 Securities joins me now to discuss the week that was. In particular, Mark, thanks for your time this morning. Let's talk about these geopolitical risks that we did see, especially towards the end of last week. And now, this morning, another police shooting in the USA, at least three police officers are dead in what looks to be a multiple shooter incident, based, obviously, in the reaction to the Black Lives Matter movement. On top of that, we obviously had that awful tragedy and niece towards the end of last week. And what we're seeing in Turkey, this attempted coup that seems to have been thwarted, although there will be further ramifications, you would think. How are the markets reacting to all of this information? Are we moving back to a risk-off environment, the flight to safe havens? How does that continue, do you think? Yeah, good morning, Carrington. I mean, I think it certainly puts the geopolitical risk back on the radar from investors, which I think we're enjoying a risk-on rally during the last few weeks. Having said that, I guess, the US treasuries, which obviously did close before you saw the real news from Turkey come through, they backed up two basis points, 10 years in the US to 155. And that was around about 15 basis points higher on the week. And that is the worst performance since June 2015. I think you probably see some reversal of that during the next few days, as I think investors just maybe pull back a bit of their risk appetite, just to see the developing, as you say, situation in Turkey and how that does play out. Still a lot of moving parts over there. And I think investors will probably, given where equities are trading at the moment, look to maybe take a bit of money off the table and you may see some profit taken. And also you probably see government bonds, sovereign bonds do particularly well, as maybe there's a bit of a flight to safety coming on during the first few days of this week. We haven't seen yet really the impact of Turkey, in particular, flow through to markets. Maybe some of the FX trading, it flowed through a little bit in commodities trading. Do you think that now that we're at a situation where it looks like the coup has been thwarted by the president, by the ruling party, that it effectively, as a non-event, as far as markets are concerned, or does it just point out the instability that this country is dealing with? This is a NATO ally. It's on the border between Europe and the Middle East, which is obviously dealing with civil wars in Syria and Iraq. Is it now still a live issue? Do you think, how do you think it's gonna be absorbed? Yeah, look, I think the situation is a lot better than it looked initially as we kind of woke up on our Saturday morning and saw the news. And it looks like they've got the situation more under control than was probably originally thought. I don't think this is a non-event. I think it will just put that whole region back on the investor's radar in terms of that political risk. I think you'll just make them a bit more cautious going forward that these risks are around in that region and will continue to be so. I think you'll see a bit of a flight to safety. I think you'll see some buyers of government bonds and probably a bit of safe haven buying in terms of the currencies. Probably see the US dollar a bit stronger and potentially the yen as well as we move out of the Euro. I think as well in terms of how that situation develops will obviously depend on investor sentiment and that will be a key driver of that going forward especially in the earlier part of the week. But the Australian and the Asian markets will be the first markets really to be able to react to the news. And it'd be interesting to see what happens but my feeling is that you'll see a bit of a risk off and safe haven flows coming through on the back of the news out of Turkey. In the UK, Mark, we've seen the new Prime Minister Theresa May try to consolidate her power, if you will, or stamp her authority on the government. She met with Nicola Sturge and the First Minister in Scotland. It was an interesting meeting. I mean, an amazing photo there. There's two women now leading both the UK Parliament but also the devolved powers in Scotland meeting for the first time in their official capacities. Theresa's made commentary I thought was interesting though. She seemed to indicate that she only wanted to look at initiating Article 50 which is the formal step the UK needs to take in order for the Brexit to actually begin for the negotiations to officially start according to the European Union at least. And suggesting that keeping Scotland within the UK was a critical aim for her and that she wanted them to be on the same page before they do it. Does this effectively mean that Scotland does have a veto on the Brexit? Is that what she was trying to indicate? Or does a Brexit, as she had said originally, mean Brexit? Yeah, I mean, I think it's a very fascinating situation and there's been a lots of legal opinion about in terms of what the Scottish veto actually means. Is it legally binding? Does Scotland have to come along with the UK as well? And this is still to play out by as we go through into the coming months. But in terms of the negotiations, in terms of the negotiations that Theresa May wants to do with the trading partners before triggering Article 50, we're still looking even if the Scotland situation does resolve itself and