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tv   Street Signs  CNBC  September 26, 2016 4:00am-5:01am EDT

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rubber maker lanxess announces plans to buy another in $1.2 billion in cash. and hillary clinton and donald trump go head-to-head in the first presidential debate. catch the face-off bright and early at 3:00 a.m. ct bright and early on tuesday morning. good morning, everyone. let's get straight to some german eco data. they say the business morale has risen in september. this is nice despite the current conditions out of 114 versus a
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forecast of 113. that's better than expected. and in terms of the outlook, let me bring you that once i find it, but clearly this is a nice improvement from july and august and in august we saw that big dip as a result of brexit. so it seems like the german comedy is coming in better than expected. >> it's a lot better across the board. i wonder if it's because we have the fed out of the way, people are heading towards more of a solution for the central banks. >> or it could be the short-term blip that we saw in the uk economy. because the article won't be triggered until next year and we are not seeing the full-term impact of brexit. in terms of euro/dollar we are still unchanged at 112.33 on the
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day. >> there's a lot of psychology in this. and speaking of psychology, we have been talking about shares of deutsche bank trading at an all-time low after angela merkel ruled out state assistance for germany's largest lender according to a report from the "focus" magazine. merkle declined to talk about the u.s. justice department that announced it might seek up to $14 billion in sanctions from the lender. there's been a lot of marketing positioning on whether or not we're going to see this type of a tie-up. we have spoken about this before and what the intentions are. and the article was published friday morning. >> to be honest, i never thought that state aid from the german government was likely to begin with. because we always knew germany was going into federal elections next year. we don't know if angela merkel
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is going to run, because she's been hit by the migrant crisis giving state aid to one of the biggest banks. i don't see that happening at all. so to be honest, this headline to me doesn't surprise me the least or at all. angela merkel is not one to confer in corporate matters and wasn't involve in the bw scandal. it's too hot to handle in a way. >> that's a good point. and deutsche bank having changed the face of the company over the last couple of years going from being the darling, a lot of value, to seeing the shareholder value grow quite exponentially over the last few years due to the financial crisis. >> i wonder with shares falling to a record low, just about ten euros or so, i wonder if that ironically gives deutsche bank a lot more barg nip power with the department of justice. because they are going to tell them, we have to pay the $14 billion or whatever the number
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is coming down to, because the share prices are falling so much. so they have to ask the shareholders to raise more money or say, hey, this is all we've got. all they've got is roughly $5 billion. >> we continue to see this erosion in the share prices today as we just saw off by some 6%. we saw deutsche bank being among the main losing stocks in europe this morning. and indeed, we're in europe and continue to see just a little bit of repositioning after these decisions by the very central bank and the bank of japan last week. and it is all about the u.s. presidential debate. the first of three election debates today taking place tonight. in fact, if you're night owls, 2:00 a.m. in london, 3:00 a.m. ct. but the european equity markets are treading lower ahead of this move. massive moves are not being seen in the sectors, but we are seeing some in the oil and gas sector. for example, you have oil and
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gas up now by 1.8%. food and beverages and technology are holding up the best. banks are off the most again among this story and other things. >> off 2.7%. let's go to the fund manager at tsa partners. robert, good morning to you. i know you like the banking sector in europe, but do you also like deutsche bank on the brink of limitation? >> if you look at the banking sector in europe, it falls under two categories. there are commercial and retail banks and more investment banks, like swiss banks, like deutsche bank. we are not so keen on investment banking because it is extremely capital intensive, it's an extremely difficult business with volatile earnings. we live in a world where people want some degree of certainty. i think that is a very difficult space to be in.
