senate. is there a moderate to be found? inequality is so todd 14 and-surprise -- 2014 and -- surprise -- so 2015. right now, our top headlines of this first working day of 2015. >> oil is falling again. futures are down as much as 2% after moving 5% last week. brent crude trading at $55 per barrel. prices are likely to head south further. russia says it's output jumped to the highest since the soviet union broke up. the euro is its weakest in nine years. it rebounded slightly another is

growing concern that the greeks will exit the euro. the german magazine "there spiegel "d --er -- "der spiegel." vanguard is the largest provider of index funds. the fees are also a fraction of the average mutual fund. >> the tragedy of airasia bad weather is slowing up the search . searchers have found more bodies bent of located sections of the tail at the bottom of the java sea relatively shallow versus other parts of the ocean. ice may have caused the airplane

to crash. pope francis and the catholic church out front on a global diversity. new cardinals, nine from the emerging markets, including tonga myanmar, and ethiopia. let's look at equities, bonds currencies, and commodities. futures deteriorate. 10 year yield is stunning. scarlet mentioned a 1.18 handle on the euro. crude oil, i'm essentially speechless. brent crude, $55. euro yen shows not much going on. it is all about dollar strength against everything else. the german government bond. we will talk about eurasia. looking forward to that.

the german government bond mimics that of japan. here is oil adjusted for inflation, scarlet. it is an approximation. it is a little squishy. here is the decline in oil prices. here is opec, the collapse of opec. we are back there. >> what happened in the last leg lower? >> i would say it is oil prices dropping. it is very little about incomes. >> the income level has flatlined. >> but we were richer here than we were here. we are back to a good value. >> the question is how long it stays like this? >> absolutely but there it is. oil continues to descend. getting us started, kate moore

. we are also honored to bring you senator judd gregg. cheap oil will have a profound effect on america. >> it is great to have low oil prices. we heat by oil. most of new hampshire is oil, not gas. this is a big plus for consumers. it allows them to save more and send circuits to college. it is a consumer oriented energizer. >> another has never been a democratic senator from new hampshire. [laughter] >> we have one right now absolutely. >> how do you talk to when oil republican from texas or oklahoma? do you speak the same language on energy? >> no. [laughter] and we never had. they used to have the bumper sticker, let them freeze in new

england. [laughter] they like oil prices up and we like them down. >> we have kate moore with us and you have a different view on oil and you say it is too early that oil below $60 is an unequivocal positive for us. >> it might be great for constituents in new hampshire and on the consumer side, but oil and energy investment has been a huge part of u.s. economics and the growth we have had over the last couple of years. if we see a massive cutback, it may have a big impact on growth. >> give us an update on jpmorgan on this. there was a headline with a very cautious view. do you have a tip point on a barrel of oil were things begin to change? >> we are not taking an explicit view on oil at all. we have stepped away from commodity views in general.

we are looking at the early part of 2015 before we decide. it will determine whether or not we want to add oil back into the portfolio or we are fine sitting in out in 2015. >> i understand the argument about the u.s. economy, but isn't there the argument that as a whole it does not make up a huge part of the labor market? 2% or 3% is not going to damage the u.s. economy. >> if you look at the for s&p 500 companies, that is where it becomes an issue. it could really start to add up to something significant for the companies. >> there was no energy policy. we have this wonderful nirvana of new oil prices without a federal mandate on energy. i'm going to call that a republican ethos.

republicans say, let the government get out of the way. is energy one of those examples? >> for the most part yes. but the market decide which energy works the best. in my opinion the fact is that the lower oil prices are going to cause the oil industry to adjust in the united states. we produce oil at a lower price than many countries in the world. we're much more competitive. in the end, our economy will be the winner. >> the data is showing we are getting closer to energy independence. the voters care? >> they should. it means a great deal to jobs in america. it means we are more likely to be investing in the united states. >> should we export our product?

>> i think we should. >> even with the timing? >> it is actually probably pretty good. we can produce oil at a lower price than other exporting nations and that could give us a competitive advantage. >> why is there a divergence in the rest of the economy, kate? >> i would love to believe that the u.s. can be very isolated and we can operate as a cordoned off economic unit. i'm not sure it is going to be so clean and easy. when we are talking about energy , this is a perfect opportunity with oil prices a little bit soft people concerned about initial investments for us to increase ties with europe and increase ties from the emerging world. get people comfortable with the way we are trading. >> you saw this. there was a suggestion that it

would be a good time for some form of a tax. i wanted to get you going this morning. [laughter] >> the last thing we need is a national sales tax on energy. that translates into a national sales tax on everything and it is not constructive to the economy. sure, it will go -- grow the government. >> isn't the real issue the distrust of what we are going to do with the money coming in the door? what do you do with carbon tax proceeds? >> the thing i found when i was governor, all government moves left all the time. the question is how quickly it moves left. the pace of the train is determined by the number of engines on the train and the engines are revenue. to the extent you live in revenue raising sources that is how the government grows.

it has very little to do with good government. we deliver good government in new hampshire without an income or sales tax because we are efficient. >> is he running for office? [laughter] >>judd gregg with us. we will go to peter cook and a little bit in washington. coming up, ian bremmer joins us in our next hour as we begin a real look at eurasia group's thoughts on this year. what a double barrel. look for that in the next hour. we say good morning from our world headquarters in new york. this is "bloomberg surveillance." ♪

