holidayunveils its strategy. but there are some warning signs about retail. is it going to be a green christmas? welcome to bloomberg this is stephanie ruhle. we're going to get through this, stephanie. >> i'm stephanie ruhle. stephanie: i'm not ron burgundy. we have a great group of people to help us because clearly i need it. are we going to have ourselves a merry little christmas? brendan greeley is here. for christmas, i will have to get you a blazer. a woman who knows retail very

well. in the former ceo a brooks brother. joe grow back is -- gromack is here. joe, welcome. i know everyone's name, just not my own. vonnie quinn. vonnie: that's me. thank you. good morning. dish forces have launched a major offensive in northern iraq . they are attacking isil fighters. they are led by us-led airstrikes and iraqi forces. they capture the city last year. that prompted the u.s. to begin air rates. the next round of talks on serious civil war resumes saturday in vienna. russia is proposing a political transition that will last 18 months. according to a draft proposal obtained by bloomberg, russia also wants u.n. becky to carry out -- backing to carry out airstrikes. the u.s. and allies says russia is aimed at shop -- propping up

syria's president assad. the same unions that brought alexis tsipras to power are on the other side today. they have called a general strike. from port workers to doctors, they are protesting pay cuts. pras said he had no choice to get the european bailout. you can get more on the stories of the new bloomberg.com. that's have a look at what is moving in the premarket. acrossetting headlines the bloomberg -- liberty media is going to recapitalize into three stock trading groups. so, it is going to trade in a andb and c shares. and will also get media tracking stocks as well. we are going to continue to bring you what this means for liberties shareholders. liberty mediaate, is going to recapitalize into three tracking stock groups. let's take a look at the indices here.

futures are mixed. little change here but the s&p has been down five of the past six trading sessions. we will see if it can snap that today. oil right now is trading around -- its lowest since august 27, down six of the past seven sessions. you busy oil trading at 42.85 a barrel. copper especially low. six year low. getting hammered by the news out of china of just not lending as much, not putting out as many new loans. the economy is slowing down. dr. copper, because it measures the health of the chinese economy. glencore, speaking of commodities dropping below a pound for the first time in a month. sixth straight day down. you can see glencore trading at 94 pence. and we, glencore, we also had

rolls-royce also getting crushed in london. down 22% right now. as it says earnings will be hit by about $1 billion. a lot of big problems over at rolls-royce since it brokered partnership. i'm going to bring you some retail earnings. quarterad a third eps, 75 cents. kohl's beating the streets estimates. billionooking at $4.43 in sales, also beating estimates. so kohl's coming out with a beat on the bottom and top line. retailers a hot topic. david: let leads us into our first topic. we do want to talk about retail today. and i know shannon you have talked walmart about their plans for the holidays. let's talk about yesterday. what happened at macy's. had a big announcement that hurt

their stock a lot. it also indicated a little bit about the fourth quarter maybe. shannon: announcing they are closing more stores. comps down 4% " fewer people going into the stores. the company try to explain this in a lot of ways. there is not cold weather. people are not getting coats. when you look at what investors are saying -- stephanie: if it was cold weather will be saying it was raining o ut. shannon: before that it was the ports. always something. and part of it has to do with fundamentals and the stores not being in shape and not being in a condition that shoppers want. part of it is to do with the consumer who is spending the money away from clothes on cars and electronics and home goods. ago, everybody was saying that macy's was doing the best job of omni retailing. shannon: they would love to keep

those stores open if they felt like those stores are generating revenue. part of it might be retrenchment. when macy's was the leader in are a lot ofe competitors that have gotten a lot smarter. a lot of people nipping at their heels. they might be doing good at it but everybody else is in the game. matt: david, ever since you showed me this function rvc, i can't stop using it. it blows my mind when i look at -- "the pulse stephanie stephanie: i love you. this bloomberg fortune blowing matt miller's mind! matt: we have sales growth. this blue ball is macy's. losing out toy competitors. what blows my mind is this is jcpenney over here. jcpenney is the biggest loser on madison avenue, but really? it's a turnaround what we saw a few quarters ago.

