tomorrow. the dollar ranges higher, other currencies lower. cashless society. good morning, everyone. this is "bloomberg surveillance." i'm tom kean. -- tom keene. are from election. are down to one last day. anotherans may win seat to take control of the senate. , republicans are expected to expand their significant majority. turning to the crash of richard branson's experimental

spaceship. it disintegrated after a device to slow the spacecraft deployed prematurely. pilot error is a possibility. the copilot was killed. the pilot was seriously injured. known thatalways commercial space travel is an incredibly hard project. we have been undertaking a comprehensive test program for many years. safety has always been our number one priority. we do understand the risk involved. we will not push on blindly. to do so would be an insult to all those affected by this tragedy. to takeon hopes passengers above earth. >> a big takeover in the advertising business. the world's third-largest ad company has agreed to buy

sapient. >> moving on -- >> the new york city marathon. 50,000 runners had to deal with wind. 30 miles per hour with the up to 50. the men's surge was won by a kenyan. the women's was won by another kenyan. >> it was freezing. it was cold. it was legitimately called. -- cold. you did not see a lot of pain and agony in central park. cold is better than hot, is my basic take. i trained this year.

i was going to. there was a whisper of a moment, a glimmer where i considered it. [laughter] one marathoni ran in the cold and i would qualify for boston if i was 75. >> that's good. [laughter] let's do an extended data check. futures up a little bit today. the 10 year yield is turning. -- churning. it is in the currency market. on to the next screen. the vix showing massive complacency in rally on friday. the tao, re-acclimating. the yen -- dow, reacclimating.

weaker. dramatically charts, if i can bring them up with my puny brain. gold is breaking down. gold at 1200. that is major, major support, that gold has broken through and is soggy this morning. >> the first back-to-back monthly decline. >> this is the yield. we are better. we are higher-yielding relative to japan. you can see they are grinding lower. this is the attention in europe, as well. as germany rolls over. >> diverging monetary paths. >> there it is.

let's focus on that right now. we have two phenomenal guests for you this morning. the dollar surges. gold cannot find a bid under 1200. oil, 80.00. call it one big distortion. carl weinberg joins us. william lee joins us. we are thrilled to have lee and weinberg with us. we will talk japan in a minute. why is it taking so long to readjust? the market readjusting on friday. will we really just further today? >> i think it is a one-shot pop in japan. the biggest pension fund and the company said they were increasing their allocation to

12.5% of their $1.5 trillion portfolio. let's hold both of you into the conversation. gives draghiapan cover to go to the bundesbank. >> we have been saying that we need more stimulus. monetary policy can only do so much. it buys time. it buys time for structural policies. there is nothing left to do. care what thelly ecb does right now. tool.ry policy is not the they need fiscal and structural changes, they need to recapitalize the banks. >> amen. the twomy slow clap for

of you. you cannot fix it with monetary policy. [laughter] effect of is not the monetary policy. i see long-term decline based on assumptions about lack of investment, lack of stimulus. melees.tural malays -- it is slow growth. we cannot get rid of it because it takes something much more fundamental. >> when you see oil done to a low 80.00, is that reinforcing >>? >>that is a reflection of the lack of demand. you look at this, the president meets with janet yellen this morning. what perfect timing. >> the first one-on-one meeting. >> what is that about? monetary policy is supposed to be independent.

what is sad about this is that we have not coordinated fiscal policy to support monetary policy. >> yes, but we are in better shape. >> great shape compared to europe. >> are we removed from these debates in europe and japan? >> we think that the u.s. economy is more than strong enough to continue to grow despite the headwinds from europe and japan. the drop in oil prices and domestic gasoline prices adds more to the u.s. economy. thember, europe is not whole world, and neither is japan. there were much bigger economies out there, like china, which at 18 million new cars per year, new demand for oil. it is hard to be bearish on oil prices for more than the very short term. energy, int oil,

china, it is big, big, big. 18 million cars per year is more than japan makes, more than we wake -- make. we think that every $10 per barrel off of oil takes -- adds one or 2/10 of a percent to u.s. gdp. >> those are the same numbers we come up with. >> can we get them off set, they both agree with each other? [laughter] our imports are a contribution to spending. about a quarter of a percent. >>'s monetary policy ever divorced from actual politics? >> no. >> right now, we need to make don't start financing governments with monetary policy.

that is a big no-no. >> is the game theory changed with the bank of japan? janet yellen has fewer degrees of freedom to play with because of this historic action. think bank of japan is really on a track by itself and i analyze them completely independently from the other two central banks of the world. their job is to keep the yield flat. i think they are increasing quantitative easing to offset a change in strategy by the government pension fund, the largest investor. they are reducing holdings of bonds and the amount that the bank of japan increased-- >> is to keep the yields where they are. >> this is very much politics in line. >> weinberg and lee to get you started. we will look a geopolitics in our next hour. 7:00remmer, the entire

hour. our twitter question of the day. what is the biggest geopolitical risk to financial markets? that is the question to get your november going. stay with us. our election coverage tomorrow. it is "bloomberg surveillance." good morning. ♪

elections are upon us. there is the beautiful capital. some assembly required. which state are you most focused on? >> from iowa to louisiana, there are a number of them. we want to check in with our