>> good morning, everyone. "bloomberg surveillance." sallie krawcheck -- look for her

thoughts in the loop this morning. she participated in my year and study -- end study of the year forward. >> that was the one at the bar. >> yes. she was the only one who did not have a shot every time we talked about the euro. >> brendan greeley is noting out attending -- nerding out attending a conference with academic economists. this year, it is income and inequality. >> economists move at a glacial pace. they are just starting to pick up this book. things were different at this year's conference. the american economics association. i try to go every year.

it is nerd mardi gras. there are hundreds of sessions. this year it was all about thomas p caddy -- picketty. there was one session where he was actually on a panel. for the first time, there were hecklers. i have never seen this at this conference. it is a reminder that he has made sure that it is clear that economics is also political. there was absolutely substance to the panel i went to. in addition to having selfies taken with thomas picketty. everyone agrees that his data is amazing. the arguments were all about his prescription, what to do about wealth inequality.

wealth is slippery. it is hard to define. it moves across borders. the other point was that if you are really worried about fixing wealth inequality, you should look at a consumption tax. eventually, people have to buy things. once they consume, then you can get them. the third that a lot of people brought up is that a lot of the wealth economy is housing wealth. if you are going to figure up how a way to tax it, there are property taxes as a way to do that or changing mortgage policies. >> you spoke with a number of people. >> allen our back -- aurbach has been looking at income inequality forever. thomas piketty showed up and messed up his world.

economists in many ways assume that all members of the economy are one single person and they behave the exact single way. piketty rejects that and that is a staple of modern economics. aurbach made a good point and that is that you cannot look at what is the ideal tax policy but what actually works in the real world. >> and executive gets a flight on a corporate jet. we don't know whether to call that income or consumption. these questions always come up and we make decisions. we will never have a perfect measure of consumption. but we have consumption taxes around the world. it is a successful practice in every country except the united states.

we do have inheritance and state taxes, but we don't have annual wealth taxes should tell you something. >> thomas piketty is having a profound effect on economics right now. when you have a best-selling book about economic policy, you cannot help it. >> what did you do it nerd mardi gras? did you dance in the streets? >> [laughter] i got dunkin' donuts. there were some amazing sessions i went to. i looked at the man who looked at the best way to get people to

donate to their church based on data that we had. i did something that is a little embarrassing. yes. >> who is that with? >> that is andy ckim. we will look at how gangnham style affected economics. >> we will be checking in with you later on this hour. we do want to bring in our twitter question of the day. should we be more concerned about income inequality or wealth inequality? tweet us. tom and i will be right back. ♪

>> good morning, everyone. "bloomberg surveillance." with oil continuing to descend under $52 per barrel for american oil moves in yields in europe are stunning. in lockstep with a 119 euro. -- 1.19 euro. it is stunning. >> we are wondering when we will get to parity. >> we have to get to the next ecb meeting. >> mario draghi may go forward

with quantitative easing. >> let's go to our morning must-read. we have to wake up judd gregg, who was slumbering. this is the morning must-read. brad delong. writing in "project syndicate." the quotes franklin delano roosevelt. i think the biggest problem for republicans is that if it fails admit it. we don't do that. it just keeps going. >> to some degree. i thiegree. i think this congress has made it clear that they are going to try some things and they are going to make it clear coming out of the box.

that is the right approach. if the new congress had come in and said, we want retribution -- but they have said, we are going to do three or four things right up front and we are going to ask the president and his party to participate. >> how do you find common ground in this new washington? >> there are four or five areas where there is natural common ground. i think one of them is keystone. the biggest one is tax reform. you have major bipartisan agreement on tax reform. corporate and individual. i do think they will do individual. widened codes. you even have the president talking about corporate reform. tax reform. trade adjustment. immigration has to be done.

i believe there will be some sort of immigration. >> the to do list is certainly long. as history has shown us, gridlock tends to be the end result the matter what. his gridlock good for the market in 2015? >> i think it will be. we were having the debate head of the election. we have had a significant progress on a number of things. i think that might be a surprise for the markets in 2015. instead of gridlock and positioning for 2016, maybe we have a little bit more movement. >> you see george herbert walker bush in his last days. quite ill over the last few weeks. and yet mr. bush of florida is considering a presidential run. you have been a strong supporter

of their egos and politics. what is the distinction of jeb bush versus his brother were father? >> jeb bush represents the rational, conservative wing of the republican party. the party has different factions. we will have both factions at the table running for president in the persona of a lot of different people. you just a governor huckabee is talking about getting in. the opportunity is there for an open race. >> coming up ian bremmer, carl weinberg will join us. high frequency economics. good morning. ♪

