higher, andrge ever mainstream media will be on the edge of their collective seats. john malone holds a media day at his liberty media. good morning, everyone. this is "bloomberg surveillance." our worlde from headquarters. it is wednesday, november 19. i am tom keene, joining me brendan greeley, once again back to back julie hyman in for scarlet fu. >> senate supporters of the keystone pipeline came up one vote short. 69-41 in favor of the controversial project. backers needed 60 votes. it was a blow to louisiana senator mary landrieu. wanted deep approval to boost her reelection chances but only 14 democrats voted in favor. here is landrieu. reid'sd not ask harry

permission to do this, and i did not inform mitch mcconnell. i took to the floor of the united states senate and to be power that comes from being a senator representing one of the great states in this nation to force a debate on an issue that i felt strongly about and they feel strongly about for many years. >> the issue is not dead, though. senate republican leader mitch mcconnell says lawmakers will vote on keystone next year when of course there will be more republicans in the chamber. meanwhile, senators blocked an attempt to put limits on the nsa's ability to collect phone records. it would force spy agencies to only obtain records of proof by a court order -- records approved by a court order. according to people familiar with the matter, president obama will issue a reprieve for undocumented immigrants whose children were born in the u.s. that is part of a plan to prevent up to 5 million people from being deported. russia'sise from president vladimir putin. he plans to go for a crackdown on corruption.

according to people familiar with the matter, he wants to end inspections and other forms of bullying that costs businesses billion's of dollars a year. his advisers have a proposing to crackdown for years. is again accusing russia of sending troops and tanks into ukraine. here is putin -- tothe u.s. does not want humiliate us, they want to subdue us. they want to use us to solve their problems, to bring us under their influence. no one has ever managed to do that to russia, and no one ever will. [applause] >> putin is also offering his own take on big diplomacy. he said "an -- and i cannot believe i am reading this -- "you can do a lot more with weapons and politeness than just politeness." is demanding a nationwide recall of cars equipped with potentially dangerous airbags. already almost 8 million cars

with the takata safety devices have been recalled. safety regulators say that has left car owners unsure whether their airbags would rupture. weatheris hell bad the is in western new york. you may not seem -- this is how bad the weather is in western new york. feet of snow on the ground in new york east of buffalo and another to feed my fall by the end of the week. areas near the great lakes are getting hit. from wisconsin through miss you michigan and eastern wayne's world. julie, it is my childhood! roof of thef the house into the snow bank. >> that is actually tom walking uphill through the snow both ways to school. >> we had an ice rink in the backyard, and in february, you just give up. >> they did not let him wear shoes, though. >> we had snow shoes.

this is why jenny ray exists. let's go to what matters -- equities, bonds, currencies, commodities . l was a $73y -2, oi handle when i wondered in this morning. $74.48. dow up with me, the grinding ever higher, not ever higher, but near a record high, s&p 500 of course we saw that. $117.54, the yen, really beginning to look at $120. let's go to auburn on make= -- let's go to abenomics. yen, you can see it is like government mandated. this is the government working, getting into the market, and then they have finally given up. weekis strong japan,

china, and it is not just about renmembi.nt i >> i am so confused. are there other countries in the world? there are other countries in the world, and this is the tension between china and japan, and this is all been on makes. -- and this is abenomics. >> what you guys don't know, it relations,satlantic it is called bilateral idiocy. >> how many people trade that? >> i do not know the answer, but very few. they use it, in the control wem, they go my god, are spending so much time on this? >> tom just likes to say renmidbi. say it. >> renminbi. and the yuan.

what a strange bull market. [laughter] and bonds with low-grade yields, they are prime to perfection. robert walter is head of multisector in invesco. he has just returned from asia. what did you learn in asia? asianearned that investors overall are interested in some of the things the -- some of the same things here, as the fed is driving more and more what is going on in asia. >> i got this question --terday, and your totall and you are totally qualified to answer it. bond market, u.s. sovereign in every thing else, or is it more you -- omore nuanced? under thed market is risk-free asset in the way that soare thinking about things,

the treasury market is extremely important to the overall finance. >> this woman was very elderly, she isin stocks, but a saver and she is getting absolutely crushed. >> i looked at your research report from this week -- >> "surveillance" breakthrough exclusive -- really reading the research reports. >> i actually lost count of how may times assess such environment calls for active management in our view. making decisions. >> it should not scare you, and the reason it should not scare you is if you look at the global market right now, you have a large the virgins between different countries and different central banks, so for instance we think the u.s. is pretty -- you have a large different between countries and different central banks, so for instance we think the u.s. is pretty --

>> when you save managing actively, are you talking on a week, a must? how long are you taking to make these decisions? >> we think for investors like us, we are in the market all the time with our investment process. we can think about three months to 12 months, so it is not a daily trading, but it is making sure that we are analyzing the economic cycles. >> it is a really sophisticated question because the timeline and the bond market of a portfolio is radically different , thinkingity markets of chris marangi at the belly company -- at gabelli company, buy disney, hold it, never sell it. when does the media juggernaut stop? been a lot of cyclical change in the media industry, and disney has been pretty well highest against those changes, and it has been a great want to hold. >> is it just because of espn?

>> it is more of that. >> is it because of bob iger? >> bob iger has done a terrific job. they've added great brands with marvel, pixar. >> within the context of the bull market, liz ann sonders joining us, and i look at the dow 17600. say media hasto led? >> media has led last year, content companies this year. >> we do but the acquisitions disney has made, but they pulled off an amazing trick, which is that they took open-source public material in the hans christian anderson fairytale, and approved you can make money with invention. >> absolutely, and great product that has great appeal, "frozen"

you are referring to. >> the constant theme here on "surveillance." >> what about the content and infrastructure and the companies that are trying to do both? is sort ofybody who a model to you who is doing those really well? >> content is king, john malone has said distribution supports. >> to bring both of your worlds together, and we see this with apple when we talk about the apple bond offerings, rob, i'm looking at disney, 30-year paper with a coupon of four and three-eights. back fromlding cfo's doing ever more bond offers? arene of the things we seeing is returning money to shareholders, which is essentially to some extent choosing to return the money to shareholders, which i think is

getting to your points, which is that you can borrow very cheaply. >> do you can see that -- do you see that continuing into 2015? >> yes. i cc that in buybacks? -- >> do you see that in buybacks? >> yes. >> rob, i want to go to college and be a financial engineer. what the hell is that? >> coming up, mary landrieu's last stand. keystonealk about the pipeline vote with peter cook in washington. >> are you with us today? >> out what her question of the day -- -- our twitter question of the day -- what is your advice for the freshman class of congress? ♪

