Bubbles cannot mix unless at work. Tom im speechless. I was just talking to jon ferro, just getting up at the crack of 9 00 a. M. In london, about the uniqueness of it. There are two separate parallel worlds and the United States, where europe and the pandemic is off the radar. Clearly in europe it is unraveling. Francine it is. We are all dealing with the same virus, having the same effect on people, but if you look at germany come it is different on how they decide to do with it, compared to macron, with tighter measures. Now lets get to the bloomberg first word news with ritika gupta. Ritika the chances of Congress Passing a preelection stimulus are all but gone. Treasury secretary Steven Mnuchin is blaming politics. He says democrats dont want to give President Trump something to brag about in his campaign. Democrats say the white house never took the need for another stimulus seriously enough to push for a compromise. Senate democrats are all but powerless to keep Amy Coney Barrett off the supreme court. They will use the final day of aboutoning to grill her statements made about her by President Trump. London reportedly will be placed on what are called high coronavirus restrictions. One of the curbs is said to be a ban on two separate households meeting indoors. Averageill soon hit an of 100 cases per 100,000 people. British Prime MinisterBoris Johnson told e. U. Leaders he is disappointed by the slow progress of brexit trade talks. Johnson says he will decide e. U. Summit this week whether it is worth continuing to work for a deal. Previously, johnson threatens to walk out today if there was no clear agreement inside. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im ritikauntries, gupta. This is uber. Tom thanks so much this is bloomberg. Tom thanks. Equities, bonds, currencies, commodities. Pullss 40, everything back here on a percentage basis. Dollar with some strength. Swiss franc, euro swissie comes in strong, swiss franc, four days in a row. Nothing to write home about, but we are watching that trend. Also on euroyen, we are looking at stronger yen and a weaker euro. Socgen writing up on the ramifications of a 1. 16 handle on euro, and we are not there right now. One quick note, the real yield in the United States goes back 1. 00 . L that will be noted today. Francine i wanted to show you some of the bayous on the european bonds. Have not really seen anything of the buyouts on the european bonds. We have not really seen anything like it. Im distracted of what is happening in london. That is impacting european stocks in general, after receiving after we are seeing measure after measure of lockdown, starting to take hold london is being banned from also gatherings this weekend. Also the prospect for the stimulus from d. C. So quite a lot going on for thursday. We are delighted it could not better day to speak with sir Howard Davies. The worldunderstand we are living in. We want to talk to you about brexit, but before we get to that come in the last 10 minutes we found out that london will go ono this tier to phase saturday. Is there worry that between brexit and london being a big city affected by covid, that we will lose london in 12, 13 months from now . Well, im not quite sure how to interpret your statement that there could not have been a better day to have me. Is that because you associate with bad news in some way . I would certainly say that on the lockdown measures it is quite difficult to keep up, and there do seem to be a lot of different and rather confusing changes in the regime. We all have to reflect on how that is. Theon the upside come on optimistic side, what i observe is that people are now finding ways of carrying on their business in the midst of all of these restrictions, and not ignoring the restrictions, but nonetheless finding ways of working around them. So i dont think that a second lockdown is going to be anything like the one at the end of march and in april, where basically the economy simply froze. People are finding ways of working, people are much better working at home, a lot more can get done. We observed that within the bank. While it is bad news clearly that we are moving into a more difficult environment as far as managing the virus concerns, i personally dont think that these lockdown measures will have as damaging economic consequences as the first wave did. That is for 70 of the economy. What about the other 20 , 30 , making it more difficult than thinking about the arts and travel and leisure. What does that mean for the bank of england . Are they worried there will be default from that . Howard we certainly feel that, and there are clearly businesses in cities, sandwich bars, airlines, and the travel industry that are going to suffer. Everyone just feels for them because they have been desperately planning in imaginative ways to reopen, and that looks as though that is going to be put on hold. That is a chunk of the economy that will not work. As for bad debts, most banks i ded at the first half f a large portion i think all banks would say that the lived experience is not as bad as the provision. T the actual grip sees at that the actual bankruptcies there have been some, but we have not seen a great wave of them. That is because the economies have been largely anesthetized because the provision of liquidity on the one hand by the Central Banks and the other hand provision by the government support, the economy at the moment is on lifesupport support, if you would like. I think probably governments will have to continue with that. That is dangerous, from a fiscal point of view, but clearly if the governments are going to lockdown again, then they will have to put in place extensions of the various measures they have had in order to support the