>> good morning, everyone. "bloomberg surveillance." brendan greeley on assignment in boston. gold like a rock this last week. you think it would be lower off deflation. but it is holding steady as everything else is in flux. let's get to our top headlines. >> the founder of wainscott capital was gunned down in his apartment yesterday. his son was taken into custody, but has not been charged with a crime. gilbert spent decades investing. bmw is helping distributors in

china. it will pay $820 million to cover losses after retailers stopped ordering cars. the subsidies are the largest by an automaker to its retailers in china. dealers complained about unrealistic sales projections. americans were logging on for love last night. that is according to match.com. the first sunday after new year's day is online dating's busiest date of the year. >> i was on. [laughter] >> finding a partner requires a little patience. it finds men about 10 weeks. it takes women about eight weeks. >>i thought you were doing silver singles. [laughter] >> yak on the silver singles. it takes about 10 years. [laughter] judd gregg is with us. the senator is familiar with the herding cats by republican

leaders. peter cook is in washington where the herding begins today or tomorrow. how ugly is the lining up of republicans going to be in the next coming weeks? >> we see that the cats are already running astray in the house of representatives. tomorrow is the day when john boehner's name comes up for a vote and we know that there are at least nine republicans who either are not going to vote for boehner, vote for somebody else, or say that they will be present, but not supporting him. it will be a distraction, may be an embarrassment, but he will prevail in the end. it is not the show of unity that republicans were hoping for as they kick things off. he had to keep his eye on his right flank. >> what will be the linkage of the senate leadership with the republican house leadership? >> i think it is good between

mitch mcconnell and john boehner. these are two men who work well together, have in the past. they respect each other, they come from someone of the same perspective. they want to get some things done. that is the most important relationship in washington arguably for the next two years. >> the passing of edward brooke of massachusetts. one of my grandparents true heroes, full disclosure. an attorney general, a black attorney general. where are the moderates? is mitch mcconnell one of the brooke or snow moderates? >> peter knows more about what is going on in washington. mitch is a doer.

you cannot govern from the corners. you have to get in the middle. he understands that. >> i want to bring up some of the republicans on the sunday talk shows yesterday. among them, bob corker. john thune, mitch mcconnell. how do we make the decision of whether this is lip service or willingness to extend an olive branch? >> scarlet, you sound skeptical. [laughter] i'm so surprised. there was always a lot of talk about bipartisanship and compromise when a new congress convenes, especially one where there is expectations. it will be very hard to get a lot done on major issues. i know senator gregg was talking about tax reform and that is going to be an enormous left. it is hard for me sitting here

seeing them get anything done really on tax reform in the short term. >> ask a question of senator greg plays. -- please. >> i want a softball. [laughter] >> am going to get right into the policy mumbo-jumbo. the house is going to vote on the rules package where the budget committee might be able to oversee dynamic scoring versus traditional budget. does this make a difference? should americans care? >> definitely. especially on the tax issue. i'm calling irrational. -- it rational. you have the capacity to make tax reform. money does not get repatriated.

create an atmosphere where it can be repatriated and you create a huge amount of income. >> then why do they have to go after the congressional budget office? >> i think he is a straight shooter. capital gains is another example. it is always scored as a tax loss. the rules need to be changed to make the more rational. >> what is the democrat pushed back to what we just heard? >> that you are playing for -- with phony numbers and it is not real math. there is been one way to score budget and spending bills and if you change it, you are changing the rules and messing with the math you are not being honest with the american people. >> thank you for the rink side

seats at the winter classic. i really liked that. >> that was a nice wink. >> anytime you need those seats, call me. [laughter] >> this is going to be fun in washington. >> this is going to be an interesting one. with president obama's approval rating not heading south anymore. forget the 1%. we look at skyrocketing fortune of the 0.01%. there is a distinction. this is "bloomberg surveillance." we are on bloomberg television. ♪

>> good morning, everyone. "bloomberg surveillance." futures at -5. oil in a dissent -- descent. let's go to single best chart. >> it touches on what has been and will be a big scene. -- theme. the rich getting richer. there it is a -- is a distinction between the 1% and the 0.0% -- 0.01%.

they had 8% of total household wealth. the green line tracks the uber rich, the top 0.01%. it has increased to more than 11% in 2011. this shows the wealth gap. brendan greeley you are attending the american economics association conference in washington. the twitter question is, are you more concerned about wealth inequality or income inequality? what with the economists say? >> the concern is about wealth inequality. it is relatively a new concern because we did not have the data. wealth inequality is politically more difficult. i worry about it because truly come of the superrich, the ones

you are talking about, they are more likely to skew the political process. the way we see it skewed is that there are a lot of rich donors come a wealthy donors on the right and on the left and none in the middle. none of the superrich money goes to moderates like judd gregg in new hampshire. >> i can think of the phrase coined voodoo economics. >> the people who have generated this huge wealth and tremendous economic expansion mark zuckerberg, for example, the fellow who runs uber they are coming up with ideas that are generating massive expansion of our economy, creating jobs and wealth for a lot of people. sure, they are disproportionately wealthy for everybody else. they have been disproportionately successful in their ideas to everybody else. >> you have seen this in

southeastern new hampshire. >> absolutely. we are an entrepreneurial society. >> is he running for office? [laughter] >> it is not just the top 0.01%. but we look at who is most exposed to the financial assets. it tends to be the upper couple quintile in terms of income earners. we are looking at 2015 and trying to look at where the growth is going to come from. are the lower quartiles of growth of income earners, going to see wage growth? are they going to be able to start spending? >> they will start spending it with oil where it is. here is the headline from the bloomberg terminal. this is on european oil. this is brent crude through $55. >> the low is that $55.