>> good morning, everyone. good morning, worldwide, particularly in europe. this is "bloomberg surveillance." joining me brendan greeley, julie hyman -- she is working, like, a 20-hour day for scarlet fu. tell meody did not something. let's get back to keystone. it has been six years since the proposal to b build the keystone xl pipeline. , 59-41. was rejected they needed 60 votes, just one vote shy of the 60 needed to pass. we are joined by chief washington correspondent peter cook. after all of that waiting and this vote finally happening and it not going through, i mean, is a just a matter of waiting another month and now the bill passing in january with the arrival of the republican-controlled congress?

>> absolutely. that is what republican leaders including mitch mcconnell promised last night after the vote ended up on capitol hill. they said we will be right back at it as soon as january. they stand in much better chance of success given the arrival of those new republican senators. or notstion is whether the president would feel any different about this proposal at that particular moment in time. we could have a completion of a court case in nebraska he has been waiting for, we do have a determination by the state department, but it is not clearly president at the end of the day will approve this project going forward. >> peter, how desperate was mary landrieu to get this done? gethe was more desperate to the issue on the table. i think she knew from the start this would be an uphill fight, but she got a lot of attention with her push to force democrats, including harry reid, to bring this to the floor. she was successful enough. i was watching her on the floor literally hovering at the table where the votes were being counted, and pressing senators at the less moment, i saw her

grab carl evans, who is retiring. who is retiring. she raised the heat on this issue. she probably helped her sell at the end of the day, her opponents of course support this project. it is not clear it has made a difference. >> peter, and all of the pictures we've seen, joe manchin of west virginia, what we learned about the number of democrats in the next congress who are going to start voting with republicans? inthe core group you saw this vote is a pretty good indication that there will be a certain group of democrats. it may not be 14 like you saw this time. who will cross the aisle? who will be prepared? warnereople like mark who have been centrist democrats, more willing to follow harry reid. when harry reid is no longer the majority leader, watch them to freelance and cause problems not just for the senate but for the

president as well. >> what happens if it is not approved? what happens to the united states of america if there is not a keystone pipeline? >> well, you were on the senate floor yesterday, maybe not much is different. this is far more important to canada than it is the united states. there is some who would challenge that. at the end of the day, they believe more oil flowing into the united states from friendly countries like canada is a better thing than potentially down the road more oil coming from not so friendly countries. the reality is the energy industry has moved on. there is now a significant rail capacity bringing a lot of this alberta oilsands to market. there are new pipelines being built in canada moving it eastward. the energy industry has not counted on keystone, and it still may not have to going forward. it still may not be able to at the end of the day, this president still may stand in the way. >> peter, so many say it is a

symbolic importance. richard haass joined us yesterday of the council on foreign relations. here is what he said -- >> it will send a powerful diplomatic signal. we want the germans to maybe restart nuclear, we want the french to do fracking -- how can we get them to take tough energy decisions if we are going to continue to kick this down the road? >> what about the importance is leverage in foreign relations? >> the most important foreign relationship at issue is with canada and there are canadians who think that the u.s. takes canada for granted, especially the energy relationship, so it is an important diplomatic signal to other countries that the united states work to approve this or if the u.s. were to stand in the way. there are so many other factors. this is a political issue for democrats and republicans. this is a fundraising issue for both sides and both sides would like to see this remain an issue rather than a problem. >> peter, thank you so much. peter cook from washington.

brendan greeley, explained the landrieu family to americans. x mitch landrieu is mary landrieu's brother, and he is the mayor of new orleans. mitch landrieu of new orleans wanted to run for the president. >> but she did not want to. >> she is wanting to run away president. it is difficult to have them do campaign appearances together. >> dovetail this with tom cole that we saw yesterday of oklahoma of the fourth congressional district just south of oklahoma city. is oklahoma and louisiana on the exact same page on keystone? >> louisiana is not on a separate with anybody. it is its own unique american place. the politics are really hard to compare actually with other places. , what peter cook said, is we are really seeing a small class of democrats that unlike the last congress are going to work with republicans.

>> let's bring this over, rob waldner of invesco, energy is a lot of high yield. our investors staying upload nights analyzing? the high yield index, and it has grown a lot over the last 10 years, so about one-third of the s&p 500 capex is energy now, and that has resulted in a big growth of energy within a high yield market. the key issue there is that with oil prices where they are, you start to have some fundamental issues in the energy sector, company viability, which is important to be able to look at the individual companies very carefully. >> do you have scrutiny for next year or not? am i worried about energy at $80 a barrel, 75 dollars a barrel versus at $100 a barrel in the fixed income market? worried about energy prices at $75 or below. we think it is important to make

sure you're doing your work on individual companies. i think a lot of times we get questions about why hasn't high yield bounceback as much as equity market has. a big part of that 15% of the high yield market is energy. >> all right, rob waldner with us from invesco. >> later, an interview with robert milliken at 4:00 p.m. this is "bloomberg surveillance." on bloomberg television, streaming on your tablet, your smartphone, and bloomberg.com. ♪

>> brendan, could you give me an uber at 10:00? >> where are we going? >> the whole family.

