the last days of bill gross at pimco. and the decline of magazines, it continues to survive. you need to go upscale, go narrow. this is bloomberg surveillance. we are live from our headquarters in new york. i am tom keene. joining me, scarlet fu and brendan greeley. arco a standoff between safety regulators in the u.s. and japanese makers of airbags. takata is sticking to recalls only in states with high humidity, which has been blamed on the airbags' non-function. theirtors are considering next move. a congressional subcommittee will question a takata executive later this morning. another sign russia may be headed into recession. index fell industry

to its lowest reading in 5.5 years. bypanies are being heard economic sanctions, a falling ruble, and weak demand rid -- and weak demand. hospital areal not talking about the patient system -- symptoms. 6.2ress is approving a million dollar request for treatment. the president spoke while visiting the vaccine research center. the urgency remains because if we are going to actually solve this problem for ourselves, we have to solve it in west africa as well. almost 6000 people died from the recent outbreak of ebola in west africa. obama's choice to

be defense secretary is an expert on the pentagon's budget and weapon systems. the president will nominate ashton carter, who spent those careers as -- he has been the military's top weapons buyer. john mccain says he does not expect carter will have problems being approved by the senate. >> another record for u.s. stocks. the dow had a tough morning, closing 17,880. give the credit to oil prices and stabilizing markets around the world. chevron werend both up as oil rebounded. hydrocarbon companies added about 2%. those are our top headlines. let's continue the discussion with the data check. the headline news, the euro 124 -- gives way through 1.2329.1.24,

there is the oil rebound. moving on to the next screen, please, if you will. cx back under 13, showing the buoyant nature of these markets. dollar-ruble at 53 point 5286. is -- here is the nader in early 2009. double when i went into leverage cash, 200% cash. we are all going to die -- oh, no -- i am just randomly kicking these, and here is the latest we are all going to die. a>> the moments i pull out my statement for my 401(k) and ignore it. here, here, and here. jason is joining us in the

7:00 half-hour, but right now we are not in recession. there is and will u.s. economic growth. inflation and disinflation and wildly uneven sharing of that growth make for a certain bewilderment. guestsour most popular -- so many of our audience agree -- where is my fair share of this economic growth yet that we are not in recession. i'm not sure you called for recession, but you have been adamant how so many are not sharing in this economic growth. next year do we all begin to share in the boom? anything in that, but just that you are going to change and there will be more widespread prosperity across the nation. growth one day of wage on friday.

everybody is hoping for wage growth. it is not their bank. >> it is not, and if you look at the recovery since 2009, you see the real wages are lower today than they were before. how do you find an economic recovery? is in terms of part-time employment, is it in terms of wages, or is it in terms of the billionaire index for looking better? some indexes are better, but the the populationf is not benefiting. >> and the fed has done the lord's work in explaining that unemployment is more complex than a simple topline number. what is the number that is most important in letting us know when things have gotten better? employment, underemployment? >> i look at three things, brendan. one is, part-time employment continues to be important. 6econd, i look at the u unemployment rate.

third, i look at wage growth. signalingof them are to me that the labor market is still very weak. >> when you see u6 move, you are very happy? .gov when i see it move down substantially. >> u6 -- weren't they and band out of dublin? >> bono wrote a song about it. need ad that people northstar to focus on about how much risk they are taking. does it extend to other asset classes commodities, like oil? >> that is an excellent question, scarlet. the nonstarter i used to look for is the bond yield, so if you have it going down, the risk is decreasing and the people are going for a safe haven. today you have people buying bonds and there is a lot of the -- there is a lot of liquidity

and you need to do something with it. or you say the equity prices are going up, and there is more risk. no longer the case. there is a lot of cash on my hand and what do i do with it? that is the problem, because there is so much distortion that when the hit comes, you will be totally shocked. >> the great distortion of 2014, a theme for "surveillance" this morning. you have enjoyed the responsibilities of the trust company of the west, working out in california. mary childs has an important article this morning. bill gross' final days at pimco. i want you to explain how pimco fits in to western u.s. investment culture. how do they fit in with trust companies in the west? capital group, the american funds group. how do they fit in with the others out there? pimco is a great organization in terms of the growth that they

have had an bill gross has been phenomenal. i would just focus on saying that they have done a great job of improving in the fixed income market. as you said, i have not led the raid -- i have not read the latest article yet. but what they achieve in the article -- >> at the end of the day, has mr. gross moved out because of internal division and the debate of going into equities? >> that was the breaking news part of it that i had not known before. sri,t the key thing to me, is maybe bill got the fed call wrong? we got low rates, they looked for backup rates, and it did not happen. 2008 is that since you could not, however great a portfolio manager you were, you

were not able to make your moves because the fed could completely change -- >> the fed could just knock you over. kind, the fed -- at the same time, i think that is the new phenom on and we have had. we talked about discussions. -- distortions. that is part of the major distortion. >> it is a costly lesson that you should not fight the fed. the other thing is that pimco and the total return from -- the total return bond fund was so large. >> it is also difficult to make asset allocation changes. >> is it fair to say that every decade needs its own investor? we have hedge funds getting out because they do not see a way to make money. one way to look at bill gross is bonds we really well when did really well. >> i think bill would agree with that. >> not only with the market --

not only were the markets favorable, but you were able to make the right choices on which types of fixed income securities we were going to do. part of the distortion today is even if you had the skill, it is difficult to see -- it is difficult to succeed unless you had a wire to the federal reserve. what is your call on the bond market for next year? do you finally look for the fed to act to enforce to see a higher rate regime? the --ok for >> thank you, vladimir putin. >> thank you, vladimir putin, and for a lot of political circumstances. to 1.86 in october, and i think we will go below 2%. >> there is the headline right --, come all sweet kumar cobol street kumar --

>> within the united states, i think it is going to be in the high yield bond fund. something like 16% of high-yield bonds are issued by energy-related companies. many of them are in fracking and fossil fuel. they are going to be hard pushed making interest and dividend payment. outside the united states, you have those killed major hits. you talk -- though scope major hits. you talked earlier about russia. >> we have to bang much to talk about. -- we have too much to talk about. >> it is a fantastic week. "surveillance," microsoft's new ceo is facing shareholders for the first time with their shareholder meeting taking place. what will they say about their shareholders so far? their shares are worth 3% more since he took the helm.

