can volkswagen-- buy its way out of trouble? major changes that the second-largest country in the world. -- company in the world. ♪ >> welcome to "bloomberg ." i'm david weston. stephanie: we are about to have a big tv week. now.berg kicking off what more could you want? stephanie: can you outdo trump on "snl"? let's get some news from vonnie quinn. israel's prime minister

meets with president obama today. he plans to discuss boosting u.s. military aid to israel. it will be his first visit to the white house since he tried to scuffle us-led nuclear deal in iran. the european says union has to become more flexible if it wants britain to stay in the eu. the countries will back me and this negotiation. frankly, the status quo is not good enough for britain. we need to fix these challenges, fix these problems. that is what the negotiation is all about. then we can throw ourselves headlong into keeping britain in a reformed europe. vonnie: he will layout his demands in a letter tomorrow. party may, the ruling be admitting facing defeat in the election yesterday.

even if the opposition wins, the military is still guaranteed 25% of the seats in the parliament. you can get more on our raking stories 24 hours a day at the new bloomberg.com. here is matt miller for a check on the markets. a look ate futures, down across the board to kick off the week. a seven-point drop. futures down about 50 points. take a look at the bloomberg terminal. of can see the likelihood the fat actually raising rates in december has come down a little bit from the job surprise we had on friday. at one point, we were looking at a 76% chance. now, 68%. this is what futures are calling. most economists are thinking that it will actually happen. take a look at the two-year. 0.9%. obviously, the new bonds have a higher coupon and you don't want

to hold the old bonds. you are seeing that across the curve. take a look at the euro. goldman sachs reiterating its call for parity by year end. today, we see the euro climbing just a little bit. it has come down substantially. on friday, the move was notable. it was just a cliff, just dropping off a cliff after that jobs number surprise. david: thanks very much, matt. it is a big week for economic data coming out of china. we started yesterday showing that exports dropped for a fourth month. imports are down 19%. we are joined by joyce chang. thank you for being here. we saw exports and imports down. how bad is it and how much does it matter? two-speedna has had a

economy for a number of years. manufacturing has been coming down steadily. the trade surplus is at a record level right now. $61 billion. the surpluses are looking better. that has stabilized the currency, but you are going to continue to see the slowing in china going forward. stephanie: how about consumer sentiment? singles day is this week. emily chang is headed out there to sit down with jack ma. if we see a very big singles day , what does that mean about the chinese consumer that so many companies have been excited about? joyce: household income is holding up and that they have been better than the manufacturing numbers that we talked about. i think you will continue to see that china is growing below 7%. we have it coming down to 6.5% next year. you will see the disconnect

between the services and manufacturing sectors. david: what are the numbers we should be looking at to get a feel for the consumers and manufacturing? peter: as the economy shifts toward services, there is more noise in them. getting a good sense of the chinese economy requires better data on the services sector. joyce: absolutely. i think the manufacturing data is over exaggerating the growth in china. we took our forecast up a bit. we still have it coming down. it would not surprise me if the official target comes down to 6%. this is a rebalancing that has been underway for a couple years. stephanie: let's talk about the uber wealthy in china. they are working hard to activate the chinese uber wealthy. their coulter of to give in a big way in terms of philanthropy. why is this and how are we going to change it. the first time, we have

more billionaires in china than in the united states. we are at 537. it is not a part of their coulter, but they are adopting very western approaches, following the practices of carnegie, rockefeller, and ford. ford foundation, we just hosted a group of philanthropists coming over to learn about western philanthropic practice. stephanie: sounds good. we actually see chinese culture changing. just saw the president of china shaking hands and kissing babies. do we see them adopting western ways in terms of business and investment? joyce: they finally abolished the one child policy. you see the statements of inclusive growth, green policies, so china is evolving, but things move slowly still. david: there are other data coming out of china. which ones will you be looking at particularly? joyce: i think the negative inflation prints are behind us

right now. we are looking at the inflation data, but we continue to look at the external surpluses. everybody is looking to the end of the month on the decision about the currency. well -- whether it will be included in the basket. david: you go ahead. stephanie: when we think about big data, everyone was so excited last week about the jobs number. if we get more negative news out of china or positive news out of the u.s., is it going to get more cash flooded here? peter: it depends on the relative magnitude. one of the things that we, in the united states, need to decide is are we in favor, do we want chinese growth? there is a group in washington and elsewhere that will be blunt .heer

they say the tpp is an anti-china containment policy. of chineseavor growth or not? it is starting to lead to cognitive distance -- dissonance. i'm in favor of chinese growth. i think the world will be a safer place if the chinese economy continues to grow rapidly. matt: i just charted exports and then world imports. you can see that around 2010, we were kind of peaking. we have come down significantly. the white line is mainland exports. the yellow line or the orange line is global imports from china. you can see that the demand really isn't there right now. aside from the competitiveness issue that they have got, the demand is lacking. how reliable are any of these numbers?

on the set, people say it is fine, but after, they say i'm not sure i believe the numbers. what has been your experience? joyce: the best numbers out of china come from the special sample surveys in my experience. it is hard to necessarily know you can break them down, but the survey data and the sentiment impact gives you a better read on this. i would say that 2.5% of global trade goes to china. the final problem is demand from china has slowed down. this is hurting a lot of the other emerging market countries because there is not a lot to replace that. stephanie: who does it hurt the most? joyce: it hurts emerging markets practically 121. -to-one.o for the commodity exporters, it is practically that. stephanie: if that is the case,

why are we so sensitive? the u.s. we focus so much on china. why are we so sensitive to the chinese slowdown? peter: because of all the indirect effects. , includingt effects on the commodity sector. it affects australia, it affects lots of things indirectly. from the perspective of global growth, we are becoming more sensitive to global developments. a significant chinese deceleration does not help. david: darren you see any indications that the slowing down in china may affect the willingness to contribute? >> not week -- not really. there is a new chinese foundation created every week. people are interested in domestic philanthropy, helping the education system, helping the environment. it is a really exciting time for philanthropy there. stephanie: in terms of lag time,

they are excited about it today. in order for chinese philanthropist to truly have an impact on health care, education, transportation, infrastructure, when you talk about people like andrew carnegie and the men who built america, how long does it take to impacted? darren: we are already seeing the impact in terms of the education system. improvements are being made, in part because of philanthropy. matt: it is very interesting to look at the gini coefficient, which shows you the gap of any quality, the wealth gap. it hasnteresting because come down in comparison to the united states, according to bloomberg data that we have collected. we are looking at a gini coefficient. germany is down a 30. the lower you get, it means a more equal society. the higher means a more in equal society.

even if they are not doing philanthropy the same way, it does not look like that they have the kind of problems that we have. david: i would not have predicted that. peter: the latest data there is 2011. i would argue that the crackdown and corruption has led to the continuation of that trend. the future of philanthropy in china is going to be much more affected by the evolution of the top 0.5% share than whether the chinese economy grows at seven percent or 5% or 4%. darren: correct. stephanie: what is the most important thing we need to focus on with respect to china? joyce: i think the fears of a chinese hard landing are overestimated. stephanie: no, but they do make more dramatic tv. [laughter] try again. what you most excited about. [laughter] joyce: i think watching the capital outflows is important. it is going to continue.

you still have a corporate debt problem. that is more of the key thing that i'm looking at right now, rather than the overall growth numbers. stephanie: joyce, thank you so much for joining us. joyce chang, head of global research at jpmorgan and recently named one of the most important women in the banking universe by "american bankers." r were not named one of the most important women, but you are on for the rest of the hour. we are going to give you a chance to up your game. we will have more on the marketplace. emily chang is in china and she will be interviewing jack ma in the 9:00 a.m. hour. it is time for you to get engaged. do you have questions for darren, peter, or david and i, send them in. us.can always tweet

we have so much more to cover. just getting this week warmed up. when we return, the volkswagen board meets to discuss the next step in a deepening crisis. ♪ we have so much more to cover.

welcome back to bloomberg . breen has been running dupont since last month and now has the job on a permanent basis. breen has said he wants to expand the cost-cutting program. the former ceo resigned after being under pressure from an activist investor. apache is trying to fend off an unsolicited takeover offer. they rejected the initial bid and is hired goldman sachs to work on a defense. apache has a market value of $18 billion. the world's biggest banks may

have to raise up to $1.2 trillion to avoid another lehman brothers-style collapse. have absorbingto capacity of 16% of their assets by 2019. that will left to rise to 18% three years after that. stephanie: now time for global go. board is meeting to discuss further consequences in the growing scandal. hans nichols is in berlin. i want to get clarity about what we are going to get out of today's meeting. who specifically is on their supervisory board? this is an internal problem with people in the company where there is a lot of wrongdoing. for these guys in charge today. hans: importantly, the head of the labor union is on the council and he is upset -- he is on the supervisory board -- he is upset that a lot of the plans have not been run by the works council yet. one of the more interesting,

aboutght exciting, things covering a corporate scandal in germany is the unions have so much power on the board. they have about 20% of the voting rights. they can always leak about meetings after the fact to bring more clarity. we are expecting some fireworks at this meeting, and part of how the labor unions have not been read in the entire way. stephanie: in part because maybe that supervisory board is embarrassed that they were there when all of this happened. we know you are going to be watching this closely and hopefully you will be checking in with us later today. we will be back with more "bloomberg " in just a moment. ♪

david: welcome back to

"bloomberg ." there are big changes afoot at the ford foundation. walker, the president of the ford foundation, is here with us. the ford foundation has been a leader, a path breaker throughout its history. darren: we were founded in 1936 by henry ford. the mission was a charitable mission. 80 years later, we are now an independent global philanthropy focused on social justice and advancing human achievement. we have an endowment of about $12 billion and we give away annually about $500 million to $600 million. david: what are the changes you have announced? darren: we are going to be focusing more on the global challenge of inequality. that is going to be the organizing principle for our work. we are going to have new work that reflects the challenges of today.