>> could you do it your self? >> what did we do before uber? let's get to our morning must-read. guess what, it is on uber. >> "the new york times" talking about uber. an executive at uber talking about investigating journalists against the company. farhad manjoo says marangi, i'm not sure i agree. the tech industry is littered with companies that have " ethical questions," but they work, so people use them anywhere. disruptivea very technology to the taxi industry, the automotive industry, so it has troubled some -- it has ruffled some feathers and will get pushed back. >> will it be overwhelmed by -- i mean, does it live or die by whether it works or not? or does it live or die by the

malfeasance of its executives? know love it.i >> when they hired david fu -- we have already seen the changes in their images. they say publicly we know we need to be regulated, they just do not say what kind of regulation. >> they could be coming to a room full of journalists -- >> they think disruption is enough. that makes them awesome. >> all right. we will table the discussion for now and take a quick break. we will be right back. "bloomberg surveillance." ♪

>> good morning, everyone. "bloomberg surveillance." i am tom keene. mr. greeley today, what is the twitter feed? >> @bhgreeley.

h is for harrison. >> julie hyman has got your top headlines this morning. supporters of the keystone pipeline came up one vote short last night, 59-41 in favor of the controversial project. backers needed 60 votes. it was a blow to louisiana senator mary landrieu. the democrat wanted keystone approval to boost her reelection chances and next month's run off. an adviser to institutional investors says shareholders should just say no to marcus lco socgen and ella -- to microsoft's ceo satya nadella. a nonbinding vote will take place next month. and the late reggae star bob marley is ready to again take the stage, so to speak, this

time as the face of a global marijuana brand. agreed toeirs licensing to offer various strains of pot. touts marleedings natural.- marley inof course died of cancer 1991. rolling in his grave? i mean -- >> my jaw actually dropped when i heard that. i was not aware of that headline before you read it. >> i believe he has endorsed after death a number of products -- >> i think "frozen 2" is going to have "jam and go, jam and go." no? wi-fi do not think the rights of your heirs can pass that image. we all know he is associated with marijuana. i think it is wrong to sell it.

i am not sure that his hard work should be supporting ziggy 's new purchase in malibu. >> ziggy has its own music, thank you very much. >> malware, after years of financial oppression, central banks clearly do not care about those in search of a measured appropriate yield, so with a vengeance, you, me, and others have moved away from the masters and towards greater and greater risk. us of waldner with invesco, head of fixed income strategy. on we go. what is going to change next year versus the financial repression of the last 3, 4, 5 years? >> well, we are going through a period of transition and financial markets, away from what happened in the last three years or four years towards a new world. we will get the minutes of the meeting that happened last month later today, and i think it will be very interesting to look to

see what the fomc is thinking about this transition. >> everybody is saying they will go on longer and we will see more of this, bill gross and others -- do you see a further decade of financial repression? do we get back to a 2%, two-year yield at some point? >> we think the long end of the fixed income market is likely to partlyell contained because growth excitations are lower. regarding the fed at the short end, they have a balancing act to do. they have a dual mandate, one of which is unemployment and the other is inflation. they have the economy getting back to full employment, but there are still a lot of questions about whether we will get inflation. >> an economic slowdown if it is not a recession? flatter yield curve or a very flat or inverted told curve would lead recession. >> is there any danger of that? alan greenspan talked about what he went through recently when the fed tightened back in 2004,

did see the long end of the curve not responding as the fed would have wanted. is the risk zero of that happening? >> the risk is not zero. we think the key thing the fed faces right now is that global disinflation and the rally of the dollar, including commodity prices lines as part of a global disinflation, are keeping u.s. inflation very low. so how the fed will respond to a strongly growing u.s. economy and tighter labor market with very low inflation -- that is going to be a tricky act for them to follow. >> when i talked to fixed income investors, i would get the sense that the hope in the background is it is going to be normal again. is it? the you ever worry it is not going to be normal again, that that is over? >> we subscribe to the new

mediocre, so that means going forward, it will not be what those of us who are older experienced early in our careers, growth will be slow overall globally and levels of bond yields will be lower going forward. >> you get a 5% coupon. my chart of the year, i stole this from jason at strategic research. the blue on is the euro. this is from the trackhi -- this is from the draghi speech, the white line is the fed. that is the greatest torsion that is out there, isn't it, rob? >> it has driven a lot of what has going on in markets will stop ecb is committed to driving that line back up, and he said has said that line is not going to go up anymore, and the doj -- >> within that, and this is absolutely critical, do we get to where we are going as they

jump condition or with some stability you can manage for your shareholders? >> we think it is a transition. it is not a jump. it is a transition. there is going to be volatility, so our message is as the fed liquidity, earlier we talked about the u.s. -- >> you have got a great morning must-read. >> this is "bloomberg view," he borrowed an idea from oxford economics in london, is there a a way to encourage japanese to spend, thus reviving the inflation and confidence japan lost 17 years ago? boj have aidea -- a card. >> that has been proposed many times as the money drops. we talked about that in the u.s. at one point a while ago, but that is not likely to happen. >> that was very politically done, rob. less political equity market for

stop you listen to a fixed income grower talk about his great distortion. don't tell me your world is not distorted. part of the fuel of the media group, chris marangi, is because of what the banks have done. >> no doubt about it. >> has your long media group? >> rising rates are bad for equities all else being equal. the problem is nothing else is necessarily equal, so 2015 is going to be about the push-pull between economic growth and rising rates. >> within that, do they continue to generate cash throughout any instabilities we may see in rob's world? >> media companies, distribution companies, and cable networks have the benefit of having subscription cash flows, which allow them to take on a lot of leverage at very low cost, which even if you start a rate cycle, rate increase cycle will still be historical. >> i wrote a paper on the

annuity double plug-in of subscription revenue. it is not a single plug-in, it is a double plug-in calculation. >> i am going to read that and highlighted. >> this is algebra november. continue. >> chris marangi says equities next year are your least bad option. >> i think that has been true for a couple of years. >> rob, do you agree? >> they have been a pretty good least bad option from our position. we think there is opportunity in fixed income. equity markets will probably have more volatility going forward based on what i said earlier. we do think there is opportunity in fixed income. getting back to what i said about the long end of the market, if the long end of the market will stay contained, there are opportunities. maybe investors should not be of duration. >> on a similar note, you have got to look company by company as there are a lot of different prospects.

industry changes, regulatory changes, and you have got to pick stocks. >> all right, we are going to take a break. coming up, we have been talking about net neutrality, but one important aspect of that is speed. we will take a look at the fastest internet connections in the world. and surprisesul, in the u.s. including chattanooga, tennessee. this is "bloomberg surveillance." on bloomberg television, streaming on your tablet, your smartphone, and bloomberg.com. ♪