white house correspondent, who checks in with us about our most watched races. the momentum seems to go in the republican favor. republicans are on the verge of a route. is that the deal? >> i do think anybody is willing to go all in, but republicans have the momentum, there was a ton of pulling that came out that in just about every state they needed, they are in a great position. harry reid had a conference call saying iowa is a must win if he wants to maintain the majority. a poll came out and the des moines register that showed joni up, up seven points right now. that is a huge deal. as you move south at little bit, you have two seats the democrats need to pick up if they want to try to defend their majority, kentucky held by mitch mcconnell , georgia which is now an open

seat. both of them without his potential areas were democrats could make drug rest -- progress . both polls are looking bad in both states. , there are aort lot of pathways for republicans to get the senate majority, very few for democrats to hold it. >> sobering. it kind of looks like the republicans are not just going to get there, but they are found to be on 50. the most likely distribution is a 52-53 seats. >> i think that is fair. good harbinger to watch is new hampshire, where democrats would never thought they would have had to be dumping billions to jeanne shaheen.

if is down, there is a good maybe they get to 54 is a possibility. >> when you look at this, the washington post shows that this is not unusual. i want you to tell me what happens wednesday morning. -- thethrough the it elections, what kind of government will we have on wednesday morning? >> it is a great question. it is one the republicans are trying to figure out. that was a lot of concern if republicans hold both chambers of congress, they want to show they can govern. everything,ght veto but they actually want to send something to his desk. it is a big open question. ask john boehner what a dislike to have control of a chamber. it does not make things easy.

it will not make things any easier because of ted cruz and rand paul. we have a couple weeks right after the election where they are going to have to pass funding bills for the government , pass a bunch of things in the lame-duck. how that is operated is going to be interesting to watch. has been miaent for a couple of key senate races. he has been showing up for the governor races. is he moving the needle for those? he has been hitting a couple of these governor races. to getll about trying out constituencies that are still supportive of him. that is not a lot of people left. but there are people in blue states where he has been going, and connecticut, wisconsin, maine, places like that. want to win these governor's seats and they need african-americans and hispanics to come out. that is to the president is targeting. this is one of the few areas

where he feels like he can have an impact and that is why they sent him in. >> thank you for giving us the lay of the land. >> you were talking about malays earlier.- malaise republicans are going to have a to do list. what is your to do list for them? my to do list is high structural deficit, high public debt. processen political prevents us from forming the coalition we need from getting politics in place. two years from now is when the problems are really going to hit. any level ofve confidence that the broken political process can be fixed? >> it is a global problem. the voice of the people has gotten so loud. politics and power cannot get it together.

>> do you agree with that? are not being driven by conviction anymore. they are driven by reelection and the polls. that leads to bad solutions everywhere, particularly acute when it happens in the u.s. congress. >> the views have been so polarized that the polls are making it difficult to form the coalitions. >> it omar sounds like somebody needs to leave. [laughter] >> imagine that. forbid.n for bed -- "with all due respect." extended coverage here at the midnight hour. look at that at the midnight hour tuesday evening. stay with us. it is "bloomberg surveillance." good morning. ♪

>> good morning, everyone. city's one world trade center. new york continues a strong recovery, particularly downtown manhattan. we say congratulations to condé nast to changing the landscape of downtown manhattan. that is a single achievement for all of new york city. the architects, the politicians, everybody. >> i can't wait for that to not be a big deal. i can't wait for that to be normal. god, i am sore.

>> you were running a marathon last night. [laughter] tom did have a late surge on sunday. [laughter] >> this has to do with the new mediocre. economy is slow, individuals and businesses tend to play it safe. her point being that there is no corporate leadership, no individual leadership, no political leadership because some things are getting better, other things are falling back, no one is taking risk. >> it period of low growth. it is easy to have amazing, fantastic ideas when everyone is

in the market. i was surprised that somebody was able to described the way i dressed. it is definitely called normcore. it effectively means dressing and bland and generic clothes. >> when you hear this talk about no corporate, political leadership because times are not bad that anot so jolt anybody to any kind of impetus, does it strike as familiar? >> it scares us because all of these relationships we are and have areas of growth. are we going to get the investment? will we get the relationships we have in the past? >> is there any country out there that is in a position to take a bold step? >> china is redefining their norm.

the kind of reforms with urbanization are absolutely key. >> that is something that ian bremmer will speak on. >> absolutely. he will join us in the next hour. lots coming up. here is our twitter question. what is the biggest geopolitical risk to your financial markets? we have been thrilled at your many responses. futures and doubt futures are negative. stay with us. ♪

>> good morning, everyone. "bloomberg surveillance." of the weekend. already some sharp analysis out about putin. -- publicis. they are taking over sapient. wpp martin sorrell of calling at the rebound transaction. competitor.e is a publicistail is that already gets 50% of its revenue from digital.

i found it interesting that have already crossed that threshold. the second. sir martin sorrell -- if this world's biggest advertising agency? sapient in and field to $7 billion cash in a for $3.7n a deal billion. i cannot say how much the bank the bank-- enough how of japan stunned markets with their decision. the japanese economic experiment is a failure and fridays experiment won't fix it.