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>> you like vmp, why is this an event you like right now. because it does have investment banking opportunities that you just talked about. >> it does. but even paribas has one of the smallest investment banking off one of the large european banks. fundamentally, we think that the pendulum of pessimism has swung too far against the eurozone banks in general. and, in particular, some of them for the more conservative ones like paribas. this is a business that doubled its value per share during the last eight years. that's not exactly a period chen you would regard as a good period for banks generally. >> i think we have two titles for you. the correct one being the investment director gaam, is that right? >> that's right. >> you talk about physical stimulus versus non-physical stimulus. how much is the wave of stimulus, how much emphasis is
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that going to put into the european markets as opposed to elsewhere? >> well, we all like to see a change in how government looks to stimulate the economies, both in europe and the u.s. i think both donald trump and hillary clinton are going to put their foot on the fiscal accelerator. in europe as well we're likely to see the restrictions and restraints on governments being taken away. and i think in france, in italy, in spain, we're likely to see the european union taking a bit more relaxed attitude towards deficits because they recognize how important getting growth is. >> talk to us about some of the particulars apart from pnb paribas including residential property. >> residential property is a long-time story. for a long time, germany had this big issue which was that when there was unification, there was a lot of housing stock from eastern germany that won't
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be a great quality. and furthermore, a lot of people went west to leave eastern germany. but now the most exciting parts of germany are berlin and the east, we're starting to see the cities growing. and this is a place where you can get decent quality property for a fraction of the price of -- i realize this is an extreme example, but london. it really is less than a quarter of the price on a likely basis. we are now beginning to see rental yields rise. we are seeing people move to berlin. this is a long-term growth story where you're able to get exposure about a company inexpensive relative to peers and should perform on a long-term view. >> if you ask people living in berlin, they would argue that we have already seen a bubble forming in berlin. and i think bank of america very merrill lynch dominated the real estate sector saying rates can go much lower. we are not going to be seeing another 5% to 6% increase
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annually. how do you respond to this? >> bell, berlin property prices are still cheaper than paris, they are cheaper than milan, they are cheaper than frankfurt and cheaper than london. when i say cheaper, i don't just mean a little bit cheaper, they are an extraordinary difference. they are. you can live in a very nice apartment in berlin for 2,000 euros a month. that is not true in london or paris or frankfurt or anywhere else in europe. and i'm a great believer that good things happen when there are cheap assets. people want to move their businesses to berlin because you can get people who are graduates that can live a good life there. sure, prices have risen, but this is not a one or three-year story. this is a 10 or 15-year story. >> robert, thank you so much for that. now the correct title, investment director at gaam.
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e-mail us at @streetsignscnbc. or you can tweet us, that's what it is. tweet us directly as well. coming up on the show, to freeze or not to freeze? that's the question to face producers at the sidelines of the international forum in algiers. join ugs and we'll be back with more on "street signs." allowing them to handle the recent popularity boom in fanny packs. it's pretty fly. unless being '90s is your thing. well, cdw and hpe services gave them the flexibility they needed to scale up their scale up their cloud resources, making sure supply meets demand. poser! [ classic ringtone ] what's crack-a-lackin'? hey, did you remember to set the vcr? increased flexibiilty by hpe services. i.t. orchestration by cdw.
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hi, everybody. welcome back to "street signs" here on cnbc. asian shares have been under pressure as the bank of japan governor kuroda says it has taken longer than expected to
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move. sri is here with more. >> oil had a 4% decline on friday that greased the wheels on these declines. as you said, the boj doesn't seem to have a great deal of confidence on the latest cocktail of measures to inflate the economy. i think the way that you view this, the prism is through the dollar/yen. yes, we are holding up reasonably well, but we had appreciation here once again as part central narrative. so we're knocking on the door of a century mark, which is really the dangerous spot in the psychological handle. so that didn't help the nikkei japanese equities ending off down by 210 points. the other factor here is that trading volumes in the main chinese equities are that much thinner on the ground today because we are bumping up against a fairly major holiday once again. so some of these moves to the downside seem to be exact by the
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credibility. we are watching the u.s. electric cycle and watching the presidential debates that is keeping a few people on edge and cautious, caution is really the watch word over here in asia until we get some policy substance. i wonder how long we have to hold off on that one from the two candidates, both republican and democrat, hillary and mr. trump. so that's where we stand. back to you, ladies. >> sri, good to see you. thank you very much. now the world's largest oil producing countries are set to meet at the sidelines of this very large meeting that is taking place international, the energy forum in algiers. speculation is mounting that the producers could be inching closer on a deal to freeze output. politics could still block the way while the internal divisions make an agreement to cut production very unlikely. at the same time, a cap seems the most effective and realistic way to stabilize oil prices. many analysts believe the most likely outcome will be nothing, just like we have seen the failed summit in doha back in