♪

>> good morning, everyone. bloomberg "surveillance." bringing your attention to an accident in ukraine. the government in ts is -- the government in kiev is playing it down. a nuclear plant working below capacity? >> this is a hangover from the soviet era during you came -- from the soviet era. does not use gas well or any kind of power well, and this is the largest nuclear plant in europe. energy minister says no threat to reactor."

there it is. >> they will hold a news conference in washington later today we will bring you that news conference when it takes place. let's move on because microsoft is holding its annual shareholder meeting. does the company need to buy back more shares, increased dividends? all of this will be up for discussion at the annual meeting later on. bloomberg intelligence analyst joins us now with some perspective here. the issue for microsoft is that the shares have gone up 32% since satya nadella took over in february. yet when you look at what is operationally different, there -- there is not a lot going on. >> that is the big thing because that has resonated very well with investors. the communication with microsoft to how theyed as will be the i.t. company of the future under the old ceo. as satya nadella came in and he made it clear to investors, it has resonated well.

o, aboutt wonder, to his comments about how women should not ask for raises. a needs to make microsoft destination for talent, a source of information. as opposed to making -- >> there will be a lot discussion on those topics, including from investors. that will be on the tap today. >> when i hear a ceo say we are moving into the cloud, i hear the words, "i have no idea what i am doing." what does that mean for their product? some of their platform service offerings, they have done well on that. scarlet is our celebrity lodestone. she cares about the soap opera. i do not.

>> i care about women's pay. >> what do they do with -- are you ready for this? 85 -- is it $85 billion in cash? >> yeah, it is a lot of cash. >> and they are building $20 billion plus a year. we call a --hat >> where is the special dividend? >> to be very honest with you, 10 or 12 years ago they issued a special dividend and stock did not do much. >> who cares? where is the special dividend? they should be spending the money in innovation and m&a. >> i had drink the carl icahn last night. >> where has tom keene been? >> i am with scarlet. if you have $85 billion, maybe who could buy a ceo write a better strategy memo instead of trip all over his own tongue.

keeping it relevant to the younger generation, and also inviting a lot of new questions over whether it's focus is on the enterprise business or on consumers. it is not really clear. >> according to the ceo, it is a mix of both. 's used to run the enterprise division. so the place where he has gone out and talked publicly about new products, most of them have been in the enterprises business. from the server business to databases to cloud, everything generates from stuff he was doing before he became the ceo. >> what is the continuing value of the legacy products? something, i write it in stinky old words. >> you have to remember, most enterprises have 10 to 15 year licenses for office products, so that will not go away soon. the question is, what is their strategy? enterprises have not gone to the

cloud, not more than 2% to 5%. but none more than that. >> 10 year total return even with a good performance recently, a .4% per year. that does not get it done? what are they going to do with all that cash? even 8% was not even possible under steve ballmer. what he has done in one year is not that bad for the shareholders. >> i agree. >> what is the one last thing you will be watching for, then? >> a lot of questions about any possibility of a special dividend or how they will return money. eyearl icahn, keeping his focused on that. -- anuragar anna rana, thank you for joining us. >> a special treat, mary childs

will join us with the morning must-read on bill gross' final days with pimco. good morning. it is "bloomberg surveillance." ♪

>> good morning, everyone. "bloomberg surveillance." we need the morning must read. here is brendan greeley. back:'s feckless rulers the tortoise against the hare ."

that caught my attention because finenk a good op-ed puts a point on what we were thinking for a while. this was the warning in europe for the last six years, that if there are not better social policies, people get radical. >> we are seeing in italy, quiet at the end of 2014. these are new characters. >> we are seeing it in stodgy centrist germany. we are seeing the new party gaining share theire. >> this is not not see is a more fascism. is deep anger against the european project that is not being picked up by the mainstream party. >> scarlet? i-kumar with us as well. >> i actually want to jump in on that. there was a profile on angela merkel in "the new yorker" where

they talked about her talent in politics, less so on economics. -- she is aeme supreme politician, tactician. >> this is an old morning by economists, that it is not about being a socialist, it is about understanding the basic problem that there is not some accommodation for policy that helps actual people, when that happens, actual people get angry. >> absolutely. you can only go on with economic it ims for a time there used to travel in chile in 1980. then you had economic reforms. you had sharp real wage construction -- sharp real wage contraction. but you cannot do that in a real market, which i think is angela merkel's problem. >> do you look at it as chronic chronic recession

in europe, or is it something that we can be more optimistic that they can grow out of? >> you asked me earlier about what was happening in the united states. you have that in a more pronounced fashion in the eurozone or they are trying to tackle what is a structural is aem, and the problem monetary one. i think you will be chronic unless -- >> we will come back on that. sri-kumar with us. what will make mr. putin blank? ♪

>> good morning, everyone. bloomberg surveillance, from new york. tom keene with scarlet fu and brendan greeley. let's get to our top headlines this morning. here is scarlet fu. >> the japanese company that made the potentially deadly airbags is digging in its heels, takata refusing a nationwide recall for the devices. only in states with high humidity, which has been blamed for the malfunction of airbags. the faulty airbags have been blamed on quattro deaths. in hong kong, morgan stanley has snatched a deal from goldman sachs and credit suisse. morgan stanley will handle the theire placement of

number to insurer. the upcoming sony pictures movie "annie" has been removed from filesharing websites after from-and-desist orders studio to -- now you will have to pay for those tickets. i knew it was you. on, a fews on context pages on -- that i'd is how the magazine covers the year ahead. andrew bucket is with us. did you just throw a dart at the map? >> not at all. interesting things will happen. it turns out that norway is putting a huge amount of money behind backing nightclubs around the world. they see this as a way of promoting cultural exports.

