canceled a golf
tournament next month because the flood. news 24 hours a day powered by more than 2600 endless and analysts at 120 countries. this is the berger. david: let's get back to our coverage. british politics are in turmoil. a number of shadow cabinet members have quit. they are calling for jeremy corbyn to resign. >> jeremy is not going anywhere. there might be a few more rented nations of those people will be replaced. our members voted nine months ago with an overwhelming majority. leader. biggest party francine joins us. are we expecting were raising nations today?
francine: there are not many more people who can actually resign i think three or four people are still in there. they seem to be pretty loyal to jeremy corbyn. there is a fundamental problem. i would go further and say it's in disarray. even if he were to be challenged, it's unclear if voters of the labour party would vote for anyone else. he has changed remember sip structure. bear with me. canou pay three pounds, you join the labour party. he speaks to a very broad days. the older establishment once someone stronger that could come prime minister. that still speaking to base voter. jonathan: the next time an mp tells you there is no plan b, we are going to believe them.
what it appears is there is no plan b. has athe only person that plan b is mark carney. he planned for this and had something in place. i would go further. it's been many hours here. johnson did a very divisive and mean campaign. it's on your if he can unite the party enough to become the successor of david cameron. david cameron step down on friday. he is more of a lame-duck. if you look at leadership and you look at leadership right now, it's only nicolas sturges of the scottish national party that has been there and has
speaking to the base. david: we're talking to francine lacqua in london. john kerry was in rome today. he is heading to brussels in london. what does he plan to accomplish on that trip? interestingat is an question. the people that voted for brexit, barack obama said they should stay in. what john kerry can do is look after his own interesting find some conciliatory language. when we look at the broader landscape, we don't know what article 50 would start. team that is a playing. we don't know he is renegotiating what with whom. john kerry wants to be informed
of what's going on. it's not clear if you any influence or power play here. jonathan: just to wrap things up, what was clear to me today is germany is not singing from the same hymn sheet. francine: we heard the same thing from adam posen. when you look at politicians across europe, merkel is the only one who was thinking long term. she seems to be the one who is pushing the u.k. to start renegotiations. she is not in a haste. she thinks there is some way of keeping the u.k. in. they want toar u.k. out as soon as possible. they want to give a message to the others.
be careful of the outcome. you might he kicked out as well. it seems the situation is quite fluid. thinkmerkel, she seems to longer-term and look at the nuances. david: that is francine outside of westminster. thank you very much for your time. next, what are the similarities and differences? we will speak to you about that on bloomberg television and bloomberg radio. ♪
jonathan ferro. david: this is a special edition of bloomberg markets. the eu's industry commission said vw should compensate european to own cars with omissions cheating software same level as americans. dollarsl pay american as much and $7,000 each. jonathan: google is peering to release its own smart phone. they are in talks with mobile operators about a google landed phone. they already make the android operating system that runs on four of every five smartphones. thed: finding dori was winner at the box office. waspendence day, resurgence the second. it was less than expected. that is your bloomberg is this flash at this hour.
jonathan: i wish i had time to watch it. i been distracted by this thing called brexit. a provision in article 50 gives negotiating two years to include new arrangements. what can we expect in the next 24 months. charles rice joins us from washington. it's great to have you with us on the program. we had ack me is series of events in our mind. we thought the prime minister would trigger article 50. you been watching this play out over the weekend. could this be delayed a lot longer? charles: the core problem is the exit did not have a strategy for the day after. they did not have a vision of what their relationship would be
with the eu. we're seeing that in spades. the prime minister has resigned and there are complicated leader selection processes. submit cameron wanted to his application under article 50, he doesn't have a strategy. he doesn't have a concept of what the relationship would be in the future area i don't think this can go on until october. they will have to, but they vision of what kind of relationship they want in order to start the negotiations. david: i want to ask about the similarities between those two things. goingt extent is this forward about how greece might have exited the eu? charles: simple answers are hard to implement. they took over in january
2015 in greece, the had a very simple answer. they had a more naturalistic position. then a number of months later, they talked about an exit in they found that those kinds of ideas were not implementable. the same implement -- realization may come to the brexit campaigners. jonathan: what do we learn from they'rek situation? willing to punish country to make sure others don't follow. leaders be willing to do the same thing they did to greece to britain to make sure the dominoes don't fall? charles: i think the situations are not analogous. britain is so much bigger and more important to europe then
greases. no matter what the relationship, the city of london, the exports, the investment. it is a lot tougher to take a very hard line politically, the french and others that are concerned about their right-wing populist threats will talk that way. in the end, i think anglo mercker -- merkel knows where the center of gravity is. you see in her and john kerry an effort to let this workout and have some cooler heads think about what to do. david: you're talking about what happens going over in the european union. i am sitting here next to a stack of newspapers. everyone has a think piece about what this means for china and russia. ,e focus so much on the u.k. what does it mean for other
countries going forward? charles: but is not going to leave nato. british willhe want to emphasize european partners and their continued cooperation on security issues, especially counterterrorism. investorse are large and traders with the rest of europe. they will be mostly concerned with the impact of brexit. they will be quite concerned as all investors are. jonathan: you know europe. weekend,ssue over the it has been very clear there was no plan b. there is no key to the negotiations. thebig of a team does government need to put together to get the next two years done?