it has not gone below it yet. >> still, these are stunning numbers. back to inequality, brendan, is this just a political debate? is it just that the long -- delong's against the stanfords? >> i do anybody begrudge his mark zuckerberg his fortune anybody who is not marissa mayer. [laughter] i think that the real issue is whether or not politically citizens approve of inherited wealth. that is really what is going on. the real fight is how much of this super wealth is inherited and how much of it is earned in a lifetime. >> does anybody realize what

these economists make in textbook royalties? these guys are minting money. >> that is an important point. greg mankiw was a rich man. he makes a lot of money. he is a professor at harvard. >> economic professors are treated like gold. we have some photos here. >> we do. the season debut of "downton abbey" with last night. >> we are going to start right back from the beginning. judd gregg's great-grandfather worked down the stairs at "downton abbey." >> he was a downstairs guy. [laughter] let's get to the top photos of the morning. this is in brooklyn. mourning the loss of her husband. the officer and her husband -- his partner were shot in the

police car on december 20 in their police car. >> for those of you worldwide this is not disappeared in a week. >> tensions have gotten even worse. many of these guys turned their backs on mayor de blasio. a cargo ship carrying luxury cars to liberally grounded to prevent capsizing. it was carrying 1400 luxury cars including rolls-royce is an bentleys. >> mine is on there. [laughter] >> it looks very precarious. all 25 crew members were rescued. one did get a broken leg. during the grounding. the number one photo. the international ice and snow -- >> is that in new hampshire? >> no. china. it is the world's largest ice festival. that is the big green one in the middle.

thousands attended the opening ceremony. who are they fooling? it is not anyone fulling anyone. it is a cool thing to attend. it gets bigger and more colorful and more extravagant. >> ok. >> i wonder how long it lasts. >> with the winter we are having. >> it has been raining all winter long. >> cold later this week. >> ian bremmer will join us later. this is an important series this week. dr. bremmer and his colleagues that eurasia group. we say good morning. this is "bloomberg surveillance." ♪

>> good morning, everyone. "bloomberg surveillance." good monday morning to you. let's get to our top headlines. >> 10 sent -- tencnent is launching china's first online privately owned bank. said news from the world of sports. espn personality stuart scott

has died. he was 49 years old. the cowboys are moving forward in the nfl playoffs. they rallied to beat the detroit lions 24-20. just their second playoff win in tony romo upon -- tony romo's nine years. the cowboys joined the indianapolis colts, baltimore ravens, the carolina panthers as first-round winners. and there is the awkward hug. >> we awkwardly turned to senator judd greg of new hampshire. this is not a you connect with the people. >> this is the compassionate

conservatism. [laughter] i would suggest to go to the new england patriots game rather than the dallas cowboys game if he wants to do well in new england. >> brendan has a boston addition of a morning must-read for us. >> the trial of the boston marathon bomber begins today. my morning must-read is from "the boston globe." anyone accused of what is late loser brother and he are doing they can never get what defense lawyers consider a fair trial. that said, the reality is that jurors take their responsibilities seriously and expects prosecutors to prove their cases beyond a reasonable doubt. the argument the defense lawyers have used to get the trial moved

is that it is impossible for anyone in boston to get a fair trial with a boston jury. >> it is impossible for this trial to take place anywhere in the northeast. >> i think it is impossible anywhere in america. they have paneled 1200 jurors in the case. >> jury selection will be very interesting. >> if you live in cambridge or watertown -- you cannot possibly be on the jury because you were under lockdown. it is going to be difficult. >> it will be. brendan greeley joining us from our boston bureau. we will check in with you a little later. >> very good. investors consider how much they have not participated in markets.

kate moore assisted jamie dimon with his private account this weekend. she said, what happened? why wasn't i in the markets? >> he was in. >> hopefully, a healthy beginning to 2015. how do you advise people the courage to be here? >> courage is a keyword. most people don't have courage. back in the first quarter of 2014, i was speaking to clients and i would ask them if it could advance a 0% to 10% this year. no one thought the markets could advance more than 10%. if we were dealing with a very skeptical investor base at the start of last year, we are dealing with an even more skeptical investor base. we are not seeing people throw cash.

yes, you were citing inflows into mutual funds. but we have not seen a huge amount of participation or enthusiasm for equities yet. people believe there are not a lot of alternatives. but they're not going heavily into single stocks. >> a lot of it will depend on what the fed does and how the fed communicates its intentions. a lot of people say that will determine market activity. one of the former fed governors said that the communication, the lead up to that causes more volatility than the actual change itself. >> i'm not so worried about normalizing policy in 2015. i think the fed has done an excellent job of saying what they are looking at and the timing of normalizing policy. what i am worried about creating more volatility is growth and disruption from growth outside of the u.s., particularly the eurozone. whether or not abenomics is successful and whether or not we see a slowdown in the emerging world as a result.

>> jeff gun lock -- gundlach said 1.3% yields. what if we get that market? >> it would be surprising, but perhaps less surprising than at this time last year. i was absolutely in that camp as well. i thought the strong economic growth would lead to higher rates, but it did not show up. there are not a lot of people who are adjusting down there estimations. >> what is your target for this year? [laughter] >> who is your leading gop candidate for 2016? >> i think the economy is going to do well. i think the united states is in a good position because of the energy issue and we are still the entrepreneurial playground. we have people willing to go out and take risks and we have capital to support them. >> judd gregg, thank you so much

for helping us to get the year started. kate moore, thank you. how about a forex report? russia considers ever cheaper oil. ian bremmer and coral weinberg, next. ♪