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april. >> since that meeting, some things have changed for saudi arabia to reach that agreement to work together to stabilize that market. saudi arabia is showing other signs to compromise. the kingdom has offered to cut its output if rival iran agrees to freeze production. no decision on oil production will be made in algiers. meanwhile, all the mixed messages suggest that opec and non-opec members are still some way from consensus. let's go out to hadley who is in algiers. what is the risk they are going to leave this meeting empty-handed and we'll be looking at another doha-type disaster? >> reporter: good morning. essentially what we have heard over the last 24 hours from the algerian oil minister is that no one wants to leave the meeting
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empty-handed. we are here on the sidelines of the international emergency forum set to kickoff later this evening. all the ministers are arriving in nigeria today. they understand that in terms of the shell producers that they have been able to adapt rather quickly to the price shocks. it is time to declare victory and move forward. the question for iran is whether or not they can say at this point that it makes sense for them economically to do a cap. the question also for oil producers in general, this is not happening in a vacuum. the conversations without the oil market are bringing stability back to the oil markets and aren't existing in a vacuum. we have to remember there are a lot of other conversations happening between moscow and real. we heard the saudi arabian foreign minister offer treatment to them if they would change
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track, this is iran. this is iran versus saudi arabia. so a lot of different stories, a lot of different under currents happening at the same time. we did hear from the algerian minister saying over the last 24 hours nobody wants this to be another epic failure out of the doha meeting. we had a lot of angry faces from the russians and nigerians as well. we heard from the energy minister of russia saying this is a non-critical meeting for them. at the same point, you have to remember this had a major effect to the economies, not just of russia, but also to the gulf arab states. and the big question is at what point are the saudis and the folks in the eu going to say stop and listen to the discomfort of what is happening in the oil markets. guys? >> hadley gamble joining us live from that meeting in algiers
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taking place. we just spoke to the russian finance minister and asked him about his expectations for the algiers oil meeting. >> translator: on the one hand, this sort of speculation has been happening a lot in recent times. on the other hand, of course, we are looking at the dynamics of the global economy, which to a large extent depends on demand, including demand for oil. therefore a freeze on the part of several communities when the opportunities for the growth of the economies are on a whole and on the decline that will not produce the effect that some people are anticipating, which could lead to a rise in oil prices. therefore, in our plans, our budget plans, we are making decisions on the basis of a conservative approach when planning prices. we are basing our plans for the next three years on $40 a barrel. why are we doing that? because in our view this is a balance price at the moment.
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it's a price when the oil producers, especially shell oil producers, are at their capacity level. if we see prices exceed this threshhold, there's the possibility we'll see an increase in oil production as a result of shale oil. and then the prices will fall again. therefore, in our view, there's no need for a high price. there's no need to manage things on the basis of optimistic forecasts for a rise in oil prices. we simply need to put our budget together on the basis of reality. and in our view, that is $40 a barrel. >> well, emma richards is a senior gas and oil researcher. thank you for being here. >> good morning. >> i love the reports of iran saying they will cut back a bit. saudi having 20 cakes, iran having 1 cake. and the cuts if they were both cut on the same starting points given the sanctions that iran is trying to get back to.
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there's no way we're going to get an agreement, is there? >> no chance at all. the most likely outcome is we see them come out to make a vague statement to the effect we'll support market stability and continue to cooperate to bring that about, but i think the chances of them agreeing to any kind of coordinator at this stage is virtually nil. as you said, the relations between saudi arabia and iran are just so, so poor. i can't see any scenario under which saudi arabia would cut without iran freezing. and iran has said so consistently they will not freeze until they reach pre-sanction production levels. they were approaching those but are not there yet and won't be for several months. >> listening to what the russian finance minister says, is there any reason to see any type of movement up $40 per barrel, right? we have been there before. it's not super low or super high, shouldn't we be happy? >> i would agree with that. the market rebalancing is underway. we need a lower price for longer to allow those prices to play out. and you have to remember that we have seen massive productions in