jcpenney could not stop posting falling sales and macy's was the king of the hill. i cannot believe how the tables have turned. david: far out, man. stephanie: that's amazing. david: it is part of my heritage. joe: jcpenney was coming from the floor. macy's was close to the ceiling. mason is coming down a little bit. jcpenney is coming up. they are still one of the $9.00 stocks. there's no comparison. a sudden jcpenney's has inventory. it is filled with inventory. stephanie: is it filled with things that people want to purchase? ahead inweeks ago when their store, the head the signs outside -- 25% off. that is not a good signal. i think it is a moment in time. they are doing much better than they were doing, but i do not think you can make a comparison

between macy's, which is a stellar retailer, and jcpenney's which has been struggling for a long time and is coming back. stephanie: another retailer with difficult news in the last week. i almost said restructuring. moving and a new direction, trying to target amazon. give us an update on walmart. bignon: walmart is betting on the holidays. we might think black friday dead because the number of companies have come out about closing on black friday. no. walmart expects black friday to be bigger than evan. -- than ever. they are starting to offer their online deals that 12:01 a.m. thanksgiving morning. the very second you can start shopping on thanksgiving. we talked to the chief merchandising officer. here is what he thinks. expecting a record turnout in our stores. our offer is really great. our program is great. it is simple. we have great availability of products. one thing that disappoints customers this time of year is if i decide i want this tv, it's not there.

we have bought deep on key items. our differentiation is we have the inventory in stock. the issues there is if they are wrong, if the shopper does not turn out on black friday, all of that stuff markdown, markdown, clearance. staff,: better paid more staff. is that going to be there in time for black friday? shannon: they say it is. they have been spending, since april, they have focused on getting the stores ready. they have a clean, fast, friendly mantra. for the holidays. i asked him about hiring. they said that is on track. they have not had any difficulty with hiring which i am surprised about given the labor market. so, it'll be interested to see what numbers they hit. the demographics of who they hired. are we seeing younger workers taking seasonal jobs? stephanie: whether we are

talking masons or even walmart, fromonsumer shift is away clothing which is a higher margin to electronics. because that is the consumer focus, what does that mean for macy's who cannot make that much on those products? there isd on fashion, one sector that is doing well and that is all of the athletic and leisure wear. so, if you are sneaker manufacturer like nike, if you are -- one of the retailers that caters to it like foot locker, you're doing well. under armour is doing well. lululemon. i think the department stores have tried to shift their inventory to get into those categories but they do not have the critical mass. stephanie: if i'm macy's and all of those specialty categories, there have their own standalone retail, and those stores are experiences at how does macy's get in there? my kids do not want their products from macy's trade they want to go to nike town. in finishs brought

line to do their footwear. they signed an agreement yesterday, they announced something with lens crafter to bring in. so, they are trying to make the department store more productive. increase the productivity with things consumers want. they did the same with best buy as well. stephanie: they are also tied to are fallingwichhich out of fashion. the malls have to find a way to drive people back. stephanie:m off 5%.l traffic is there is no sense that is going to improve. stephanie: we stay on the retail beat, but we are going to take a dip into luxury. let me give you a quick bloomberg bite. pay go on the terminal. walmart ceo doug macmillan awarded pay so far this year, 32 million bucks. that is a lot of products.

bloomberg back in a sec. ♪

stephanie: welcome back to bloomberg vonnie: president mario draghi. draghi says the likelihood of inflation returning to the ecb's desired level has declined. policymakers are debating whether to include stimulus programs at their meeting next monday. talking to banks about creating its own mobile to mobile pay system. the system would allow users to send money directly to each other from their phones. the apple service would be a rival to paypal. billionaire money manager stephen a cohen has sold one of his gems. andy warhol's portrait of mouth

and tongue -- of mao tse tung. thank so much. staying with height end. -- high end luxury. burberry reported sputtering sales and america, adding to the woes of luxury goods makers, re eling from an asian slump. make of this luxury has only been getting more expensive in the last couple years? joe: remember what has been going on over the last three or four months. the volatility of the stock market. people who have money think about how they want to spend it. it does not make them feel good. you do not want to run out and buy a $5,000 handbag when you see your portfolio going down. there is acally when slowdown like this with luxury, there is a catalyst. i think right now the stock work it is the catalyst. talk about thet

wealth effect. it is normally tie to house portfolios. you are looking at equity portfolios and that makes a difference. joe: i believe it definitely does. it is disappointing for main street retailers to see the luxury brands not doing great. because walmart, target, macy's, jcpenney, they see their customer and we need to raseach higher. that is were people are spending. our customer, the average american, their incomes are not growing. they're trying to reach out to higher income customers. when you see luxury retailers cannot bring them in, that is does not say much for target. the dollarrength of right now is playing against shopping for luxury in the united states. tourists are not coming over as they once were from europe. then you have the asian factor as well. we have never as a country been as friendly to the chinese in terms of offering visas.

they've been going to europe forever. now what is happening? the chinese are all over europe. between paris, london, milan and buying up a storm. and we are unfortunately losing that battle right note. david: immigration policy and retail. we have talked about a lot of individual retailers. can you wrap it all up as we look forward in the fourth quarter? are there indicators overall that indicate where retail might be? joe: christmas is coming. we will have a christmas. and it will be, there will be times in times of business to be had. unfortunate, there will be strengthen certain quarters and weaknesses. the consumer is struggling on the low and medium end. and the high end depending on the stock market. last week people felt better when we were trading at 16,005, it was not looking pretty. when it was approaching 18,000, it felt better.

