Down 600 points recently. We are not near a correction yet on s p, but we are getting there rapidly. I dont think this can be underplayed the virus, the pandemic is really front and center on a global basis, even with an america distracted by an historic moment. Momente and a historic that could possibly sway the election. Lets get to the bloomberg first word news in new york city with ritika gupta. Ritika good morning. The death of Justice Ruth Bader ginsburg has thrust the Supreme Court into the political spotlight. Republican leaders in the senate are hoping to rush through a replacement with President Trump expected to nominate his pick this week. Democrats are warning of a constitutional crisis. If joe budden wins the election but a trump candidate is still confirmed to the Supreme Court. President trump is celebrating the tiktok deal, despite it falling short on some of its key demands. The white house gets a promise of new jobs sources have told bloomberg that tiktok is taking a valuation of 60 billion as part of the u. S. Deal concerns are mounting that u. K. May need a second lockdown to stop the spread of coronavirus. Prime minister Boris Johnson is set to be told today that the nation is at a critical point in the pandemic. There are exceptions that locally restrictions could be extended to london. It is reported that mayor sadiq khan will be tightening the rules today. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i am ritikantries, gupta. This is bloomberg. Francine . Tom . Tom lets look at the data right now. It has been a real deterioration in the last 20 minutes. S p futures come and dig of 61. Down 61. Tures, you see it with the vix really up, four big figures, 4. 42 on 32. 25, and that is not a good statistic. Weve got substantial correlation across bonds with to 52flattening, down point 54 on the two cent spread. Yen, 104. 17int out, really gets my attention. Butto some breakout, nevertheless, dollaryen showing significant safe haven action. Francine looking at european stocks, they are following the most since july, but if you look at travel and airline companies, they are leading losses on the european stocks. Ais is on worries of potential second lockdown or further restrictions being put in place. And the european banking shares are also dropping. Hsbc, the lowest since 1995 in terms of how share prices are trading, and this is after a story by the International Consortium of investigative journalists showing some lapses in suspicious activity reports. And it is very clear that treasuries are rising. There is a risk off mood out there. Ruth bader ginsburg, the 87yearold Supreme Court justice, liberal icon, and pop culture phenomenon, died friday after a long battle with cancer. Her death puts the Supreme Court front and center in the president ial race six weeks before election day. President trump has said he will nominate a successor. Pres. Trump i think we are going to start the process extremely soon, and we will have a nominee very soon. I could see most likely it would be a woman. I think i can say that, it would be a woman. If somebody were to ask me now, i would say that they woman would be in first place, yes. The choice of a woman, i would say, would certainly be appropriate. More, were joined by Peter Trubowitz. Thank you for joining us. Actually change the election outcome, or does it reinforce trends . Will morehink it reinforce. I dont think it is going to be a game changer. There was a poll over the weekend, a reuters poll, 62 of americans think that they can see that the court should be filled by the winner of the november election. What is interesting about that poll is it includes 50 of republicans. If you are looking at the markets, i know you are focused on the stock market, but the predictive markets are really have really not changed. If anything, they are moving in bidens favor. What i would say is that what this does for trump, it does change the conversation, it moves it more away from his mismanagement of the pandemic and the economy. It will fire up the Republican Senate in key some key senate elections, but it will also fire of the democratic base, and we saw that over the weekend with this report from the democratic fundraising organization. We can expect trump to play this card because frankly, it is the best card hes got in a pretty lousy hand. Francine does it sway the undecided voter at all, or not . Know, there was another poll, a wall street journal poll, nbc poll over the weekend, 90 of americans have made up their minds. Nothing is going to change it, they say, including the debates. Like if biden failed in the debate or trump. Possibility of some movement there. But it is just not obvious how this cuts. If you are Susan Collins in maine, having to vote on this before the election does not help you at all, and that is true in a number of other campaigns. You know, i think it is a little too easy to say that this is going to help trump with undecided voters. I think what it does is it helps him with his base, and given that his base, the worry is that some of those people are just not going to vote. You could say that on balance it helps him there, but in terms of undecided voters, i think it is a crapshoot. Tom peter, good morning. Thrilled that you are here to start my coverage with Ruth Bader Ginsburg and where we are going afterwards. I want to go back to austin, texas, and your study of government. One of the great moments in history was ike having to pick William Brennan because he needed a catholic vote in the northeast, my guess in 1956. Does trump have to pick a woman from florida to garner floridas edge . Peter i would go with the Catholic Lady because he has already got the cuban vote. It is a great question, and if you play into the politics of it, it is close in florida, but biden is having a lot of trouble in floridaic voters and