for example, new work on the internet. stephanie: does philanthropy need a new brand? should we start looking at philanthropy like impact investing? soft, think of it as a nice, girl in human resources way.of but today, the need for private founding -- funding from foundations is more important than ever. there are a lot of failed initiatives out there. it is interesting that you make that point. one of the things i announced in my letter is that the ford foundation is going to have a new policy with respect to impact investing. our endowment heretofore has not been invested that way. impact investing is a way of investing that takes into account social impact. we want to use our grants for social good, but we also want to use our $12 billion investment for social good. peter: the second point that you

made is also crucially important. lots of foundations are not so good at evaluating what they do in terms of whether it is working or not. a big new movement in the foundation sector, which i think is a great thing, is to do that kind of analysis. we put the money here, what actually happened? stephanie: you talk about this all the time. --id: you are making changes when you are making changes, you have to give something up. what you cutting back on? darren: there are programs we are going to cut back on. in the u.s., we are reducing investments in our lgbt writes program, in parts because there have been significant advances. investment in a program that is investing -- stephanie: that is a good point. they are reducing it because it worked. that is a huge positive. darren: in addition, there were

new philanthropists who have come to the fore since the ford foundation pioneered this field of the lgbt writes funding. do we still he to be there? is this the best use of our philanthropic dollar when there are so many other needs? stephanie: how do you create real accountability. top andt comes from the it comes from an insistence that you are evaluating what you are the stuffcutting back that does not need to be done. exactly what ford is doing. stephanie: making it happen. darren and peter are staying with us. tom keene is here for this morning's must read next. ♪

david: welcome back to "bloomberg ." still with us is darren walker and peter or zach. he is a bloomberg view columnist

and tom keene is fresh off of surveillance radio. tom: good morning. stephanie: how about some first word news from vonnie quinn? in new york, there has been a shooting near penn station. no other details so far. the shooting happened about 19 minutes ago. three hours from now, president obama meets with israel's prime minister benjamin netanyahu. it will be by benjamin netanyahu's first visit to the white house since you try to schedule the nuclear deal with iran. he wants to boost military aid to israel. canceledans that has flights today because of strikes from flight attendants. they say the strike will not affect 70% of its services. strikes have cost the airline more than $350 million.

you can get more on these and other breaking news stories coming four hours a day at the new bloomberg.com. david: tom keene is with us. what would you like us to read? tom: let's bring it up here on international economics. peter or zach can do it all. this is from brazil. ims sdre, the department is to become a global liquidity hub capable of mitigating future crises, reform is vital. ideally, major powers with support efforts to strengthen the imf, but the u.s. has so far been unwilling to do so with domestic partisan politics spurring congress to block the relevant reforms. at a lot of code phrases in there, but this is the heart of where we are going to the in the future. writing this up that we finally got a break from where we were post-world war ii and talk about an international organization. it is very clear that

china's role in international institutions needs to be expanded. the u.s. doesn't need to support reforms and we are not doing it. skip jackson would have . tom: years ago, this would not have been a debate. tough in is very today's political environment to be in favor of international organizations. it is the blunt truth unfortunately. stephanie: why specifically? of the frustration and antiestablishment backlash is with all of these international organizations that people do not feel like they get some from. stephanie: there's just no accountability? peter: the fx are too removed from the everyday experience. and then do not think they are working that well. david: that's another explanation. stephanie: he actually gave the answer. david: explain to someone who is not an expert in the imf withdrawing rates in china, where are we in that process?

peter: the big puzzle that is why the chinese are so desperate to have their currency included in sdr. frankly than it being a bragging right, it does not really get you that much. the best explanation i think that has been given is that this is a very savvy move by the reformers in china, who say that if we sign up for this important change, we will win a lot of internal battles towards globalization. so far, that has been happening could short answer, yes, the decision is later this month. the most likely outcome will be yes, but -- you have to continue down the road of reform and revisit next summer. this: in order to have performance you talked about in the must-read, is it necessary for legislation? yes the bottom line is that , the united states and different institutions have to get on board and what i would suggest is modest international change.

it does not seem that way with the polarity. peter: one of the hardest things at the beginning of the obama administration is trying to have a relatively small change involving international financial institutions. it is just among the heaviest lifts. tom: how do you see paris in december? i started getting informed on the known world in paris. can we assume anything will get done in paris or will it have the same gridlock that we have seen? it's like a two-week meeting and i will be there for like eight hours. the answer is -- do you have any optimism that something gets done? peter: i think it will be very challenging. am very encouraged that the obama administration is taking the initiative and moving down the path to trying to alter our own carbon pathway without new legislation. i think the probability that we get legislation is very low.

what comes out of international negotiations is going to reflect that reality. if we are promising a carbon tax , no one will view that as credible. david: coming back to the chinese again, it was always that the chinese have to go first. fairhinese have moved a distance here, which changes the bargaining dynamics. peter: it is also the case that we learned last week, talking about the data, chinese carbon emissions over the past day --ld were substantiall decade were substantially larger. stephanie: that's in china. tom: i thought the accounts on foreign relations and when she put out "the river runs black," it was earth shattering. nothing is changed. it's that simple. peter: i think the short answer is that the rollers larger and their openness to being part of the international

-- i agree with you. david: before they were saying that we are behind and we need a fair amount of time to catch up. peter: if we do not have china talking about cutting emissions, we would be nowhere. stephanie: you are talking hot topics internationally and we pastwhat it has been the two years and it is income inequality. it is a hot topic with a elections. income inequality is only worsening. everyone at this table and in this building is very passionate about this issue. darren, how are you addressing it? darren: the american people are concerned. more than 50% of americans believe that inequality is a major challenge. we are addressing it by organizing all of our grantmaking in the u.s. and around the world. inequality in many ways undermines our vision for a more just and fair wrote in four, inequality is particularly problematic because takes us and

opportunity, aspiration. these are the pillars of our culture. the ability to get on upward social mobility, a kid like me starting in a shotgun shack in a small town in texas and the up as president of the ford foundation -- that's an american story. be question is will there more american stories like mine and yours, david, in the future? if the trend with inequality continues, it will not be. david: you deal of business leaders stay in and day out, what is the business case you can make to business leaders? darren: inequality is bad for business and that for the ai economy. the good news is that business leaders are taking this up. i was speaking with paul tudor .ones stephanie: our first guest on "bloomberg ." head of rawthe

child and a number of organizations and leaders are starting a movement called inclusive capitalism. stephanie: how about our government leaders? the american dream begins with education and a great foundation. that does that happen with business leaders. we have to start voting that way. peter: i think the reason it matters is that evidence suggest its extreme levels and it's bad for growth. it is literally killing people. there is evidence out that less educated white males in the united states have experienced a decrease in life expectancy and an increase in mortality since the late 1990's. be driven by me to the dire economic prospects if you cannot be a business leader and believe it is a good thing. stephanie: why are we not pointing to business leaders and saying, you fat cats make all that money and you need to fix this? peter: there are multiple causes for this and there is plenty for everyone to do. it is also the case -- coming

back to business for a second -- the surprising share of the rise in inequality looks to deal with what firm you work at versus how educated you are and how hard you work, which is the traditional story. at the company level, andormance is diverging some of that is spilling onto workers, driving wage inequality. it is not just government. it is not just business. it is not just individual. it is everybody. david: one of the things that i wonder about in this discussion, are we talking about inequality of results or inequality of opportunity? those are two very different things in the american culture. tom: the answer is both and all the above. i think the confusions can get conflated together. peter is a global expert on this. i would go back to the research that peter alluded to and that different companies are doing far better in the modern millie you than more traditional analysis. what i noticed was this idea of what to do.

what it is is the will to socially fix the problem. without question, the political will is not that. 1979 in median household income. peter: experiencing no income growth. tom: i talked to my kids about this all the time. stephanie: this is one of the reasons why donald trump has had so much success. if you think about his base, it is the middle income families who are frustrated. peter: i agree. tom: i would also agree with mr. sanders. the american people -- and it is not just trump supporters that are feeling increasingly vulnerable, increasingly insecure. what that does is that it drives in ourin our society and democracy. inequality is bad for our democracy. it kills aspirations and dreams and makes us more cynical as a people. david: you have written a letter saying this is your number one

priority. what are you going to do about it? darren: make big grants for big impact. we are making and new initiative called inclusive economies, where we want to get to a conversation about what kind of capitalism we want to have in america? i capitalism that is an economy of a hollowed out middle class or an economy that produces shared prosperity where all americans have a possibility to get ahead and get a good education and live a secure life? peter: this is going to take multiple different levers. it will take investment and better education. it will take increasing moves toward a progressive tax system. it is going to require aggressive competition policy and some of the returns of the company levels are results of moats around the company. it will require a whole list of things. it is not just one silver bullet. stephanie: i know i'm going to get in trouble because we have no more time lift. if you look at quantitative

easing, does quantitative easing help or worsened the inequality divide? the asset holders got richer and richer the past few years. darren: this is a pre-existing trend in the fed is like at the third level in terms of income inequality trends. peter: the fed should do what it is going to do. tom: did you see how that happened? [laughter] stephanie: when you give an answer i don't like, suddenly he coughs. coincidence -- i think not. [laughter] peter: there are some things that janet yellen does not control. david: tom keene, thank you for joining us. darren walker, stay with us. a quick look at futures and the stocks pulling back a bit after major averages recorded the six consecutive weekly gain. it's their longest winning streak of the year. dupont has named their new chairman and ceo. this is less than a month after he was named interim ceo following allen's resignation.

