Banking Crisis Has Not Been Resolved: Hewson

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July 14 (Bloomberg) –- CMC Markets Market Analyst Michael Hewson discusses the recent M&A activity between Shire and AbbVie, Citigroup’s $7B fine for the banks’ sales of mortgage-backed bonds and the contagion risk from Portugal’s bank problem with Caroline Hyde, Jonathan Ferro and Hans Nichols on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

Houston.

Michael, finally we might have an agreement.

What does this speak about the wider activity to mind does that justify where markets have been?

I think to a certain extent it does because you have all this cash overseas.

The bigger point from my perspective is does this throwback into play another deal?

Especially when you have them saying, we want more stringent rules on foreign takeovers.

We want to get rid of the wiggle room.

Doesn't actually make a deal more likely?

The british public knows pfizer would have to either maintain the jobs it promises to or pay a financial penalty.

You are talking financial penalties.

How big?

It reminds me, if you find someone 60 grand for biting someone.

There have to be big sides.

What wider message does that send to businesses about the u.k. is open for business?

I do not think it is enforceable.

Let's talk about banks that might get a big fine a little later.

They were talking about a deal with the justice department.

Do you think this news comes out with the earnings, or is the earnings a bigger picture?

We have had very low trading volumes.

I think investment is going to be down quite markedly.

If you factor in the u.s. economy -- i do not think they had a pretty good quarter in q2. if you look at the housing market and durable goods, we have not had that sort of rebound.

I think it goes into the u.s. economic recovery.

What other fines are being hidden on the balance sheet?

We have the foreign exchange probe, which we were talking about a little bit just now.

What does that signal for you that we are going to see more hefty fines from the united states?

I think so.

We have that article over the weekend.

If i was and affects trader, and i used to be -- i would be shifting uncomfortably in my feet, not that i have anything to worry about, but i think it is guilt by association.

Here i thought they never shift in their seat.

You know you are on the wrong side of the trade.

Those guys can see it quickly.

If you are on the wrong side of the trade you answer that phone.

Wi-fi had a guest talking earlier about the portugal situation.

Look at this in isolation.

For you didn't did raise some questions about whether the eurozone is out at the moment?

I think that's a mistake.

I think the banking crisis has not been resolved.

I think there are a lot of hidden nasties on the balance sheet.

Look at the recovery in europe.

Even with mario draghi promising more credit, a trillion dollars could go to the banks -- should we be worrying about nasties?

A few trillion dollars failed to solve the banking crisis.

What does another 1.4 billion do.

It just kicks the can a little further.

Look at industrial production.

Portugal's ratio -- portugal's economy hasn't really grown in the last 14 years, so where is the growth coming from?

Thank you.

This text has been automatically generated. It may not be 100% accurate.

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