>> oiled defends as your

decisions into deflation. it 2015 begins of the fragile geopolitics. washington and its allies consider the weaponization of finance and sanctions. inequality is so 2014 read any quality so 10,014. we live from world headquarters in new york. i'm tom keene joining me is scarlet fu and brendan greeley. we will see brendan it later. it's time for top headlines. >> oil is falling yet again. it is hitting a five and half year low. crude is trading just above $55 a barrel. west texas intermediate is four dollars less than that.

prices are likely to head south sooner. look at the euro at its weakest level in nine years. it is weakening before rebounding slightly. there is concern that the greeks will exit the euro. merkel is ready to accept that. investors appear to be saying who needs stock tickers. the vanguard group took in money from investors last year. that is the biggest ever for a mutual fund. they mimic benchmarks and don't use stock tickers. their fees are also a fraction of the average mutual fund. >> to the plane crash near indonesia, bad weather is slowing down the rescue mission.

or bodies of and found and sections of the tale at the bottom of the sea. it would contain the flight recorder. there is speculation that ice may have caused the airbus to crash. it's a diversity campaign for pope francis and the catholic church. the pope names 15 new cardinals nine from the emerging world including tonga and miramar. we are checking oil right now. it is breaking down to new weakness. $51.41. we begin 2015 with the continued collapse in oil. europe fails to halt inflation and disinflation. there is no better way to link our geopolitics then with ian bremmer. he is the president and founder

of eurasia group and he brings along his top risks for 2015. honored to have you here with us. we are getting through what your smartest people have thought about. what is the number-one thing you argued about as you put together the lists? >> it was how concerned we are about geopolitics this year. i am not a pessimist. we are all feeling a level of significant foreboding this year. >> the foreboding of the glide path of oil, what is the curve mean? >> it means that it's one of the things that causes a dramatic shift in global power. it's one of the reasons why the united states has less interest getting sucked into the middle east. that's why president putin in russia is going to be on the offense in 2015.

the near-term is better for him. >> let's ripp up the script on this. will he be more aggressive there or in the south? >> we are going to see direct conflict, this affects his west borders and europe. it does not affect the united states very much. that goes to our top risk. the economics the number two risk is russia itself. they are much more revisionist geopolitical layers in their own backyard. cyberattacks affect the united states wherever the russians are located geographically. >> you would think it would. america's interests in punishing

the russians on security is very high. they are ensuring that the europeans are not hurt economically is low. we see the french president coming out and saying we want to remove sanctions on russia as long as there is progress on ukraine. there is no one in the white house saying that. there was no one in the republican congress that will be saying that. this is the year when transatlantic relations on a bunch of issues start to fray. that is one of the reasons i am concerned geopolitically. the transatlantic relations with the bedrock and foundation of what coke eared america as a superpower and go here to the world order after world war ii. we are used to that. now we think about the europeans, they are allies, that they are out there doing their own thing. we are out there doing our own thing. >> is that the definition of a g0 world? it's amazing what the

institutional responses will be. >> one of the institutions that will respond? >> it's much more relevant today. it's no coherent -- more coherent. those divisions are on greater display. the organizations that get stronger are the regional and local. >> maybe the catholic church as they announced 15 new cardinals with more global reach. >> with some nominally important catholic led states they can make a difference. i would not look to pope francis to fix it. >> you mentioned the french president, what other leaders could be wildcards in 2015? >> the ones we don't have yet. we have greek elections coming up. are we going to see some reason that in that government? look at what the germans are saying preemptively across the

board to respond to that? we can handle a greek exit. the economics look much better right now. the politics look so much worse. >> to take a victory lap here, citigroup got pounded for their essays of two and three and four years ago. >> i pounded them. >> you were out front of this. >> i believed there was no chance of a greek exit. the politics were very coherent. the germans and the europeans were going to do what was necessary and the germans lost the right to have a democratic governor. the answer is no. that is the problem. it's a lot easier to keep the eurozone intact getting -- getting rid is not a political -- >> does europe lead the core or

does the court leave the periphery? >> the dynamic is both are escalating. there is very little politically to enforce them to come together. if someone is leaving the periphery, they are choosing that route and the greeks are moving in that direction. you see the announcements made by the leader of cerise up. he is trying to tone it down. the germans are all basically saying don't expect a new deal. a deal is a deal and we are not moving. the germans are becoming more populist. you have this grassroots populism from the bottom up and you also have things that are growing. add to that the geopolitical environment that is great for the united states. it's horrifying for the europeans. bottom-up and inside out, europe

is bad this year. >> the euro is falling to 119. the economics are better. does this lead to economic performance? >> oil prices are much better for europe. employment numbers in spain are taking up. this is the greatest level before the financial crisis. those are positive. it is you're going to have a bang up your? no. they're not going to take the politics away. that is going to start to bring them down. >> in 1999 it was at 116 and went down. we are down from the peak. how critical is it for europe to have a currency stability to get through this crisis? does it devolve down through 116 to parity? >> the risk continues to devolve

down. i think they think that's a positive for them. >> including germany. >> does it make it less likely, the answer is no. is any of this going to move and trickle-down? you talk about inequality and views on inequality, it's not a global issue. poker gets piece this weekend looks great. the european middle-class is devastated. >> analyst from the eurasia group will be joining us to discuss the top risks of 2015. we already have the number one risk. ♪