the UK is allowed to actually exit. And there's still legal opinions that says the UK Parliament still has to vote on triggering Article 50 and pass an Act of Parliament. And it's not clear whether that would still go through. And elsewhere, you've got the Labour Party leadership debate continuing as well with some candidates saying, look, potentially they may take it to the general electorate in terms of whether they want to really, on the second thoughts, actually leave the European Union. So there's a lot of moving parts there. Even if Brexit does happen, this is not going to happen until 2018, 2019 potentially. And it's going to be a long drawn out process with lots of bumps and lots of uncertainties along the way. But I think in the meantime, I think investors will probably, UK investors will probably take a bit of comfort that potentially the UK may not actually leave the European Union. Well, and then the timeframe on this is interesting, isn't it? That Theresa May had now indicated, she always said that she wanted to wait until 2017. There is now talk that in order to really stamp her authority on the government, the only way you can do that is by going to the public, going for a general election, calling a snap election as a word. Do you think that that's in their thought process? They have these fixed terms. Do you think they'll take the step of actually going back to the people in order to get a mandate for these negotiations? I think I would be surprised, Clarence, if they did go to a general election in the next six months. I think that, look, as far as Theresa May is concerned, you know, the UK has voted, Brexit means Brexit. I think it's quite right that she's taken her time to kind of get the pre-negotiations out of the way and some kind of formal or informal framework in terms of how these discussions will go forward. And in terms of the key negotiation points that they want to achieve before they trigger that Article 50, because once the Article 50 is triggered, it does set that two-year limited timeframe to get everything else, all the ducks lined up in terms of all the negotiations. So the UK quite rightly will want to take its time to make sure that it is on the right path. It knows what it's trying to achieve in those two years, because as we all know, those two years will pass very, very quickly as that clock ticks down until the formal exit of the UK, leaving the EU, if that is the path that they do go down. And as you say, it's not clear at this stage whether that is exactly the path they'll take. But I still think that the Conservatives will probably and Theresa May will try to keep the government as is with the mandate that she's received from the referendum and try to negotiate as best she can with the various trading partners and the various other legislation, as well as Scotland, without triggering that general election. Let's turn our attention to one of the other points of interest in Europe at the moment, if there wasn't enough. And this is the continuing deterioration, really, in the situation in the banking system in Italy. A huge flare-up of media attention over the weekend, many suggesting that this could be a much bigger risk for the eurozone than the Brexit was, but even what's happening with Turkey as far as keeping them all together on this issue. Where are we at the moment? What are we thinking is the starting point for how this is going to work or the main way it's going to play out, the most likely outcome, versus what are the extremes? Could this potentially bring the financial system, again crashing to its knees? There's always that potential once we start talking about the financial system in terms of Italy and its links into France and into Germany as well. There's all kinds of cross-holdings there. In terms of the specific Italian situation, there's around about 360 billion of bad loans on Italian banks' balance sheets. And I think it's the Daily Telegraph or the Sunday Telegraph in the UK reporting that J.P. Morgan has been given the mandate to try to establish a bad bank, and that will be, initially, have 10 billion euros of capital in that bad bank. And they will look to basically take off around about 50 billion of those bad bank loans off the balance sheets of the banks. And obviously, that means that they're going to be buying those at around about 20 cents in the dollar, so highly stressed and distressed loans. And that will hopefully free up the existing banks to start to make loans again going forward. Now, as we've talked about previously, the really critical point here is whether the European Union will allow such a bail in to take place without, first of all, triggering capital losses on the equity holders and some creditors further up the capital structure, whether that's hybrid holders, subordinated bond holders, senior bond holders. And we did see in Cyprus the extreme situation where depositors also were effectively bailed in as well. So that negotiations are continuing, but as I say, the UK press is reporting that JPMorgan has been awarded that mandate to try to establish a bad bank, to try to clear up the situation there. And hopefully if they can do that, that will prevent any kind of systemic shock to the European banking system, which I agree I think is a bigger risk than the Brexit vote. Mark Bailey, thank you for your insights. Thanks, Carrington. You're going to take a short break here on Mark...