economy. At the moment, i think most next and i have been talking to a lot recently because it is the where we normally would be on a s speed dating course in washington. I think everybody is in a similar position, well provided in terms of not seeing those losses coming through yet. We are worried about next year, but not overanxious about the position of the international sector. Tom tom keene in new york. Good morning to you, and thank you so much for this generous time this morning. I dont know at Manchester Grammar School if you were forced at gunpoint to read a play by albert camus, but there are wonderful points where things unravel, and there is feeling on morning about the silliness of the lockdown on saturday versus thursday do we completely misjudge the need for fiscal stimulus now, just to actually jettison austerity to get to a vaccine . Howard well, it is disappointing that we that the u. S. Stimulus will be delayed, and i think many in the markets have been hoping that there would be an agreement before the election. It does not seem to be the case, but after all the election is not far off. I do think it is a position where governments are going to have to continue with their fiscal stimulus. That is going to be difficult for some countries, because the a 1. 3s, i put in place trillion euro package. The germans have got plenty of room to continue to support their economy. The u. K. Is not in such a good position, but i think probably given that we are interlaced, we have a huge debt to gdp ratio. We can continue on a lower scale. Other countries in europe may be under more pressure. I think my worry now is not so much an aggregate worry or a worry particularly about the u. K. And germany. It is that we will now identify weak spots in the european economy which will require help from the center. The 700 50ooka of billion euro communitywide package is there, and i think that is going to have to be used. If i were in brussels today, i would make sure that that is going to be mobilized as quickly as possible to help the people who are in trouble. That wont be germany, but it might be some other southern european countries. Tom many themes to talk about in this halfhour, and for all of you in the United Kingdom and across europe, extraordinary pandemic announcements today. The mayor of london speaking right now and we will bring you those headlines as they evolve. Coming up later, what a wonderful day. Howard davies with us. And then Anne Richards will join us from fidelity international, chief executive officer on asset management. But also Anne Richards on some of the unique mathematics of the investment business. We will do that in the six are very hour. Puget in at 37. Please stay with us futures in a 37. Please they with us. This is bloomberg. There are a number of weeks left in this negotiation, not a number of days, so when the European Council meets at the end of this week, there will be a detailed stock take on where we are in these negotiations. But certainly i dont see that there will be any major breakthroughs this week. I think there has been some progress on the level Playing Field issues. There has been little or no progress, unfortunately come on fishing. Both sides are still very far apart. The message was clear for member states. We value fishermen, we value their contribution across the european union, and certainly e. U. Fishermen are not going to be sold out in an effort to guess to get an agreement on a future relationship with the u. K. On trade. Is always right to ask questions that are difficult up to the last moment, and my experience is sometimes at the last moment you will find a solution. Francine the irish Prime Minister and the german finance minister discussing the aspects of a brexit breakthrough. We also want to bring you uptodate with the headlines from the london mayor, sadiq khan, commenting in assembly meeting. This one especially important after we heard that london will go into a tear to other level, meaning from saturday come as far as we understand it, households cannot mix. You can still meet people outside, but no more than six people at a time, including yourself and six people in total. There will be a number of more provisions. Im trying to follow all the headlines from mayor khan in london. He has called for a National Virus circuit breaker, called for by a number of people, including the leader of the opposition, that people would be in lockdown for two weeks and traveling would be restricted to make sure that there is not a rise in the number of cases. Asking ministers from more financial support. Lets get back to talk not only about these extra restrictions on london, but also brexit. We are back with Howard Davies. Sir howard, thank you for staying with us. When you look at brexit, and the next 24 hours we are on tenterhooks to find out whether there is a deal or no deal. Are all banks prepared . A lot of banks have actually left because they worry about passporting and equivalency and they cannot afford to find out at the last minute. I think banks are as prepared as they can be. What is disappointing to us is that when you hear the noises coming out of these negotiations, they mainly have a sort of fishy smell to them, or indeed they are about state aid, which is not particularly relevant to us. What you dont hear much about is the important question of Financial Sector equivalents, and that is a very important outcome if we can secure it. We just dont know whether that will happen or not. As a result, banks have had to prepare the prospect of no equivalents, and in the european financial markets, and so we have a subsidiary in the netherlands which we can do our business. It is not as convenient as doing it through london, but we are ready for that. So