you go to a nightclub in berlin or london, it turns out the host is paid for by the government of norway. >> this is the korean model, right? >> exactly. we do look into the magazine as we wonder story, and why, with her ability to sell everything from music to football, they are so used to selling that food culture. why does no one in the united states say, i want to go out for a brazilian meal? what will you do to promote your country around the world? why can't you be the next career, the next country that will it be able to see that as well. >> for the record, the greeley family does go to cheap brazilian in queens. is that a, why country to pay attention to? >> we were fascinated that he really did not think it was a

proper country. he said he admired the current leadership, but actually they pulled together a group of disparate people. we went there to ask the people of kazakhstan, and the country is only 20 odd years old, but the people feel they have pulled together and created a country. it is a bit quirky, but there is a real sense this is a nation that is nervous about what is happening of the border. >> i love your magazine or you have to wear a wool tie and have keep it in place to you interview me out of london. asia,all europe, everywhere but america. why? >> you will find good u.s. stories and all of these per we come to washington, we look to a accountability lab

through the new ngo. $250,000 a year is all he had. he was making huge changes, sponsoring amazing -- an amazing tv program a bit like "x factor." not taking bribes, doing things. >> but you do not know if he has a trust fund based on exxon mobil shares. >> i thought it was a fascinating article because this is a topic we go back to again. >> you actually read this? >> it happened to be the one article that i skimmed. this is an endemic problem that there are no solutions for. knows the light is on him, so he publishes in real time. you can go on his website and he does not just do it at the end of the year and say this is what i spent. spent onee what he travel, and that is real accountability. d.c., there are

interesting things happening for a we also look at the power of america, the soft power. >> i want to bring in our guest .ost, komal sri-kumar you just traveled back from moscow. these are magazines that you get at the airport store and read through for the entire eight hours when you should be sleeping. what kind of stories on india -- couldnocle" right that you did not already know? >> the contrast that you have. you talk so much about economic growth and there is so much optimism on global investors, but still there is a lot of poverty. there is still corruption and inefficiency that has to be tackled. ist is fascinating to watch the simultaneous presence of the phenomena in that country and how you can navigate through

that and get things done. >> andrew tuck, will people eight -- will people pay $18 to read about poverty? >> they will not connect in that way, but when we go to india we tried to tell different stories so you always get the stories about poverty in india. we know that. there are people trying to turn it around. who are the best business leaders? we try to find the benchmarks for success. >> global celebrities drive this imaging, which "monocle" has this cynicism. the jackman -- i had pleasure of meeting him. i did not know who he was. >> he is australian. >> he is a movie guy echo >> he is a triple threat. celebrity different nextnd nest here -- and

year versus what we have seen in the last couple of decades? recognizet is, people -- he is seen as energetic and clean and incorruptible. it is important to have people in your country represent the brand. >> scarlet, you do that. you are soft power for "number surveillance." >> i am. we focus on roger federer and hugh jackman, but zeroing in on cities in particular and separating them from countries -- for instance, you talk about calgary, and there is research future ofdrive the the sports industry. >> nearly all of the biomechanics people we have here all come from the same school. they all come from calgary. it turns out all the big sports brands are going to one school and hiring all these amazing guys and women to come to their

research lab to create the shoes they will be wearing for the coming year. >> this is a classic "monocle" question. is it our signal that the berlin moment is over, that it is no longer the coolest place to go in the world? >> berlin is interesting because it has what every city needs to thrive with entrepreneurship. it still has places to set up your company, a mass of people coming to start businesses. barriers,putting up they are unsure about immigration. that is still a city that has that welcome out. >> what is the city you will be watching for in 2015? guy from rotterdam , a city that is 50% dutch, 50% migrant. he came from morocco and has some passionate views about how migration can work. >> it is almost a brand-new city

that was rebuilt after the war, so it is not a classic dutch city, it is a modern city. >> it does not have the kind of glamour as amsterdam. he is trying to reach out to a sort of no-go zone at night. he built an amazing outdoor market that draws people. what does it mean to be a migrant? he is saying my family came here and we had to learn dutch. >> one of the things that is interesting, monocle treats a very narrow audience, a very elite audience. can you scale this overpopulation? it is all great to talk about ngo's and innovation, but can you take it to a larger purview? >> i think you can. one of the issues that you have in many countries in europe dealing with immigration is the fact that you have this native population with all their economic issues. the north african immigrants are

coming into these countries and having difficulties. their you deal with integration? it probably makes it more broad-based. >>'s idea is that it is not just the economy, it is about identity. traffichink about running along, they will make a gap for the migrants to drive -- to join in. that happens more in the u.s. than it does in europe. >> it does not happen so much in europe, and it is interesting to talk about. >> people are very concerned about the migration issues. a cultural moment that something is really changing. >> pope francis -- didn't he say something about comparing europe to a haggard old grandmother who is not fertile and really cannot create new ideas? >> we will talk about soft power. here is soft power for the nation of canada. this is one of my heroes, sean

palomo of the national hockey league. he passed away, 83 years old. it is incalculable. there is no american equivalent. this is a huge passing for the entire nation. he was a perfect example of your soft power. >> exactly, someone who makes you feel -- >> he personifies a culture. great to have you here. >> we will be right back here on "surveillance." a dismal chart here for a couple of newsmagazines. we will discuss next. ♪