>> good morning, everyone. good morning from new york city. brendan greeley is on assignment in boston and he will join us in this hour. scarlet the euro -- is hans nichols paid in euros or dollars or doubloons? >> there's been a steady grind lower. now it's at its weakest level in nine years. this is after mario draghi made a signal that the central bank will move closer to bond

purchases. from berlin is hans nichols. i won't ask you what you are paid in. what is this a reaction to? is he reacting to merkel and greece? >> it looks like the big move in the euro happened over the weekend when you had a respected publication report that merkel is preparing for a greek exit and thinks it's manageable. before the line for the last three years has been an agent of any -- exit is and think about. it's the distinction that the germans could live with greece not existing. >> them been predicting this for ages. be careful what you wish for, what is the knock if this

process continues? >> aside from this being messy. it's going to be predictable. the actual breakup would be like a celebrity high society divorce times 20. you can't imagine how difficult the breakup would be. after that, you start to have conversations about who the weakest member of the eurozone. you will see pressure from bond markets on we countries that have survived so far. resale is generous. the debt to gdp ratio is higher. they are in a bailout program. >> to the streets of berlin change with a 119 euro? does the domestic economy feel different question mark -- question mark

>> we are pro-in law visits and they come to visit me. it will affect exporters. it will be good for air bonds. >> party and hans nichols in a berlin. where are we? futures are negative five. coming up in the loop with betty liu. stay with us. ♪

>> good morning, everyone. good monday morning. we're watching oil south in the euro souther. it's a new word. >> nissans december sales beat expectations. it was the best year since 1996. u.s. dealers sold 170,000 nissan and infiniti models in december.

the founder of wainscot capital was gunned down in his apartment yesterday. his son was taken into custody but has not been charged. the elder spent decades in stocks before starting his own fund in 2011. americans were logging on for love last night. the first sunday after new year's day is the online busiest day for dating. matched says it requires patience. it takes men 10 weeks and women about eight weeks. those are your top headlines. people are looking for love online. in europe there could be a high product -- profile divorce between greece and the euro. >> ian bremmer is with us. let's rip up the script.

they are an datable. >> it's not like their other organizations out there. >> let's say they were able to piece together a government. >> should that be the guy that we are paying attention to? >> that's the problem. if you could pick as the germans did who the greek leadership was going to be you would wind up with policy orientation that would be in line. you have the greek people speaking and they are saying we support none of the above. we are euro skeptic. we don't trust the germans. they are a big piece of this election in greece and that's a bad thing. >> go over the top tone. in the background is the death of the washington consensus. now we are trying to find a new new for 2015. >> the top risks are the

politics of europe. what i found interesting was the effect of the china slowdown is the weaponization of finance. the u.s. government can leverage its strength in unexpected ways to finance. >> underline all of this is the notion that the united states doesn't want to be the world's policeman. boots on the ground sounds quite these days. that's a 20th century term. obama is not the only one, his opponents do as well. the united states has an interest in a lot of things. we are still engaging but doing it our way. we're are not asking our allies permission. we are not looking for a huge coalition. if you look at sanctions and drones and the nsa and the weaponization of finance, the u.s. dollar has been a much stronger leverage of power internationally than our nuclear arsenal or our combat forces have been over the past couple

of years. you see this with a response in north korea. the first ever sanctions reacting to a cyber attack. you look at iran and russia. you'd look at the sanctioning of u.s. banks. you want to do business in the united states, you have to pay by our rules. >> we've got sanctions against cuba for my lifetime, have they work best and mark >> if it takes 50 years to open up, it hasn't been effective. sanctions do work in areas where the government wants to engage and wants to be a part of the international community. sanctioned are not working on russia because putin's popularity is helped. his political benefits are coming from crimea and ukraine

and demonizing of the united states and the west. that's a very different kind. >> you map out your top three risks for 2015. the politics of europe. it's a number two is russia. the third is the effects of the china slowdown. why is north korea not highlighted? >> it is mentioned, but not as north korea. when you talk about the weaponization of finance and the rise of strategic sanctions, north korea as a country and a market isn't having a lot of effect. north korea as an actor that reflects a bunch of rogue states and bad actors that cause lots of problems for the marketplace and volatility, that's a real

issue. >> is that a model for patent what kim jong-un it does? >> how is it batting above its weight internationally? the united states once to punish it to make it behave better. that sounds like north korea. the chinese refused to play along. here is the question, we have said for a long time to the chinese will not want north korea to bet -- behave too badly, how does that work? will they have more success with put in overtime? >> what is the top risk for the united states? >> this year, there aren't top risks for the united states. this volatility does well for the united states. we talked about how we are the cleanest dirty shirt. it's a much cleaner or t-shirt deal politically. >> most people are looking for

bonds. we've got a lot coming up on surveillance. the founder of high frequency economics on asia. ♪

>> those reports are true, over my sabbatical i grew a beard. i shaved it. we are back. for those of you on radio. my sabbatical is done. scarlet has our top headlines on a busy monday. >> it was a record-breaking year for the vanguard group. the biggest inflow ever for a mutual phone -- fund firm. they don't use stock tickers. the finance agency accuses rbs of selling faulty mortgage runs

to freddie mac and fannie mae. they can be fined as much as $8 billion. espn personality stuart scott died after a battle with cancer. he joined the network in 19 93. he hosted nfl in nba programming . he was 49 years old. those are your top headlines. we have not mentioned brendan greeley yet. he is on assignment nursing out at the american economic association conference in boston. no jet lag. he is checking out what is puzzling academic economists. it's not so much the fed or the normalization of rates, its wealth inequality. it sounds like 2014. >> it's all about thomas the caddy.