especially with cuba. And i think that trump has got to find one of these Big Industrial states that he is going to pull. Right now michigan is starting to look like it is out of reach. Wisconsin is a problem. Maybe pennsylvania. To answer your question, it is not obvious, going with the gentlewoman from florida is the right move. See it is interesting to how this lines up in the coming days. What will the hearings be like if we select the professor from the university of notre dame . Fine, what do you think those hearings will be like . She has been hugely vetted, right . Peter i think they will be a mess, and we dont know what we know is that trump is saying he will pick a nominee this week , and he wants this to go, you know, to have a vote before the election, a confirmation hearing, and a confirmation vote before the election. Powderll has kept his dry on this. He has not said what he is going to do. It may be that for mcconnell it make more sense to put this off until after the election. His interests do not necessarily lineup with trump. Trump needs the added insurance, with contested election results, with another conservative justice. Mcconnell wants to hold onto the senate. If he pushes this thing and runs the risk of losing senate seats, i think he holds off until after the election. Of course, if trump loses the election, it makes it even more complicated to try to us this thing through afterwards. Hearings, theye will be incredibly contested, and the gentlewoman from notre dame will be in the hot seat and will be pressed very, very hard. Are lookingter, we at the markets, and part of it is of course because new restrictions some people take issue with the fact that we even call it lockdown hearings in europe and things like that. How will trump be judged on election day on covid19 . It is still 48 days away. People remember the last couple of months, or do they have a long memory . Peter personally, i think that still remains the big structural impediment for him. We will hit either today or tomorrow, 200,000 americans that have died. In some ways, the Supreme Court pick provides biden with an opportunity, because the smart move right now for a democrat is to connect the Supreme Court decision to health care. And i think that is what we are going to see. Pointed in that direction yesterday in that speech in philadelphia. Nancy pelosi is already talking about it. These battleground states like arizona, florida, north carolina, there are a lot of retirees who are worried about health care. What he needs to do, biden, and what i think he will do is to remind those voters that the more conservative the Supreme Court, the more likely obamacare will be struck down. Tom one final question, something that has been through my mind all over the weekend. That President Trump cannot control justice picks whether liberal or conservative, they can shift over time. Has this changed . Are we so polarized as a nation that the president can go into be selection knowing it will a lock for conservative thought and theory . Peter i agree with you. There was a day with and there was a day and time where the president would first sound out the other side with respect to a possible pick and so forth. There is none of that now, and we are in personally i think. E are in danger if trump and mcconnell push forward on this, and the republicans lose the senate, i think we can expect democrats to talk about increasing the size of the Supreme Court. I dont think these are good things for the united states. For either side. This is just not what the country needs at this point. But i am afraid we are right on that edge right now. Tom Peter Trubowitz of the London School of economics. We are thrilled that he could join us this morning. Certainly a set of ideas floating around for democrats, if they take the presidency, if they take the senate, of some form of permanence to the change in the process. We will be looking at the Legal Process in the coming days. Thrilled that david westin will be joining us in the sick a clock hour. How about an important interview at the center, robert kaplan. I believe these are his first comments since his dissent, the meeting last week. This is an extremely important interview. Michael mckee in conversation with president kaplan of the dallas fed. Dow futures 464. 4. 64. Spx, 49. This is bloomberg. Tom good morning, everyone. Bloomberg surveillance. We are watching markets, which are more than difficult. The vix on four big figures, negative three. 60 right now, 29. 43. Some real upset not only about the pandemic and potential lockdowns, including in the United Kingdom, but also stimulus has drifted away and thought in america, of course, over the uproar over the death of Ruth Bader Ginsburg and who will replace her. On the banking front, there is any number of reports. Joining us, Jonathan Tyce of bloomberg intelligence. I hate to say it, but it is an elegant chart, and that is the plunge and persistency of plunge of hsbc. I would suggest that if that bank were an american bank, it would be front and center on the mind of institutional authorities. The british are those in china concerned about the dissent of hsbc . I think you would be hardpressed to find a bank that is more squeezed. You think about china, sanctions, negative rates now in the u. K. , as you put on top of more, although the bank is saying with all of the data predated by their prosecution agreement from 2017, it is a perfect storm of international sanctions, risk, International Relations between the u. S. And china, just a horrible place and time to be a bank anyway. Chiefne if you are the executive of hsbc, fairly new in the job, how do you get ahead of this with investors . Jonathan well he has been with a bank for 30 years. There is not an easy fix for this. We have published and some of our reports that, would you build a bank like this today . The answer is no, so you have to rethink, do you have a listing in the u. K. And in china, when quite clearly the growth sentiment in china, the chinese were not happy about the pr of telling the bank to stop paying thedends, for example, and stress continues, i mean, you do have to wonder about whether this is a sustainable structure for the bank. Tom exactly. It is stunning to see barclays. Ith a lower ratio Jonathan Tyce, there has to be regulatory effort here to say to these banks, do something, consolidate, combine, whatever it is. Is that tension out there . Are there authorities saying hsbc, this is untenable . Hsbc jonathan hsbc is very wellcapitalized. Got different sort of markets. You have the u. K. , european angle, and then lets not forget, they have said we are going to cut 4. 