our heart media ceo bob pittman will be with us next hour. and youyour questions can always tweet us. still ahead, why president obama rejected trains canada's bid to build the keystone xl pipeline after seven years of debate on "bloomberg ." ♪

vonnie: welcome back to "bloomberg ." here is your latest bloomberg business flash. ta's recall may get bigger. a number of automakers are using the airbags that many automakers have no confidence in. those include land rover in tesla. so far, 19 million vehicles have been recalled. boeing has announced an $8 billion deal with india's jet airways. of boeing's 75

jets. the order was already ongoing, but the buyer and details are undisclosed at the new james bond movie led the way at the box office this weekend. it took in $73 million in north america and a number that was less than some analysts had productive. in second place, "the peanuts movie" with $45 million. that is the news you need to know at this hour. stephanie: president obama announced his rejection of the controversial keystone xl pipeline, saying that the approval would undermine the u.s. efforts to curb greenhouse gases. he also said the project would not make a meaningful contribution to the economy and would not lower gas prices for consumers. let us dig into this with clearview energy partners managing director kevin. what is your immediate reaction to this news? kevin: for several years, the

regulatory paper trail led to guess. in the last year, the president's body language led to a no. this came to a little surprise to anyone. stephanie: what does it mean for the pipeline project? kevin: any public project that wants to go from western canada onto the most proximate and really best market in the gulf of mexico is going to face and ed environmental movement with the techniques and new ability to persuade a regulatory apparatus, which took seven years to make a decision that ordinarily would have been much faster. david: how much did the price of oil affect the economics of this project overall? kevin: the economics of the project are a lot worse than when it was first proposed. right now, you would not get a lot of investor support for the keystone xl northern leg. the critical question may have been to the extent that oil prices also justified putting oil on trains. belowhe oil price fell

$60 a barrel, the epa argued that the cost of shipping by rail may keep oil in the ground. keystone xle pipeline was the difference between drilling and not drilling. that may have acted into the decision. stephanie: what does it mean for price differentials? will it suppress them even further? most: the answer is a certainly yes. the press today is not the issue. it is about the price in the future. it is at capacity constraint situation. global demand being what it is an development being what it is. one of two future outcomes is likely. but oil stays in the ground as environmentalists hope or more likely, the oil comes out of the ground at a greater discount to the producers of western canada's sediment terry basin. matt: there is a very cool function and there are some map andyou can do with b i have mapped out the keystone pipeline. here you go. you can see that this is the

project that was next. here is an existing pipeline. the existing pipeline is bringing down a lot of oil. if you go back to the original terminal screen that i pulled up, what we have done is graft all of the oil movements from the keystone area down to cushing. you can see that it has grown and grown and grown, even without the keystone pipeline. we are at a high here with takers and barges and other pipelines. we are already getting so much crude product from canada and sounds of those refineries that maybe the keystone pipeline is not necessary. stephanie: i do not know about that. what do you think, kevin? kevin: the question is not about today but about tomorrow. the upsurge in the chart has a lot to do with the 2006 reversal of the spearhead. heavy crude has been coming in and greater volume pick for it to keep growing, there eventually needs to be a lower-cost conduit. if prices stay low, it will make

a difference in the future. stephanie: where does transcanada go from here? kevin: that is really a question from transcanada. there is not much in reapplying with this administration. it really raises the outcome of the next president election to the new level for them. this election is not going to be about energy, but it will probably matter an awful lot for energy. david: kevin book, thank you for joining us from washington. donald trump took over "saturday night live" this weekend. stephanie: i thought peter and darren trumped him actually. david: that is next on "bloomberg ." stephanie: it's shocking he wore a red tie. ♪

>> now that i am here, this is actually the best monologue in snl history. can you believe that? that's pretty great.

yay, look at this. [applause] >> donald. >> henrique. >> i brought you the check for the wall. david: that was donald trump hosting "saturday night live" saturday night with a couple of imitators. stephanie: the impact that beald trump has, people will on youtube, but the show itself had the highest rating since 2012. david: what do you make of the donald trump phenomena? darren: i think you resonates with a lot of americans. stephanie: why is that? earlier come you mentioned the american dream and you are someone who lived it. that is why david and i want to do this show, to amplify it. the reason donald has been so successful is because we lost the american dream? darren: because we are losing it and many people in their everyday lives are feeling it and feeling it profoundly.

when a politician steps forward and speaks to their vulnerabilities, their insecurities, their need for a certainty of a future, people respond. love this why do they billionaire and hate other billionaires out there? darren: he is speaking in terms that resonate with them. stephanie: there you go. thing, do you have one you want the people to american -- the american people to know about what you're doing, what is it? darren: we are changing the world with visionaries at the frontline of justice. stephanie: when we come back, bob pittman talking about earnings, music, and a whole lot more. ♪

david: well volatility returned to the markets? embrace a wild ride. why radio keeps thriving.

the force of americans still discover new music on fm. we will talk with i heart media ceo bob pittman. it is the ultimate investment for fans. why so many people are investing in sports. ♪ david: welcome to "bloomberg ." i'm david westin. stephanie: i'm stephanie ruhle. here with us throughout the hour to answer the question did video killed the radio star, the answer is no. that is bob pittman. david: i like the historical reference. bob: you only have to remember one video. david: let's get to the first word and with that, we go to vonnie quinn. vonnie: benjamin netanyahu meets with president obama today. he plans to discuss boosting

u.s. military aid to israel. it will be his first visit to the white house since he tried to scuttle the u.s. nuclear deal with iran. russia is now focusing on the threat of terror at home. speculation is growing that a bomb threat down the airline in egypt. it is important to keep a simmering islamic state search and see under control. david cameron says he will campaign to stay in the european union if his demands are met. cameron says he is not satisfied with the status quo. he is taking a hard-line and says the u.k. could survive without being a part of the eu. he lays out his demands tomorrow. you can get more on these and other breaking stories toni four hours a day at the new bloomberg.com. i am vonnie quinn. matt: let me give you a look at the markets. futures are down across the board to kick off the week. we are looking at a six-point drop on s&p contracts.

about 40 on the dow jones many contracts. take a look of the individual stock stories. a $73ine, which is billion company believe it or not, beat estimates but missed on its outlook. --rth quarter a full year no, fourth-quarter profits as you can see, a share of $1368. they expected profit to be as much as 11 .90. -- a mess their there. apache isorting that giving the unsolicited takeover bid. the stock is up 12%. apache has hired goldman sachs on the defense for this, but neither apache are goldman is commenting. that is an $18 billion company could warehouse or is buying plum creek for a $.4 billion. the combined company will have 13 million acres of timber land

and they say that this will save them $100 million a year in synergy. you can see that plum creek is at 17%. the price -- 1.6 shares her every plum creek share -- is actually a 21% premium. stephanie: now to talk markets and a deeper way. october was the best month for job growth so far this year. this means that the fed could be weeks away from raising interest rates. we want to know if the market volatility will be returning. let us bring him our own joel wiesenthal and francine from london. welcome. and bob pittman is here. david: i'm glad to hear that she is spending her way through the big apple. [laughter] stephanie: let's talk about friday. friday with the stupendous jobs number and we were cheering and people getting excited and futures are down. ?hat gives

know if you dot not want to read into much, but short-term interest rates jumped after the friday jobs report, which is an indication of the markets as citation that barring something surprising, a rate hike is coming. december is likely a less data disappoints. thus unless the data disappoints. we cannot get all the way there because market volatility comes. david: you just made my day. i never thought we would make that on "bloomberg ." that's real progress. what several banks are not doing is not having an impact at all. francine: it is working on currency. that the dollar continues rising and at this level, it did have an impact on exports, does it mean that they will not be able to raise gradually 2017? the game changer is what happens

to the dollar and impact of what janet yellen season currency. joe: the divergence between eurozone monetary policy and u.s. monetary policy -- it is hard. the euro has been falling a lot lately. goldman thinks it can go to parity fit a strong dollar can have a damaging effect on u.s. inflation. stephanie: bob, do you care? how focused argue on whether janet yellen will raise rates are not in december? bob: i think we have zero control over it. the only thing someone can do sitting in my shoes is to run our business the best we can. we have some international with a company our size, there is little control we have over that. stephanie: what a rate hike effective? affect you? bob: some things good and some things bad. matt: don't we have one more jobs number before the fed meeting? everyone is saying it is going to happen now, no questions about it.

look at the chart surprises. the last time we had a surprise this big was back in september 2013. you can see that the very next report was the biggest negative 2011.se that we had since there is a lot that can happen between now and the next fed meeting. you can see the divergence. the yellow line is forecast in the white line is actual reports. the street is not always on point. thanks surprises can come at any point, especially after you just add one along with big revisions. david: that said, after friday, it felt like there was a little more certainty on what was going to happen. don't markets like certainly? ty? francine: i would like to look at the wage growth numbers. have 3%.k., we the problem wireless heard was that the u.s. is not getting that wage growth and it will make it much more difficult to

friday, boom, we had it. it would make it sense that we are one step closer to lift off. joe: it would have to be extremely bad to d rail december, but watch the wage number in november. if it comes in strong and there is further acceleration, the story will shift to how gradual will be pace of liftoff will be? if wages are starting to take off, the expectation for the will of hikes in 2016 ratchet up. stephanie: how many listeners do you have? bob: a quarter of a billion in broadcast radio. stephanie: do you look at those listeners and those trends? what does the economy look-alike in your mind? bob: it's unpredictable to meet an advertising is the best indicator. you do not get that rocketship going like we did in 2006-2007. i think that is probably the best barometer for us to watch.

there are other factors involved. with advertising, you have more inventory and more players and more media companies, etc. but i think that is better than the consumer. the consumer is outspending. look at the concerts and the other discretionary spending they have. stephanie: matt is smirking because he is two weeks dead in the row. does anyone think a rate hike given how small it is will hurt the economy? francine: i do not know about the u.s., but if you look at emerging markets and the fragility which even china is still on, if we see a big outflow from these emerging markets, that could put world growth at risk. i would argue that if world is suffering on the rate hike, that would impact the u.s., so yes. joe: this has been a dismal year for emerging markets. i think it's in large part because of these expectations. you have to wonder what is priced in already.

i am skeptical that a tiny rate hike would have a negative affect on the u.s. economy. if you look at you longer rates, i like to look at the two year yield and that has been going up since 2011 and that is a rate hike. that is an effective tightening. if you look at shadow funds, which is a look at the fed's fun rate if there was no zero and that has been going up already. we have seen the effective tightening and the economy seems to be ok. francine: what about credibility? if you look at the european lens where he tried the hike and had to reverse, is there a danger here in the u.s. that janet yellen will have to do the same? joe: i do think there is a fear has no central banker wants to do that. the conditions that he hiked him were so different because the economy was absolute dismal and he got thrown off by the oil driven headline inflation. here it looks like the fed is not getting too worked up with what is going on in oil. the economy is clearly in better shape. you are absolutely right.