they are wrapping their heads around this book. i went to one session where he answered three critics. it was jampacked. there were people taking selfies with him. it the one way to look at all the arguments that are gathering about this book is are you more worried about the .1%? then you are talking about capital gains taxes or are you worried about the 1%? that is income inequality. the solutions are better education and better social mobility. >> there is an age gap. for the younger people, it's a job fair. what are the younger professors thinking about the debate over inequality? >> what you are seeing younger academic success with is new

sources of data. the older academics came of age in the 1960's and 70's when there wasn't as much data. they had to work with thierry. younger academics know how they feel about it politically. he gathered data. the younger economists are looking to google and dating services and starbucks for new sources of computer data. they can churn and come up with new theories. >> again as i mentioned, it's a job there. one year i was stunned that there was no mention of four exchange for three days. one of the not talking about in boston? >> it is brutal. the other thing that happens is academic economists do the rounds. they will go through 15 interviews. you move from hotel room to hotel room. that's brutal.

they are not talking about the theories that are slowly dying like the single agent model. >> is there a lot of drinking of longer beer? >> sam adams boston ale. >> when did we see you again? are you going to be back tomorrow? >> i am a nerd mardi gras. i'm never coming home. >> brendan greeley, thank you so much. >> for interview who missed it they really get going. they really get going in the sessions. i have had some wonderful experiences. >> let's get a day to check on this second trading day. >> look at the euro. >> the euro 11902.

that follows comments from angela merkel. she would not be opposed to a greek exit. this is "bloomberg surveillance." good morning. i'm scarlet fu with tom keene. >> it's a new frontier for europe. draghi is front and center. suddenly, greece is different. carl weinberg has been way out front on the charges -- challenges for europe. ian bremmer is also with us. our, wonderful to have you. i want to take a different tack. we talked a lot about greece so far. is this the culmination of fears you've had for for five years?

is this just another inning the ballgame? >> everybody is talking about quantitative easing, credit is contracting in the euro zone. that means depression is on with no press insight. >> cannot come over to the united states? the lower interest rates and the lower currency? does that affect our viewers? >> the u.s. economy is growing solidly. solidly recovering. these are headwinds to u.s. investors. there are substantial risks. the biggest of which is if greece does elect this government and we do default on their foreign desks -- that's, bonds are going to turn to dirt. there are going to be a 180

billion euro problem. that could spill over to us. don't focus just on the banks as a source of instability. but at all the institutions that bought these bonds. >> let's open this up with ian bremmer. i want to go how upfront others were about the restructuring of debt. what do we fear about doing a healthy restructuring of bankruptcy for europe? we can't get there. >> there is no longer popular support. the feeling of crisis in germany domestically is not there. the feeling that all my god our banks are going to implode. >> i have been arguing for restructuring greek debt since 2010. i wrote an article in the wall street journal and talked about it. based on my background, this

could have worked wonders for greece. they are past the point now where a restructuring can fix the problem. their debt is 175% of gdp. it's more now than it was in we started. it's getting worse and the economy is not growing well enough to service the debt out there. there is no good way out of this. >> this is true politically. it can end up with a government that is going to be constructive in engaging with the germans and the rest of europe. germany is a political issue. they are going to elect a government that is going to say we oppose the strengthening of these institutions and the stripping away of our sovereignty. that's a very different dynamic. >> just looking on the bloomberg terminal, january 22 is a meeting.

tony 28 -- january 28, will policymakers wait to see what happens with mario draghi in the greek elections before they declare their next up? >> i think the fed knows what they are going to do. until it comes around to affect the economy, their focus is on the united states. there is so much expectation in the council meeting that there is nothing but disappointment that can come out of it. i fear that yields being down, they are down as far as they can go. >> i am going to put this out on bloomberg radio plus. do you think there is a tipping point? 116? >> >> i say talk to a technician and not an economist.

>> scarlet? >> shouldn't be concerned that income inequality or wealth in a quan ♪ inequality?

>> the euro through a 119.

we just got a 118 off the terminal. 11896. oil is down. we've got a morning must-read. >> mario draghi's interview. having a wide ranging effect on financial markets across europe. he hammered home the theme of structural reform. this is what he said in particular about which countries need to do more. which governments of ample minute rid -- reforms? >> spain a little bit. you are seeing improvements in growth there. you are seeing more flexibility which allows people to come into the labor market.

italy will see benefits from the reforms they have engaged in. there is more competitiveness in a lot of sectors. i think it's going to take a long time. even in france he has the worst approval rating in france since world war ii. they are engaged in reforms for france. is that enough to deal with the unemployment problems? of course not. >> in the research notes, you have been way out in front on this. is there a political solution to france's euro sclerosis? >> i wish we could fix it. i can't. the banks in europe are bust and they need more capital. until they lend, we are in a depression. there is no political solution in sight. politicians don't know how to fix what's broken in it and still get reelected.