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the u.s. shales. there's a lot of capacity there that could be wrapping up quickly if prices recover too quickly or too strongly. so i would agree from a fundamental perspective, you don't want to cut at this stage or freeze. >> every analyst out there tells us on the show that a freeze wouldn't make any difference at all because all the producers are producing at record levels anyways. what about sentiment? how much difference would it make in terms of sentiment if not fundamentals? >> i think it would restore faith that if we would get a shock agreement, you would see prices bounce back up to $60 per barrel. on the flip side, if we don't see an agreement, the investment probably won't be impacted because it is so weak and the downside is so limited. >> that's something that they have been eluded to, once oil prices go back to $50 a barrel we see the u.s. producers who
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have turned out to be very nimble and flexibility, they have come back into the market and started producing again. does it even make sense to have an opec agreement without the u.s. shale producers? shouldn't there be a big agreement, not that it is possible, around all the actors in the table? >> yeah, that's the point. if you look at the u.s. no longer being in the marginal barrel, it is so much more conventional in terms of what opec can do to keep prices at $70 to $80 a barrel. it is not feasible with swing capacity to respond to $50 a barrel. >> but it is still about protecting market share versus the price in town. >> if they exceed market share for six months to bring it up to $50 per barrel, the u.s. comes back on and they have to see more market share. it wouldn't be enough to cut 500,000 barrels. they have have to cut 500,000 barrels every year and be a losing share. >> where is the oil price headed
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for now? are we going to go back down to 30 if there's no agreement here and no agreement in november? or is it going to be upwards and onwards, close to 50? >> i think it will continue to go upwards. the market is pulling back, demand is strengthening, not seasonally right now, but it is strength anything. high cost barrels in southeast asia, east asia, you are getting supply pull-back. so that will support prices, you know, upwards. but i don't know when we will get back to where we were. there's a cap on how high prices can go. >> are we anticipating the same type of seasonal push in the fourth quarter now? i mean, is anything going to be different this year? >> hopefully demand will have strengthened a little bit and you'll have the supply components we didn't have last year. so that will be a factor, but i don't think it will be enough to drive us to $60 per barrel. >> emma, thank you very much. emma richards, senior oil and
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gas research. and lanxess has agreed to buy chemtura for $2.1 billion in cash. lanxess is seeing they are seeking to improve their additives business. both boards unanimously approved the deal which is expected to close in the mid-2017. uni credit has chosen four potential bidders for the near asset management business allowing them to access to the unit's financial data. this is ahead of the sale expected to take place later this year. and former imf chief rato will stand trial today along 65 other former bank executives over accusations they spent more than $30 million on personal expenses. now that is a lot. >> that's more than a lot. >> private jet, hotels, what else? >> food, more food, drink. >> the group are believed to have misused funds. where did they go, hotel,
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shopping sprees and more. >> the that is a lot. how do you think they could spend that much and get away with it? >> exactly. >> but it is not like they just bought a pack of gun. and in california two former wells fargo employees filed a lawsuit seeking $2.6 billion or more for workers who did not engage in fraud and were later forced to resign while attempting to meet ambitious sales quotas. this comes just days after the ceo testified on capitol hill how they opened two million counts in customers' names without their knowledge. goldman sachs is closing nearly 300 investment banking jobs outside of japan in response to a slump in regional deal making activity. the value of these deals across the asia pacific region has dropped to $75 billion year to
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date down from 746 billion for the same period of 2015 according to reuters. in the spanish group telefonica is working on listing their group as o2. the company has already put together a team of investment banks like barclays, ubs and morgan stanley. this goes ahead, if it goes ahead, this would be the biggest group in years. tesco is one of the biggest pension schemes in britain with around 350,000 members. this comes after the retailer is looking to recover from the accounting scandal from two years ago. coming up, today is the day of the announcement of the dates. stay tuned, we'll hear more about renzi's referendum as the italian prime minister finally gets set to tell us when that vote is going to happen. and we are going to go for a
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quick break, but do keep in mind that you can check out world markets live on our blog that runs throughout the european trading day. we'll be back in two, don't go away.
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welcome, you're watching "street signs." i'm caroline roth. >> and i'm louisa bojesen. >> deutsche bank has hit a new low after angela merkel ruled out any stake in the lender. and crude output fades despite tough talk from host algeria. rubber making lanxess bounces to the top of the stoxx 600 after going after chemtura to buy them in $2.1 billion in
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cash. and a third of voters will rely on the tv events to decide their vote. catch us at 3:00 a.m. central european time on tuesday, tomorrow morning. good morning, everyone. it's monday. a quick peek at the u.s. futures, the s&p 500 down by roughly ten points, the dow jones said to lose 86 points. this is after we saw a down day for wall street on friday. oil prices slumping, that certainly didn't help the picture. for the week, though, the s&p of 1.2%, that was the best week since july. government bonds also had a pretty strong week last week. also the best week since july. and in terms of the injury mean market picture, we're looking pretty risk-off this morning. the xetra dax down 1.5%. dragged down by deutsche bank. we'll get to that in a second. the cac 40 at 1.82%.
