Washington and why the bank stocks have reacted so favably to what is happening. If you look at the equity valuations of Global Equities without Financial Services since the crisis. Equity prices are up 100 . Until the selection, financials were down 20 to 30 . So you are starting with a phenomenal valuation discount. Thats why i think this will be sustainable for a while. I think discussion of rolling back the parts of regulation that have been not effective and by no means am i a proponent of rolling back all regulation. We can see there are portions of this that have been costly and ineffective and slowed the growth of banks. I think there is some wind in the sails here. Trish you couple that are higher Interest Rates and thats feeding this as well. I dont think there is any business that wont benefit from higher Interest Rates. Gary viewers talk about how the financial industry suffered from regulation. But i always ask what kind of thing will make the earnings grow faster for the banks . I cant think of anybody in a better position to explain. What will be rolled back that will increase the earnings so they will have more money to shelf. 20082009 what were we focused on . Make banks safer and sounder, and create an environment where we have jobs and economic growth. Thats kind of a formula. Within that in my view, even today what we should be focused on is capital, liquidity and leverage. Those are the key levers in the bigger banks. And i understand all that and i think its been healthy. But when you get to the European Union directive which says you cant pay people. Or here doddfrank and many parts are being applied to small banks in minneapolis. I had the chance to meet with chairmachairman volkar. The rule is 900 pains, and we are applying to it Small Community banks in minneapolis, and there are thousands of people. A third bank is subject to doddfrank and subject to the stress test. In 2011 their report to the fed was 2,000 pages. This year, 19,000 pages was the qualitative stress test report from that bank to the fed. You think of the thousands and thousands and thousands of people that are unproductive adding to cost and reducing lending. Trish the thinking is this will friep liquidity. Banks wont be hindered by all the requirements that they keep capital around for a rainy day. So they will be able to lend it to people so you get more money and leverage in the system again. Its 8 years on. We can look back on doddfrank and volcar. Centralized clearing has been effective. Is it applied to all banks or is it for certain sectors. My biggest worry is some of the Community Banks which can provide a lot of lending to Small Businesses and consumers are adversely impacted and its unnecessary. The second thing is a nobrainer. Take the level from 50 billion to 150, 250. Raise that level so you are reducing the burdens on the region. Banks. Trish people are talking about tax reform and less regulation but things are not hunky dory in washington. Its pretty much out in the open. At what point does all of that dischord start to inhip it the reforms people want to see take place. Look what happened this week. Jeff sessions, Elizabeth Warren going after Jeff Sessions on the senate floor. Mr. President , im surprised that the words of Coretta Scott king are not suitable for debate in the United States senate. I ask leave of the senate to continue my remarks. Is there objections. I have got. I peel the ruling. Objection is heard. The senator will take her seat. Gary you said you are optimistic on bipartisan support. Its good theater. All of us yearn for the day when we had people in Congress Like the senator from the great state of maine, olympia snow. Most people would not know if she was republican or democrat. She voted on substance and what was right. The way to get back to that is to focus on things that are bipartisan. The United States of america has the highest rate of corporate taxes of any country in the developed world. Yet we have Successful Companies paying no taxes because of the exesm shuns. Thats ridiculous. Trish were Elizabeth Warren might say its not fair that the big corporations get a break. Why are we giving the fat cats a break . Everyone has an ax to grind. Certainly in presiden president t Obamas Administration especially in the first term. There is a play book. Its not that complex. Its good for our country. Good for jobs and its ridiculous right now. Gary we are going to talk after the break about where you find the opportunities to deploy your own capital. Wall street week will be right back. [ ] announcer as the u. K. Parliament votes to leave the European Union, bangs and markets may bear the burden. How will that affect your [vo] quickbooks introduces rodney. He has a new business teaching lessons. Rodney wanted to know how his business was doing. So he got quickbooks. It organizes all his accounts, so he knows where he stands. Ahhh. Thats a profit. Way to grow, rodney visit quickbooks. Com. Dtry align junior probiotic. Th digestive balance . So she can have a fraction dominating. Status updating. Helloyellowbelt kind of day. Get 24 7 digestive support with align junior. The 1 doctor recommended probiotic brand, now for kids. Trish the British Parliament voting this week to give theresa may the official power to ditch the European Union. Gary we are back with bob diamond. You spend some time in london as ceo of barclays. What do you make of the brexit situation . Are you surprised it hasnt had more an impact in terms of asset prices . Actually, i am. I love the fact that i can vote in the u. K. As well as the u. S. My family was there long enough that we had passports in the u. K. As well as the u. S. I voted to leave and i was wrong. But i have to say its bench more calm post that decision than i would have expected. I think the Financial Services industry in london will be a dominant Financial Services industry, by think it will be smaller. I think the biggest beneficiary of that Financial Center is not paris or dublin. I think its new york. The bismght s. Firms doing bert than the european firms will be more and more reluctant to be in london when they could be in new york. And i think there will be far fewer people outside of london. Its having an impact. The u. S. Has a strong economy. The challenge is more for europe than the u. K. The stability to help with the financial system. We havent seen a tremendous amount of evidence that its taken its toll it dont sound like you think things will unwind over this in any way ala2008. There were a lot of dooments dayers out there that were concerned this could fell trouble. I dont think from a solvency point. View, i dont think there is an issue. Europe is still in a fragile position. Gary lets talk about what you are doing now with the her channel bank. You had a lot of investments but you are putting a lot of money into europe even with the uncertainty. There are a couple of themes. We are focused on the developed economics and we see a couple of themes that the other thing i would say, the her channel bank, we like to have stakes that are substantive. Even a majority so we are able to be part of management and driving growth. So we are actively involved. One of the these is the broker deal. I think the Bank Holding Company is the wrong model to be holding a