no central banker wants to turn back after one hike, especially not be fed. david: francine, go back to your point. divergence is grown. for a while, the central banks sort of felt like they were moving in the same direction. what are the opportunities and costs in that divergence? francine: europe is late to the game and we had a much bigger problem than the u.s.. mario draghi, because the germans were dragging the feet, and he was late in doing the cute you could for investors, when you look a currency, the euro dollar pairs the best. he had a great call from on the hazards and london and if you look at what japan and the ecb is doing, maybe that is the better call because japan seems to be stuck. not are also doing qe, but at the same rate we are expecting. mario draghi is looking like he will have to do something in december. stephanie: we have got you for the next five days. francine and joe, thank you for

coming in early. i'm sorry that i left my type. stephanie: you do not need to wear a tie. you need to ask us some questions. david: if you have any questions for i heart media ceo bob pittman, send message to and regulators look at media sway. how important is the time warner cable charter deal? that is next on "bloomberg ." ♪

vonnie: welcome back to "bloomberg ." i have vonnie quinn.

for the first time in its 213 year history, dupont will be led by someone who does not have a longtime history at the company. the chemical company has given ed doreen the job. he is been running dupont since last month. he says he wants to expand the cost cutting programs. shares of the largest online travel agent in the u.s. are falling in the free markets. priceline gave fourth-quarter earnings for quarter estimates. it has been hurt by expedia and airbnb. the operator of tender, maps, and other aiding sites wants to go public. match.com host to raise more than $400 million in an ipo. match is a unit of star dealer's interactive corporation. that is your bloomberg business flash. david: what is the big deal? jeff mccracken is here with us now. you always are pretty much. regulators sent queries to three companies that list liberties

john malone as chairman. whenever john malone is in the news, it is big news. jeff: if he does this deal, they become the second-largest distributor and second-largest operator of cable companies. 24 million homes will be impacted by this deal if charter gets it done. liberty media, liberty broadband, liberty interactive -- how do they tie with discovery and stars and what influences their back-and-forth? will they favor deals with stars wer or discovery? stephanie: do regulators know what to look for? jeff: with someone like john malone, you have to look at the history when you look at it from my approach, it is very much about which companies belong together. i cannot imagine that john would tell david that you have to do a deal with someone at stars or someone with cable. i've never seen that happen. i think that john has got a

history of that and he really does trust people. he puts them in a position to run the company. he sees them running the company. i think the genius of john is figuring out which companies belong together and what capital structures are so companies can thrive. david: he has done business is way for many years. at all.nothing new it is surprising it would come up now. bob: one of the concerns that people have is if this deal will get blocked the same way that comcast got blood. jeff: we had this huge thrust of activity and i think regulators in general are being overwhelmed by it all. get deal will probably delayed or go slower in getting approval than previously deals like this would have. you had the big health insurance companies trying to come together. you have regulators over one by all this activity. bob: i think there was a big difference between comcast getting bigger and charter still not number one with this merger.

i think it brings a more competitive situation appear th. jeff: they're going to make sure he is not cutting deals with discovery or stars. stephanie: i'm sure he is going to play ball to some extent. how does this deal work? jeff: the deal will get done because it seems like regulators have gotten tougher on the deal in the second obama administration. halliburton is trying to get a deal across the table. ge electrolux got blocked and now they're going to go to trial. they are concerned if regulators will let these really big deals go through. stephanie: jeff mccracken with what is the big deal? bob pittman with us for the next hour in traditional media roundup. with media turning digital, what is i heart's strategy? ♪ matt: time now for futures and

focus. gold holding your three-month low. ald enters the week on seven-day losing streak, counting up the biggest weekly loss of the year. is there any reason to try and catch this falling knife? joining me from the cma is phil struble from our geo futures. let me ask you about the holiday season. people by gold for christmas or hanukkah and there is a seasonal upswing at the end of november. is there any reason to try to bet that that will bring gold up from the lows of the year? phil: i really like the way that is setting up. gold is down seven straight sessions. you look at the highs and lows and it has been a $100 move lower based on the fed rate hike. it looks like 60% right now and december should continue to boost as fed officials continue

to speak throughout the week. if you look at the seasonal play, it tends to happen right around just after thanksgiving and tends to go through the end of the year. the reason is that you have reallocation of funds. a lot of people are looking at the s&p 500 year these record highs again with gold prices back near the lows could and has put a lot of mining constraints on operating costs. this has longer-term implications. you will see the supply of gold that was available here start to dry up. you have a lot of central bank still looking at adding gold to their position here with the prices so low. i think a seasonal play is it possible -- a possibility right around the corner. matt: what about the dollar though? this is a commodity priced in dollars. as goldman sachs puts out a note today reiterating its forecast for parity with the euro by year end, it seems that dollar

strength is going to move pretty quickly. phil: dollar strength is definitely there. the fact that we are at a three-month high and the dollar will match those types of moves with the euro. it will reach parity. in europe, they are still doing quantitative easing and looking to ramp that up. the ocp cut global growth in thet for 2015 quantitative easing is still there. you will see the dollar continued to break away to the outside. gold really needs to strike off that dollar link and think about what are the ramifications once the fed makes that rate hike. will investors get nervous? will they look at gold prices being so low as an opportunity to perhaps put some and a portfolio? -- in their portfolio? matt: got it. so what, thank you for your time. o>" right now.g

♪ stephanie: welcome back. you are watching "bloomberg ." we are talking media. last week was a turbulent week for media companies as they reported third-quarter earnings. time warner's fears about cord cutting led to an industrywide selloff. i heart media reported a wider than expected loss last quarter and missed on revenue. the stock is down nearly 80%. bob, are we looking at the right metrics as it relates to i heart? your ratings are up 10% on the year, but why do things not line up? bob: in my view as an operator, we had pretty good earnings. which is radio, digital, events, etc., i thought it did pretty well. ex political. on if you look at everyone else in the sector, it's a pretty good comparison compared to most folks.

i think that is a reflection of all the investments that we have been making in the strategy and we are also up in international and the u.s.. i think the u.s. is coming back. he made mistakes a few years ago and put it on a new cap. given the turbulent international, i'm happy to say that we have. stephanie: with the way you are operating your finances, you have so much debt on the books. how are you going to get out from under this? when is it time to restructure? bob: we have a lot of debt. this is a highly leveraged company. it's a leveraged buyout for a good reason. for us, it is to do things. one of the debt due and what is the liquidity? we managed to push up the maturities on the debt and we are happy with that. on the liquidity, we feel comfortable and we have a lot of levers to pull their and cash on the balance sheet, which we feel comfortable with that position, too. stephanie: what about two years an from now?

bob: we're pretty confident about the position we are in. i'mou go much beyond that, going to put you in the hands of experts because i'm certainly not that. us run theto let company and make this a great operating business. we developed a new strategy and put it into place and we are seeing that strategy pay off. to me, that is the game you play. we will let others worry about fixing those other issues if we can fix the business. david: compare the hand that you are playing with some of the other media companies. cbs --like disney and how do you see the media landscape? bob: i think the biggest issue is who is in a good position given where the consumer is going. i'm one of those old-fashioned people. stephanie: you are the opposite of old-fashioned, fyi. [laughter] bob: chronologically, i am old-fashioned. the issue that the tv guys are

facing is that 75% of millennials watch tv -- down from about 95%. the public3% of listing to the radio in 1970. 93% listen today. by the way, our ratings are up 10% year over year. our broadcast radio stations are up even more than that. i think we are in a good position because the consumer clearly -- and one of the issues you have got the tv -- tv is changing because it turns out that when you're looking at programs, it turns out the networks for the most part are retailers of programs. calledetailer showed up netflix and others and some people said i will buy my program there. i think that has had a big impact. they have a lot of levers to pull. they are in the content business. some are making a lot of money and some retailers are selling their shows. on the other hand, radio has always been america's companion. we have the best friend sitting in the mtc with you in the car.

stephanie: what about opportunity lost? of mtv.the godfather every day, we talk about the importance of the lineal that was the network to impress them and win and they are not on the millennials radar screen. what is going on? bob: i think things coming go and there are certain strategies could when i was there, we were very music focus. it changed over time to be reality show focused at that time, it kept the millennials interest. i would not count them out, but they have got to do some new stuff. they are looking at doing some new stuff. clearly they are not in digital what they were in tv. i think that they put them under a little bit of pressure. david: bob pittman is staying with us. is apple the king of streaming? on "bloomberg ." ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment,

we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. ♪ amazing images is seen in sydney, australia this

weekend. an eye-catching synonymy seen off the coast. australians, thank you very much, we do not have to wait for the news organizations, took to social media to share this weather. it looks like a massive wave. matt: it is externally. bob: i saw the picture because i also look at social media. stephanie: you don't have to wait for eyewitness anything. thank you, social media. welcome back to number go. bob pittman of i heart is here with us. israel's prime minister will ask for a dramatic increase in minister when he sits down with president obama a couple hours from now. this will be benjamin netanyahu's first face-to-face meeting with the president and more than a year. the iran nuclear deal is straining the relationship. israel gets $3 billion from the u.s. annually. that increases to $5 billion annually for -- within a decade. there has been a failed junior

penn station. one person was killed and two people injured in a shooting a block from the iraq. it started on the street and continued into the early station. and myanmar, the ruling party is signaling it may be facing defeat in yesterday's election. to leader urged supporters stay, it even if the opposition wins, the military is guaranteed 25% of the seats in yen mars parliament. -- myanmar's parliament. you can get these breaking stories 24 hours a day at the new bloomberg.com. i'm vonnie quinn. matt: that me give you a check of some of the individual movers as we approach an hour away from opening bell. platform specially products is backed by bill ackman. over the weekend and behrens, a securities analyst said that concerns a platform specialty has been overleveraged will be