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you're seeing risk aversion, in part, as the banking stocks are there. oil is mixed. just a second, before that currency markets, a quiet go into the first presidential debate. we saw a slight uptick in euro/dollar to 112.38. we got the eco numbers at the top of the hour. and now finally we'll talk about the oil markets. here we go, that's the picture this morning. wti trending a tad higher as we're awaiting the official opec meeting in algeria up 1.2%. brent crude just off a smidgen by 0.1% at 45.85. wti slumping 4% on friday. for the week it was up by 3%. caroline, thank you. jeremy corbin has been re-elected as labor leader feeding rival owen smith with a resounding 62% of votes. corbin now faces the challenge of uniting a splintered labor party and persuading members he
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can mount a serious leadership campaign against teresa mays conservative party. this comes ahead of the finance minister jonathan mcdonald telling them that the government would be an interventionist government. steve is joining us from the labor party conference in liverpool. steve, people are calling this a landslide victory, but then the mayor is warning about the real splits in the labor party, especially if corbyn goes after the people who didn't initially back him. >> reporter: absolutely, louisa. both of them are talking the right talk but saying it's up to the leadership to bring the party together. from the other side of dubai, there's some fighting talks. and i thought it was worth our viewers to listen to the veteran labor mp. the so-called beast there to see what he had to think and say about unity in the party.
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>> it's time that the people in the parliamentary labour party, or members of progress, whatever you call them, it's time they understood that jeremy is here to stay. he's got the biggest majority of anybody since the second world war, get behind him. tedious teresa is worst than dod dodgey dave. she hasn't won an electioner but believe me, taking that election next time will be a relatively easy exercise for a labour party that is united. >> reporter: no mr. skinner is not in the shadow cabinet, but i didn't think that sounded like soothing, calming, olive-branch language. i'll leave that one hanging. let's get a view from the
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director here. we have seen snip-its and think it will be more interventionist, the question is whether naturalization being brought back in is a large one. maybe we'll get a few answers today, but do you think there's a shift across the broader politics to a more less austerity driven policies? >> i think there might. we're really going to find out on november 23rd when the current chancellor delivers his first statement. but we know that he's said he's going to change george osbourne's rules which are aimed to get us balanced by 2014. it could mean loosening of the taxes like roads in town and so on. but there could be a change witness the current government. >> how essential is that given that many people are saying, i well i don't mean your views on it, the monetary policy has run
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its course. so mr. carney went early with the package of stimulus and that's what he has to offer. >> monetary policy has gone as far as it can. interest rates are almost at zero. there's not much more you can do on that side. of course, there are two big issues here. one is that the monetary policy has positive effects and negative effects as well. if you're trying to save -- if you're in your 20s and 30s to save for your retirement or buy a house, which is worth a lot because of the monetary policy, that's really tough for you. so it has its negative effects as well. so we don't know where or how far that can go. >> but it is destroying the older ones, the one who is have the money and the income have suddenly lost a lot of their pension income as well. there's got to be a grave concern about how precious this is building up and the black holes it's building up as well. >> i should stress this is a cost on younger people, it's not a cost on older people. if you up your house, it's worth more than it would have otherwise been.
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if you've already got your pension, that's being paid and inflation is low. there are a small number of people who have a lot of money in a bank or a building society getting less interest as a result, but what this really is if i'm 30 and interest rates are zero, i can never ever save enough for a pension. that's where the real cost is coming. >> that could be a big problem, apparently. tell me a little bit about the globalization side, we're hearing it from mr. trump about protectionist barriers. we think we'll hear about the up fettered globalization that has run its course. is there a build-up of dangerous tendencies around the world to build up tariffs or is that a good thing? >> the issue is the globalization on a whole and across the piece doesn't make people better off. we get cheaper stuff from other countries better off. but there are losers as well as winners and one of the challenges of politics post-brexit, but also before us is how you support and protect the losers from the additional
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money the country has as a whole in order from the winners. you don't want a series of tariffs that makes us much worse off. if we're not trading, trading is more expensive and we grow less money to go around in total. >> what about brexit just hanging over all of us? we don't know if it will be a soft brexit or hard brexit, what the ramifications are, the passporting and the access to a single market, how can any chancellor or broader government or monetary advisor make any decision when we just don't know what is happening? >> you put the case very clearly and well. there's huge uncertainty about where we are going to go. we'll have to go on november 23rd with the statement that the central economic forecast, but the central forecast not knowing what policy is, we don't know what the policy on the membership of the single market and so on will be. so we have huge uncertainty and we'll have huge uncertainty for two or three years and possibly more down the road. and making policy in that world