>> good morning. "bloomberg surveillance." you.lcome all of tom keene with julie hyman in for scarlet fu, and brendan greeley has a single best chart. >> there are only a few things in the world where you can get gigabit internet, between 50 and 100 times faster than what you have right now. these cities the subject of our single best chart today. i want to throw this to chris marangi because looking at these cities i was very surprised. got are a couple of outliers, seoul, paris, tokyo, chattanooga, tennessee, kansas city, missouri, lafayette, louisiana. chattanooga and lafayette, there is municipal broadband, faster

and cheaper than the commercial option. >> is this the google thing? >> no. both kansas city and missouri have google fiber. --as really struck by farther along in the list is bristol, virginia. a very small town in southern virginia. also up there in the top 12 cities globally. is municipal broadband part of the answer? >> i don't think so. you can pick out individual cases, but industrywide, nationwide, increasing the cable industry-- the cable has spent over $1.1 trillion building and maintaining and upgrading their networks. that will continue. we have had new entrance like google fiber push as a. >> why isn't it better? not on that, but we are behind most countries still in terms of speed. >> we happen to have a very

large country in comparison to south korea or singapore. >> if we are going to talk to fog are free, we are also behind other large companies -- other large countries, australia. you can talk but in for structural up, which we are ahead on, but really adoption comes down to price and offering, and in the last 12 years, we have slid from about fifth and high-speed internet take up to 13. whatever it is about the market, and you can point to any number of statistics, it is all adding up to fewer people in america are willing to pay for high-speed internet than in a lot of other countries, and we are slipping down in those rankings. >> there are a lot of new entrance, commercial wi-fi, the cable industry is rolling out a nationwide wi-fi mesh network. >> let me cut to the chase. what is google going to do? google wanted in kansas city, and they delivered wicked fast -- what is next, austin?

30they put in their rsp to cities will stop it will take some or all of them. the competing cable or telco will get dragged along and they will have to upgrade their speeds. ex what a shock -- competition. --why ask what a shock >> what a shock. >> we have a real problem in the u.s. in that we do not have competition. >> well, that is changing obvious he was google and others. >> does it say google directly? >> yeah, it is like a regular cable company. >> do they work within the financial engineering that you are looking? >> it is likely to be a positive project for google. >> it will be. then what are we waiting for? >> they have a lot of other options.

>> than becoming a utility? >> it is still a pretty good business, search. >> then do both. i do not see new york on your bar charts. america doties in not have it. you have to have a local provider in a leroux area that is going to provide it. >> come on, the google. >> i am obsessed with municipal wi-fi. >> what is the other question -- what are you going to do with a gig of speed? >> i would like to find out. we have got three photos, small twin-engine cargo plane crash into a house on south knox avenue in chicago around 2:40 yesterday morning. that is what you are looking at, theirplane sticking out of house was up the pilot was killed but the couple in the house survived. the plane came eight inches from hitting them in their bedroom. >> we take this for granted, but

the fact is planes are landing at airports and there are a lot of people around. >> that is a thing that can happen. next photo, what are we looking at? mexican demonstrators are taking to the streets in guadalajara to protest the disappearance of 43 students. we've seen a couple of photos here. students are believed to of been murdered in a drug cartel involving the mayor of ig uala. >> and i would say game change yesterday, you heard from ambassador haass, council on foreign relations, he says there is a change in mexico. there is a change come it will be difficult to enact because the cartels have so much power. >> we are going to the u.s. now. number one photo, 58 new members, this is the freshman photo. they will figure out where the restrooms are.

>> aren't they three buildings away in a basement with no windows? >> is a really competitive who gets the best phone? >> who gets on ways and means? the answer is none of these people. 11 women, five african americans, three hispanics, two asian-americans. >> they all need staff. >> you know what else they need? a class on how a bill becomes a law. that needs to be included in orientation. if you get elected to congress and you do not know how a bill becomes a law -- >> can you blame america for the last three years for not knowing how a bill becomes a law? >> but if you're running for congress, isn't there a higher bar? >> one would think you would sit down sometime with the constitution. twitter question of the day, looking at that photograph -- what is your advice for the freshman class of congress? tweet us @bsurveillance. ♪

>> good morning, everyone. stay with us. in the next hour on the equity markets, she has been right, right, right, liz ann sonders of charles schwab. 17688 on the dow.

where were you in 2009? she will join us. let's get to top headlines. here is julie hyman. >> another pothole in the road for uber. the ceo -- officials in toronto are getting in order to shed on the mobile cart ordering service. uber has been operating since 2012 without a license. opposition researchers should be hired to dig up dirt on journalists who scrutinize the cup in he. and taylor swift be damned. spotify is not letting it prevented from increasing its reach. it plans to increase its workforce by 500 people, giving a total of 2000 employees. spotify's chairman says it has more than 50 million users and paid subscriptions could reach 12.5 million, up from 10 million in may. reviewingll start

viewers of netflix. the provider is inside 40 million u.s. home. nielsen says it will start collecting the viewership members next month. of course companies like nestlé's have their own tracking -- >> we deal with this with bloomberg radio. christopher marangi with us. how big of a deal is this? the accountability of the audience. i think it is a fiction. >> i think it is a very big deal, actually. television viewership has declined in high single digits. where have all the eyeballs gone? netflix, amazon, more will soon go to other services. it will be nice to know for a fact where they have gone. what do youing, call it, two screens, multiscreen. that is here to stay.

when does your industry adjust? >> it is going to be a transition over many years. obviouslye services have no advertising, so there is not inventory to sell, but there thatther viewerships they can sell advertising whether it is regular vod, dvr, viewing on your tablet -- that has to be measured. >> nielsen has to adapt as well. until relatively recently, they still had people filling out diaries and their own homes. are they moving beyond that? >> they are, and other companies thatbetter data, like one gets data sets from the set top boxes and so they know exactly what you're watching, when, and -- how long stop >> but my's and for how long. >> but my point is, rob waldner, are you in front of your tv? >> the only thing my family watches on tv is sports. everything else is never >>,

amazon. we are paid subscribers to both of those. -- everything else is netflix, amazon. we are paid supporters to both of those. companies like madison square garden, which owns the underlying sports team. >> the rangers are two players away. ask are we going to do hockey now? >> i need to talk about telecom's regulatory policy. you think about hockey. half of winning in the media industry is running washington well. are we seeing a shift away from -- at&t has such power there and streamingtflix, the business is, because that is the push and pull right now. >> that shift seems to have happened. i was surprised when the strong suggestion to what is supposed to be an independent expert agency as to how to handle telecom policy. >> what do you watch on tv? >> iwatch bloomberg. [laughter]