>> good morning, everyone. "bloomberg surveillance." i'm tom keene. in the next hour, mary childs on the final days of bill gross with pimco. now our single best chart with scarlet fu. >> our single best chart shows digital mediat has had on traditional media. these magazines have lost more /5 of their copy sales since 2008. by 2013 the declines have

moderated to a 2% rate, smaller than the 10% drop. >> should we do a magazine test? there it is. don't do that anymore. >> they are becoming lighter and lighter because there are fewer advertisers. -- fallingertising advertising leads to fewer pages. >> there are so many different pain points for magazines. in 2008, add points disappeared. that is not a metaphor. they just did not exist. >> brendan greeley with his wonderful work at "bloomberg businessweek." with us as well, we talked to "monocle." andrew tuck, it is not like the ," butber issue of "vogue it is like the may issue of "folk." -- of "vogue."

why do they advertise with you? they going to people's offices and they say you are a " reader. they like the fact that it is big. it is an accessory and people understand what you think about the world if you have a copy of "monocle." it says to advertisers we understand it is an interesting market. why don't we just offer you exclusivity? so if you advertise a car company, you will be the only car company in the forecast your it -- in the forecast. >> if anybody in your magazine over 35? >> look at me. i am well over 35. thank you. >> you are not on facebook or twitter, are you? >> this is a contentious point when you are in the u.s., but we are very open to our audience. with 5000 people.

we did an event here last night in new york, and you can have my e-mail and contact me. >> good. i love you guys. get on facebook. >> you do not give it away. we are not going to not look at this photo. we are going to look at it. andrew picked this out. he does not remember a time when the trans am was the coolest car in the world. i do. >> how many miles does it have? >> 12,000. werea question -- where smoking and the bandit headed? texarkana. >> who lit the trees? >> i hope the obama daughters. >> john boehner lit it.

this is the president of the united states sitting still for a 3-d portrait. he is being scanned and he was then re-created. there we go. >> there it is. that is the 3-d sculpture that came out? >> and he is looking at the 3-d print rendering of himself. >> where do you put that? where do you put a bust of yourself? >> we have lots to talk about. us assri-kumar is with well. out twitter question of the day -- russia. blink?ll make mr. putin we say good morning. it is "bloomberg surveillance." ♪

>> good morning, everyone. bloomberg surveillance. jason trennert and mary childs in our next hour. right now let's get to top headlines. barbara's a becomes the first woman to lead christie's.

she will also retain her chairman title. this comes after dose co-weeks after their arrival announced -- executive vice president of operations of the anna felt vincent was testifying in washington about the league's domestic violence policy, painfully witnessing the abuse of his mother. >> i relate to the 20 million violence, inmestic every community across our great nation. >> the nfl has taken a recent public relations hit with allegations of abuse against several of its players. who will listlly ribeye roast cost $900 per pound.

a $300 discount from the price of 1500. who says cosco does not have any deals? >> one of the great event of 2014, the elections of india. brendan greeley has looked at this carefully. komal sri-kumar is with us today on tensions between the new government and central bank. pick it up here. >> one of the issues in india has been the question of whether the central bank is independent. there was a great article this "ft," and is the central bank independent? >> dostwo things. -- subordinated to the

finance ministry, in -- the indian case used to be typically in fact subordinated to the finance ministry, but now there is an independent person and they call him a rock star in his own right. he is clearly charting an independent path. >> but what is critical here, have done many panels with him here at bloomberg. is he bringing an american central banking to such an interesting economic experiment in india? , and the mostis important revolutionary feeling on his side is to say that he says bringing down inflation is the way to create growth. that is something that the industrialists in the government -- >> it is a new idea. >> a completely new idea.

and even though the inflation rate is at 5.5% today, it is lower than the 8.5% targeted an even lower than the 6% targeted for next year. but he still is postponing great declines because he wants to make sure the inflation comes down. >> one thing we are seeing today is that india is not listed with soft power. >> andrew tuck, you put out a soft power list for 2014. who leads the way? india is not on their bank. >> despite the difficulty america faces, the fallout from conflict, allom of us have our hands in our pockets and we pull out american products. we go online with google. it has given the world a different view of the u.s., and a positive view. the tech companies have done in for americal role in an extraordinary way. >> second is germany, third is

the u k, fourth is japan, fifth is france. where are china and brazil? >> china is doing a lot deliberately. it is using its tv station, trying to find ways to engage people. it offers free language to people to study that. it is doing a lot of engagement, but it is a little heavy-handed at the moment and it does not over.win people >> it sounds like you cannot thata conscious government creates soft power. it has to be a consequence of your values. >> you need good values, but you need a good government to get behind it. good atassador's are opening doors, entertaining people, using the embassies in innovative ways. >> thank you so much for coming back. you deserve to be on facebook. you have something to say. sri, as always, thank you for

your perspective. the euro weaker at 1.24. in thelar-ruble stronger last 20 minutes. stay with us. another entire hour of "bloomberg surveillance." ♪

the dollar drive ever higher. russia faces currency devaluation as america stands alone with good economic growth by stocks. should pimco head straight into equity management intentions with the acolytes of mohamed el-erian. year. is my charge of the well, i stole it. jason turner on draghi on kuroda and the great distortion of 2014. are live fromwe our headquarters in new york this wednesday, december 3. i'm tom keene. joining me are scarlet fu and brendan greeley. >> the japanese company that made potentially deadly and backs, just say no. takata refusing to give into nationwide demand for recalls, only sticking to those states with high humidities which have been blamed for making the bags

malfunction. they have been blamed for four deaths. an accident at a nuclear power plant in ukraine. it is located about 300 miles southeast of kiev, the capital of ukraine. is saying theger damage is not significant and there is no threat to the reactors. it's also not in an area where ukrainian troops are fighting pro-russian rebels. what's one more sign that russia may be heading into recession. russia survey and that's service index fell to its lowest reading in five years. service index fell to its lowest reading in five years. the rulers in the midst of its biggest fall against the dollar and 16 years. -- the ruble is in its biggest fall against the dollar in 16 years. meanwhile, president obama is calling on congress to approve a $6.2 billion emergency approval for treatment of ebola.