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is going to be really tough. >> what are the key messages i keep hearing is we don't want more anti-austerity. many question how much austerity the british had in the eu as well. is there a danger that they would be in a perilous situation a short while down the road if we loosen too much in the markets and they suddenly turn on us? >> you are right. policies here mean less austerity than across europe for a wide range of reasons, not the least of outside the euro. we have deficit manageable levels at the moment. i think the worry -- it's a bit bigger than it was pre-crisis. the real issue is now we have debt at a level twice what it was pre-crisis and continuing to grow. so clearly you can't carry on borrowing forever. what we don't know is the limit, how far can -- how far can you
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actually go? the last point to make on austerity is in the end we'll have to get from where we are or a slightly lower deficit. brexit is going to slow the growth of the economy and that could inevidently mean more austerity, not less. >> so it's important. paul johnson, director of the institute of business studies. back to you. >> steve, thank you very much. sticking to politics in britain, britain has a lot to do before triggering brexit according to the foreign secretary boris onon who appeared on the bbc this weekend. he said article 50 will definitely not be enacted before christmas. and even then it will depend on what progress has been made. this was a reported crash between johnson and prime minister teresa may on the schedule on the separation from the eu. this has a new survey compiled shows the majority of uk ceos are looking to move out
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post-brexit. a revenue of 100 million pounds shows 75% are considering a move. however, the numbers show 86% are confident of their own company's growth prospects and 69% have confidence in the growth of the british economy. now the spanish people's party has won a regional election in the northwest over the weekend according to an exit poll. there's a sign of strength for the current prime minister. meanwhile, the opposition socialists lost seats in both regional votes over the weekend to the new anti-austerity party. and the date has finally arrived. well, it's the date of the announcement of the date, italy's prime minister mateo renzi is expected to tell us when the italians will cast their ballots on the country's referendum on con cistitutional reform. he said he would step down if he loses. and as we head to break, tributes have been poring in from the biggest names of golf.
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arnold palmer has died at the age of 87.
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messaging app snapchat is planning to launch cameras with a built-in camera later this year. it will cost $130 to have a battery to last for a whole day. do you think teenagers are willing to shell out $130 to just use their smartphone? >> i actually do because it will be cool and on them. the question is whether other people other than teenagers will be willing to. >> but hey, it doesn't matter, a teenager and millenial is such a big market. >> no, you're absolutely right. there's no way i would be wearing glasses with a camera. >> we are not teenagers, so it doesn't matter, right? meanwhile, yahoo! has been
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sued by one of its users for gross negligence. the company reported that at least 500 million accounts were hacked in 2014 in what is the largest data breach in history. meanwhile, the financial times reports that the ceo marissa meyer was made aware of the hack last july. twitter is reporting the biggest launch after cnbc broke the news that google and salesforce are in talks to acquire the social media app. investment bankers at goldman sachs have also called around to engage the appetite but have yet to draw up serious interest. it is worth noting that twitter is worth some $20 billion. that's an additional $7.5 billion just as a result of all the speculation. so that is a nice bump up in terms of the market share value. real interesting article in "the financial times" talking about who can reap the most value from twitter. salesforce says twitter is a marketing add-on. if it is google, it will be an
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advertising add-on. and if it is a media company, it will be a media play. the jury is out on which of the three options will actually unlock the most value. >> the people want the data, right? they would be buying twitter to get the data, to see the online behavior that people who use twitter have. but there's also the issue of you had the ceo coming out and saying, look, it's a tough company, how we make money in the long-term, indicating the difficulties in terms of strategy for twitter. and yet there are 16 to 20 billion and it is astounding to see the value of the company where the ceo himself said there are issues with this company. or ex-ceo. >> can the new ceo unlock value if, you know, a series of ceos couldn't do it on twitter? that's the question, right? >> that will continue. all right. in other news, police have arrested a 20-year-old man suspected of carrying out a deadly shooting which killed five people at a mall in washington. arcan cetin was found walking in