you are one of the great voices and it. how desperate is mr. abe? to deliverying inflation that he cannot possibly deliver. quantitative easing cannot change things. >> i look at the relationship of napanese yen to the korean yua and it breaks out to new korean strength. that is not good for hyundai, is it? >> no, it is not. japanese exporters become a little but more competitive. but japan is not the biggest now.ter right they're using workforce, they are losing technology. they are not investing. are we in the midst of a currency and trade war to come

in asia. >> i think they view the cheaper yen as a solution to their problems. i think that is a failing solution. depreciation buys you time to get things in order. but it has a temporary effect. you have the trading sector and the domestic economy that is mired in a lot of problems. have -- areroblems there. e does not have the political influence to put through the reforms that he needs. >> exports are going down. it is not a bifurcated economy. the whole economy is in the trashcan. >> we are hearing that the problems are cultural. there arephemism for

not enough women in the workforce and there never will be and the japanese are not big on immigration. there's nothing wrong with the japanese economy that immigration can't solve, i'm going to throw that into the quote of the day. >> if you do not solve immigration, the economy cannot grow. extrapolational is that the economy is going to get worse until something breaks. this is japan versus korea. the red box is the asian crisis. of 1997. look at the strength of last month. korea, china, taiwan, singapore. goingis something that is

to shift the power calculus in east asia. i want to get to your thoughts on china. you have been pushing back against larry summers, who says that china will never to the norms. >> he is talking about the wrong norms. china is experiencing monetization. when iteat for them happens. a small fraction of the world has actually benefited from modernization. they have to revert to a norm that is not applicable, that is just wrong. they're moving 20 million people per year from the farms to the city and every times that happens productivity goes up. >> i want you to bring us back to the united states. u.s., we face similar problems. we have to get productivity up, we have to reallocate resources. china is trying to shift to consumers. the u.s. needs to shift to a smart source economy.

will hold a summit. what kind of efforts can you expect to move into modernization? china is going twice as fast as the u.s. is right now. i don't think they have to explain a lot. they have a reform program in place that fits a lot of the deficiencies. they are growing at 7%. one that is disappointing, it is to pretty great by world standards. >> there is this word pivot. everybody is pivoting. we are pivoting in asia. >> we don't really pivot. we kind of purulent. irouette.

i think you are disagreeing with larry summers, which i heartily applaud. >> was that an editorial comment? [laughter] >> all growth eventually slows. eventually the process does end. >> i'm disagreeing on fundamental approach to why china is growing. they moved 20 million people front farms to the city last year and the your before and the your before that. the pace of migration is actually picking up. you have to build 20 million housing units. 20 million dining room tables and chairs. they need other things for urban life. >> urbanization is key for growth. the population is really topping out, but they have moved people in a way to work more productively. that is the key to their future. are six entered 50

million people on the farms. this modernization has a long peoplego -- 650 million on the farms. this modernization has a long way to go. it is happening every minute of every day. how china hear about is losing the one child policy? are you going to have a child where there is not a clear sense of where career is? they do not have a market to allocate resources. i would not be having kids in china right now. >> a fabulous discussion right here. we will talk about this with ian bremmer in our next hour. >> when we return, our single best chart about education. this is ""bloomberg surveillance." ♪

>> this is "bloomberg surveillance." it is time for single best chart. higher education is one of the biggest. the haves versus the have-nots. credit to gary laneger.

through 2000 12, inflation-adjusted wages increased 23% for those with a bachelors degree. real wages fell 9% for those with no college degree. >> it is not a solution for the entire economy. >> it is no longer the union .ard it used to be you have to be able to define the right skills. >> that is a scary thing, an apprenticeship in economics.

>> we are going to take a look at a political apprenticeship. we all sit at the knee of bill clinton. , whose namee braley the obamas mispronounced when they were out there campaigning. bill clinton knows how it is done. this is an outfit for the clintons granddaughter. >> lookout thrilled he is. >> he is thrilled to be alive. he is thrilled to be bill clinton. i will tell you all you need to know about this election. this event was a barbecue being held in waterloo, iowa. that is what it is looking like for the democrats. wallenda.ik

a daredevil walking a tightrope in downtown chicago. he broke two records. one for the steepest tightrope walk. >> this is in chicago? >> yes. >> and the highest blindfolded walk. 700 feet above street level. >> there is no safety net there. i'm counting down between when tom says keynesian and blindfolded. >> the cover of "bloomberg businessweek." >> we are still on chicago. you kidding? he has a go pro on his head? wouldn't you want to capture it? he is blindfolded. how does he do that? >> the wind was blowing 25 miles per hour when it had them.

surprised they didn't put the blinking sneakers on him. >> are you kidding me? >> his father died attempting the same feet. >> does he become manager of the chicago cubs if he does this? in thisyou missed morning's story meeting at 5:00 a.m. was the side of tom keene , the nick will end the -- wallenda of donut consumption. our photo of the day is sitting on the desk. this is not a grown-up --cronut. this is a croissant doughnut. gentlemen, would you like one of the croissant doughnuts that tom has not eaten? >> i'm on a low-carb diet.

>> keep them coming. >> what we are hearing from the control room is that we need to hold onto some of them for the producers. >> i have your cronuts right here. >> these are different from the cronut cronuts. >> because i never had two hours right in line. >> ether $3.50 of these. >> brings them over here. of that is a doughnut of substance. innovation?e is no [laughter] >> futures coming up.

>> mediocrity? ♪

>> good morning, everyone.

markets on the move. ian bremmer will join us in our next hour on bloomberg television. we say good monday morning to you. this is "bloomberg surveillance." everything and gold cells. >> i moved all of the gold out of my house this weekend. >> i did, too. kugeransgar ran's -- have been pesky. why are the swedes always so much cooler than we are? [laughter] greaty have a lot of internet apps. people have been saying we don't need cash, we can use credit and debit cards.