5 billion in costs. Hsbc does not make any sense of anything. You look at the u. S. And say why is some of that there. The bank has already put his hand up and said all this. As ever with hsbc, they are taking their time. They are not going to give a new strategy without results. Tom i cannot convey enough the importance of what jon tice just said. Tyce just jon said. Francine if you look at the things that came out with the International Consortium of journalists, you said a lot of it we knew, but does it implicate u. S. Banks as well . Jonathan i think what it does, it reminds us that we are seeing all these sanctions, multibillions and finds, but if you were allowed to flag the regulators that there is a suspicious transaction so keep he knew so continue acting on behalf of the client, i think there is something wrong with the system. Hsbc is probably sitting there wondering what happens with the election. Does the whole angle with china u. S. Change . I believe that is the case. From that perspective, they cannot undo their global footprint. They can over the next 18 months cut a lot of costs. They need china for growth, and at the moment china has them over a barrel. You have the u. K. Regulator looking at that closely. Francine jonathan, thank you so much. We will have plenty more of Jonathan Tyce coming in the days and weeks and months. Coming up, Christine Lagarde will be meeting with the french president today. One of the things that she could we will have more on the ecb launching of the pandemic bond buying program. This is bloomberg. Ritika this is bloomberg surveillance. A global crackdown on banks doesnt seem to have curb suspicious activity. Leaked documents tied to more than 2 trillion of transactions shows some lenders continued to profit even after the u. S. Imposed penalties on them. The socalled fincen files were released over the weekend by a consortium of investigative journalists after being obtained by buzzfeed news. The founder of a lector Vehicle Company nicola is stepping down as chairman as the Company Finds itself in the crosshairs of a itrt seller who says deceived investors about prospects. That is your latest Bloomberg Business flash. Tom . Francine . Tom on the data, while we have improved over the last halfhour, 600 on the dow, 461. S p futures 48 as well. The vix, up three big figures. Francine european stocks are following the most since july. Airlines, travel Companies Leading losses. We also had a couple of concerns about the banks. We spoke with Jonathan Tyce about it. Virus cases in general are climbing across europe. Coming up, we speak with stephen king. This is bloomberg. Francine this is bloomberg surveillance. Tom and francine from london and new york. Virus restrictions could be coming to london. Will bemeasures different to the first lockdown. Joining us now is stephen king, hsbc senior economic advisor. Thank you so much for joining us. It is quite a lot going on when you look at economies around the world. I mean, i guess a lot of your economic assumptions were based on a gradual recovery. Extra restrictions or even a possible second lockdown in europe, what does that mean for forecast . Means that basically most economists should hire some epidemiologists to help them, because at the end of the day, the lockdowns are very much determining the economic trajectory. If you go back to february or march and you think about what we didnt know at that stage, the we should have known, lockdown policies were equally incredibly important. Healths out that advisers suggest that we should have either a partial lockdown or a full lockdown. That changes completely the kinds of economic assumptions that people have been making. Bear in mind that most economists have said the gradual return to normal, or provided we get to a point whereby we will have some kind of vaccine, we now know partly through the experiences of france, also increasingly in the u. K. , but havethough infections faded away over the summer, it is coming back pretty rapidly. Francine does it also mean that we need to learn how to live with the virus, and does it change the compositions of our economy . Think those things are already changing to a degree. One of the things that i think rishi sunak is beginning to recognize is that if further schemes are blunt instruments, you can effectively key people at home and pay them as if they were at work, but by doing that, you are not necessarily creating the kinds of signals that will shift from one part of the economy to another, so we need more in the way of delivery drivers and fewer in the wave Airline Pilots basically. That sort of thing probably will have to change in the years ahead. Of course, getting what the world looks like after the pandemic is over is tricky. I think we do now know that you can do things through zoom that did not seem to be plausible just a handful of months ago, and as zoom takes off and other related connections take off, you can imagine that things like Business Travel will be much lower in volume in the future than the