now we are going backwards. all this volatility creates uncertainty and the lack of desire to spend. brendan: let's talk about china sales in china. veryit continues to be positive. but not at the same rate. china was growing at 7%. now at 6%. the major cities are doing extremely well. if you are in shanghai, beijing you are doing very well. if you're in the rust belt, that is where it is difficult, just like in the united states. where they are producing me copper, that geography is struggling. david: thanks very much. berendan, please stay with us. up next, why a december meeting as the ecb may be just important as the fed meeting. we had to london next on bloomberg ♪

and so we go to london. about lunchtime over there. a gray day. that brings us to global investors are focused on comments from ecb president mario draghi. he spoke before the european parliament saying that central banks is ready to act. let's listen to what he had to say. mario draghi: if we were to conclude that are medium -- is at risk, we would act by using all the instruments available within our mandate to ensure an appropriate degree of monetary accommodation is maintained. david: so, markets are moving on these comments. let's get now to mark barton in london. tell us about the markets. looks like there is a lot of red. mark: you said i t. we are getting used to his pronouncements. look at it. stocks initially got a bit of a boost but they have come back.

i tell you what, we are getting used to what draghi has to say. don't forget, he first -- in on october 22. on october 31, he was a bit of an unreliable boyfriend. ansaid that ecb said it was open question as to whether we need stimulus. on november 3, he said the ecb would have to look at its policy in december. today he signaled more stimulus because of the waning of inflation and the worsening economic prospects. just to prove to you the wobblyness, have a look at the euro against the dollar. that is one draghi spoke. the euro fell. it's still down against the dollar. don't forget. thee draghi first signaled ecb will press the stimulus button in december, that was in october 22. the euro has fallen by 5% against the dollar.

so we have already seen a big reaction in the markets. david: to an american on this side of the atlantic, did he say anything different today from what he said in malta? draghimark: no, he didn't. david: bless you. simple, direct answer. brendan: i'm going to read into the fine print. inflationterday, core has leveled out. a little bit of a tweak from draghi today. the turnaround has weakened in inflation play please help us understand what is the board trying to tell us about inflation in the eurozone? mark: inflation is at zero. inflation expectations are not going in the right direction. that is what the executive board member was telling us yesterday. that is why we essentially need more stimulus. the fear is that explicate -- inflation expectations are going in the wrong direction. we will know more when the ecb issues is the latest projections in december.

we are expecting the ecb to reduce its inflation and growth forecast in december, which gives the ecb further reason to put their finger on the q.e. button. we just counting down to december 3. david: the good news is you are so good that i like talking to you even when it is red. now to stephanie. stephanie: when we return from ereak, samuel palmisano will b joining us. we have this morning's must read and a whole lot more. you are watching bloomberg ♪

i just had a horrible nightmare. my company's entire network went down, and i was home in bed, unaware. but that would never happen. comcast business monitors my company's network 24 hours a day and calls and e-mails me if something, like this scary storm, takes it offline. so i can rest easy.

what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. stephanie: welcome back, you are watching bloomberg go. things are about to get exciting.

we are joined by two special , ands, samuel palmisano kevin wars, former fed governor. should we do the first word? leaders arecan pushing back against european union's plans to crack down on migration. eu leaders offered more development aid to africa but only if the nations agreed to take back or p -- take back more people. african leaders say europe should make it easier for their people to will -- to live and work there. bernie sanders has gotten his largest union endorsement yet. the american postal workers union has decided to back him. the federal government is looking into public housing. --roposed rule would apply affect almost one million house owners worldwide -- nationwide.

they could face resistance from tenants who did not want to give up control over what they can do in their apartments. you can get more on these and other breaking news stories on bloomberg.com. stephanie: today's morning must-read is coming from our guest, the center for global and -- enterprises. in the book, introduction, i will share a quick quote. " more people now live in cities than in rural areas. a larger share of the global population is middle-class and economies are generating a greater share of outbound foreign investment the ."ver before take a steep and walk us through

it. samuel: the point is that if you andhrough the origination kevin has been kind enough to help me with that, the original ibm guys as well as -- as well as being a board member. his global enterprises were in an environment that as a global environment group, it would lift growth for the world, which we also happen. -- theless, that was the first book we wrote. we were sitting around and realized that we needed to update because of the world being a changing place. going global is the current book, but this book is focused on now and the future. the orientation now is coming from a macroeconomic perspective. it's really about what we see today and these developing countries that were the -- brazil, india, and china that