that you have done has continued even as the cameras have gone elsewhere. becauseurgency remains if we are going to actually solve this problem for ourselves, we have to solve it in west africa as well. >> u.s. personnel are in west training and treating health workers. almost 6000 people have died from the recent outbreak of ebola in west africa. >> the dow jones industrial average, up, up, up -- where were you? 17,780. jason trainer put out a bullish note. two of the countries -- whopper 2% as we -- to the end of the year. go -- euro giving way you giving way?

finally, the dollar joins the ruble and euro in depreciation this morning. the final days of bill gross at pimco, it is absolutely riveted -- riveting reading. the collegial this agreement, and sometimes less than collegial to buy as well as significant tensions with the disciples of mohamed el-erian. -- as well as significant tensions with the disciples of mohamed el-erian. did they want to talk about this? >> there was a lot of dragging her feet. they are kind of tired of talking about this. it has had us negative impact on -- had such a negative impact on their business they want to get back to the regular job. >> its nose to good to everybody i'm quite close to dr. el-erian and i've introduced him at speeches and we go way back.

simplistically, do they get along? do they actually not like each other? what is the relationship? >> the take away that i've had from the series that it feels like a divorce. i think the bill was really heard by el-erian positive archer -- el-erian's departure. and if you were an el-erian disciple, as you say, josh through a going away party for el-erian and that would be a reason why that would put them on a target -- with a target on his back. complex digital you just get into gossip? -- >> and you just get into gossip? >> well, no, but i think people really want to know. i would suggest in my meetings genuinelythat they like each other. >> they worked together for so long so well until they didn't. of this was expanding pimco into areas that bill gross was

not convinced it was the right direction. >> strategic discussions will always happen at businesses like this and you always want challenges, but apparently the conversations were too vitriolic and too heated and you could not get that much done. argument that, hey, it may not be a time to emphasize equities with record highs, it may not be a great time to be buying assets directly. had a tremendous amount of assets under management, but i don't think that explains why we care so much about bill gross. right do we love talking about him? > scale, right? >> scale, and he had a best record over 40 years. people want to know what he thinks about the market and at the same time, he's completely fascinating. -- jasontran or should trainer joining us. let's rip up the script.

your opinion is almost as big as pimco. >> i wish. air inot bill gross on tears at the waldorf-astoria because he sucked so bad and the bond market eight years ago. everybody goes through this. how much of mary's reporting do was grabbed to a really tough run of management versus just a normal back-and-forth? >> at our shop it's one big happy family, think it is. dealing with a different color set of chips than those guys are. it's a little different. when theme token, stakes are high in a business like that -- >> it really permeates. >> when i was growing up, the biggest which were fun stars were all equity people. it was peter lynch, but you know, those guys come all of the fidelity guys.

they were the rock stars. now when you look at it, the mutual fund stars, it's really bond guys. it's just black, though gross. -- jeff black bill gross. i think the focus makes their problems amplified in the media. >> just good luck, did he be to you on this story? , did he speakck to you on the story? >> he did. they were the conversation about, maybe i should come work for you, maybe i should manage money at the line. i think that is an interesting conversation to have full spinal been jeffrey was interested in having a co-ceo cap of -- type of position. maybe the personality match would have been off. they had always been rivals. it demonstrates the emotional depth that we have gone too.

>> you talk about the rock stars being in the least income world. what do the equity guys think when you hear about bill gross and the turmoil he's going through? >> in full disclosure, all of these guys are clients of hours, of our firm. ,> to credit to the institute these guys are heroes. >> oh, to be clear. that withery clear someone like bill gross that he's a competitor. he's not a youngster anymore. he certainly doesn't need money. person who genuinely loves the financial markets and wants to win every day. to shake.ry hard if you have a love for the financial markets, it so most of the session. there is a lot more to this, i think, -- i'm sure you found and i'm sure you know them better than i do at this point. i know them on a professional level. it's hard to imagine them doing anything else.

>> absolutely, it is for love of the game at this point. he's not doing it for the money. what you think about his shop at now? now -- janus would you put money in? >> you are such a reporter. it's a good question. >> some people on the show like to commit journalism. >> i think it would be the height of arrogance to say you wouldn't put money with bill gross, one of the best investors of all time. but i would say there is an argument about going, let's say, in the equity direction, because stocks are at an all-time high. by the same token, you have 10 year treasury reels -- yield at 2.30. >> with you think they will be? >> probably below three. >> mary, do something with that this morning. >> i'm on it.

>> one of the famous quotes when he was asked whether he was a legend and he said, not yet. did he make it? >> i don't know what standard he's comparing himself to him you know, jesus. [laughter] >> that the high bar. >> it is a high bar. if you don't think you're a legend yet and you're bill gross, it's interesting. >> he's been in the bond market for 30 years when it's been a bull market, so he said, is it me or is it the market? clegg's it's a rhetorical question in any case. we'll be back. ♪

>> good morning, everyone. here.trainer is he says on american earnings growth will be the fuel for higher valuation in 2015. what is the distinction of this year versus next uxo >> i think there -- versus next year? >> i think it will be less share

buyback and more capital spending. i think this will be the waiting for go for a lot of equity investments. godot" foring for a lot of equity investors. >> will you do so well and your research knows, you parse sectors. is there a sector this year? is there a fundamental seachange? from all this research is there is essentially a gradation of more of the same falling into next year. >> i would say, largely. there is one sector in particular that does not necessarily fit into the cash idea, but does fit into the fact ont the economy is discretionary, consumer discretionary. what is more important from our

point of view is that there are real gains happening in the employment picture. believe real wage gains will be significant. the fact thatith the stocks haven't participated and that could provide for a very good opportunity. >> you and i go back on game changing events. one of them is the growth of apple. how do you take other companies using cash and making it a structural change tool? >> it's a good question, because if you think about apple as an example, why is it trading at multiple -- let's say, in the teens. certainly, less than huber -- 's valuation. by the same token, who is bit of better steward -- who has been a better steward of capital than apple in the past several years

ago my own view is that apple really wanted to -- in the past several years? my own view is that apple's really wanted to increase the dividend meaningfully. i think that the multiple would be closer to what a consumer staples multiple would be. >> jason trennert, the continued optimism in the new year. our twitter question -- what will make prudent blink? -- putin blink? ♪

