Surveillance. He was the two mario monti later. We are seeing that reverses to the earlier losses we saw. If you look at german stocks, they seem to be remaining lower. The dollar is little changed. Treasuries nudging higher. Lets get to the first world news. Here is sebastian salek. Mugabe failed to announce his resignation. The twist means he may face immediate impeachment hearings. He was expected to announce he was stepping down. Todays meeting with a command element has underscored collectivelyus to start processes that return our nation to normalcy. U. S. Senator Susan Collins has said the republican tax plan passed by the Senate Finance committee needs work. Thed if she can vote for measure as written, she said, quote, i have not reached that conclusion left. Republicans can afford to lose only two votes and still pass the bill. Ron johnson has artie said he cannot back the bill as written. Japans recovery remains on track with exports growing by double digits for four straight month. Imports gained almost 90 from a year earlier, leaving a trade surplus of 2. 6 billion. Improving Global Demand has few growth in exports throughout the year with new Electronic Devices creating needs for parts of machinery. The u. K. Is about to improve its financial offer ahead of a European Union meeting next month. Areers of mays cabinet considering how much their offer in the divorce bill. The suggestions are a settlement will come soon. Global news 24 hours a day. Im sebastian salek. This is bloomberg. Francine Angela Merkels attempts to form a new government have collapsed. The euro has bounced back from earlier losses following the german chancellors admission that Coalition Talks have failed. It puts europes longestserving leader in doubt and means germany could head towards elections. Merkel promised to make states ability to maintain stability. I will do Everything Possible as transitional chancellor to make sure the countries led through the difficult weeks. Francine our German Government reporter is in berlin. Why did the talks collapsed . Fdp thate sdp pulled out. They wanted a turnaround denver turnaround in german politics and would not produce of a it in the government unless they got all their points. It was tough negotiations. Yesterday it looked like they would narrow the differences somewhat. They might be able to agree on something. Look at the fdp whole package and pulled out. Francine what does that mean for Angela Merkel . Its a difficult situation for her now. What she told reporters, its not very likely that she will not at least make another sdp,mpt to talk to the the party that she is in an acting government at the moment even though they have said that they do not want to go into a grand coalition again. It cant be ruled out that michael at least try that. Merkel will at least try that. There will be uncertainty for the next couple weeks and the new german president plays a major role. Francine where does this leave the formation of the next German Government . Luckily, there is a clear procedure as to what happens now. That has to do with germanys experience from the weimar republic. There are rules that ensure there are certain steps that be taken. The next thing will be after a. Of a reflection, the german president will put forward merkel as the chancellor candidate and the german lawmakers will vote. Now she is not very likely to get the 51 majority. After that she has two more weeks to put their Heads Together and try to come up with something else. Moment when merkel could talk to all of the parties in parliament again, and then there is another vote. If that fails, the president can choose to let merkel either have a minority government or start new elections. Francine thank you. How should investors be positioned as these talks collapse . Thought aeconomy once bastion of stability. William porter and max kettner join me for the hour. Max, lets start with you. You are german. Was this unpredictable . Think so. t when you have four out of the trying to form a coalition, that artie tells you that there is too much in terms of diversity and opinions. It doesnt come as a total surprise. I think over the weekend and last week, we saw there was too much disagreement across the most widely discussed issues. Weve had too much vagueness. Weve had this proposal by the greens about immigration with a set we do not want this absolute blinding binding limit. We want a breeding framework. Breathing framework. That phrase does not make any more sense in german. Is it one of those things where she can get it back together and it doesnt get weekend . Max i think she is more vulnerable now. I think she has been weekend. Eek weakened , whatever isget is going to happen, if we do have new elections or a minority government, inevitably there will be a. Of uncertainty, Political Uncertainty, in germany over the next couple weeks. That is more than we are are used to in germany. Francine we dont have an end date. But do these kinds of political on settlements hurt the ucb nasty ecb the ecb . As long as the German Economy is growing, this is much less of an issue. Thisuestion is, does interfere with growth . I think you can say no, broadly. Its not that much of a problem for the ecb. If you look at the markets you sillyok forward to it worry about similar instability in italy. Look forward to italy and worry about similar instability in italy. Looking at the dimmest between 10 year u. S. Treasuries , isthe 10 year german bund this a fed story . It is a fed story but also a growth story. We had a diverging growth story for the last couple