>> described the market for mobile payments in sweden. >> you have a couple of different options. the major cell companies have banded together. six of the largest banks have come together. here is an immediate transaction that will allow me to give you money right here, right now. that?you buy >> i was in stockholm two weeks ago and my american express car would not work. what are the americans doing wrong? what do we need to do to catch up? charges an express very high fee overseas. >> it just wouldn't work in places like a taxicab. i am sitting there, swiping and swiping and swiping.

>> are they hipper rent go into it quicker? >> not particularly. there is a democratic -- demographic difference. young people are growing up without any cash at all. see anything that can compete with apple pay? >> one of the companies that is the square of europe. one company is called seamless. .hey are all over europe they are in 30 different countries. they have half a million locations. >> how many different payment systems are competing? >> one of the people in charge of deciding how transactions , all of these things are going to come together and the best services will win out. >> this is one of the big vulnerabilities.

what is interesting in sweden is that the banks did very well out of the 2008 crash. a lot but people have more faith in the banks. told us money would come out of a machine in a bank called an atm. [laughter] this is like ancient history. the first iteration of it did not work. i waited for my iphone and i walked around all weekend and i could not use it once. i tried at the grocery store, i tried at the sandwich place, i tried at the tractor supply. [laughter] all these great places. i waited on this thing for a month. the vendors did not have the

appropriate -- >> they did not have the right year. youo you have video of attempting to pay at a tractor supply store? >> i have a collection of feed store cap's. >> we can talk about it after. [laughter] >> do you have chickens? >> no, i grew up with horses. >> i have 17 chickens. do you need any eggs? this is the barter system, the barter economy. this goes to hr this weekend. -- a chart this weekend. >> absolutely. you can pay for your bus ticket with the same device as mcdonald's.

>> thank you so much. let's wrap up our our. -- hour. what the talk about geopolitics mean for the u.s. economy. >> we get back to the global economy. the global share has doubled. >> 30%? >> 30%. >> i did not know that. >> it is amazing. the exchange rate matters. >> where on the euro does the effectiveness click in? strong have a weak euro,

dollar, when does it begin to hurt? >> when you look at all the rest of the trade shares, the difference of the interest rates , they can only knockoff half. >> you wonder if it is a strong dollar policy. it is hard to say that this is all about currency depreciation. vulnerable now than ever before. that is the message the fed gave. the fed was worried about weakness abroad because we are now more vulnerable and more exposed. >> at the end of the day, the stuff we import from abroad is very small in terms of the individual consumers. consumerbout expenditure and they are services and they are made here. >> that is all domestically produced lu vetted apps.

>> william lee, thank you very much. don't give my kids any ideas. [laughter] carl weinberg. thank you. how about the forex report. stay with us. ♪

>> this is bloomberg

"surveillance." >> democrats scramble to get out the vote and republicans argue. the midterm elections are tomorrow. the dollar region is higher. how will janet yellen react to the bank of japan? ian bremmer joins us on measuring risk and uncertainty for the transnational business. good morning, this is bloomberg "surveillance." york.rom new monday, november third. i'm tom keene. joining me, scarlet fu and brendan greeley. >> republicans are counting on momentum. democrats are hoping a get out be vote effort will salvation. americans vote tomorrow. there will not be drama in the house. republicans expected to expand their majority. in the senate, the gop needs a net gain of 6 seeds. races are going down

to the wire. republicans are trying to capitalize on obama's low approval rating. branson'sd richard spaceship to crash? say pilot error is a possibility. the station disintegrated after a device that slows to sent was deployed prematurely. friday in california's mojave desert. the pilot was seriously injured and the copilot was killed. richard branson spoke about the accident. >> commercial space travel as a high project. we are undertaking a testing program for many years. safety has been our number one priority. >> richard branson plans to charge $250,000 for journeys more than 60 miles above earth. >> key third-largest advertising company expanding in the u.s. publicis will buy sapien for $300 billion.

sapient is based in boston. it will give publicis a bigger hold and digital advertising. cis give up on a merger with another company. half of itsmakes revenue and digital. the story of the new york city an hour, wind 30 miles through the race. gusts up to 50 miles an hour. tennyan won in 2 hours, minutes. another kenyan. she finished twice before at third in new york. >> i did not run this year, sorry. a data check. dow about 17, -- dow about 17,000. 96.o-dollar 1.248

>> tom keene only runs when someone is taking away his donuts. >> i'm in training! >> you started by having a donut croissant. radio, we will have a chart on the number of done it i have consumed. >> all right. day, politicians fighting to win a seat in congress. we will check in with phil mattingly. the most-watched races. clinton, the former president, showed up to help campaign for bruce braley. president obama in sight in the key senate races. >> bill clinton has been the number one surrogate that every close senate democrat once. bruce braley needs help. poll,s moines register the most respected and the

state, coming out on the senate race. 51.44, outsidep the margin of error and a big lead. forekend at that post democrats. a democratic operative i spoke to said this is like where republicans were in 2012 in the presidential race. mitt romney had a narrow path to win. obama had a town of different ways to win. it is reversed now. republicans have a ton of ways to win the majority in the senate and democrats is narrow. iowa is a state they need. trying to pick up a republican seat in kentucky or georgia. forh mcconnell is up reelection. starting to pull away from alison lundergan grimes. open seatorgia, an with a republican lawmaker. givinge nunn,