were lifting. their economies are slowed because they are doing up to the middle class and innovation-based economies. corporations today are facing a slower economic environment but technology on steroids. it's a combination of both, you have technology on steroids, platform based business models, that are threatening traditional business models. at the same time, they are faced with a macroeconomic environment that has slowed. the challenge is that -- the challenges that they face in the premise of the book, we go through culture, branding, supply chains, etc. the purpose of this book is to go in depth in some of these key areas and businesses and point out some ideas of things we think could be constructive to someone leading enterprise in today's environment. prospects? are the another area of the world that could come online and start

growing and dramatic levels, will result china for many years. kevin: the global economy is not in great shape right now. central bankers key promising next year will be great, global economy, as it improves, you get more opportunities. and so we put our house is in order, it is hard for these emerging economies to grow as fast as they want. we spend as about, lot less time talking about central bankers and what they will do and more time focused on these globally integrated enterprises and figure out where the ball is going. stephanie: you become addicted to central bank intervention, it's all you focus on. : five of my former colleagues out there today talking about where interest rates are going to be in two weeks. i'd rather hear from five ceos about what's happening. i wonder when they do

their jobs. [laughter] would rather you hear from five ceos than five fed governors, it seems that investors are addicted to central bank intervention, it's all they pay attention to. kevin: in the depths of the crisis, we got active. we were on the front of newspapers and bloomberg terminals and it was essential in the crisis. that was seven years ago. why we are still front-page news and not in page b12 is a hard question. toneed ceos and businesses be on the front pages and central bankers could learn a lot from them. david: i think matt has something for us. matt: if you type on your bloomberg terminal, ws i i, you can be global flows as far as that you can see global flows as far as --

u.s. data from fed take data, you can see the outflows here from the u.s., $144 billion year-to-year data. it is amazing if you scroll down and look at the huge outflows coming out of germany. $1.5 trillion in the last 12 months. it is a snapshot of where investors are putting money and taking money from around the globe. kevin: if you look at your bloomberg terminal end of your assets, there was a lot of dean. if you look at real data, it is considerably more rick -- more mixed. the real economy and the financial economy cannot tell different stories forever. they have to converge. samuel: they are today, and this is one of the challenges we face. this incredible optimism for the top 1% and the returns of those

people. if you are running a company, it is a tough challenge. stephanie: why? samuel: the environment has changed, dramatically. you need some form of economic growth, it's not to say that people will find great things and do great -- and do well. , apple, they are all doing very well. spending is down and it's down because of economic opportunity, not down because of capital allocation. this is another big debate that goes on. a macro growth environment, so if you are a ceo today, you have to be ambidextrous. scale ando be able to get global, it does not matter if you are big or small. we are involved with some startups. china has already copied it, so it's not like field days. stephanie: what does that mean?

funding,econd round of as soon as you file the first time, they've copied you. they have guys over there in china that already created the knockoff. amazon, alibaba, you've already seen it. you have to be able to scale and innovate and you have this huge thing coming at you called this massive technology shift. it's the combination of all the data analytics and events. you correlate it and then you can drive your marketing decisions or what have you, one layer on top of that which adds to the complexity of these things called platform based business models. the api economy, i prefer to think of it more as a technology plot or been a political soundbite. what it is, it's an alternative

to have you consume, so you get your transportation in a car. an enterprise can consume software differently and services. stephanie: meaning uber. samuel: you can subscribe and consume it. you can buy as you use it, it's the same model being applied, but the interesting thing is the for business companies have gone three years old, they are in 50 and 60 countries immediately. it took ibm half a century to get that far. the traditional models of market ofry, asset clement, use human resource and capital resource, it is all up in the air. you have a commendation of a much more complicated shift, technology driven, tied with the slower economic environment. stephanie: is this because these majorca companies -- these mature companies, it's like moving the titanic.

for them to be nimble, they can't, they are so big and there is so much infrastructure. -- when the's cooper's -- u -- samuel: it's an interesting dialogue as to why a large company has this inherent culture, which at one point was a strength which today, might be an inhibitor. stephanie: lousy middle-management that won't admit they are not that good. [laughter] samuel: it's mark obligated because the culture is connected to the brand. that.orkforce is tied to that's how they generate value every day. all of a sudden, your brand is up in the air because you have lending tree are all these different alternative models, were you have a different payment system than you had international credit business. that is all in the air but your workforce is oriented to the old brand.