of years. The more drastic is not on the 10 year but on the twoyear. You see it headed towards higher and higher and higher every week. The more interesting question is so s happening to curve curves. We see curve curve flattening. Likely will see expectations for an ecb height disappointing. We see that different to widen. Widening. Fferential francine you agree . William yes. We are starting to build in the second hike for 2018. Its not enough. The fed takes a lot of displacing from its current current path. The burden of proof is on anyone who thinks they will slow down. Will talk more about Central Banks and brexit. Ax kettner and William Porter we also talk later with mario monti. Conversation, 9 30 a. M. London time. This is bloomberg area bloomberg. This is bloomberg surveillance. I am Francine Lacqua. Sebastian toshiba plans to sell 2. 2 million new shares at 10 less than rights closing price. The moves come as the embattled conglomerate battles to be avoiding battles to avoid being delisted. Buy parts planning to of chinas biggest retailer. 400 operate around hypermarkets. Alibabas disinvestment in oldschool shaping shopping. Its alibabas biggest investment in oldschool shopping. Bitcoin hit a thousand for the first time. 8000 for the first time. Futures trading on bitcoin will be offered for the first time next month. U. K. Could be about to improve its financial offer for the European Union. The European Union is pushing for around 60 billion euros. Theresa may had only offered 20 million euros. Theresa may may be on the verge of offering more. Demands, itsout about what is properly due from the u. K. To the European Union under International Law in accordance with the european treaties. We have been clear it will not be easy to work out that number but whatever is due, we will pay. We honor our debts. Francine will this offer be enough . William porter and max kettner are still with us. Moret know what it is important, the budget or brexit talks. William its gone quiet on the budget, which is not the tradition, which makes me think theres something more substantiated. This is often seen as the governments last chance. We have to watch this space on wednesday. In terms of brexit, the stories the same. The uks in the process of swerving and its the matter of whether they can get away with thats worth. Swerve. Is whether the ec j follows the laws. Swerve pretty aggressive going on and a regressive nonswerve from the eu block. There is plenty of more vista calm. Francine pound weekends or pound higher . Its probably net positive for the pound. The pound came off a long way on this and its not fully priced too hard brexit but it came a long way. 120 150 to52 120 move. Seen as we runve towards 135, much of this was an genuine strength, it was dollar weakness. Back, wedollar comes dont have the fed price fully yet. We might go towards 125 again. Stay in that will range between 125 and 135. I see 132 and 133 a little bit more downside. This is the chart to look at. This is the one . William thats a far better way to look at it. Francine is that how Central Banks will look at it . Max broadly, yes. It follows inflation. Francine up next, on the way to 10k. Past 8000 but does it have the momentum to keep going . We will discuss. This is bloomberg. I am Francine Lacqua. Lets talk about big going. Topping 8,000 for the first time. Year as700 this investors shrug off technology concerns that derailed its growth earlier this month. But is it a bubble . Our guest joins us. We love having you on. You make us stronger. Is it a technical level . Does it go up from here . What am i looking for . Inif you saw the dip september, it looks very similar. Last week we saw did when an upgrade for bitcoin canceled. We see a pattern developing. The biggest stories the mainstreaming of bitcoin. Tensee hedge funds raising if not hundreds of millions of dollars to invest in this space. And situational investors are calling their private bankers and saying, why am i not in this . Thats creating this buying momentum. 700 higher this year. The trend is quite amazing. What is the next test . Who is buying it . Hadi think you have hardcore enthusiasts and now you have more mainstream institutional investors. If it is crossing 8000 after an upgrade is canceled, imagine what might happen to this price if the Bitcoin Community comes and says they have fixed that problem. Upgrade and really improve the Processing Power and make it scale even more, thats going to be a massive bullish signal. Francine can people afford not to be in it . We had one highprofile members say they are not convinced that they dont want to take the risk of not being in it. The question for me is it already an asset class . Pipe ave is data of a of a price rallying. Me, it seems like random gold ounce. Is it an asset class . Is it a store of value . People cant afford to be left out but that is the dangerous thing. Me back when i started to sell my parents tech stocks in 2000. Thats the memory i have now. Everyone said you have to be in tech stocks. Even though no one had a clue. You dont feel very easy about it. Max is headed down the right road talking about store of value. The three criteria of currency our store of value, media of exchange, but unit of accounts . Not so much. Haves going on here is you very real, very new Block Chain Technology. Someone is going to make a lot of money. I heard the argument in tech stocks that you had to be in everything because you did not know who the winner would be. Thats dangerous. Francine any chance that Central Banks will come in here . Not soon but we do have the bank of england examining, is it possible someday to maybe use Block Chain Technology to offer a digital form of sterling. We have the ecb also doing a lot of r d in the space. They are looking at it but in terms of something happening, thats far off. Francine thank you so much. Coming up, we speak with mario monti. Youll be talking about german, italian, and european politics. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Francine this is bloomberg surveillance and im Francine Lacqua in london. Heres sebastian salek. Sebastian Angela Merkels bid to create a new government has failed just before midnight in berlin, when the promarket Free Democratic party walked out on a deal that merkel said was within reach. Points theially oint worlds for its biggest economy towards reelections. We will have to move forward in germany. I will do Everything Possible as transitional transfer to make sure this country is wellled. Reporter zimbabwes Prime Minister failed to announce his highly anticipated resignation. Immediaten impeachment hearing. He was expected to announce that he was stepping down after being removed as leader. Today, meeting with the command element has underscored collectivelyus to start processes that return our nation to normal. Sebastian u. S. Senators Susan Collins says the republican tax plan past others the needs work. When asked if she would vote for the measure as written, she said this week, i have not reached that conclusion yet. Republicans can afford to lose only two votes. Senator johnson has already said he cannot pass the bill as written. Japans recovery remains on track with exports growing in double digits for the fourth straight month since october. Exports rose 14 , leaving a trade surplus of 2. 6 billion. Improving Global Demand has fueled exports throughout the year. The u. K. Could be about to improve its Financial Office within the European Union ahead of a crucial meeting next month. Theresa mays cabinet will discuss how much they are offering for writtens divorce from the eu. Offering for britains divorce from the eu. Global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. Im sebastian salek. This is bloomberg. Francine thank you so much. Lets talk about italy and the banking sector. Keys investors backed a share sale. An agreement was reached with the two biggest stakeholders will stepth. Shares were suspended as talks between investors and underwriters were halted. Lets bring in a man with intimate knowledge of how the Italian Government works will he was Prime Minister from 2011 to radekleaving a technique government during the leading a technocratic government during the sovereign debt crisis. Thank you for joining us, mario monti. Max kettner is still with us. Mario monti, thank you so much. We have about one million things to ask you, so lets start with italian politics. The bank scene is taken care of, by and large. Do you worry that if spreads widen, italy will once again undergo a political crisis . Mario first of all, lets me underline that the italian bank issue has been a permanent of session for the markets for the last couple of years. Largely unjustified. Because the italian banks have experienced some problems, of course, later than banks in other countries because those problems were linked less to speculation. Been takenon has care of, not always presently with some delays. The then Prime Minister was waiting for the referendum of december of last year and did not want to disturb the waters. Had, as you said, much smaller amounts of italian money being spent to support the banks than in germany, france, etc. So, it is good if i got this question not only from you, but in the last two years in the brexit, theres been there has been almost the cessa tion of catalonia, very unusual behavior from the polish government. The little thing with which observers have liked to watch fervently are the italian banks. Francine we have talked much of brexit and donald trump. The mostaly is seen as favorite source of problems. Francine the problem child. Yes, but this would be a strong message, if the italian banks were taken care of than a matter what happens in politics caroline there would be less francine when do you think the elections will be called . Mario the elections will be called by the end of this parliament. Electionte, no realy at any rate, no early election at this point. It will be a situation of difficult elections with a coexistence of different shades old stylem and the berlusconi is seen as the protection by many, these ovvis a vis, the aggressive five start movement. And of course, mr. Renzi in the last couple years has become a soft populist from the Prime Ministers office. Francine what are the chances of some kind of government possibly a collision between the fivestar and the Northern League getting into power and if they do get into power, what does that mean for the economy and for the euro . Mario that would be not good at all for italy and for europe. They are, although being populists, both, they are really, i believe, almost incompatible for a number of reasons. So, i think that it is not totally to be ruled out that in ar will be taken worst casebut the scenario, the Northern League and the five star making a coalition of themselves is, i think, extremely unlikely. Francine investors keep asking about percentages and probability, but what is the probability of a central bank government, and who would be the right person to lead it . Mario i n the end there would be a Broad Coalition between the Democratic Party, the central right and the cent