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his city of oak harbor 30 miles from cascade mall where the incident took place after a 24-hour manhunt. the authorities have yet to establish a motive for the killings while the alleged attacker is held in the county jail without bail. u.s. officials have accused russia of barberism as war planes attack in aleppo in support of the syrian government. representatives say bringing the civil war to an end would be almost impossible after the failure of discussions at the u.n. security council meeting last week. a diplomatic remedy is looking increasingly unlikely. a lot of write-ups over the weekend about how the attack, the latest attacks by the russians is one down from a clear attack. whether or not it is, that's what a lot of the press is reporting. take a look, there was a lot of tweeting on this over the weekend if you're interesting in knowing more. donald trump has told israeli prime minister benjamin
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yet an yetanyahu he would recognize jerusalem as the capital. the two met in trump tower for an hour according to the latest post. he also met with hillary clinton where she committed her unwavering commitment to israel. it is really fascinating at the moment because jerusalem isn't recognized by the un or international laws being the capital of israel. you have east jerusalem, which is primarily arab. western jerusalem, which is primarily israeli/jewish. they are not recognizing it so trump saying something like this, i wonder what that changes in terms of these relations. >> it could be a seismic shift, no doubt about it. and the day is finally here. presidential candidates hillary clinton and donald trump set to go head-to-head on key battlegrounds like immigration, terrorism and the economy. the face-off will take place amid a backdrop of tightening approval ratings as trump catches up according to the latest polls. jennifer johnson has all the details. >> reporter: donald trump is at his trump tower home prepping for monday night's debate after meeting with israeli prime
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minister benjamin netanyahu. while hillary clinton prepares near her chappaqua oklahoma. clinton has already stirred things up by inviting trump critic mark cuban to sit in the front row prompting that he might ask gennifer flowers who had an affair with bill clinton. >> we have not invited her formally and we don't expect her to be there as a guest of the trump campaign. >> reporter: the clinton camp denies it's trying to rattle trump. >> no, i think mark cuban is one of the business leaders who was never involved in partisan politics who has endorsed hillary because he thinks she'll do better for the economy. >> reporter: both campaigns say the candidates will focus on the issues. >> hillary clinton apparently thinks this is an episode of "shark tank," but this is america. it's serious business. >> reporter: this as the new "washington post"/abc news poll shows the race tightening between the two. clinton with 46%. trump with 44%.
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this is why it is so important to both candidates. >> you can't win an election in a debate, you can certainly lose one. >> reporter: unlike trimp, trump, clinton has debated dozens of times in her political career. jennifer johnson, nbc news, washington. all right. "the new york times" has endorsed hillary clinton saying that the country should put to work the democratic presidential nominee's quote lifetime commitment to solving problems in the real world. meanwhile, the paper called trump the worse nominee put forward by a major party in modern american history. not a single chief executive of a fortune 100 company had donated to donald trump's presidential campaign up until august. this despite the republican party's 2012 candidate mitt romney securing a third of the group. and it is in sharp contrast to clinton who has attracted twice as many donations from the fortune 100 bosses as president did before her. and, of course, you can catch the first national u.s. presidential debate tonight. that's at 9:00 p.m. eastern or
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3:00 a.m. cet on tuesday morning for our viewers in europe if you want to get up early. from the other perspective, he's done phenomenally well without the use of donations. so he's done very, very well without the donations and could still win. they can both win. joining us for the market perspective on the upcoming election is david glube. super exciting to be watching the politics. >> absolutely. i am totally riveted. it is interesting to talk about the debate, you think about this. we have seen a dramatic collapse of risk premium volatility last week after the boj, after the fed meeting. things have not been this low since i don't know when, three months ago at 12, which would suggest the market is not even thinking about the u.s. election. the market consequences. i would argue if the market is thinking about the election at
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all, the markets would decide that the pump is going to lose tonight. that's because the market has an uncertainty from this production. think about this, if you look at euro very dollar right now, it is at the lowest level since 2014, which is when the fred was still doing qe. the volatility has never been this low. from that point of view, ironically going to this election, which will be the most interesting in 30 years, the market is trading almost like a non-event. that is the most curious about this market right now. >> you say there's a huge deal of come pay centuplacency out t. what if hillary clinton wins and she takes one of the houses, what happens then? >> that's what the market is thinking the most likely scenario is with the election, that we get a clinton victory combined with the split congress, which means, guess what? four more years of gridlock.