>> chris marangi with the extra point. he will be our guest host for the entire month of december. what else do we have in this hour? we have lots to talk about. liz ann sonders in the next hour. rob waltedner on bonds. where will the 10-year yield be? don't feel the pressure. everybody got it wrong. >> we spent a lot of time thinking about this obviously. we have the high-end at 3%, but it will stay below 3%. >> that is that stability you are talking about. >> of the long end, that is correct. >> you mentioned munis earlier. they put you to sleep, but are they your best buy right now? >> we do think munis have some attraction right now. one, they did not sell of last year, and two, the overall

growth is boosting fundamentals will stop >> rob waldner, chris marangi, thank you. forex reports, yen over $117. liz ann sonders next. ♪

>> senator landrieu of louisiana is crushed by her own party and democrats win the battle and republicans look for a keystone pipeline war in 2015. call it -- well, one great use of cash as stocks surge ever higher. and there is not even a collegial debate in washington on immigration. good morning, everyone. this is "bloomberg surveillance." life from headquarters in new york. keene. >> the keystone pipeline went down by just one vote last said. it was 59-41 in favor. backers did it 60 votes to advance. it was a blow to democrat mary landrieu. from 14 democrats voted in favor. here is landrieu.

did not ask harry permission to do this and i did not inform mitch mcconnell. i took to the floor of the united states senate and use the power that comes from being a senator representing one of the great states in this nation to force a debate on an issue that i felt strongly about and they feel strongly about for many years. >> the issue is not dead, though. senate republican leader mitch mcconnell says there will be a vote on it next year when there are more republicans in the chamber. limiting agency access to phone records. and president obama has come out with his -- will come out with his executive order on immigration later this week. a plan to prevent up to 5 million people from being deported. surprise, from russia's president vladimir putin.

for my he is calling for a crackdown on corruption. in thatg to be -- month, he is common for a crackdown on corruption. putin's advisers have been called for correct and for years. nato is accusing russia of sending troops and tanks into ukraine. correct the u.s. doesn't want to humiliate us. they don't -- they want to subdue us. they want to use us to solve their problems, to bring us under their influence. no one has ever managed to do that to russia and no one ever will. correct it turns out, prudent also has his own -- >> it turns out, putin also has his own understanding of big stick diplomacy. lot moreyou can do a with weapons and politeness than just politeness." recall because on potentially

dangerous airbags. so far, almost 8 million cars have been recalled them about that recall only covers cars in high humidity states. humidity apparently triggers the fact -- the malfunction. >> talking about humanity, the weather is beautiful -- brutal in upstate new york. there may be six feet of snow on the ground east of buffalo from eastern waynesboro way over to oswego. can you tell i lived a lack of the street signs of 15 feet. the great lake effect. through michigan, indiana, ohio, , snowing inania november. i'm kidding the? this is why everybody moves south. safed in the balmy climate of new york city where it is 25 degrees out today. >> there you go.

luke do a quick data check. kudo -- he will do a quick data check. at $74.84. 13.86 on the mix. a nice member on the dow. on the way to 25,000. the dow. number on on the way to 25,000. the s&p 500 up 11% year to date, 14% in the past 12 months. exxon mobil is down 6% of its peak. is with us from charles schwab. she is on a victory lap and has decided to join us on the backside of a lack. except what happens next year? 2011ptimism of 2009, 2010, , and then the road of that optimism. and then what?

that we will head -- >> we will head into an initial rate hike. outave no reason to think of the consensus right now. if you look at the conflict -- the history of initial rate hikes and the years spanning it, the market does quite well in that time. but with a pick up in volatility and with more not really corrective phases, but pullback faces. flex you've got a fast -- fabulous chart on this at your website -- >> you've got a fabulous chart on this at your website. what actually happens to the fed market -- to the market when the fed moves. what are you doing in the markets? it's wanting to strategize about it, another thing to do. what do you do?

>> remodel 40 asset classes and we invest in -- >> i have no idea what she just said. >> oh, i'm so relieved. >> near diversified across the globe. oh, come on. we are diversified across the globe. >> i get it. liz ann sonders is going to brazil. >> not yet. but we are in india. we have a position in india, it's one of our favorite emerging markets. ofwhy india i'm not a zodiac -- and not brazil? has a spectrum of commodities. that is key. politics have been coming into play and will continue to come into play more than probably anything i've seen in my career. i think politics particularly

comes into play when you have a reform agenda. in the case of india, it's both on the monetary side and on the fiscal side, which i think is a positive. >> health care has been the leader. what is the lead in next year's volatile environment? >> i think investment will be more investment driven, capex driven. we have now been down to the point where capital spending used to bottom. we're really just starting what is in an accelerated proportion of the cycle. and to get that to 80%, which we are getting close to that point, that is when it really starts to kick in. i think you want to have a cyclical bias in portfolios. don't stay in defensive areas. tech and industrials would be the two favorite plays on that capex cycle.

>> through that prism of your republican support, how do you look at a new washington you go does that play into your market calculations? >> we just had president bush at schwab's impact conference last week. crack sees quite a guy for >> he is hysterical. is quite a guy. >> he is hysterical. i have people who have come and said i sit at the far left of the spectrum, but i have newfound respect for him. and iowa's just tell people, you may not agree with the policies but he's a funny guy and a lot smarter than people give him credit for. [no audio] i hope he is right about that. it has bipartisan support, not

only within congress, but i hope it gets done. will take a look at a consumer story. there are rumors that you've heard about a shortage of thanksgiving turkeys. they are technically true, but greatly exaggerated. there are still plenty of birds to go around despite the fact that the national supply for this year's holiday season is down. >> this is frightening. >> agricultural department put it at its lowest point since 1980. >> liz ann sonders, the 26th pound -- 26 pound on seasonal turkey, it's like the gdp of an african nation. correct baked or fried? >> not fried. up to thel come catskills. there are plenty of wild turkeys to go around. you can just run -- >> you can

just run over it with your car. no big deal. >> brining? >> yes. next do you put anything in your brian? >> -- >> do you put anything in your brian? >> herbs. >> f feel at the third hour of the today show? >> you be quiet. >> i also like to eat things kosher, which also means no better. >> olive oil? >> ateneo, yes. -- olive oil, yes. >> we can make it happen. it will be delicious anyway. >> good morning, it's bloomberg surveillance.