brokered dealer. Its all the issues around the supplemental capital and the leverage rule. The large u. S. Treasury business or derivative or Foreign Exchange business best housed in a Holding Company where the regulators would prefer not to see that risk. Or brokered and regulated by the fc cd the sec. The brokered business coming out of banks is real. For 20 or 30 years its been global, global, global. And wript was universal notments about focus and selectivity. When we look across europe we are looking at Asset Management business within the banks and until they resolve the nonperform loan on the italian banks and some of the other banks, you wouldnt see real investment. But we are close to today it laying to that and the support of the governor is important on that. Its important about the locality. And thats a trends in a different direction. We see sit with whats happening in the u. S. Anticipation is it will happen more so through europe. What is it going to do to your view of Global Growth . Is there a chance the record is going to grow less has a result of this focus inward or minus might this all be okay. I always like togo to a real example. Whats the math . I look at the challenge that ceo of bar claifs has to exit africa. As he explained, the penny hasnt dropped. The math hes facing is simple. The business they own 50 of has a 17 returnen equity. Its the best bank across africa. When it gets to barclays its 8 . The u. K. Tax on their global balance sheet. The charges cant be allocated to a subsidiary. Because the regulators charge them 100 capital for a 5060 ownership. We had capital, product, and client sinner jis. So the Global Business model is no longer the best for reasoning a regional bank. I think that will have a knock on implications. Trish it will hinder growth . If it gives an opportunity for the local and regional banks to be much stronger, it can foster growth. Gary if you can identify within the specific countries, well benefit by being homegrown, indianapolis where you will get the growth. All right. Trish bob, good to see you, thank you so much. Announcer the market loves a tax cut. Well be announcing something i would say in the next two or three weeks that will be phenomenal. Phenomenal. Announcer well explain why wasnt fixing the tax code job one instead of repeeling and reform obamacare. The country wants growth and the way to get growth is to cut tax and stimulate the economy. Neil remember it not as important as tax cuts and goosing the economy and giving it a pickup because things are slowing down. And this should not be the signature leadoff event for republicans. Im pretty sure our President Donald Trump watches fox business. After stuart and neil called out this need for tax reform. What do you know, the president announced its coming. Take a listen. Lowering the overall tax burden on americans and businesses, its coming along very well. Well be announcing something in the next two or three weeks that will be phenomenal. Trish markets want it. The dow, thats when President Trump made the comments. It took off like a rocket. Gary but dont think everyone is in agreement. We are joined by the former director management and budget under president reagan. Our friend david stockman. The market wanted the president to talk about tax reform. He did and the market rallied. The market is delusional by the hour. Whats happening is ahead of schedule the white house is a political train wreck. Capitol hill has erupted into partisan warfare. Administration is distracted with his ridiculous immigration ban. Gary the president said he will deliver a tax cut across the board, corporate, personal, and hes going to do it i am mentally. Imminently. Thats a fond hope. But it will take months to put together a detailed 10year budget plan to do all the forecast and analysis. Without that trish how do you think that breakdown will happen . Is that paul ryan and company, the status quo republicans who say when cant afford this . Of course we do. But hes inheriting a 10 trillion builtin deficit the next 10 years. He wants to raise the defense by over a trillion dollars. His generals are running around doing that. The debt ceiling which has been suspended will go back into effect march 15 at 20 trillion. And to do any of this hes going to need to raise the debt ceiling by a trillion. Where are the votes going to come from. The democrats arent going to help. There is a large segment of republicans that will not vote for another 10 or 12 trillion worth of National Debt on top much what we have already. Wall street is talking about hope and aspirations. They are not looking at whats possible. Nothing is possible in the mess that has been created over 20 years in washington. Trish we asked this question of bob diamond. When you see Elizabeth Warren quoting coretta king and the fallout that happened on capitol hill. The question is, is it going to impede the ability for law makers to get through tax reform . These are all distractions. Gary what is the stock market saying . I have to believe as an investor the stock market is smarter than any single individual. The market likes it. The market has reacted very positively. Why is that going to change . The market liked it in february, 2000. The market liked what was going on in july and awning of 2007. July and august of 2007. They inflated and the problem is they inflated the bubbles. The markets are unhinged. The shorts have been killed. There is no twoway trade in the market. There is the machine driving you have the stock by a day or two. But then you get a black suwannee vent. Trish ways your black suwannee vent . The real your back swan event. Trish ways the black swan event . The realization washington is broke. Gary you are say regular they bring it to the hill it will never happen. You have to have reconciliation instructions to avoid the fill busker 60 votes. That will have embed tonight under trumps policy because he doesnt want to cut Social Security or medicare. He wants to raise defense web wants big revenue reductions. It will be over 10 trillion and there arent the votes to pass it. If you cant pass the budget resolution you have no instruction. Without instruction you have a filibuster. Without instruction you have the k street lobbies eating alive the legislative process. On a week the markets reacted favorably to the talk about the fact that the tax cuts are imminent, we thank you for sharing it with us in terms of what you think will happen. Trish that does it for us on this is the silverado special edition. This is one gorgeous truck. Oh, did i say theres only one special edition . Because, actually theres 5. Aaaahh ooohh uh holy mackerel. Wow. Nice. Strength and style. Which ones your favorite . Come home with me its truck month find your tag for an average total value over 11,000 on Chevy Silverado all star editions when you finance through gm financial. Find new roads at your local chevy dealer. Est and fastest green way to travel to the sea in l. A. To the florida keys, and a powerful new engine designed to keep our waters clean. See how blood science is diagnosing disease. And mind science is rehabilitating lives. Plus, a most Unlikely Partnership in the oil fields of texas to conserve nature. Its all coming up im john holden and welcome to earth. [music open]