>> merkel seems how to know -- know how to get reelected. >> even in germany, it is developing the same academy momentum but the party did a few years ago. it is a very conservative and eurosceptic policy. merkel's plain politics over the last few days. the domestic politics are becoming important in europe and that makes washington look harmonious. >> my biggest shock is russia being immune from all of this. we have a weaker wrubel. -- wrubel. >> i don't read reports. >> i have two of them. >> i have in writing for months that vladimir putin's play in

this is to reign egg on foreign debts. i call the argentine solution. the more we disenfranchise vladimir putin and russia from the global financial system, the less he has to lose. they have six hunted $70 billion in foreign debt. that is a big ouch and that is high on my list of problems for 2015. >> how do you get that? >> should we be more concerned with income inequality or wealth inequality? ♪

>> good morning. the euro through a 119. weaker euro in weaker oil. let's get our headlines. >> 2014 was a banner year for ipos. that is according to the new york times. the highlight was alibaba's $25 billion offering. that made jack ma one of the richest people in the world. it raised 36% more money. bmw is helping distributors in china. they will pay $820 million to cover losses after retailers stopped ordering cars.

the subsidies are the largest by an automaker to its retailers in china. dealers of complained about unrealistic sales expectations. investors are waiting jobs data this week. that will show 2014 was the best year for job growth since 1999. we will show u.s. companies added 225,000 workers in december. right now, the consensus is for 240,000 jobs added in december. >> we will go beneath the headline data on friday. it's a late report. to our international relations europe and the diversions of a better america from global economy. quietly, there is japan. it has been lost for many

decades. carl weinberg is with high-frequency economics. you have been way out front on the struggles of japan. why do i care? >> probably not so much. you probably care more if you are in china. or singapore. if you are somewhere else in asia trying to take manufacturing jobs away from to, you care about that. if you own stocks it's a time to keep a careful eye on them. maybe they will fall more. the population is imploding. there is no reason to think the economy will grow. it's kind of a sideshow in the united states. we saw a lot of reduction leave after the earthquake in 2011. that's what we will see over the

next several decade as japan's population drinks. >> one thing noticeably absent is asia nationalism. why is it a red herring? >> one reason is they need to work on the economics. they have pulled back on so much of the we hate china rhetoric. he has been more careful. there is a new speech point to happen and apologize for atrocities in world war ii. the chinese also see that japan is not doing well. investment in japan was down 40%. the chinese government does not want to see that. they want more stability in their region. they are trying to restructure the economy. he can still play the long game. there is a huge risk of great power politics in asia. it's not a 20,000 -- 2015 risk.

>> there are elections in taiwan. local elections show that the -- >> the lead does have a relationship in taiwan in a way that it doesn't with hong kong. it's a security relationship. hong kong has spooked the chinese. it's one of the reasons why you've seen these elections ago against and toward the nationalists. the chinese not going to be patient with taiwan. >> described that patients. that is an entity relationship. >> for the last 20 years, the policy between taiwan has been we will integrate and make them

into china. we will preference them for business. we will integrate them economically. they see that policy of integration has not worked. the economics are not doing well. the population has turned against them. the china dream institution does not work. >> as we have 50 new cardinals of the pope, what is the imf going to do? >> if they don't, china will start its own. they have the framework for a bank organization. they have their own monetary system as a next step. geopolitically, i have a question for ian. who in asia can afford to fight a war right now? i always say nobody fights a war unless somebody gets paid. china is the only economy in

asia that can field and army and feel the navy and do damage to other countries. that's why japan has minimalize. if you can't pay for it, you can't fight it. >> were start with people have access. could the germans really pay for the war they started in world war ii? it's hard to make that argument. they were driven into near economic collapse and that forced him to put everything into militarism. ms. doing that now. i am more worried about accidents coming out of europe green --. >> let's get to the agenda were we focus on stories. next oil. we have stat -- set here and

people have said this is the bottom. it never is. >> $55 even for crude earlier this morning. it's now below that. on my agenda is congress. they convene tomorrow. we will see if they can do better than the last one which did nothing. everyone is traveling back to washington. we are going to head over to boston where brendan greeley is hanging out. what's on your agenda? >> i am going back today. it's an amazing place to pick up new ideas. i talked about how resilient tele-novella's are helping brazil meet goals. this is how many sessions i could go to. i flipped through it a second ago. consumer choice and welfare through a behavioral lens. why would i not go to that?

>> that sounds fascinating. you're hanging out with some economists and doing some dancing in the streets gang them style. >> we're going to look at how the video will affect the market cap of one south korean company through nonmaterial information. >> i can't wait for this. >> we will tweeted out to everyone. stick around. our twitter question of the day has to do with what you are discussing worried should we be more concerned with income inequality or wealth inequality? answers are coming in.

what are you hearing over at the conference? >> people seem to know that no matter how we feel about both kinds of inequality, people find wealth inequality less tolerable. we had people going to great lengths to say they were not rich people. that is not true. i think we know socially whether it's legitimate or not, voters are uncomfortable with the idea of the very wealthy. >> safe travels home from boston. >> markets are on the move. futures are negative five.

the headline still is oil. >> it's remarkable. thank you so much for joining us. the eurasia group will be featured all week long. ♪

>> good morning. it's a monday and we are live from bloomberg world headquarters. i am betty liu. we are 90 minutes away from the opening bell. welcome back from your holiday.

we have a packed show for you on this monday morning. sallie krawcheck is joining us in moments. she led bank of america. she is the former ceo of smith barney. with 2014 the best year ever for automakers? they are dominating the media. we are going to talk about the auto trends. how about a car that tells you where the closest doughnut shop is? these are our top stores sprint the euro is starting with a whimper. it fell to a nine-year low. it rebounded. signals from mero draghi that the banks will start quantitative easing this month.