>> good morning, everyone. i'm tom keene and julie hyman with me as well as brendan greeley. on the burden -- halliburton hunkered down with baker hughes, both expecting a change in the market. happy consumers will make a difference the seat -- this -- the seasonuto

ofob >> there is a bit change met. free cash flow is going up and energy is helping out. >> there is always this question of stimulus. what do people spend and what they save jacob -- and what they say. do people spend what you earn? -- what they earn? checks i think you will see them spend a portion of it and then try to save the rest. that is a metaphor. you are not actual talking about lust office of >> i don't know that one either. buyingraw hat -- you are

your straw hat. >> i have a house in florida, so i have anticipate that. >> mining, will they beat up hydrocarbons enough? will become a valuable place, but i'm not quite sure yet. >> got a chart hear from our last section on india. this has been a boon of a weaker currency. >> i think it is modi. >> that is my typo. but -- >> you think great men make a difference. >> and great women. >> great politicians. >> one of the key directives in india is foreign investment, at least relative to the emerging economy is extremely low. that is also low hanging fruit.

you get the slightest term in fdi in india and that can be incredibly high -- incredibly powerful. >> i'm reading in off the bloomberg terminal. that was my typo for 2016. up, is there still a future for keystone? ♪

>> good morning, everyone. i'm tom keene in new york city. snow in new york, but big snow up in upstate new york as we get close to thanksgiving. >> officials in toronto want to get a court order to shut down the mobile car booking service. the city says it has been operating there for two years

without a proper license. to criticism for saying he wanted to hire opposition researchers scrutinized -- to dig up dirt on journalist to scrutinize the company. scrutinized the company. is valued at 65 -- and u.s. regular does want to expand that recall of cars with potentially dangerous air bags. they say it should cover all bags made by japan's toccata corporation. humidity can trigger the malfunction. regulators want to expand than -- the recalled nationwide by with highust states humidity rates. >> john boehner said if the president move forward on immigration it would "poison the well."

and so it shall be. have anbama will executive order today that will for 5legal residence million. you think he's given them so much time that water quality should not even be in the conversation anymore. the message by the white house is, we telegraphed this for six to eight months. movement inpartisan the senate. we are not willing to wait anymore. there is a calculation on the white house out of things that when republicans take control of the senate next year and they are so interested in showing the american people they can govern, they will be willing to move forward on issues they can agree on complement -- and compartmentalize. i don't know if that is the story. and theooking right now

president is also including tech visas in this expansion. he's going for the whole issue. >> the white house understands this is not something they can do just one sliver of or piecemeal. yes, you are going to include a reprieve for deep rotation for legal permanent residents. but you will also try to expand the section for deportation of tech residents. there is a talent shortfall and it doesn't make a lot of sense to bring foreign students over here, let them work in the stem categories and get degrees and that, and then send them home. yes, they will try to expand programs there as well. theumeral really good of spin in washington and outside washington. beth reinhard in the "wall street journal" today says what jeb do? tie the aspirations of republicans to jeb bush, to -- thepanic bush hispanic vote. do they even have a chance to

get the hispanic vote? they do have a chance, the question. but the president asked unilaterally, this will give something that the pro-immigration candidates that are republican candidate can rail against. jeb bush, one of the biggest supporters of comprehensive reform in the republican party, perhaps one of his biggest issues in the early primary states if he gets into the race, now he has an issue on immigration that he can attack democrats on. it's an interesting thing. what jeb bush will be dealing with in the early primary states, in the south carolina's, it's the fact that he has never raised any questions whatsoever. he is for comprehensive immigration reform on the opposite side of ted cruz. having something to attack the president on might help him.

>> could we see an immigration deal between the president and congress echo -- and congress? >> that is tough. people are trying to figure out what is actually a possibility in terms of making deals. this is not a white house that has a moment to come to the table and deal on separate issues. they work on a grand bargain issue on deficits, debt, taxes, things of that nature. but the idea of trading one thing that environmentalists care about for something that immigration advocates care about has never been within the conscience of this white house. table fors on the dealmaking extra because there is some type of inevitability about it. on immigration, it's just so difficult with the house republican conference to think that this would ever come to the table for the white house. and what he's about to do would pretty much put this off the table for the entire next congress. >> we will move from phil mattingly, who is sitting at the treasury building up the mall to

capitol hill. members of congress attended atd orientation yesterday to figure out where everything is and learn who the group could start. >> did a really rare red and blue ties? rare -- really where red and blue ties echoplex we all know what the power ties is. the power ties no tie. you are looking at fresh faced congressman and women. what do we need to tell them? screeningy all schoolhouse rock echo -- schoolhouse rock? >> get in the sandbox and just get along. and maybe bring more alcohol back to desk drawers. -- right and up and go to dinner with the bloomberg consensus is "get drunk together."

>> i have trouble being optimistic. >> does congress need to get drunk or? drunker? ♪

>> this is "bloomberg surveillance." i'm brendan greeley. let's go to the top headline this morning. the keystone pipeline came up with one short -- one vote short. akers needed 60 votes to advance. -- the backers needed 60 votes to advance. improvedrieu wanted to her chances in the next election runoff, but only 14 democrats voted in favor. the dammed, says spotify. it is going to increase its workforce by about 500 people, giving it a total of 2000 employees. has 50irman says it now

million users and paid subscriptions have reached 12.5 million. that is up from 10 million in may. nelson says it will start measuring viewership of network and other providers of streaming video. they are now inside 40 million u.s. homes. there is viewership data now for popular shows like "oranges in a black" and "house of cards are covered it will start next month. cards."e of it will start next month. >> liz ann sonders is our guest. europe, relative to japan, the u.s. is doing better economics. you just spoke with chairman at length for charles schwab. what is the burning key distinction? > -- the bernanke distinction? >> he takes great pains to go