democrats a lot of enthusiasm, starting to fall behind to david perdue. people have options been looking out for a pathway forward for democrats look like they are starting to close. >> a week ago this was so much closer. 'sat i assume you do in d.c. stand in bars and have drinks with smart people. does anyone have a theory on why the polls take towards republican in the last week? >> republicans have then waiting for this. people point to the 2006 model where things stayed close up weeks until the election day. these races are not very far apart. the polls look good this weekend for republicans. without question, the mood looks good for republicans. the big question everybody has, democrats operate on the ground that are than the other party. can turn out, it might

have an impact. the races are not that far apart but they are trending that way. >> phil mattingly in washington. days ofg our two coverage. tomorrow night, "with all due 5:00 p.m. on bloomberg television and radio. everything we can, pol lsters. republicans and democrats scrambling. ian bremmer axes it to the prism of our foreign policy. a lame-duck president and possibly a lame-duck democratic party. how do elections change our foreign policy debate? >> it makes it unlikely you are going to have a consistent message coming out of the u.s. bey little push for obama to accepted internationally. he's been reacted to all sorts of conflicts. headlines in every region of the world. if you look at the republican

side it is not as if there has been a coherent "no, do this instead." >> what is the history of a two-term presidency with new people involved? could we see secretary kerry exit? he's likes the job and working very hard. i would be surprised. everyone and their mother is starting to circulate cv's. those people are starting to get picked up. >> when you hire -- would you hire john kerry? >> no. that is purely a question of partisanship here he will be hired by all sorts of people. very closeeady been to a small number of people who are dealing with too many issues on their plate. that will get worse over the next two years. that's the problem. >> do you see any international issues that matter domestically? are we all looking at minimum wage? >> of course, there are lots of

them. i would love to see the transpacific partnership done. >> you what. >> because it will matter for the u.s. economy. thatact that we can say does not mean it resonates for the american population. the u.s. population overwhelmingly wants the u.s. to do less. even the fight on isis. everyone said we have got to bomb because they decapitated two american citizens. when you look at turkey, which finally decided they would start , if you are an american citizen, wait a second. this affects them more. they are doing how little and we should engage why? that is the discussion around in our tables in america. >> who in washington understands how to cross that divide? >> nobody once too. look at where the american market is.

explain what is the economic imperative. in a way that the europeans have downside impact on every single geopolitical risk, they are the ones taking on the chips. going to die because there is not that impetus? >> obama did call prime minister abe in japan last week and said this is a priority for me. they put a lot of effort into it. it is one of the few big wins for policy wise available for obama. the other is the iran negotiation. no one has talked about the sia is the parta of the world obama will have done the best with. he has to restart the pivot. tpp didn't die. american troops over there. our relations with our allies in asia -- >> to get this started, what is

the american order? henry kissinger's book, "the world order." the this order, the that order. >> the u.s. does not know what it wants to do and the rest of the world. it is not having much of an effect on us to play less of a roll and kick the can down the road. the cleanest dirty shirt you economically, we are the cleanest. >> we will be right back. ian bremmer's twitter question of the day. what is the biggest geopolitical risk to financial markets? tweet us @bsurveillance. ♪

>> we are focusing on geopolitical crises with ian bremmer of eurasia group. he's identified 4 crises set to rattle the global economy. it is the topic of his cover story "nowhere to hide." we focus on one of them, russia. russia's conflict with the west. russia and the ukraine.

russia and desperation because oil prices continue to decline. everything it does is tilted towards that. >> you look at the russians today and you do not get a sense of desperation. you get a sense of antagonism. >> to compensate? >> i do not want to talk about putin's compensation. that is a different field of study. anyone who might have believed -- that 10crease is increases in sanctions would lead to an iota of different behavior from president putin has been mistaken. inin supported the elections a separatist region in ukraine, which the ukrainians and nato and the eu, the americans oppose. the separatists did win. the ukrainians say there is a large number of russian troops in southeast ukraine. this is only escalating.

>> i want to read something you wrote about russia. "russia becomes weaker as putin 's hold on power becomes more tenuous, russian foreign policy will become more unpredictable." you use the word "rogue state." >> is being perceived as a rogue state. the u.s. is saying we cannot do business with these guys. they are becoming a pariah from the american perspective but not the international perspective. the number of times i've seen about the international community supporting ukraine, that is only true if your definition of the international community does not include an emerging market. the brics are doing more with russia commercially. takes it personally. a lot of the sanctions have gone .fter his friends

they feel -- he feels like americans want to undermine him. russians to the cyber attacks against the white house, icy putin reacting personally. >> is there going to be a book about vladimir the great? >> there will be many. >> it will include him posing with a jaguar. our twitter question of the day. what is the biggest geopolitical risk to financial markets. @bsurveillance. stay with us. ♪