it is much more complicated than just middle-management. fundamentally, the cultural thing you have to drive as a leader, you have to be a will to have a strong point of view of the future that is fact-based, not just big dream. you have to have a factual base, then bring everybody with you, that is your workforce. stephanie: we have to take a quick break, but we have a lot more to cover. you can read a lot more about this in the book, growing global, lessons for the new enterprise. cultivatinge on how -- change money flow with sam and kevin. before we leave, check this out, astronaut scott kelly tweeted this out, talk about destruction, another photo from space. he has been on the international space station for 229 days as part of his year in space.

the i.s. -- the iss orbits 200 miles above earth. this is fantastic. david: it's gorgeous. stephanie: who would i talked to out there? we will be back. ♪

david: special guests are still here with us. we were discussing with the new normal is in today's economic climate. this was in the news this ,orning with mario draghi promising what looks like even more easing over in europe and diversions going on. -- diverting going on. kevin: not just in the last seven years, but may be the last 20 years, where the world central bankers appear to be

going in the opposite direction from one another. we are working across purposes and the bloomberg terminal has to wonder what does that mean for my assets? that mario draghi's comments this morning, they're getting ready to go with real size to lower -- to more monetary easing. it looks like you might be changing his tools. we got used to quantitative easing. my co-author and i talked about some of the unfairness of quantitative easing. so the distributional -- some of the distributional consequences. be closer to more negative nominal interest rates, and the applications of that when the europeans are doing it, at the same time my colleagues here are talking about tightening policy, this is a big deal, not just for markets but for the economy. david: what does it do? samuel: if you are sitting

there, fundamentally, what you would like to he is more investment made in the real economy. rmb,ation, production, what have you. when you have capital biased because of rates or government incentives, the financial economy,ersus the real my term, kevin may have a better term, that is what causes some of this dilemma. if you are sitting there like mayor bloomberg and i were teasing about this, it's the planning process. you look at this envelope and there are great returns in the financial markets, but you're looking at real economic opportunity for the next couple of years, you don't see it. if you don't see it, what you do? focus on productivity, you throttle back investment, then you begin to allocate capital anyway they can get something back to your shareholders.

matt: does not do much for your budget. -- does not do much for your cap x budget. always toldhe fed us they are data dependent, but now they have more data than ever and people say janet yellen should've done it six months ago. has a tough job and from where i sit, it is getting tougher. i don't know what data dependence means. policy is supposed to be about where the economy is going to be in six or nine. getting a payroll number that tells me how it was last summer is not revealing. my own best guess is that her job is getting tougher. it was not that tough to raise rates 12 months ago or 18 months ago, it is getting tougher now, especially because we have a global economy and virtually every other central banker in the world looks like they are going to do more at the same time the fed is threatening to do left -- less. stephanie: what should happen?

kevin: this is good because i don't have to sit there and do it, but i'm paying attention to the news you give me every day and it sure looks as though they are ready to go and tighten policy. or may notarkets may like it, but the reality is, she has very few degrees of freedom and if you listen to her patiently, it sounds like december is going to be the big christmas present and they will see whether there is anything good in our stocking after that. samuel: i'm not sure what the alternative is. of course it is data dependent. what is the alternative? [laughter] kevin: it depends on what data she is dependent on. she will user economic workbench, easy wb, this is rates in white, obviously down at the zero, found here and here are the multiple cue ease she

did. this is the data our viewers probably look at the most. that the first to be had a big effect on this, the second one not so much, then the third one may be holding in above water but not doing a lot for financial markets anymore. that's a lot of improvement in the financial economy, what about the real economy? the real economy has been very steady, despite will we hear about deficits and headwinds. the real economy has grown around 2% for the last six and a half years. the bad is it looks like the real economy is losing momentum. the answer is not the central banks with more stimulus, in order to get the global economy growing, which i understand is the basic issue you are addressing, what should be done? samuel: if you are a corporate basically what you would

like to do is take the inhibitors of the economy off. there are some natural factors that are going to happen. china will move to an innovation and services-based economy. it will not be perfect. it's a large economy, even as you know, to get back from them allies to 2007 at 14% growth. you do believe in china, this slowdown, the bad numbers, not deflating you at all? samuel: i was there last week and it's great. the chinese are happy. they are looking at a 7%, maybe they would like more, but if you are a business -- in business over there, you are looking at about $516 billion of the criminal -- $500 billion of potential activity.