triggered,e 50 is how big of a team to you need to get to trade deals done and to negotiate? charles: you would need hundreds. i was assigned to both the american embassy in london and the eu in brussels in the 90's. we marveled at how good the british were working their policies. they have a cabinet office which is analogous to our national security council. they have basic it -- secretary of it coordinates all the ministries on all the legislation. it's incorrect for the brexit you have all of these policies imposed on them. they are one of the most effect of member states in brussels. they have a much bigger problem. domestics of the
regulations are required. the have to figure out what they want from the right to change and what kinds of trade and services and migration relationships they want to have. they have no government to direct the bureaucrats into preparing those positions. they have a very large challenge. it's going to be distracting to delegate to these teams the requisite expertise. more question here about immigration and migration. this is something was central to this referendum in the united kingdom. out, that gets hashed migration crisis continues. how much attention will this be given? charles: it depends him what happens on the ground. , bulgarianseu polls
choose to move in this time to england to get their chance to get established in england, they might he tempted to do something invoking emergency authority to restrict those kinds of movements. it is a very major tourist destination. they want to display a welcoming travelers from all over. they will need to balance those two things. there will be some arrangement for grandfathering, eu citizens living in the u.k. and citizens living in france and italy spain. the numbers are just so large. david: thank you very much for joining us. still to come, the market celeste to others. we have the numbers next on bloomberg television. ♪
jonathan: live from london, i am jonathan ferro. david: this is a special edition of bloomberg markets on bloomberg tv and bloomberg radio and. jonathan: you can find us on serious exim. donow some you may need to some aaron's to finish your weekend. strategist is predicting more pain following the massive selloff. about we are talking trading and we are talking about that specifically. quant funds. they have these computer programs in place. below's --n index falls below a certain threshold,
that triggers another wave of selling. computer programs are within the market. we spoke to you vs and jpmorgan. that ision selling ilion dollars 300 could further be wiped from the value of the market in the coming days. you have the fundamental issue, which is not insignificant. you have a problematic trade issue on top of it that could exacerbate the selling. that is likely part of the issue on friday. -- howhow does this ready is it? julie: you look at some past
crises, it's not quite a steep. sunday, theto black example of this. that was a 20% drop. 3.9% move. first go back to the trading after the september 11, that was a 4.9% drop. felt likeive asus, it it was a lot of selling. in the united states, it was smaller than other market shocks we have had recently or in the past several decades. what was interesting was the magnitude of the movement. the magnitude of the move was bigger on friday. it was the biggest move in history on the cable rate.
thanks are not stepping in to do what they used to do. can you tell us a little bit about that? to thei can speak more stock market than to the fx market specifically. least,stock market at there been some steps taken to make the selling more orderly so to speak. that is something that we did see to some extent friday. you did not see as many circuit breakers being activated. you did not see as much of the panic when you talked to traders in terms of the selling and how it went through in the market. --re's that you what's all what's also interesting, when you look at sterling is when you aok at volatility going out week, a month, six months.
predictive volatility is lower than it was during the financial racist. it's interesting that we are not seeing the longer-term volatility expected. those are some really interesting points. coming up, our interview with alastair campbell. that is next on this special edition of bloomberg markets. ♪
breaking news very quickly, and eu officials speaking to reporters in brussels not expecting high minister david cameron to trigger article 15 exit clause this tuesday. the ukip prime minister to outline the situation tuesday night as to why he will not activate the exit. the leaders are determined to keep the eu together. the article 15 exit clause the only way to leave the eu. expect the prime minister to outline the situation, but do not expect him to trigger the exit clause. let's wrap up all the other news happening with first word news with mark crumpton. u.s. reaction to the brexit vote continue today. senate majority leader mitch mcconnell said people in u.k. got tired of being dictated to i unelected dealer crafts in brussels. itis