proved to be overblown. they estimate it is worth $20 a share. it is up in the free market 3.5%. weight watchers is an amazing story if i can editorialize a little bit. staken collins 7.2, a 6% in weight watchers. oprah has about a 15% stake. we learned that a couple weeks ago. no pun intended -- getting involved in weight watchers, driving the stock up. since oprah took her stake, it is up 237%. finally, dean foods, the largest dairy processor in the u.s., the prophet estimates, a $.22 profit per shares compared to a loss, 17% loss for sure in the same quarter last year. gains,take out one-time

it beats estimates. big gain in the shares premarket, up 10% an hour before the opening bell. back to you, david. david: but it to the morning meeting where we hear what key banks are looking at today. the senior level economist michael hansen joins us now. michael, we saw some remarkable jobs numbers for our turn on friday. what are you watching for now between now and when the fed meets in september -- december? michael: i think the october jobs report suggests it will be a high hurdle for the fed not to go in december. you had to have a full reversal of the november report, really weak inflation or global data to cause that. there's a good chance -- the conditions for the height in december have been met. -- hike. david: how are the markets reacting? the in your certainty -- do they like the near certainty? michael: before the october

meeting, it may have been around 40%, after 50 -- 5060%. it does seem that the dollar strengthening on the back of that, as you might expect. generally speaking, it seems that markets are coming around to digesting that. this has been one of the most well telegraphed rate hikes in quite some time. it does not look like it will be a surprise to the markets. -- is that rising dollar that causing grief for some u.s. companies? michael: that is certainly the case. for the expert -- export oriented sector, manufacturing generally, you are seeing a decline, sluggish slowdown in growth. for the broader u.s. economy, you're not seeing that. as the jobs report demonstrated, the u.s. economy is running on most cylinders at this point. david: what does this create in terms of opportunities for the investor? michael: the u.s. dollar and the u.s. domestic place are where you want to look.

you will get farther -- further easing in central banks outside of the u.s.. tot may give some support global growth and to local markets, as well. david: thank you very much, michael hansen, bank of america. merrill lynch. merrill investors are overcoming were concerns that the music streaming service is losing its ability to compete with apple music. can there only be one chain of streaming? what do streaming even mean? word is radio for into music? is answer that, bob pittman still with us, owning only 850 radio stations across the u.s.. let's take a look at streaming. way intoe making its the business, how big of a threat is it? bob: you have to get rid of the streaming level. that is not what consumers use. 90% of consumers say i listen to

both radio and my music collection at different times were different reasons. there are people who are replacing cd sales and the radio. there is something in between called pandora and i heard radio. i heart radio is mostly radio stations, we are on the radio side. we do a little custom radio. that custom radio is different than your music condition. we challenge you have is to analyze what that means. what you are seeing today is that is selling you your music collection on a subtraction basis. don't lose sight of the fact that itunes downloads is still doing well and they are selling cds. i think people are quick to run to whoever is out there without really taking a close look at it. a study just came out -- 3% of in car listening is to streaming services in the broadest sense. we shouldn't get carried away. when you look at radio, radio is 90%, 10% is to the digital

versions, including i heart radio and pandora. when you look at apple, the challenge they have is they are probably not going to get a spotify user because they have already decided -- why would i fire spotify for apple? the challenge they have is to convert more of their itunes download folks to a situation service. stephanie: what is the challenge for advertisers? if i am an advertiser and bob -- and other guys are saying streaming is the future and digital is what you need, where are we going? of the day,end radio is digital. if it were invented today, it would be in the digital category. no data charge and no buffering -- what a marvelous frequency. consumer doesn't know the difference between cellular vacancy and fm frequency. -- cellular frequency and fm frequency. nor do i and nor do i care. the biggest difference is how it is bought and sold.

radio has traditionally been sold traditionally the way tv has been sold forever. the challenge is to go to an automated selling process the way the digital players use it. we are in the process of doing that. i think others are, as well. people and tv are doing it. that is the way business is going. i think digital has an advantage , mainly because of the way it is bought and sold. if you think about it from the advertising standpoint, two things to look at. measurability and impact. we went way to the extreme of measurability. now, we are beginning to look at and investors are saying what did i get back to the dollar i spent regardless of where i spent it and what you delivered? we see that in the world. that is one of the biggest issues that we are dealing with today. david: there was a day when there was a handful of major record labels, influential producers who would decide, essentially, who the next hit maker would be. who is that today? who decides the next taylor swift? bob: ultimately, the consumer.

discoverthe way people hits music. 73% of americans say they way they discover new music is fm radio. the question is where is radio appearing? days at mtv, we can break a record, but we could tee it off so that radio could see this one and play it. today, we look at youtube, shazam, a lot of places. here is one we should take a chance on. the record companies spend and over seven of their money with radio promotion staffs. research, case studies, they are in whatever sounds they think are in, they are in working for the radio where play. stephanie: the answer was ryan seacrest. david: is ryan on the phone right now? stephanie: who are the winners and losers? is pandora going to go away? bob: whether they give but are not -- bots or not, the service

is a good service. you put a song in and it spits out a play list the same with our custom feature on i heart radio. others are doing it, but pandora led the way on that. once apple gets their groove on -- i am in the apple ecosystem -- we all are. once apple says i am going to crack into your brain -- they know how to make it happen. will take anything away from apple, but spotify was their first with the subjection service or it and/or as not doing what apple is doing. that is a different kind of service. i think you have to acknowledge that. i think the competition for apple is it cds, itunes downloads, and the spotify. stephanie: what happens to the title? jay-z is cool, and every thing. bob: the days in which we sold cds, there were many record stores. it is logical to expect there will be many different

players. i think it is great for the moose -- music business to have a lot of players. the money the artists get and record companies get is the rate they get times the volume. the more players the more volume. trulynie: a man who celebrate the artistry -- david: fortunately, he is staying with us. he will be with us for the rest of the hour. if you have questions for him, message us. you can always tweet us at tv. -- bloomberg tv. is buying marketing company engine shop. today on bloomberg go. ♪

vonnie: there is a huge deal and the timber business. warehouse has agreed to buy

timber for a $.4 billion. the deal will create a real estate investment trust that will be the largest private owner of timberland in the u.s.. dish tv posted third-quarter revenues -- revenues that missed estimates. the second largest satellite tv provider. left as much subscribers in the quarter than a year ago. fight is gearing up the for a takeover offer. bloomberg reports to oil and gas producer rejected the initial bid. no word on who the of buyer. the sports media and marketing company for -- founded by former marketing executive george klein has acquired engine shop. this deal was announced this mine. what is with us. welcome to bloomberg go. the less about engine shop.

george: they work in social and digital media to amplify messages for fortune 500 companies. or us, we buy platforms. i believe in line platform businesses. this is our first investment in a marketing services platform that will approach my geography, service, and sports. stephanie: social media, live events. these are the buzzwords right now. why does it make sense right now? what can you do with this company in a fairway -- bigger way? >> i believe and platforms. this is an edgy, creative, young management team. i think we can build up their company on a global business databases. in sports and i had on resources. stephanie: you have said over and over life event is where it is. every person in the tri-state area wants to go. what is it about life events

today that is more valuable than ever? bob: live events are part of the whole thing. they want to immerse themselves in something. emerson cells, it is the live event, the activation of the live event for advertisers that goes out over social. they learn about over social, they talk about it over social. when we did the i heart radio music awards, we had 14 billion -- the academy were to 6 million, the halftime super bowl show is $3.5 billion. an event that catches fire is something to talk about. the place to be, members of the tribe, the place to go. everyone in the tribe will be there. it is something you can share with your friends. that make people get out of their seats to do, that is valuable. bob: the decision tree is not to i want to do this or that? they first thing do you want to go out tonight? next week? or stay at home?

if you go out, what is bayer then -- better than a big event? such a hotn this is area, who is your competition? george: we don't worry about other people. we'll stay focused and create great services for our clients. we will let our good work take care of our own future. stephanie: let's talk about the landscape. you had mentioned that now that media is becoming more fragmented, what does this mean in terms oforks sports, live events, they own it all. we are starting to see football games in places like yahoo!. is this really unintended a game changer? george: i am a sports guy. i think sports rights will remain valuable. the way people consume sports is going to change. the nfl had a live game on yahoo! it is going to mean different things for social media, digital media. people are still going to watch

games on layer television. there are more options for the consumer -- linear television. there will be winners and losers. bob: i think the winners will be the folks who listen to the consumers. if the consumer wants to watch on yahoo!, you have to give it to them. on later tv, you had to give it to them there. the challenge for the rights holders is that the idea of making the most money matches the consumer's idea to get what they want where they want when they want it. george: this will be a pivot. young people are consuming news and information different id. we do. if young people are a relevant to you, you have to meet -- reach them in a way where they consume news and ask -- information. stephanie: do you view facebook, yahoo!, twitter as future broadcasters? george: what was fox network before the nfl? not a significant after the nfl. what happened to cbs when it

lost the nfl? days, rupert murdoch, digital media, not sure who it will be, but i believe it will happen. stephanie: do you agree with that? david: i agree that fox made to start with the nfl. they lost a lot of affiliates at cbs when it didn't have the nfl anymore. it makes sense given this new medium that someone will come to the forefront. somebody will be a leader. we don't know who it is. ob: your ideal sports changes, too. i want to madison square garden with my 16-year-old to watch the video game championship. it was packed. them play video games against each other. my son thought that was competitive sports. george: things change. it is a moving world out there. stephanie: super exciting for george, congratulations on your announcement. george klein. bob, we're not letting you leave. bob pittman.

it is the time of year for holiday chains at starbucks. i don't want to hear about this pumpkin like a -- latte. coffee drinkers are happy with the coffee cups. the cups are plain red. angry customers are calling it the war on christmas. starbucks says they chose a charity of design that welcomes all of our stories. iowa to tell you these customers -- don't you have work to do? don't you have lives to live? i wish i had time to complain about the font on a starbucks cup. i have stuff for you to do. my kids, they need their close organized. speaking of stories when we come we talk about adele and where she will drop this new album. ♪