>> good morning. bloomberg "surveillance." lawsky, new york superintendent for financial services. staring up -- stirring up so much in new york city. with noon, a conversation erik schatzker. upon us.lection dawns

obamacare, dodd-frank, the pentagon. the issues for a presumed republican held in 2015. a presidential 2016. congress and the president will have to decide if they are going to legislate next year. no one better to speak to them getting a confident -- no one better to speak to then daniel clifton. what will be the relationship of republicans to the democratic president? >> some things could get done. 8-iron will have to get set early by the president and congress. the president might have to try to jam through his attorney general pick in the lame-duck segment of congress. talking about doing something on immigration by executive order. that could set a negative tone. look at some of the issues on

the table. the transpacific partnership. republican support that and president obama is trying to get this done. the details are a little messy. >> let's say the talent gets set by a senate mix. ted cruz on the cover of "the washington post." the senate we know or a different senate dovetailed with house.like >> you have two different kinds of republicans. a new class you are very conservative. you have many republican states that won in president obama won in 2012. from pennsylvania and the senator from ohio will be looking to cut deals. maybe on highways, energy, and taxes. this is about where the leadership of the republican party is. the republican leadership in the house are talking about doing

morees and getting domestic pipeline spill in the u.s. speeding up the process for drug and medical device approval to make americans more healthy. it is a very moderate conservative agenda. not the ted cruz agenda that many conservatives are going to say. >> i want to stick with energy. you wrote in your report, "coal is dying a fast death. this will continue. republicans will only slow the pace." all the conversation in kentucky about coal, it does not really matter? you are aers if coworker in kentucky or ohio. they were told they were not going to lose their job and are losing their jobs. the president is going to fight for a mission changes. the president is going to try to do a global climate change yield for the un. he's going to try to bypass congress. the president is afford on that

agenda. whether the republicans can slow the rolls down will be determined through the budget process. industry is trying to slow it down and hope a republican wins the presidency in 2016. staying with energy. you see changes in crude oil export ban. which companies stand to benefit from that decision is it comes? >> energy is the greatest beneficiary of a republican taking over the senate. i do not believe the republicans are going to change the crude oil x van. -- the crude oil export ban. the companies are the enp producers who have taken a hit with the lower price of oil. this will get them deeper into foreign markets. >> ian bremmer is here. does opec care? >> opec is taking seriously the energy revolution in the u.s. >> which is furthered by a republican senate and house.

>> do they really believe that? only a little at most. i think the united states is moving towards wanting to export oil. >> a question for both of you. what is your ticket price on oil where it becomes really interesting? $78, $75? >> my team says we are not going to hit it. the iran deal does not happen and libya is falling apart. that is as low as were going to get. >> dan, what is the lower-priced -- dan, what is the oil price that matters? >> i don't think we're going to hit it. $70 is what they spent telling us in washington. >> the president will be a lame-duck president on wednesday morning. find?egacy issues will he legacy issues -- the

affordable care act, emigration, and climate change. he's talking about using an executive order for climate change and immigration. the president has had two chances to come to the republicans and say let's do deals. the beginning of 2009 and the beginning of 2013. he chose not to do it. that's the choice facing the president if the republicans take over the senate. do we do a deal on highways are taxes? that could be his legacy. if not, it will be hard for the democrats to run in 2016 if his numbers stay in the 40% range. >> what is your confidence the republicans will decide to get something done? >> i think you will get two or three things done. the domestic pipeline will be hard to reject if you start seeing natural gas prices go higher during the winter. the fda issues are important. two or three issues. in washington.

when the polls start to close, we start with bloomberg politics. startingoss the u.s. at seven got eastern and going all night. it is an all nighter. bloomberg "surveillance," good morning. ♪

is bloomberg "surveillance." i'm scarlet fu. let's get you top headlines. quarantine says her in new jersey was politics and not silence. the nurse who was quarantined after treating ebola patients in africa. kaci hickox has not shown any symptoms of ebola and she is at home in maine. ukraine's government says elections held by pro-russian factions as a threat to the peace process. abels organized in donetsk week after boycotting national elections. eu u.n. estimates that fighting in ukraine has claimed 4000 lives. ages bc lower than estimated income. income rose 4.6 billion. the bank made provision towards

a currency trading investigation . that is a year top headlines. >> this matters to ian bremmer of eurasia group. the bank of japan and their action on friday reverberates worldwide. oil south. equity markets have a bid. nowhere is the effect greater than asia. book, what will be the asian order? >> looks pretty good. you do not have global leadership that you have leadership in asia. india, japan, china, even indonesia. leaders who are quite charismatic. they are prioritizing domestic transformation. even though there is nationalism they want a stable environment. that is good for the market. it is the one place where the geopolitical headlines should recede. people remember the

20th century. how much baggage can be new leaders carry of an asia of 1970, 1940, 1920. the nationalism is there. china is only getting bigger. they are capable of squeezing countries. if you are vietnam, very little solace. if we see that any of these leaders have serious problems at home and it is not going to be smooth sailing ever the long-term, china is the question mark, life is going to get ugly. nationalism and the jostling when the u.s. is not as secure. that will emerge. in a world that is really exploding through the geopolitical turmoil, asia looks pretty good. >> you wrote a review of the kissinger book.

what he talks about more than anything is the american-chinese relationship. where is that right now? >> he's very negative long-term about the u.s.-china relationship. he believes geopolitics -- >> he is nostalgic. >> kissinger gets russia right because russia has not changed at all. kissinger on china, his one blind spot is that the younger chinese really do engage with the world economically. they are getting wealthier and they are going to want more rule of law. not because they support the u.s. that because it helps them domestically. >> do they coalesce with korea to engage with japan? if japan uses economics as a weapon. japan-uestion that the china relationship is key.