>> good morning, everyone. i'm tom keene with scarlet fu and brendan greeley holding court today. let's get the top headlines. obama's choice to be the next defense secretary will be an expert on the pentagon budget and weapon system. according to an official, the president will nominate ashton carter. he spent more than two years as the number two civilian official

and has also been the weapons buyer. company replacing the high fruit to scorn sure up with sugar in her shoes. it would make height -- hershey it high-profile example of a move away from high fructose corn syrup in the food industry. classic or bars are made with sugar. -- classic hershey bars are made with sugar. reportedly removed from some file share website after demands from the makers of the film. >> the headline there is that it is a bigger deal than it was initially reported. am i right? >> because it wasn't just movies. >> sony went out immediately and try to sell it as a bite -- bad piracy story. it was a they had that security

story. -- bad security story. >> let's move to the russian ruble. the sanctions or fighting in ukraine, it may finally be catching up with a vladimir putin. what is his next move? dreaming now is william pomerantz at the woodrow wilson center for 70 is written extensively on post-soviet development, federalism, and corruption. weakening,ble typically this should be good news for russia, for a country. >> yes, it should be good news command in theory at least, russia's domestic industry should be able to take it vantage of our higher currency. the difficulty for russia is that over the last five to 10 years, the economic and legal environment in terms of starting business and conducting business in russia has been very

difficult. it is unclear whether russia will be in a position to take advantage of the opportunities from a falling currency. drop the backto -- the black sea pipeline, afeat that he turned into victory. what is his next move? >> at think he will expand contact with turkey. but just like in the previous deal with china, it is unclear what the details are in this agreement with turkey. they will be selling gas to turkey at a discounted price. it is unclear whether russia will actually benefit from this deal. >> i think it is a huge deal. you nailed this yesterday on the move to turkey. wondering is if it is as big a deal as it seems. russia adopted a policy that leave serbia out in the cold. serbia, gary, and others are very first -- serbia, hunt area,

and others are very frustrated. they were toldse they had to wait. as a result and it couldn't go through bulgaria, all of the other eastern european countries were out of luck. in reality, it's a reaction to the eu. >> my experience in russia as that things happen suddenly. do you have a sense that putin is in control of his zeitgeist demo or will he be in control in the coming weeks? of his site guy's, or will he be in control in the coming weeks? >> i think we will see what happens -- is putin in control of his zeitgeist, or will he be in control of the coming weeks? >> a degree will see what happens this coming weeks. if things go south, he does not have his institutions to protect them. i'm wondering why he turned

a moderate pro-western stance to aggressive revisionism. look at this statement by harold james. in terms of the sanctions and other economic headlines that are negative, what more can putin do with the likes of turkey to two in the right -- urn the tide in his favor? >> he's got to ride out the crisis and is quite clear yes to start spending down the currency reserves in order to do so. i think his bet is that he can write us up for 6-12 months and hopefully the price of oil rebounds and russia emerges from the current prices. but that is a difficult bets in light of the other circumstances surrounding russia today. >> do you as an international

relations guy, do you have a tip point on the ruble? it's a part of the game, but do you have 60 or 70 ruble per dollar? >> it's turned into a confidence game because the fed has cited not to defend the ruble. although it did at some point yesterday. tothe fed has decided not defend the ruble. although it did at some point yesterday. at some point, i think it will collapse and everybody will try to get hard currency. i don't know what the tipping point is, but clearly it's leading to inflation and russians will have less purchasing power. and that is not good news for putin. >> that is our twitter question of the day -- what will make putin blink? the kennedyrantz of institute. coming up, find out why to cut is refusing to do a recall a

isentially -- takata refusing to do a recall potentially dangerous and lethal airbags. from something news flow to tangible. ♪

>> this is "bloomberg surveillance" and i'm scarlet fu here with tom keene and brendan greeley. -- a record for apple this year following its announcement of the acquirement of beats. live nation is the biggest world -- the world biggest concert promoter. it also owns i find. a new ceo,has named replacing stephen murphy who will leave by the end of the year. she became the first -- patricia barb is a became the first woman to lead the auction house. and if you're hungry for the holidays, pick up some of those

.egendary woggle beef you have to buy a minimum of 11 pounds, bringing your total to about $1200, but of course, this is cosco with a $300 discount from the full price of $1500. correct those are scenes of tom's freezer. >> yak them aright. -- >> those are scenes of tom's freezer. >> yeah, right. [laughter] yesterday, i was allowed to stand near america's cup, the oldest trophy awarded in any sport. it was awarded in 1858. the america's cup right now? >> estonia. > australia? 042. -- 0-2. >> it used to be a gem of the kind of boring to watch even if