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and everybody knows gridlock means continued policy paralysis over the last six years and that nothing is going to get done. that means status quo. this is the reason why the market is thinking this is going to be a non-event. also, if we end up with gridlock, it means that, you know what? the u.s. could be literally one shock away from the next recession, which means the fed has no choice but to basically keep rates lower for longer. this is the reason why interest rates are low and the interest rates are low. and the low volatility and interest rates is the reason people continue to crowd into high yielding assets such as the emerge markets right now. i would argue for the large part, if you think about what the market is gearing up for, it's gearing up for not just gridlock but the high probability of the gridlock. the question is what could go wrong with that extreme in my opinion. >> donald trump favors the weaker dollar. and under him we'll be seeing a huge rejigging of the trade relations in the world. that means the em currencies are
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going to be under a lot of pressure. do you still think that the eu's dollar can act as a safe haven if donald trump wins? >> i think if donald trump wins the dollar will be or do extremely well. >> why? >> in a gridlock, there's no fiscal stimulus whatsoever to speak of. you get a clean sweep, especially with a republican sweep, you will see a massive loosening of fiscal policy. this guy is talking about corporate tax and income tax cut, he's talking about whatever it takes to basically revive the u.s. economic growth. including massive infrastructure spending. if half of the stuff that donald trump is talking about right now on the fiscal front would be implemented, you're talking about the biggest fiscal stimulus in the u.s. and postal history outside of recession. so from that point of view, easier fiscal policies will put pressure on the fed to normalize interest rates more quicker ultimately to see a stronger
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dollar. >> what if clean sweep clinton? >> you'll also see higher rates because clinton wants to see some fiscal stimulus. but i think to an extent she wants to pay for infrastructure spending by raising taxes on the rich. i think you're probably not going to see as big a fiscal stimulus. therefore any dollar rally will be shallower as a result. >> how do you trade this from the emerging market per pecki p? >> first of all, the only asset trading in the world right snow the mexican peso, which hit a new low last week as trump continues to surge in the recent poll. but as i said before, there's no way that the only legacy trump is going to leave as potential president is basically over mexico. if the market is right about mexico, it's obviously to say the market is probably wrong about everything else. the way i look at the emerging markets to say, i think if we get a trump clean sweep, you're
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talking about fiscal easing, leading up to faster normalization of the u.s. dollar, higher rates, that combination is not very good for emerging markets. and from that point of view there's also no question if we get a trump victory, while it's probably good for the u.s. economy, there's no question the u.s. will become much more isolationist. and obviously by definition in what isolation in this united states is. it's probably not going to be good for anybody else emerging or developing for that matter. >> david, really interesting. thank you very much. david gloo there. shares are trading at an all-time low after angela merkel ruled out the state assistance for germany's largest lender. merkel also declined to intervene with the u.s.'s legal battle with the justice department that earlier said they might seek up to $14 billion in sanctions from the lender. we do know that the number is
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actually going to come down. it won't be $14 billion. we know that other banks have negotiated down to single digits. but even then, it's going to be a real headache for deutsche bank. i don't think that state aid was likely in the first place, but the fact that this seems to be ruled out by angela merkel is sending jitters through the market. so they are scrambling for options over in frankfurt. >> they definitely are. as we have spoken before, deutsche has been mentioned in possible tie-ups. all the speculation market kind of indicating that the tie-ups are need in the sector. of course, not all that long ago we were talking about the possible lifting of the blanket in germany and seeing the health of all the latest banks, smallest banks in germany, the backbone of the economy as well. >> and the big question that the market is worrying about right now is will deutsche bank have to go back to the market and raise more equity? that's why we are seeing the the client in the share price.
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who would have thought that the share price would hit 10? >> nobody. with the dialing of all the big investment portfolios just a couple years back. >> a look at the european equity markets. meanwhile, these are not helping the european equity markets. the ftse 100 is down 1.27%. and the xetra dax is down as well as france and italy. we are waiting for the first of the three presidential debates taking place. we'll watch it here at 2:00 a.m. london time tonight. 3:00 a.m. cet. so be sure to tune in for that. that's it for today's show. i'm louisa bojesen. >> i'm caroline roth. "worldwide exchange" is up next. see you tomorrow. we're talking within a 1% difference in reliability of each other. and, sprint saves you 50% on most current national carrier rates. save money on your phone bill, invest it in your small business. wouldn't you love more customers? i would definitely love some new customers.
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good morning. crude reality. oil prices rebounding ahead of a key meeting with opec producers. a live report from algeria coming up. and deutsche banks drop to an all-time low. we'll tell you why. plus, it is debate day. presidential hopefuls hillary clinton and donald trump are preparing to square off on stage tonight. it is monday, september 26, 2016. and "worldwide exchange" begins right now. a very good morning and welcome to "worldwide exchange." i'm

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