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stephanie: you are listening to adele's new record-breaking single "hello." bob pittman, we have to discuss it. she is already shattering records with 1.1 alien, then the first seven days. the question everyone in the music industry wants their answers to, will she stream her new album? let's talk about this big decision-making. we saw beyonce get involved, taylor swift take control of her music and where it is aired. where do you -- what do you think will happen? idea. have no with a dell, you have a real artist. she took her time to do the second album. she did it her way. when she came on the scene initially, that sound doesn't fit anywhere. artist.e a monster it is such a new, different sound, very personal.

i think you can count on her to decide what she wants to do. david: such a phenomenon, adele. bob: and well-deserved. to do something that crystal-clear in terms of what she wants to do, has a vision, as -- executed extremely well. david: she has a beautiful voice and also write a lot of her own material. a real talent. stephanie: you once said you think taylor swift is the smartest person in the music industry. that still holds true? bob: i think she is brilliant. the best instinct and the best mind. stephanie: your favorite artist of all time? david: led zeppelin. stephanie: right answer. ♪

david: 30 minutes to the opening bell. stephanie: guess who is with us.

with a new haircut. stephanie: let's move on. erik: here is tom lee, the managing partner and founder, a former chief u.s. set -- equity strategist at morgan chase. tom, traffic to have you with us. tom: congratulations on this new show. stephanie: congratulations on your new venture. it is new, but after a year you can say it is new. tom: the honeymoon is over. right now, here is the first word with vonnie quinn. israel's prime minister will ask for a dramatic increase in military aid when he sits down with president obama. benjamin netanyahu's white house videos -- visit will be the first face-to-face meeting with the president and more than a

year. the iran nuclear deal is straining the relationship. israel gets $3 billion from the u.s. annually. that will increase to $5 billion a year within the decade. thousands of british and russian tourists who were stranded in egypt are back on today. the company stopped air for -- air service to each of because and become -- the airline crash nine days ago. bagsans have only carry on because of citations of a bomb. the university of missouri will lose $1 million if it's football team is delayed saturday. the team is on strike backing student to want the university president to quit. they say he has an address racism on the cap is great you can get more on these and other breaking stated -- stories 44 hours a day at the new bloomberg.com. for a look at what is moving in the markets, matt miller. matt: futures moving down this morning, s&p futures -- many futures, i should say come off by seven points. the dow down 43 points. ligety bond market. that is what moves -- take a

look at the bond market or that is what moved last week as opposed to equities. tosee yield continued decline as investors sought. that is still because the bet is that that's will raise rates in december. we are looking at a five-year high for the two-year. 0.89%. the 10 year is a 2.25% increase. take a look at gold and oil commodities as the dollar continues to strike him. gold futures gaining right now. ,hey have been getting crushed down 15% since the high in january 22nd. 20 straight days they are down. a little rebound today. crude trading at 44 point -- $44.11 eight now. apache is big in the news today. is reporting that apache has been approached, it is worth $18 million already. 10%s worth 10 billion --

more now. they have hired goldman sachs to help them craft a defense. no comments from apache or goldman sachs. weight watchers gets another big nnvestor -- stephen cohe coming in. two opus 15%hat as stake. important investors that have driven a stock up -- triple the stock since open major announcement. priceline is disappointing. forng out with a forecast earnings at $1110 a share. priceline losing to expedia and airbnb. that is the thought, at least. investors, this is a $73 billion company. priceline is a $73 billion company. it is not even 200 times earnings. it is 33 times earnings. i am shocked. i can't believe how big it is. it is not as expensive as i thought -- $73 billion company?

must be because people are putting the 200 times multiple on it. people actually use priceline besides plane shutter. with that is matt miller the latest on markets -- besides william shatner. tom, there are a couple of stories that stuck out to us this morning. one i want to start out with is becoming-- ed green the permanent ceo of dupont. green is a networking guy. is that an odd choice? tom: yes and no. it is something we have been doing a lot of work on. out ceos make a huge difference. companies see a ceo

change every year. the interesting thing is that green has a great long-term track record. a ceo doesn't have to know the technology, he has to be good at executing. reen has a great track record with general instruments and tyco. erik: it doesn't matter that his background is on the hardware side? you pointed out, general instrument, a table -- cable set-top box, for that he was at motorola, tyco. you can't is -- dupont is a chemicals company. he does almost nothing about that. stephanie: on many levels, isn't it about leadership? erik: i asked the same questions. if it was just about leadership, then companies wouldn't promote from within. they wouldn't be trying to develop expertise internally. they were just cherry pick whoever happens to be best working for any other company.

>> there is another factor. if you go from within you actually know them. get lucky, yout might not. you don't know until they actually -- stephanie: if you don't grow them from within, what does that say about -- say about your culture? tom: it is good to have fresh eyes in any business, anyway. there is a common thread among good leadership and good ceos. they make a huge difference. the right ceo is the right guy that makes a huge difference here it stephanie: more currently, the right person. tom: i am sorry. the right person, what am i saying, guy, the right person is critical. we see it in many instances where it is gaining fresh eyes and the right leadership. testedeadership will be in the banking industry once again with the new rules that have just come down officially. bloomberg had this news last week. officially, from the financial stability board this morning, defining total loss absorbing capital for the world's largest banks.

there is a whole now, depending on how you measure it. the whole could be enormous or it could be not so in august. either way, all of these banks, american, european, british, chinese are going to have to raise debt capital to meet the demands placed upon them by the fsd. how much of a weight will this be on the global economy? and foremost, i think regulators are still fighting yesterday's work. to be worrying about banks today at a time where they have delivered, and especially if you look at u.s. banks, have been very conservative with their lending policies, is not serving the public good to restrict banks further. i think it is a negative. i do think we have reached the , this is the absolute bottom in terms of why investment -- investors shouldn't like banks. from now on, we should be more optimistic. erik: i am impressed by what the

fsb tried to do which is to answer the question i posed to you. how much is this going to cost? the fsb says able raise borrowing costs or everybody in .he order of only 2.2% fractionally, of course, that is material interest rates is 0%. gdps only going to cost 2.8% basis points. do you buy any of these? possible to calgary to the level of precision what the impact of these roles will be? like athink that sounds big spreadsheet that is a lot of noise. i would agree. i think it is very difficult to quantify. i'm sure they might even have jpmorgan earnings estimates on that spreadsheet, as well. a problemther it is or not, how difficult will it be for these next to raise the capital? is equal for the banks? they added for chinese banks, as

you mentioned. a third of the total cost is been allocated to chinese expert tom: half. david: they are facing in overtime. capital --g regionally, it will make a difference. i think we have seen banks have no problem raising capital. especially if it is going to reduce the perceived risk. the uncertainty about earnings power -- it is a great question, but again, i am thinking that one we are overestimating the negative impacts for banks. anxiety the a real-time barometer for global growth. if global growth grows, you see an inputting credit. at the moment, the problem with banks is that they are certain -- forced to under because regulatory burdens. that will not change any time soon. they will be faced with his birding, how much they can amply -- paid or employees will be

limited. the kinds of business those employees can engage in has changed. it is a human capital business. some of the best talent in banks don't want to be part of that story. tom: i think it is difficult to be an employee in a large organization. you have a lot of ideas about ways to grow the business -- they are not always regulatory friendly ways. if the banks to want to be -- to do anything like they seemed like they are earning money. reachingay that we are the absolute peak in regulation. i think the rules will be set to ease going forward. stephanie: why do you think that? hillary clinton wants to double down on dodd-frank. david: janet yellen and her testament said we need more radiation. tom: what we are seeing his --ular -- regulatory

regulators fighting yesterday's war. this is an attempt to see how much money can be extracted from an industry that has already been willing to pay fines. there are other sectors that could be ripe for regulation. that is the real story. stephanie: we are going to take a quick break, but we have a lot more to cover. what questions do you have? instantouch with us via bloomberg on eternal, hits bloomberg go, and you can tweet us at uber tv. up next, we will speak to the ons -- stick around, big day bloomberg go, big day for accident and cisco. -- erickson and cisco. ♪

vonnie: here is her latest bloomberg business class. is taking ed green over on a permanent basis.

ellen kullman resigned last month. and a billion dollar deal with jet a were -- i was of india. 75 boeing 737s. the buyer has been listed. compensation and banking will reportedly dropped this year. the first time since 2011. as reported by the new york -- it willill file fall 5%. commercial banking is the most sluggish sector. that is the latest on bloomberg business class. back to eric. erik. erik: erickson and cisco developed new products as solutions to telecom carriers. boostts they say can revenue by a billion dollars in three years.

cisco ceo chuck robbins. i will begin with you. partnerships are notoriously difficult to manage and often unsuccessful. why do you think this one will be different? chuck: it is a good question. if you go back to the history of this partnership, we started the discussions about a year ago. i think we really focused on what is good for both companies that is also good for our customers, that leverages strength. you see two market leaders coming together. number one in several markets, bringing those assets together. the other thing that has happened over the luster is we have developed a great deal of trust between our organizations. -- of trust. two marketought, leaders bringing their assets to bear. stockholm, you'll had a re-grievant with cisco's

main competitor in carrier class routing. a two-part question. does this mean the retail agreement has done, and secondly, did you even consider just buying juniper instead of partnering with cisco? >> i think we have been on this strategic journey for quite a while. we outlined it in 2010. we looked into all the potential ways of executing our strategy. acquisitions, doubling down on our own development in ip. we are in the fringes of the network, basically close to radio with rip which we continue with. with the best solution. we can continue to focus on where we are number one. together, we can jointly transform the network that is so badly needed. out in the market. this is a win-win for both of us. that was a strategic choice we took and it was the only choice

i thought was valuable and viable for our customers. havee still going to partners that we work with, but of course, when it comes to this partnership, this is the largest partnership we have. we are going to put a lot of emphasis on to making a transformational network operation in order to support or consumers deliver enterprise solutions to their consumers. stephanie: the boom in the system, what is driving all of the m and a in your universe right now? if you think about this deal, it is coming on the heels of nokia. chuck: we have always said there will be brutal consolidation and we are seeing that as we speak. we don't believe these large mergers work that effectively. we think the strength of our partnership will allow us to be in market with our customers helping them move more effectively and quickly.