many people have prepared for it, and our optimal solutions. Aer time, they will produce drift of business into other European Centers from london if we havent got equivalents in. Hese big directives it is very disappointing to us that we are hearing nothing, and it doesnt seem as though much negotiating effort is being put into that question. Fishermenhing against because i eat a lot of fish, but nonetheless, the Financial Sector is a larger share of the economy and the fishing sector. I look at where we are in banking and the Bank Earnings stream of the United States of america, and there is a wide perception that u. S. Banks can compete and take market share, take business in Continental Europe as well. Can the United Kingdom banks do the same thing . Are you guys in a position to be like the american banks and really compete for business . On the continent . Two or three things are relevant here. As in many things, the u. K. Is halfway across the atlantic. Our banks are pretty wellcapitalized, better than some banks in europe. But there are several differences going on. One is that of course there is a dividend ban in the u. K. And in europe, and there isnt in the u. S. U. S. Banks have continued to pay out ordinary dividends, and that has helped their position in the markets. The second thing is that we in the u. K. Have a handicap as a result of the legislation which requires us to separate our Investment Banking operations from commercial banking operations, and it places a cost of capital penalty on those Investment Banking operations, and that has had an impact on the market share of u. K. Banks and Investment Banking markets. And so what you have seen is with u. S. Banks, they have been relentlessly increasing their share of the Investment Banking wallet in europe at the expense of some Continental European banks, who have been short of capital to deploy in that area, and the expense of u. K. Banks, who have the penalty. Those have been big drivers of the changes in market share. Francine Howard Davies tom Howard Davies with us here. He is the netlist group chairman. A truly breaking news across the United Kingdom, and quite frankly, waiting for comment as well this morning from other european leaders on a pandemic, a new effect, a new impact on europe. On bloomberg surveillance today, vitor gaspar of the International Monetary fund. Very importantly, there director of Fiscal Affairs on the austerity and reality of need for stimulus worldwide. Futures at 38. Stay with us. From new york and from london, this is bloomberg. Good morning. Ritika this is bloomberg surveillance. Wells fargo his fired more than 100 workers suspected of improperly collecting Coronavirus Relief funds. According to an internal memo, the bank determined the workers defrauded the Small Business administration. The memo said what happened with personnel actions that were personnel actions and dont involve bank customers. Ready to jump on a travel rebound while writing out the unprecedented industry slump. Uniteds thirdquarter loss was worse than expected, but the airline loaded daily cash flow rate to 25 million. Plus it had more than 19 billion in liquidity at the end of september. Goldman sachs warns that a number of policy and economic shifts will temporarily put an end to the outperformance of technology stocks. Autoan says banking and shares will be lifted. And upgraded his recommendation on those stocks to overweight. Strategists cut tech stocks to neutral. That is the latest Bloomberg Business flash. Tom there is nothing more than a risk off giveback today. There is no other way to put it. With stronger swiss franc, all sorts of safe havens, not through distress, but nevertheless giving it back. 1. 0013 on that inflation barometer claims at 8 30 this money. Futures deteriorate over the last 20 minute, 40 now on the Standard Poors futures. Francine if you look at european stocks, they are down by more than u. S. Futures. We had some pretty disappointing earnings news. We have also had some clampdowns of some of the largest cities in europe, and then at the same time, we were hoping for some stimulus in the u. S. , and actually that prospect is wilting pretty quickly. So we are seeing quite a lot of pressure on european stocks. Coming up on bloomberg markets, joyce chang, j. P. Morgan Securities Global Research chair. Dont miss that interview. That is at 4 30 p. M. In new york. This is bloomberg. Tom good morning everyone. With aerg surveillance most interesting london, monitoring headlines from the mayor and many in government today on the pandemic. West, wevies from net are thrilled he could join. Sir howard, i looked at the five year, five year breakevens. Transatlantic tension on inflation, i am thinking irving fisher, is one indicator of a society economy, just in the last number of days, reaffirmation of disinflation. Year,y, swiss year 20 yields. Year, yo ar lower the oddest time. Tell us what a gap in expectations means . Howard conventionally, one would say it is likely to weaken the euro. People are looking at the prospects of zero Interest Rates in europe, as far as i can see. Normally, that would weaken the euro. There are other things going on in relation to the dollar and u. S. Economy broadly, upsetting that. The school answer to your question is we should be looking at a weaker euro. That inan understand conventional times. This is not conventional times. How does your bank expect this to unfold . Lower for longer . Strategically planning for pronounced disinflation . Can you be more optimistic on a threeyear plan . We are expecting lower for longer. I would say lower forever. I am not sure. Forever is a long time. Which is our principal focus, there are potentially some offsets. Weak and couldeen weaken f