the japanese are moving south korea closer towards beijing. abe has done everything to try to get a direct bilateral meeting with xi jinping. >> what is the likelihood of a reunified korean peninsula? >> over the long-term it is almost 100%. the question is how stabilizing -- the question is how destabilizing is the process. south korean president park makes it sound wonderful. the interim process is going to be incredibly messy and potentially dangerous. >> when does your new book come out? >> may. >> what is the theme? tulane football? >> you and i will be talking about it. >> ian bremmer. >> data check, dollar strengthening to an almost seven-year high versus the japanese yen. u.s. futures lower. s&p futures off by three.

the 10 year yield comes down. euro-dollar at 1.2499. manufacturing comes out at 10 a clock a.m.. construction spending for september due out at got a.m. this -- at 10:00 a.m. this is bloomberg "surveillance." >> this is bloomberg "surveillance." i am brendan greeley. i am a graduate of tulane like ian bremmer. insurers are boring. they think about risk. when they are ready to name a price, they think about it again. mike is an insurer. he says the industry needs to get less boring. let's move the on industrial accidents, what are the industry is failing to price? >> there are several. you make a good point. insurers are slow to move. technology is the space ways moved the least.

if you think about how much the economy is dependent on debts as posted to -- oin bits is atoms -- bits as opposed to atoms. >> why would you get into cyper -- cyber risk. >> if we fail to an event, we are going to be dismissed. more breaches that businesses have not factored into their accounting. >> that is only one piece. the other piece is does location within business when their own systems fail. self-inflicted? >> it could be external that causes it but you are losing the ability to perform. and the economy is slowing down. we need projects in a range of spaces. thene of the stories in

last five years or so is not insurers getting into this risk of hedge funds buying insurers. you have pension funds buying catastrophe bonds. do they understand these risks? you been doing this for a while. >> i'm not sure they do. but those are the spaces where there is modeling that is done best. the pension funds and the hedge saying we trust these models and we are willing to take risk. if you have been in the business you are going these models are not that good. when wed we get scared hear "so we trust these models." >> the alternative investment scenario, 1% bonds, they do not have the room to play anywhere else. >> is there too much faith in the data? >> yes. >> where is big data

failing? >> the data set for hurricanes is not that great. we try to forecast the future. climate change will make the models was reliable. >> you just bought in agriculture insurer. that is a huge risk. >> is quite a profitable business. it is a unique play. it is very different. business hasrance been tough. out of politics. when does the industry in bermuda normalized so you are having? >> reinsurers have been doing well. we're getting the nontraditional capital and its hollowing out the profits. a very difficult sector for the next --

>> everybody thinks you are having cocktails in bermuda. you are not. with you.e this is a difficult business. the trouble with insurance is rate of change. we're looking backwards to predict what happens. the rate of change gets faster and it gets more difficult. >> a "surveillance" break-sclusive. another industry down as we are, looking back as we look forward. space.geopolitical it takes you years to put it together. is that a space we can see real innovation? a real opportunity. that is where more risk is. products, we have a whole division of our company that is about new products for that space. we think there's great opportunity. >> mike mcgavick with xl.

the twitter question this morning. we will ask ian bremmer. what is the biggest geopolitical risk to your financial markets? that's @bsurveillance. no charge for that. stay with us. ♪

>> this is bloomberg "surveillance." we are asking ian bremmer if john kerry retires -- tom keene will never retire. >> the level of ambition on this table. >> we're not retiring. not requiring. john kerry is not retiring. he sat down with al hunt. take a look. >> we are working on the measures that need to be taken in concert with many other countries to close down avenues for banking, for transfers, to largefy people who are donors and to block that. also to identify the means by which they are collecting money largerler sums from numbers of people. all of these avenues are being pursued. >> in regards to funding for the islamic state. said to have killed more than

300 members. >> eric schmidt on the cover of "the new york times." ian bremmer, this article click have been written 10 years ago. finding somebody in iraq to go after somebody else. that has worked out before. they've been so reluctant. it's not as if the u.s. has any partners it can rely on on the isund in syria and iraq it the kurds. u.s. policy against isis, given the alternatives, has been reasonable. >> what has eurasia group learned in the last four weeks? what is the understanding of all the conversations? >> they're are going to have a hard time being different than other terrorist organizations. they have institutionalized themselves. that means a lot of cost. that means guarding territory. it means meeting to be strategic and they are not.

months ork ahead six 12 months, this is a horrible organization that causes damage and is killing a lot of folks. i do not believe that they actually are going to be a state for very long. >> i like the idea that they are not strategic. you said we are doing the best job with ices that we could be doing given the options. what that implies is that we do not have that many options. do we delude ourselves in thinking we have more pull in the world? >> i think we have a lot of options if we wanted to put skin in the game but we do not. when obama said we do not have a strategy, i thought that was smart. a teamwant to put together, it behooves you not to say what the strategy is until you talk to the team. b monarchiesgulf ara that are running bombing runs with us. when we start screwing up, it is as a group -- that is fantastic. we do not want to own this.

with all the problems, we do not want to own this. we had an environment that we do f, that islot o something americans will find more sustainable. >> one of the 4 crises ian bremmer has identified as what is going to hit the global economy. >> thank you for the responses so far. what is the biggest geopolitical risk to financial markets? @bsurveillance good morning. ♪

>> please, he says. short must read. as we look to election day, he will join us. 7:30 on radio and television. he does not by the happy talk coming out of the parties. all he sees is confrontation. tomorrow, bloomberg politics. and mark heilemann halperin starting at 7:00 eastern. that goes all night.