-- it used to be a gentleman's game and kind of boring to watch, but they are trying to turn it into formula one. they are really big on what they call stadium sailing. >> i'm glad you brought this up. i can't believe i'm saying this. i remember when it was a gentleman sport and it was boring as all get out. how desperate are they right fascinating, to be clear, if you are doing it. it is boring to watch. in the late 80's and 90's, there were a lot of boring legal shenanigans about where it would be held and what kind of boats they would be used -- using. and people were creatively interpreting the charter of the original cup. but now they are trying to make the both consistent and exciting and fast and they have shorter courses about which we've more passing. >> out of the traditionalists look at this? and i would say that sailing maybe only eclipses golf in

terms of people holding onto the tradition. >> i have an expert who could challenge you on this phone is a bit has become a much more physical sport. spiegelto jimmy yesterday when i was at the announcement. >> gone are the days where you sit at the dock and have a few beers. the training is that there was nfl. >> really? man, we have taken out major league baseball guys, their take to get and they come in and say they've never seen anything like that in terms of teamwork, and what it takes physically. our average max heart rate still during the race is 90, 90 5%. -- is 90-95%. flex and you're a personal interest in this because you used to sail in high school and college. .> i did

this is me when i had lots and lots of hair. this is me at the alamo the bermuda race. mence won a cup -- this is at the helm of the bermuda race. i once won a cup. are you ready? this is the cup that is awarded to the nicest skipper. >> [laughter] >>s deeply uncompetitive -- deeply not competitive as a sailor. i'm going to drink my coffee out of it. dennis conners there yesterday? >> yes, and you really see how physical the sport has become. dennis colors was never an athlete, just a technician. >> how fast is the boat go? >> 50 miles per hour. >> how do they capture the imagination? >> people love statistics. if you can watch what is happening on a boat in

real-time, it's actually fascinating. but if i had no idea they get up to 50 miles per hour. you just don't see that on television. no changes. futures, unchanged. adp employment later this morning. surveillance"berg and i'm scarlet fu with tom keene and brendan greeley. one of the things we are keeping an eye on this morning is takata, pushing back on the u.s. call for a recall on its deadly airbags. instead, it is insisting on recalls only in states with high humidity. the auto sales numbers do not indicate any kind of reluctance to buy cars. for ex there is no correlation between -- >> there is no correlation. >> why is there no correlation bad airbagsof these

and buying cars in? >> i think it is focused on the monthly payment. also, the age of the fleet is still relatively high. and marion keller, the legendary securities analyst, i asked her, whitey you by auto stocks? they take major cash and you only buy them when things are totally desperate. cyclicals, youf want to be buying them when the pes are almost infinite. you don't want to be buying them when the pes are attractive, because that means you are close to boom time. , likent to be buying them a lot of industrials and a lot of cyclicals, when things are close to the street. you said about people only caring about the monthly payment. people think of monthly cash flow.

in many ways was the first to understand that in the late 1960's -- lee iacocca in many ways was the first understand that in the late 1960's. i may be wrong, but with the mustang. people did not worry too much about what the actual cost of the car was. they worried about whether they would afford it on a month-to-month basis. and it's been like that ever since. and keller has been added -- adamant that we can get up to 1800 units. sales sales and pickup have benefited from this. hummers are selling off the lot. >> and we have guys that are shorting tesla as a result. because they are saying, where's the demand going to be? the pump is so low, what is the incentive? >> but to be fair, anyone who not buys a test that will

worry about gas prices. >> i think that is fair. that is not the primary motivation. but it changes the economics. the propensity for gasoline savings, like if you were my wife, it's probably more than 100%. >> you got that right. >> etc. the savings. it's about the wealth -- >> it's not about the savings. it's about the wealth effect. the suggestion that this is a depressed purchase, some the people have been waiting for a long time, will we see this with other appliances? people will finally make the leap and do it? we will see that. the consumer discretionary sector will be one of the big winners in 2015. it's one of the areas of the market that has not participated in the rally. the multiples are somewhat higher, but i also think the withyment situation

gasoline prices will be a big tailwind. >> are you confident of sustained gdp likely seen in the past six months? -- like we have seen in the past six months? raisedmates were just and if we're.8, wrong, it might be even higher than that. >> what is your down target 12 men stopped? -- 12 months out? >> it will be up 12%. >> down 20,000. important words in his mouth. >> what about companies? trex company's lap to spend more on capital spending if they want to grow. right now, they have too much cash. i would argue they are over capitalized and they will either have to by other companies to do their capital spending or they will have to spend on capital themselves. >> our twitter question of the day, what will make putin

blinked? certainly, an important moment for all of europe. also, my chart of the year. stay with us. ♪

the nicest skipper in 1990,

brendan greeley. ? if youu share a ride have access to uber, you already have that option. would you share and uber? >> i do use you -- use uber. i haven't used lyft. but they are making it a lot easier with a launch this uber liberal in new york city where you can go from manhattan to brooklyn for like, seven dollars. >> it saves you money. traviswe know why skolnick raise another billion dollars. >> i'm excited that uber has

this partnership with carlos slim. -- better to pair in mexico pair within mexico than mexico's monopolist? >> exactly. our you calling uber a monopolist? >> i have a doubt about their motives and practices. >> we've heard about this in the past month with the explosion of the buzz feed article, not just the tactics against journalists, but also the whole privacy issue. and i'm reminded of how a -- how , therek when it ipo'd was concern about privacy. now there is concern about uber as well. senator franken, by the way, just wrote a letter to birth. >> he's going to testify to the new york city council.