andugh the information dealing with policymakers and how he has to go through the process, whether it was convincing the public or convincing congress that whether it was as your top, that what they were doing was the right thing. tarp,ther it was aig or that what they were doing was the right thing. >> looking forward, you talk about slack in the economy. that seemed to be the word six months ago. a lot aboutt talk forward policy. >> as a courtesy. not to askingd us questions about janet yellen. >> but you still did. >> he had optimistic things to say about the trajectory of the economy and the labor force, but also talked about it in the context of inflation risks that he thinks are still there. that you think the people

i worried about inflation should address where they got it wrong and be patient and someday it will be there? >> it may come, but it is fairly easy to figure out when it will happen and that is when velocity picks up. -- thed that the money money that the fed has added to the system is sitting in the reserves and not coming out in lending to the economy. you don't get inflation in the circumstances. the velocity starts to pick up and wage pressures start to pick up, and that is when you get that. >> i'm looking at someone who's looking for a stable outcome. looking for real instabilities. where do you fit in that continuum? >> right now, we are in a pretty close to perfect environment, certainly in the equity market with a trend like growth inflation. the overall economy has been growing a little bit below trend. but i think we are about to

narrow that gap with the overall economy growing at around trend. if we can stay in that lowish trend like growth with inflation, that is the environment you want to hope for. >> quickly, how does liz ann froers identify the word th in the equity markets you go >> i don't think we are there yet. inflows? --see where do you see inflows? >> flows are fine. the questions i get some investors have a cautious tone to them. they are not opportunistic. where is the next two going to drop? what is the next crisis? they are very worried. a data check this morning. take a look at where futures are. not a lot of change. that is, as investors wait for the next fed minutes. have the 10 year yield at 2.3

4%. and the eurodollar here this is a little changed. a wee bit higher in terms of crude prices. 74.77 per barrel. >> this is "bloomberg surveillance. oh i'm brendan greeley. tom keene has abandoned us today. but we are saved a julie hyman. like i do my best. the keystone pipeline that was rejected in the senate 59-40 1, 1 vote shy of a filibuster proof 60 needed to pass. from washington, peter cook joins us now. the bill is not permanently dead. it's only temporarily dead, it seems. >> keystone will be back soon enough, julie, you can be sure of that. this vote in the senate yesterday, certainly blow -- a blow to mary landrieu.

she got the blessing of her senate majority leader harry reid, even though he doesn't support this legislation. but she fell short. she thought she had 60, but she got to 59, just one shy. republicans and democrats are already insisting this will come back early next year. here is mitch mcconnell right after the vote. like this will be an early item on the agenda of the next congress. -- >> this will be an early item on the agenda of the next congress. i'm hopefully will be able to succeed and get it to the president. >> certainly, with the republican majority control of the senate can buy the chances for this legislation are much better. the question at this point, will they have 67 votes next year to overcome any potential residential veto? >> light is keystone still so important to get past? -- why is keystone still so important to get past? that has found other ways to get where it needs to go. why do we still need keystone in the view of the folks who voted for this?

>> they pretty much treat it like every other mile of the 2.6 miles of pipeline in this country already. they think this should have been -- 2.6 million miles of pipeline in this country already. they did -- think that this should have been approved a way back. with this as become a largely symbolic issue book supporters as well as opponents. best issue to raise the larger issue of climate change. >> it's not really about getting oil in this country, but getting oil through this country and into market. we are helping canada out. >> that is the reality and that came out on the floor yesterday, that a lot of this well will be exported to the united states -- from the united states to refineries -- to the united states to refineries along the gulf coast. , supporters oil

insist, lorraine in the united states, but a good portion of it will head over to seize. -- will remain in the united states, but a good portion of it will head over seas. is with ussonders from charles schwab. and mr. ratner from detroit. ?s it a plutocracy now the 1% among the 7%, as they make all of the gains in the equity market, on the divided? >> there is a majority of people in this country that do own , particularly with things like a 401(k). it's not terribly different than it has been in the past. in terms of the ownership society, it has not really gone to some new paradigm post in theal crisis that

past. and you do have to look at basic and thenof inequality look at more detailed measures of inequality that incorporate things like tax rates as well as like transportation. we are not all perfectly equal, but the priority are to be established and the conditions to let everyone get a bigger share. click the distinction of this bull market is nobody loves it. nobody is in it like you or i have ever seen. next year, does that change? will i hear googler drivers talking about -- uber drivers talking about getting up at 8:00 a.m. it will have to be in the next phase of the bull market. and i think we are in a secular bull market and it will go on for a while. you get cyclical bull market in a secular bowl. the next bowl, we will get that, if that. market, we will

get that, if that. the new congress gathers, trying to figure out where the hallways are, what is your advice for the freshman class? stay with us. ♪

>> good morning, everyone. julie hyman and brendan greeley with me this morning. >> back to inequality, and one set in particular as fuel prices fall. billionaires are looking for new toys, specifically private jets. betty liu joins us now with more. it's cheaper to fly something that is really expensive now. >> exactly, you think they would want to hang onto these toys. you guys had a great discussion a few days ago about whether -- oil- lower i'll prices could be bad for the economy. we know it has been good for one particular man. paul allen, the microsoft cofounder, who has been able to after months of searching big of a gulfstream 650. that is the uber ultraluxury jet. >> poor paul allen, he couldn't find a jet. >> i know. he didn't want to settle for a

five. but to conclude on that point, he had been looking for several months. but given the slump in oil prices, down about 5%, these other readers have been selling their jets and he was able to pick one up just in the last week. now he's got his christmas wish. the exit was a great article yesterday about how even within the global private jet market, >> there was a-- great article yesterday about how even within the global private jet market, there is a 1% that can expend -- can afford and thennse on jets another percentage that could only afford this much. >> i know. there's always the top tier of people who will not be affected by any swings in the global economy. they are fine with their jets. they are not selling. they are continuing to buy things. that it is that to your below

that is feeling the crunch. are down,fuel prices wouldn't they want to hold onto the jets? why is that making them want to sell? >> exactly, that is the question we had, too. a lot of these individuals are oil barons. they depend on the higher price of oil. they have seen a 30% haircut in earnings, which is why they look around and they look at assets and they say, you know, i will i bought iturth jet last year or so. i will offload that, and by the way, i will get u.s. dollars for it. this is another sort of currency trade for them. in russia, some of the oil magnets there are actually selling their jets in order to get dollars, because it's no longer fruitful to hold the ruble. >> the g six or the g5? >> women controls. -- >> remote-controlled. six.e song is about the g