a chinese person today is happy. the private equity guys are happy. it is the second largest economy in the world -- that is a tough thing to do. there are some and that -- unnatural constraints in the economic environment called government partnership. we talked about the role of government as a chapter in the book. government today is a large industry. government today has 4 million employees, a couple trillion dollar budget. but relationship is so key, the partnership could also in -- inhibit growth. not just in environmental costations, all sorts of curves they put on a and regulatory licensing processes. we are now middle of the pack as far as the ability to start a

business in the u.s. david: regulatory reform is one thing that you need. what more do you need to get the global economy growing? samuel: i will push the capital flows and then put it back to my partner. kevin: when the u.s. is not leading, not just with business but with the conduct of public policy, the rest of the world has a hard time competing. the u.s. has not changed its tax goat in 30 years for the better. stephanie: is it going to? kevin: we'd better. if we still stay at this 2% economic growth, which most economists now call secular stagnation. problem and the brick -- and the reality is radical tax reform and it will just help us, it'll help the rest of the world because when the u.s. is not leading, everybody else fall behind. stephanie: entitlement reform,

tax policy changes, is it going to happen, and i say there is a good chance it won't. what are the next few years going to look like? kevin: if that's true and we spend the next few years whether -- and we spend the next few years wondering whether the central banks will they or will it'll probably be ok for folks around new york but the real economy will suffer. we can't afford it, we need a leader who can take the economy stronger because the american people are not pointed summer through it. if i said to somebody, what was me, nothing can be done, life is terrible, i would be canned. we tolerate it. why do we? for some set of reasons that we don't have a high expectation for the public sector leaders. that's us.

we expect them to be leaders, we expect them to stand up and do what's right for us to give them all this money. when you talk about this process, why don't we get competent people in the jobs who can actually lead? stephanie: because they don't want the jobs. it is so difficult and brutal war, competent people cannot get confirmed. think people who have experience and capability in the process, we will see if the emerge versus entertaining personalities. stephanie: like to? samuel: we will not comment. come back to your basic point about leadership in the corporate environment. is that the same pair of traits you need in the president? samuel: what's the difference? need to have a strong point of view of where the country is going to be. then you have to persuade. command, you have

to persuade your workforce and convince your investor base and get your clients to buy what you are selling. david: who has done it well in the past? samuel: as president? i would not give you a u.s. example, but angela merkel is terrific. i worked for her for years in germany, she is wonderful. stephanie: a ceo today doing it right. kevin: jeff bezos. he is not playing this quarterly earnings game, he will look at 10 years out and get investors to come with him. stephanie: thank you so much, bloomberg go will be right back. ♪

stephanie: one power executives view on the global economy. ron perelman joins us.

jobs data breaking in just 30 minutes. what it will say about a december rate rise. ♪ welcome back, you are watching the second hour of bloomberg go. david: could not have done it better. matt: i struggle with that name. david: we are delighted to have ronald perlman -- well -- ron perelman. ron: thank you for having me. moneynie: first word with -- with money -- vonnie. vonnie: client -- violence broke out in greece over -- during a

general strike. it's the first strike since the minister came to power in january. strikers protest attacks hikes and budget cuts. kurdish fighters in iraq have lunch and major offensive against the islamic state, attacking a major city backed by u.s. and coalition airplanes. the objective is to cut off and isis supply line. thousands of refugees had to flee and soon afterwards, the americans began airstrikes. azeri facedents in charges for leslie posting threats against lack students and faculty. these follow protests at the university of missouri that lets the president and chancellor stepping down. you can get more of these and other breaking stories at bloomberg.com. here's a look at the free market. matt: we had a mixed trader

earlier, now we are moving decidedly lower with s&p many contracts down four points. dow jones many features down about it the three right now. the s&p has traded down five of the past accessions and it's headed in that direction again. we are waiting for a lot of fed speakers, today. not just kevin worsham -- warsh. at 9:30, she will speak as soon as the market open. w.a.r. p has become a familiar function. --wirp has become a familiar function. it has come down the last couple of days. maybe one of the reasons we've its the 10 year move three-day rally in a long time. a month since we've seen a three-day rally. yield are unchanged at 3%.

take a look at gold. right now at a five-year low, this is a reaction to the possibility of a fed move because if interest rates rise and the fed starts paying interest rates, pennsylvania does -- that does not pay any interest like gold is worth less. stephanie: let's take a turn. we have a very special guest for the hour. ron perelman. . welcome ron: thank you. stephanie: you must have an extraordinary view and insight in the good -- into the global economy. ron: that is a bigger picture than the reality i have, but i'm very concerned about it. i see most of the companies that i know and that we deal with regularly having softness and volume. i see unemployment still in

double digits. i have a real concern about the economy. some people look at the stock market as reflective of the health of the economy. i think they are two different issues. i'm worried about the economy. david: looking at the macro level, we saw draghi talking about more easing in europe and it seems a to virgins between the fed and europe -- seems to diversion'ss -- a -- divergence. ron: i don't think that is the case. on have so much uncertainty -- around the world, so much disruption. so much concern about what central banks are going to do. uncertaintyausing