we can do that next week. we believe in our case that the partnership was absolutely the right choice. we are excited about our opportunities to get with erickson. erik: i respect the fact that decide this is the best way to do it. there are frictions. how will this be structured from a management point of view? while one company have the lead? how will you avoid restrictions? -- those frictions? hans: on the highest level, it is management oversight by me and chuck. -- a strongent service organization that will work from the price with cisco to install service providers. it is going to be different ways of managing. we have put up targets, joint targets that we want to achieve.

chuck and my role is to see that we are giving the right support to our organizations to succeed. that is how we are going to do this. i think this is the next generation in a world where things are moving so fast, partnerships become very important where you balance out your strengths with different companies. the unparalleled strength of cisco is supporting us. hopefully, chuck is seeing the same from the ericsson side. erik: the rationale for a partnership or agreement has existed for at least 15 years. why now? chuck: if you look at what our customers are trying to do, particularly as we think about the three years we have been off-line, the transportation of our service provider networks, movement with seamless mobility in the enterprise, a focus on iot, we believe the conversation -- commendation of what ericsson brings with their management cap duties --

capabilities, as well as her service footprint, 65,000 people , 185 countries, we believe when you combine that with our leadership, id, data centers, networking, we have accommodations to roll out to our customers to be more effective. erik: we thank you very much. chuck robinson and hans, the ceo of ericsson in stockholm. event today, a plan to bailouts of international banks are that includes a 6% leverage ratio. the amount of equity capital a bank has to hold. brendan greeley stock -- said that with the ice chairman of fdic at the federal reserve bank of chicago. huge jumpe has been a in equity to keep banks safe. we have also talked about how you define total loss observing capacity. how it is that you define everything that a bank can lose in the event of a catastrophe.

i started by asking him what we set out on friday about convertible bonds. these are debt that become equity in a time of a crisis. this is what he said. >> you can write the bond to where it is convertible. the problem is, or the issue is, let's say you are the dilution,n and it is a signal to the market, all sorts of things. what you do is a great deal of effort to avoid that. one of the things you have is pressure to move earnings up to conserve those bonds. that puts earnings pressure on the subsidiaries, sometimes at the most inopportune times. it is how it affects decision-making by management, behavior, whether it in fact is useful. and are fill -- fail sorting things out, it doesn't matter if it is debt or equity, you take your losses.

it is a little late for him to be helpful in the financial stability seen. brandon: i want to talk about dodd-frank. brandon said he would make the vocal role unnecessary for banks with less than $3 billion in assets. graduate the intensity of regulation among smaller and increasingly larger banks? thomas: i have a proposal which says if you are a simple institution then you should have far less regulatory burden. what i mean by simple -- you can do some you foreign exchange and interest rate swaps, but you don't trade. you don't to derivatives other than hedging, you showed up by not having more than a billion dollars on your books. a you do those things and are simple institution, you should not have to do the ones and capital -- if you make a

mortgage loan and keep it on your books, it is qualified. you'll has you the mass nations are on that -- machinations around that. on the appraisal front. i do it by how complex or absence of complexity. brendan: you are not saying size. thresholdam not a advocate. $50 billion, $100 billion, tell me what it is? i do it by complexity of the organization. brendan: could you see the vocal role not being applicable to tanks that pastor or solicited test -- to banks that pass your simplest the test? thomas: i would not remove the vocal role for anyone. it does not apply to community banks. it is if you are trading. if you are engaged in these activities. community banks aren't. if you were to exempt them and you have a hedge fund that requires -- a hedge fund owner

that requires community banks, guess what he is tempted to do? there is a nice pile subsidized, insured deposits, a source of liquidity, a source of cash, why not use it? so no, i would not exempt. david: what you have there is a perspective is we were just talking about a lifelong again later. his focus is a regulator is on some the city. branding: not about the most butcient use of capital, how you write rules that the public can understand, that the banks can understand, and that regulators can then in force. -- in force. is that the right way to define loss observing capital? tom: yes and no. equity capital is the idea of stakeholders acting like owners. being the junior piece of the structure, that is where you'll see the losses absorbed. it is a challenge right now

because the power -- public as liquidated their holdings of stocks in the last 15 years. finding equity capital does mean a shift in the way people view equity in general. i think it is no problem for banks to raise capital. again, i feel like we are fighting yesterday's wars. aboutwhat we are talking before, the financial stability board requirement, does that sound like an appealing instrument to you as a strategist? is that a product investors will want to buy? presumably, it will offer a premium to unsecured debt. withi am not that familiar that particular instrument. i'd don't think this sounds like it is good for public consumption. it would have to be a professional investor owning a piece of structure. stephanie: how does it make you

feel when you hear a professional regulator has spent his whole career as a regulator talking about derivatives and how it should be used. do you watch that and think this guy knows what he is talking about? this is the kind of right smart regulation? or do derivatives continue to be used as a bad word and let's make them smaller? tom: again, it is a touchy area. one, i think banks serve a public good. i think the public views banks as these guys that exploit people. banks basically supplied the capital for the economy to grow. regulators have to view it as a knife edge were they have to encourage innovation and products to improve the flow capital without letting banks control the process. branding: the other thing to keep in mind is that he is from the fdic which has been the more conservative regulator.

much more so than the comptroller or even the fed. stephanie: they are wild up in a. there.brendan : for me, the fdic has skin in the game. they run an insurance company, basically. they have to because they have to pay out in the event of a crisis. a have to necessarily be more skeptical. dormy, the most import takeaway was can you get rid of the local roofer smaller banks? he said no. it is a lifelong regulators perspective. a hedge fund will come in, by a small community bank, and start trading on his book. if you leave the loophole, the loop will will be used. do you believe that? erik: that some hedge fund will come in and buy a small community bank? tom: doesn't really working out. it is possible, but again, if somebody comes in like a hedge fund, they have to actually have credentials to raise capital. been a private equity

firm. we know they can raise capital. tom: i think the public is going to -- you have to trust the public to do your homework. anyone who comes in, even if they have less radiation, still has to win the confidence of investors. -- regulation. stephanie: we say we have to trust the public to do their homework, but when the public doesn't do their own work, we blame the banks. we say the banks are completely to blame for the subprime crisis because they lead the public to do things they shouldn't have done. if we see a bubble in the credit market and etf split apart and investors get her, we are not going to say the public didn't do their homework, we are going to say the banks, the insurance companies, the money managers led the public to do this. when are we going to hold the public for doing that? tom: it is a great question. investing requires people to be taking losses. whenever someone loses money, it shouldn't be like we throw people in jail, it is just capitalism. are used toeople

the anymore. they don't accept losing money. they say the name -- the market has to go in one direction. tom cole and that is the nature of free markets -- losses and gains. stephanie: even another belt is ringing and the equity markets are opening, i want to talk about the dollar. common wisdom holds that when the fed raises interest rates that the dollar strengthens. investors and companies that do business abroad for commodities. you say the opposite. first of all, this strong dollar is a touchy situation because there are some of the emerging markets with u.s. dollar debt. it is a bit of a stranglehold if the dollar strengthens. a lot of times what a currency does, it has to do with positioning. logicaly, and it is

that the dollar should strengthen because you have policy rates, but it turns out that we have looked at the 11 rate cycles when the fed went from neutral to tightening. the dollar falls the median of 7%. one of the best ways to tell how it dollar is going to react is to look at the yield curve. whenever it is steve, and falls. -- it is steep, it falls. erik: it has to do with the length of the tightening cycle. sometimes, the move of the dollar comes ways in the tightening cycle as opposed to early on and we do not know how long this tightening cycle will be. if they move 25 basis points and all the sudden, the wheels are coming off the economy, it's going to be a short cycle. erik: yet they keep in mind that there are only two times of the dollar rally. tom: it was 1980 and 1984. it was as, disinflation area response to tightening. you are essentially causing inflation to fall. erik: can we bring this up, matt?

matt: which chart would you like to see? erik: dollars versus fed funds. tom: however, i do not think anyone is going to think inflation is going to fall here. we have the fed chasing higher yield rates. erik: there we are. matt: the upper bound. the fed funds obviously in white in the dollar here in yellow. that is the ds why index. dsy index. it has been a very long chart and it goes back before me to 1970. tom: the one time you see the dollar make a big move is clearly 1980. that is when we had double-digit inflation and volcker was bringing inflation back. dollar their moves, the weakened following tightening. here's the logic -- it is inflation. ry measures pick

up, it weakens currency. if we have underlying inflation pick up next year, it should weaken the dollar. erik: what will this mean for the stock market? more important a signal to sector and how your position not necessarily for the equity market overall. i think it means you have to be early cycle. stephanie: what does that mean? tom: you want to look at industrials, tech, energy, materials because these benefit from weaker dollars. it also means he wants to be positioned towards value. has outperformed value the past three years. note is cheap and it is successful and that is where it outperforms. beforeou were talking the program about what is driving the market and have a paradigm was all about the fed qe and it has shifted now. i was trying to think of it in a different way.

here i have grafted in white the value of all the m&a transactions. all the deals are in white and the red is the s&p index. have gotten way ahead of the s&p over the last two big cycles. here, the s&p has far eclipsed the deals that have been done. is this because people were so into leverage back here? do the deals into catch up or does the s&p need to come down? tom: that is a great chart, by the way. matt: thank you. tom: i think that this really speaks to how the public does not trust equities. the public meeting both corporations with deals because ,s you highlight here deals are where they were in the 2006-2007 period, but the public has not put any equity in the stocks these years.