>> i fly united, delta. >> i'm on jetblue. the loop, what i'm looking forward to, pizza. the incoming ceo of pizza hut. they got a new menu, i believe. >> curry flavored crust. does not likes it. >> we will see about that. you are watching "bloomberg surveillance," and we will be right back. ♪

>> good morning, everyone. mexico is front and center. tomorrow, we are thrilled to bring you gerard a rodriguez of blackrock. rodriguez of blackrock. this is in the 6:00 hour tomorrow on "bloomberg surveillance pi." greeley anddan julie hyman is in for scarlet fu today as well. over at the lindsey graham, peter babar writing with -- with thekfar writing

glass is half-full. that is a lot of inside baseball cvarenthusiasm that mr.book has. the housing economy, we are not going back to 2006. where are we going back -- where are they going to? wrecks if you look at any asset class, you don't get a straight shot up -- >> if you don't look -- if you look at any asset class, you don't get a straight shot up. the good news is labor force participation is finally stabilizing. at the same time, the twentysomethings, that category generally in the low 20's to low 30's is starting to search

recently with employment. that is affecting homebuying. >> when you talk to the people of charles schwab worldwide, do you look at the economy is one blended thing? or have we become john edwards to americans? it's one't think blended thing. in the aftermath of the crisis, there was a monolithic character to how segments of the economy worked, housing him a but now i think the versions are occurring not only among asset classes and among global economies, but also within the economy. you have to separate out what the consumer is doing even with investors. ex and that affects wage growth. yes, you've been talking about the possibility of a take. what does what you been doing ndicate wage growth? >> we know that companies are

pushing their workers from a time perspective. productivity has come down. you have an invested in the labor force. and the unemployment rate, if you look at the average of the past three cycles of when you saw that kick in, where you got above that 2.5%, we are within 2/10 of adding to that place. >> -- of getting to that place. >> arena situation where the market is not going to react the way we thought -- we in a situation where the market is not going to react the way we thought? we will see wages stay flat? >> we may not get back to the 4% that is considered fairly healthy. theet's get back to markets. here is a chart that is especially useful for ms. saunders. sonders. for those of you in radio, i will put this chart out on bloomberg radio plus in a bit.

have we reached an equity escaped velocity out of that tenure flatness? began inhink that what march of 2009 was the beginning of a secular bull market. >> like 1982 or 1985? >> i'm not sure if it looks at the 1982 bull market, because what is that returns was what 99.ened and 1998 and and you don't want to hope for a bubble. the that doesn't mean that we don't go through a corrective phase. of 87 occurred -- >> it occurred when every taxi driver was talking about buying stock. >> that was not the case of -- in the 1980's until the mid-1990's. >> and we are nowhere near that. >> were kind of duration are we looking at? on for sixeen going years and it could go several more.

even though we don't want a bubble, are we innovative enough at the u.s. at this point? you talked about capex earlier. i was singing of innovation? >> particularly using the andnym brain, biotechnology artificial intelligence. not only has the wage gap narrowed between us and places like china, but the total gap. the total landed cost gap. click that is fascinating to hear. -- >> that assassinating to hear. we are taking the position that kind of germany is taking with the eurozone. are don't know that we doing that, but it's also because wage pressure has been up in places particularly like china.

>> and this goes back to stephen arbitrage of 10 years ago. i just put that chart out on bloomberg radio plus. back to 1910. lyndon, that makes her day, by? >> i'm dancing -- >> i am dancing. the most awkward dance ever. time for the agenda. and we'll look at the stories shaping the day on my agenda. we got cpi coming out today. year-over-year, our survey says it will be up 1.6%. it will be out at 8:30 a.m. liz ann sonders, what number are you looking for? >> i don't do any forecasting. >> good for you. >> what is your inflation outlook in general? >> lowish.

pc stayboth cpi and fairly comfortably let -- cpi andpce stay comfortably below the fed. the expert is this come from? >> it has been around for years. that their empirical work shows you what to do? >> there is actually some empiric work. it's what the fed tells us they are using as their threshold. click the kansas city fed did great work on this years ago. nancy schapiro. t minusenda today in four minutes and 20 seconds, target. it's been a mostly year since we saw the big hack at target, which kicked it while it was already down. it had been struggling to some extent. che and its target ca investor confidence was shaken

to some extent. , howz ann sonders desperate is retailers holiday season? >> it depends on whether you are traditional over stored retail or you are online and have good stuff. just guess is that online as better. winter is coming. thanks to john tucker and his radio report yesterday. see thetraordinary to polar come across from the arctic. >> tom keene's ancestral land. >> there it is. bringing out twitter answers. we asked, what is your advice -- >> we will bring in our twitter answers. we ask him a wenzhou advice for the freshman class of congress?

blur the lines. a not sure i want to think of the song and congress. -- i'm not sure i want to think the song and congress. the next one -- >> this is some joe biden. >> i'm told from the control room, last answer, very straightforward, don't be stupid. >> that's a generally good advice. >> however, you tell that to all freshmen and then all freshmen ignore it. >> probably. >> including freshman in college. >> you need to go through it. but that was my last advice to my child when he went off to be stupid.n't >> did he follow your advice? >> he is a few months in. experience,ollow my

they will get a d in micro. that is not good for the economy. , thank you soders much, from charles schwab. ♪

>> good morning, it is wednesday, november 19, and we are live from bloomberg world headquarters and we are "in the loop."

as the vote to approve the keystone pipeline comes up short, president obama will unveil up plan to keep thousands from deportation. moves ontokberry ceo a second act as newly appointed ceo of the wireless charging company powermet and he says what is the hardest part of running blackberry and how the current ceo is doing and turning around the handset maker. billionaires are feeling the heat from lower oil prices. a global drop in crude oil means some of the wealthiest are selling off their private jets and we will tell you why they are doing that. first, here's a look at the top stories -- obama may come out with an executive order and immigration as soon as tomorrow. the president plans to issue a reprieve for the undocumented immigrants his children were born in the u.s.. altogether, up to 5 million