looking forward to that. let's go to our top headlines. federal investigators say richard branson's spatial disintegrated after a device meant to slow its dissent was prematurely. the copilot was killed and the pilot was injured. investigators say it will take months to come up with a final cause. the national football league record for ben roethlisberger touchdowns12 over his last two games. the performance came a week against the up 6 indianapolis colts. a takeover in the advertising business. will buy sapient. publicis gave up on a proposed $35 billion merger with omnicom earlier this year. there's a your top headlines.

conversation to get your november going on our geopolitical mess. g-zero coming g7, a world. the post-world war ii relationship of europe and america. think the charter of 1941. is threatened according to ian bremmer of eurasia group. kissinger out with "world order." we wax nostalgic about roosevelt and churchill. it is ancient history. what will be the new trans-atlantic order? the transgenic relationship has been the absolute bedrock of the world order -- the transatlantic relationship has been the absolute bedrock of the world order since world war ii. it is deteriorating. russia are isis and exposing weaknesses in nato. >> we talk about china growing

faster than america. we look like a growth machine compared to europe. is there a bigger picture? >> it is also about the fact that the germans are the leaders of europe. and their relationship with the u.s. is very strained. they looked at the world very differently. when you look at china, germany sees a bilateral commercial relationship. you have the snowden issues, what is perceived as american unilateralism on sanctions against european banks and drone use. u.s. relations with a german led europe. >> it comes to focus with the ecb meeting this week. >> that thursday. does the rest of europe need to be more like germany or does it bendinate need to -- does germany need to bend? >> you need germinate to lead europe with britain.

germinate needs to figure out its relationship with the eu. they are not prepared to deal with geopolitical risk. >> i keep thinking of the speech a few years ago, lead, germany. they've done a lot of bleeding after the euro zone crisis. that has looked like fiscal tightening. merkel has her own domestic politics. populism on the right is limited in what she can do. the beginning at the munich security conference. to get away from the postwar limitations and take on greater leadership. it has not gone anywhere. they do not appear ready. there are plenty of things getting worse for europe.

there's not a sharp crisis that's going to force germans to act. >> sometimes it feels like a security blanket. germany is allowed to say we have a history we have to be aware of so we don't have to lead. >> you have an external>> environment that is worse for the europeans and then you have internal populism that will make europeans growth writer part. apart. farther >> nouriel roubini publishing about a one engine global economy. do we have a one engine politics as well? >> we do not have an international environment that shows immigration between the u.s. and europe. i think obama's key relations right now art with asia and not with european allies. the french are closer -->> how would he he received giving a speech in berlin? >> much worse than he did.

obama is doing in the u.s., the disappointment in hen is so much more palpable among american allies around the world. >> we've heard from ian bremmer on what he thinks are some of the looming global crises over investors. we want your answers. what is the biggest geopolitical risk to markets? most of the answers had to do with russia and china. wanted to highlight a couple other ones. first answer. >> in some ways we are almost there. #climatechange. >> did you send this in? >> amen! came out with a report. if we do not stop using carbon, it's going to be a catastrophe. why is this not one of your geopolitical risks?

>> we can kick the can down the road. the chinese emit double the carbon the u.s. does. we don't have control. >> i will rip up the script. what will be the catalyst for china to fix air pollution? >> they are fixing it. they are going to fix the cities that are wealthy. in four cities, they went subsidize coal and jobs. >> it's not a problem because we cannot fix it? >> it is too long term for any of our policymakers to take on. >> what organization is best tasked to do with this? >> i don't think any global institution. you will have a coalition of the willing that will be a bunch of billionaires and private sector companies, some governments will likeomerate into things

adaptations, not trying to mitigate. >> the last answer to our twitter question. what is the biggest geopolitical risk? "the unknown." >> that is a sophisticated answer. >> that is a copout. >> that is out there. what's next. >> let's talk about what is next on our agenda. the stories we are following that will shape the day. tom? >> there will be a meeting today. the chair of the federal reserve will wonder by the president's office. i was surprised, why haven't they had a one-on-one before? i was stunned. is interesting is that you are thinking that ben bernanke and president obama had a lot of meetings. that was not normal, that was because of the crisis. >> i think the word slack will,. >> i think considerable time will come up. >> discouraged workers.

>> getting this fixed. it is not just the fed. >> on my agenda, auto sales. reported through the day. honda sales in october rose 5.8%, slower than expected. rosen said u.s. sales 13.3%. employees of conde nast moved into one world trade center. my biggest fears about this are getting all packed in time. great to see it be normal down there. haven't visited new york, this is a solemn location. great to see enterprise next to the site. >> more residents in downtown

manhattan than there were before 9/11. >> ian bremmer, thank you so much. greatly appreciated. onbloomberg "surveillance" radio continues. "in the loop" is up next. had a great morning. ♪

>> good morning, it is monday, november 3. you are "in the loop." we have a great program --

days after a virgin galactic space or broke apart midflight, investigators are now saying the incident was due to something other than an engine explosion. we will talk about what it means for the future of space tourism and we will talk to captain mark kelly. the 120 billion dollar company behind insulin drugs is in the loop. he will talk us through the pressure on drug pricing. there is look at our top stories -- america votes tomorrow and midterm elections and the results will determine what president obama's last two years in officer like. --re is drama involving there is no drama involving the house but there is about eight races in the house -- in the senate that are crucial. president obama staying out of combat that competitive congressional races where republicans are made in the issue. he come -- he campaigned yesterday in connecticut and nn