>> what is he saying? >> he says it changed his life. good point. despite all the bad press, people love the service. they are using it. >> breaking news, important news, positive news along the lines of jason trainor. rennert. revising austerity higher. is strengthening. u.k. stocks are falling. 15672 -- is now at 1.5672 versus the dollar. >> if you look at the pmi's this week generally speaking, they are all hovering above 50. in the u.s., is well above 50. think manufacturing is largely expanding, despite

all the negative headlines. generally speaking, global aowth is -- and like economists are saying we have austerity in england. >> are they doing better than the continent? i would argue, yes, much better. >> did you get my royalty check on chart of the year? >> not yet. i'm waiting. >> the first dollar -- the first check is $7.70. ♪

click good morning, everyone. tomorrow, 6:00 a.m. hour, peter joins us from and you want -- nyu stern. more important, peter henry on the land of the nba and the value of a graduate program. greeleyfu and brendan with me this morning. next more trouble for bill cosby. this time, being sued by a woman who says he sexually molested her when she was 15. she is the first accuser to come forward who said the attack occurred when she was underage. it happened 40 years ago at the cleveland mansion in los angeles. it follows a barrage of a salt

accusations -- of assault accusations. -- executive president of vice president of operations testified before a senate panel about domestically policy. being aully recalled child and witnessing the abuse of his own mother. violence and domestic abuse in every cutie across our great nation. -- in every community across our great nation. >>; tony blair's holiday greeting card the nightmare before christmas. blair and his wife burning at the internet. some call it creepily odd. tweeted that it has been the best photo of blair.

for tony deep sympathy blair. it is hard to smile for the camera if you cannot do it. would you like to see my christmas card smile? it's like this. >> is similar to tony blair, as it turns out. >> i read a couple of things on it and they talk to etiquette experts and there is not this practice that much of people sending out christmas of the -- christmas cards with pictures of themselves for christmas in the u.k. >> here in america, we inflict our entire family on everyone every year. >> is that our top headline? >> it's a breaking headline. the u.k. gdp is revised up for the next couple of years. fromill come in at 3% 2.7%. good times are back. up 2.4% fromgoes

2.3%. the median household income in the u.s., this is a little more complex. for those of you on radio, again, i tweeted it out before and i'll put it out on bloomberg radio plus. all you need to know is that there is one central bank that is not on the script. u.s. andred, the white, and switzerland and bank of england involved. and then there is the ecb. this is from the mario draghi speech of two years ago. jason, what a great story of europe's lonely path. of index -- assets are -- the only

one to see the balance sheet decline has been the ecb, you know, by a third. reforms,tructural labral reform -- labor reforms, other things, there is really no choice. >> they have no choice, but they have the bundesbank looking daily at this. it's anesn't feel like economic problem for stub it feels like there is a cultural problem. i took a tour of all of the bundesbank speeches and the ecb german board member speeches and they are all the same. it was amazing. woo! greg they are saying the same thing -- >> they are all saying the same thing. >> do you agree? >> adding structural reform will be far more effective. we have long since passed the point that further monetary easing will be effective. at the same time, you want to do

structural reform. the new prime minister about a month ago came up with this idea that you might actually be able to fire people in the country. >> imagine that. >> it was one of the epiphanies that they had. would think that they had outlawed's stuff. there were millions of rome, milan -- that they had outlawed pasta. they were millions of people in the streets of rum and milan. yellen the investors for next year? >> i believe so. i don't think people should fear her. she is focused on structural employment. she will normalize rates. tags when we get up -- >> when we get up to zero were really have been for so long -- correct but it is where of the biggest telegraphs in banking history. as an equity investor are not

particularly worried. i'm more worried about the steepness of the yield curve. if there is a sense that the yield curve could go unheard, that is a problem. >> she is a friend for equity, but not necessarily investors? background ofthe the last time you had a taper tantrum and what happened to the long end of the curve, but at the same time i can promise you that the pros -- the fed will proceed very cautiously. they trys tightening, to give people as much advance warning as possible, otherwise it's counterproductive. my point ofy from view is that as an investor, you will have plenty of warning from what the central bank is doing. there will not be a lot of surprises when the fed is tightening. >> let's get to the agenda when we focus on the stories of the day. >> it's a quiet day in the markets, but the end surreptitiously through friday is making a -- to 120. do you have any -- is making a

run to 120. do you have any faith in abenomics? >> i actually do. the third hour was the question, the structural reforms. >> but they still have a currency depreciation. it or not,you like that is probably the only card left. >> it is a textbook card, i agree. >> we keep asking jason for macroeconomic predictions. when his notre dame going to have a winning season? adopt notre dame the late 80's. i went to georgetown and georgetown football is not particularly good. it is so frustrating. the team went from being close to being talked about in the bcs championship and a heisman winner to a disaster of a season. i can handle it. >> you climb on board the new york jets bandwagon.

>> at least you are not a jets fan. change comes out at 8:15 a.m. and it sets us up for jobless claims tomorrow. and of course, the big job reports on friday. toi'm looking for putin expand the pipeline south to turkey for some he's looking for new friends. serbia is feeling abandoned and you said may have a -- and you suddenly have a conflict. that could be bad. our twittergs us to question of the day. what will make putin blink? let's give you some answers. china will make him blink eventually. we negotiate gas deal, mongolia relations, vietnam relations, etc. history of it has been more successful than the u.s. pivot, somewhat say. been moreot has

successful than the u.s. pivot, some would say. here is another answer. q the picture of him in type. [laughter] trennert, what does your dan clifton say about the linkage of washington to markets next year to come correct it's a little bit like the hippocratic -- next year? >> it's a little bit like the hippocratic oath. first, do no harm. the good news about the midterm elections is that the chance of doing more harm from a regulatory view are probably lower. there is a chance you could get some small that things past. -- repeal read peel the medical device tax or perhaps keystone.

unfortunately, the big ball stuff, the structural stuff will be a lot harder until you have a new president. >> great to have you out there. >> bloomberg surveillance continues on the radio. betty liu is up next. ♪

>> good morning. you are "in the loop" and i am betty liu. who knew that car services could be so juicy?

lyft is under fire for its own privacy policies as cooper tries to get -- as uber tries to contain growing unrest. is oneg about juicy, it of the biggest wall street tales this year. the fall of ponting bill gross. lostve details on how he the pimco empire and the crazy things he did just before he left the firm. in russia, the central bank trying to stop the ruble's the justified in 16 years. it has fallen 16% in the last week that the bank of russia has intervened. breaking news from the ukraine. there has been an accident at a nuclear power plant. ofis located 600 miles off kiev.