at the enterprise level, and i think that's what's affecting investment long-term. that's what's affecting growth of jobs. it is what is affecting demand. stephanie: what do you see that concerns you? ronald: jobs. unemployment is still much too high. the idea of raising minimum wages is a great idea, and it puts more money in the pockets of those who need it, but there are ways that need -- raise prices and that will affect people with the gnome wage, in and of itself. we have some real issues and i think for the next two years, we are looking at real softness, potential softness in the u.s. economy. stephanie: how does that affect

how you are leaving your business -- how you are leading your businesses? ronald: very cautiouslyronald:. everybody is doing synergistic acquisitions and that is how they are getting revenue. that is the same from walmart to procter & gamble to embed -- in bed -- inbev. david: you think the jobs numbers overstated the case in terms of employment? ronald: those who left the employment search are much greater numbers than we are given to believe and i think that's the real problem. it's magnified because there are not those jobs available for those people. technology over the past three years has dramatically changed the type of employee that is needed in the world.

they don't have the skill set. what worries me is about the next generation having the skill set of the jobs that will be available. regarding china's slowdown, sam, son of just said that people were happy and that it's good -- sam pollock, -- ronald: we'll have to worry about a slowdown in china, i think it will manipulate -- i think they will manipulate that market anyway they have to to keep people happy and employed. they will get by. of view is a lot smarter than mine, but it's reflected in the voice of a lot of smart guys. what sort of vision do you have into the chinese consumer economy? is that growing? ronald: we found it very difficult to do business in china. stephanie: you pulled revlon

out. why? ronald: we were losing money in china, so we decided we were not equipped to handle that marketplace. in other sectors, we run the chinese lottery. it is growing dramatically. sports cars and the welfare lottery. the chinese love to gamble and at one point, they put certain restrictions on those aspects. i don't think we have to worry about the chinese economy. it's not going to be robust like it was three years ago, i don't think we will see any major slowdowns. stephanie: how about the way people are spending their money? when you think about smaller consumer products like revlon, that is the place for people with still be buying -- where people would still be buying. ronald: cosmetics, like

cigarettes used to be, very anti-recession. people would smoke more when times were bad. people can buy cheap cosmetics. they can get the feeling of having purchased something that will make them feel happier and better about themselves. that proved not to be the case in the last recession. for the first time, we did not go down much, but the category went down about percent. i don't think anything today is recession proof. talk about how technology has had an adverse effect on employment. ucf committees arising in investment -- do you see opportunities arising in investment? ronald: absolutely. petrified of the industry -- of the film industry turning to digital.

what would happen to our business and our prints? i thought the changeover was going to be five years. it happened almost instantaneously. it just occurred one day. print sales were down 90%. we became the digital supplier to those customers. what we found was for print, we had one customer. , we could do the same services but we had dozens of customers. cable suppliers, rock casters, we had advertising agencies -- broadcasters, we had advertising agencies. stephanie: how did you convert? when we look at but short technology companies, eastman kodak should have been the best and ended up the worst. what did you get right? ibm and cisco are trying to look for their next beat.

ronald: we were fast enough to get the digital. we had a small digital operation, so it was easy getting in and replace print with digital because we had the technology. importantly, we had the relationships, and that's why i believe -- i read the other they were somebody said this -- i the combination of brick and mortar and digital is the right combination. brick-and-mortar still gives you the relationships, the historical credibility with customers. the knowledge and awareness of the product, and the digital offering is something that will flow from that. david: turn briefly to europe, some people are predicting that that offers a growth opportunity. ronald: certain parts of it. i love the u.k. i love italy. david: don't we all?

[laughter] the italians are really good managers for middle market size companies. stephanie: just not in the month of august. [laughter] think there are real opportunities there. france is difficult to work in. germany, i love. the scandinavian countries, i love. stephanie: what don't you like? ronald: france. david: because of the work rules. ronald: it is too hard. we've had trouble going further east. we don't do well in russia. stephanie: is that a rule of law issue? ronald: rule of law, attitude, way of doing business. stephanie: was that the same in

china? ronald: no, they are much rougher in russia than in china. stephanie: if there was one part of europe were you would most focus investment right now if you could choose one place. ronald: spain. i think it has such opportunity there. you have a smart group of people. you've got -- it's one of these countries that has two economies, like italy. i think there are such opportunities there. stephanie: we have a lot more to cover. ron perelman, we are just getting started. and he workednd on women's heart health projects here in new york as well as l.a. when we return, we will talk deeply about his portfolio and

his take on revlon. drugmaker vt the recently went public, you are watching bloomberg go. ♪