if you look at 100 years, there is another period exactly like 1970-1980.is stephanie: did you quote poison? matt: once bitten twice shy. stephanie: that's poison. david: tell us what stocks are doing in trading. matt: obviously, futures were down across the board. we are seeing stocks look the same way with the s&p down half a percent. as well.sdaq they are moves that are significant. let me pull up the imap real quick. you can look at the industry groups which are the losers and which are the gainers. all 10 groups -- are down. telecoms are doing the worst. consumer staples, industrial,

there are a little green tidbits there. banks seem to be doing well right now. citi,n see wells fargo, bank of america as the winners right now. let us take a look at oil and gold here. a for as to avoid five-day losing streak. if it finishes here, it will. gold was down seven days in a row obviously on the expectation that the fed will raise rates. ,old does not pay any interest but it is looking at a little bit of a dead cat bounce. it was the worst week of the year for gold. take a look at the euro down about 15% over the last 12 months. it is down today as well. it is on expectations of the fed will raise rates and mario draghi may blow up his qe program a little bit. 1.0738. see

finally, a look at qualcomm and an analyst said it is hard to inue qualcomm's licenses china. he is cutting them to a neutral versus a buy. that they are cutting qualcomm from a neutral to abide. that is one stock story we are seeing moved down. let's go to abigail di do little with two noble movers. abigail: priceline offered a fourth quarter profit forecast that fell short of estimates by 7%. it may be competition heating up to meet online travel space for the likes of expedia and airbnb. something worth noting -- shares of priceline trade at a significant discount even as aimless model more than 20% growth on the bottom line for this year and next. it suggests that after the dust settles that we could see investors for growth at a reasonable price extracted. turning now to another earnings story -- dish network. missedtellite provider

third-quarter revenue estimates as the company said that more subscribers than expected tv users declined by 23,000 this quarter relative to 12,000 a year ago. and bright spot here though according to bloomberg analysts -- dish sling tv, the companies streaming online tv. their work says that it may have been up by more than 60% to 110,000 users to sequentially. that is abigail doolittle at the nasdaq. stephanie: one quick correction in the show today. one of the benefits of the fact that we have bloomberg -- we have a correction. it was not poison. it was great white. matt: i thought so. david: i'm so glad we sorted that out. stephanie: thank you to eric from worst host capital. it's important to make those corrections as we make mistakes

everyday. erik: in an hours time, betty liu will speak with frank del rio right here on bloomberg television. next, bonuses on wall street expected to decline this year. we will assess the damage and today's value proposition. ♪

vonnie: welcome back to "bloomberg ." here's your latest bloomberg business flash. a strike by flight attendants forcing with transit to cancel i thousand flights. it will affect whether 110,000 passengers in germany and oversee is strikes by pilots cost them one and $350 million. a takeover by warehouse or will give the company control of timberlands twice the size of maryland. it is acquiring plum creek timber company $.4 billion.

it will make it a global forest product giants. a hot date for the owner of match.com and he market. the owner of tender and other dating sites wants to raise $400 million in an initial public offering. that is the latest bloomberg news flash. erik: thank you. it is time for the value proposition. this is where we zero in on controversial issues and trust to open to debate. his sales side compensation still too high? tom, i'm really dying to know what you think on this topic. we hear a lot about how bonuses are shrinking on the sales side among the big banks that are being so heavily regulated. this weekend in "the new york times," i'm sure you read the story that alan johnson says that bonuses are likely to fall 5%-10%. it's a study that he does every year. yet if we look at the data from the new york city comptroller's office at the cash bonus pool,

which is the money from which all these bonuses are paid, it shows that it's really not too far down from the highs of 2006-2007. bonuses,ok at average a subset of the bonus pool, you will also see a very similar looking chart. i'm not sure who is not getting paid is the numbers are still pretty high. it's a very tricky question because it affects so many livelihoods. i think a simple way to approach -- one, do clients feel like they are paying too much money to the streets for what they are getting. i think it is fair because there is probably in a lot of cases where clients are not getting good value for what they are paying. there are many instances where a firm is a good partner for them. stephanie: what does that mean?

fixed income for example for high-yield sales guys are getting paid between $3 million-$5 million for 10-15 years. that party may be over and out. should it be? a high-yield is a different situation because it is a business that is not as competitive as equities has become. erik: and it requires a little more touch -- the human factor. stephanie: if we go electronic, what is that fee worth? tom: that's going to be a transformation because that is where some high-yield guys were start to add value. you'll see winners and losers develop your i'm not intimately theliar, but i am sure that number of people being paid handsomely will be higher than compensation. stephanie: when you think of the clients that streets provide, looking at sale site research, does it make sense for banks to be in that business? if they are, how much are they

getting paid for? by the time sell side research it's put through compliance, it does not seem like it provides that much value. tom: regulation has affected that business, but i have to tell you that when you look at both individual investors and institutional, research is the cornerstone of any investment process. should people be more trading oriented and look at technicals or should they really look at the businesses and be fundamental? at the hedgeuys funds and institutions that have really pulled away because some guys are up 25% net. stephanie: they are not getting their ideas from banks. tom: they are partnering with a handful of research people that they feel add value to their process. i think the cell site is earning. are they overpaid? i cannot answer that it depends on if the clients feel they are getting a good value. stephanie: hold on -- don't they just hire them? rememberalways because

, for a firm that might want to do work on a single name, they may not want to be buying and owning the guy for the rest of his career. erik: before we wrap this up, i want to bring back that graphic that we ran briefly and did not get to talk about just to reflect upon it for a moment. this is average salaries in new york city. just check this out. averagerities industry salary set a new record in 2014. this is data from the new york city comptroller's office. all other private industries -- that is the orange line. stephanie: this doesn't mean banks. this includes private equities and hedge funds. erik: but look at the spread from 1990. david: you talk about income inequality and it's right there. erik: it's worth reflecting for a moment. david: this week, bloomberg is looking at what to expect in the year ahead. with that in mind, we asked 30 bloomberg proprietors -- reporters and anchors their predictions for 2016.

>> interview time. so going to ask me questions or what? ♪ space x will launch into space the most powerful rocket the world has ever seen. >> virtual reality headsets will launch in great abundance and will quickly be relegated to the world of video games. >> i think volkswagen will ditch diesels and go for electric engines . >> apple will not come out with a car in 2016. >> 2016 will be the first or second hottest year on record. 201516 will be longer than because it is a leap. year. >> yoga pants are going to take over the world. p yoga pants. >> men will be wearing pink. made fun of for

wearing shorts and office in the summer when it's 100 and the summer. >> my conviction is people will stop making predictions because they realize they will not come true. >> i cannot predict that when i cannot predict what i will have for lunch today. >> hell may freeze over and cities may burst into flame all away around the world and the euro crisis will not be s olved. >> i think the fed will raise rates. >> i do not think the fed will raise just rate substantially in 2015. >> starbucks will introduce a new twist on their pocket spice latte that will drop all talks about rates or inflation. >> donald trump will not be elected president. >> donald trump will definitely not be president. >> donald trump will actually admit it is a to pay. willthink hillary clinton be elected president. >> the thing is that we keep

predicting that hillary clinton will be present and that she keeps not becoming president. , but i'm going to go so far out to say that she will not be president because only a fool's want to say that hillary clinton is not going to be president. >> i'm a generally pessimistic person. i'm guessing that 2016 is gone to look at little bit better than 2015. >> how can you not be optimistic? >> i say neutral. >> i like to say that it's going to be a good year. >> radiohead's went to put out a new album is going to be terrific. >> i should have done this research before. monkey -- that is going to be a little volatile, but it's friendly. yes, yes. david: next, we will bring you highlights from today's program on "bloomberg ." ♪

david: welcome back. let's take a look at some o>.hlights in as heard on > for the first time, americans believe that inequality is a challenge. bad for ours democracy. it kills aspirations and dreams and makes us more cynical as a people. thes surprising share of rise in inequality looks like it has to do with what firm you work at as opposed to how educated you are or how hard you work, which is the traditional story. >> radio is digital. if it were invented today, it would certainly be in the digital category for i think the big difference between the two is how advertising is bought and sold. radio has been traditionally sold the way it has been sold forever. now we are beginning to look at our ally and advertisers are beginning to say, wait a minute.

what did i get back for the dollars i spent? >> what we are seeing is regulators fighting yesterday's war. the public is not as angry about banks anymore. i think this is all an attempt to see how much money can be extracted from an industry that has already been willing to pay fines. there are other sectors that could be right for regulation. i think that is the real story. stephanie: great content all around. we do not have everything we want. we actually have quite a bit of twitter chatter since you joined us. also on instant bloomberg, a question coming in. is the health care sector overheated? before you leave, you've got to give us that. tom: meaning is it over owned? i think there's a reasonable chance that the health care sector is an over own group. stephanie: what does over owned mean? tom: there has been such a good sector for years and has been such a performance for funds that i think it may be larger in

people's holdings than it should be. it is a bit over owned, yes. is because of the stock price appreciation or because people keep pumping more and more and allocating more to health care. tom: health care is a fundamentally great business because the industry has innovation, pricing power, secular demand growth, and it's not that expensive. but i think in people's minds, there is a fear that one thing that has helped rewrite the group -- remember washington cares about three rings -- health care, defense, and education. stephanie: tom, thank you for joining us. tom lee joining us today. tomorrow, we sit down with credit chiefs ceo fort and exclusive interview. that is "bloomberg ." ♪

a.m. in newa clock york, 11:00 p.m. in hong kong. welcome to "bloomberg markets."

betty: from bloomberg world headquarters in new york, good morning. i am betty liu. how to ever another lehman brothers crisis? the biggest fact may have to come up with more than $1 trillion around the world. and type dream -- the energy industry looks for other options now that president obama has rejected the controversial keystone pipeline. paysarren buffett's bet off. profits at berkshire hathaway a record thanks to a big gain on the stake in craft heinz. but what are some of the losers? we are half an hour into the trading session and we will head to the markets desk, where julie hyman has a look at where stocks are. we are kind of dropping you. seems as though we are pausing, if you will, because we