david: will come back, we want to get back to ron perelman. we talked about a few of your companies. i'm interested in humvees. let's talk about a.m. general. what does it look like, to you? it is changing radically -- ronald: the pentagon just ordered a new series of light tactical vehicles called jltv. that will be about five years before that gets into position of being deliverable. humvees in00,000

service, all of which have to be modernized and updated. the average fleet is over 20 years old. the pentagon has a program to modernize those vehicles and to get them up to the performance and survivability standards of the jltv. large quantities of vehicles to foreign governments through the u.s. approval. david: so the humvee is not going away. ronald: it's not going anywhere. companies bid on the new vehicle, our seo -- ourselves, oshkosh and lockheed. lucky protested that award -- lockheed protested that award, but that is separate from the modernization program that the

government wants to do with their existing fleet. stephanie: we look at your portfolio, it seems like you are hunting for new businesses to invest in. why not take the route of your fellow 1980 raiders and target other companies? mean? --hat does rater an?er -- raider me [laughter] i think we've taken an entirely different route than them. the portfolio is spread out over enough different areas that we can find synergistic opportunities that make more sense to base pricing then paying 15 times for a new vehicle. what we do is we are searching for companies that blend into our platform where we can

utilize our platform more efficiently and effectively, we get great synergy out of the acquisition, and that's what we are trying to do. stephanie: you don't want to go activist? ronald: that's a whole different business. we are long-term holders. .e are not short-term movers of stock prices. . stephanie: a lover, not a fighter. [laughter] david: ron perelman is with us for the entire hour. twoext, he just made donations to a republican candidate, who does the white house want in government? ♪

stephanie: welcome back, let's get you straight to morning meeting. jimmy, so much talk about credit. y: we are definitely in the

later stages of the cycle, but the reality is, the market is a different part. you have to look at each different region and sector, and there are different parts of the cycle. latet is doing well, but stages of the cycle, you see more volatility, lack of covenants and bondholder protection, you just have to because his from a credit perspective -- be cautious from a credit perspective. there are still a lot of sectors that are doing well. u.s., improving employment fixtures, somewhat improving income pictures, a lot of the market is doing well and stable from a credit perspective . the commodity perspective is a little different. there has been significant oversupply. you seen this in china were most metals and mining has been hit. you look at returns, they're going to be low in general, but

secured loans and bonds, you're talking about 5% of returns which are not good historically, but good in relation to what else you are seeing in markets. i'm a big it's about the rate hike in december, we had a really strong payroll number recently, expectations of it -- have increased dramatically. it's around what is the pace in path of that rate hike. stephanie: is that the threat of inflation? unemploymentok at from a fed perspective, the economy is doing well, employment is doing well. the mobility -- the probability of them hiking is good. , that is a bigger picture when it comes to equity in credit missed -- risk. stephanie: is this a moment where people are turning to get scared of high-yield? jimmy: it's not high-yield in

general. the market is still being very disciplined. stephanie: the market is never disciplined. [laughter] immy: the good thing about volatility is it brings some discipline back. things type toward commodities and the corporate, the market is being very disciplined for that. there are much more covenants, good companies and market is wide open for them right now. stephanie: at there is one place you don't want to invest, is it energy? immy: short-term, yes it is energy, but i think it will provide a good long-term. stephanie: we will be back. ♪ 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. david: welcome back to bloomberg go.

here want us dead here with us is ron perelman. stephanie: i think we have some breaking news just across -- just crossing initial jobless claims. matt: we will see initial jobless claims and we are expecting to see 276,000 -- 270,000. 276,000, i should be a forecaster. same as we saw last week and still holding firmly under 300,000. i have a chart that goes back five years, and you can see initial jobless claims come down. the trend is fantastic for the u.s. 300,000 all under year with the exception of one atp, and we are still down 276,000. david: all pointing in one direction. now we get back to ron perelman,

an investor and philanthropist. we want to know where you will be investing, next. ronald: i would like to point jim,hat your last guest, one of the smartest guys on the planet in credit. his points of view on the economy and unemployment are exactly the opposite of mine. that's what makes the world so great. particularly in america where we have the opportunity to make these choices ourselves. where am i going to go? i don't know. i think technology is going to be a deciding factor. i was just saying to david, when i was in the green room, i was watching the show and there was about a two second delay between live and what was coming on the feed.

now at the product locks that is just getting on screen -- at the locks that is just getting on screen. top, asend over the signal, around the world and back to america, just to display the speed of it. 4k, ind -- one second, no delay. beautiful quality, that's why i'm astounded that some of the moguls paid for we had asked the high tech companies today because technology is changing so fast. in the garage, two guys can come up with the next google or facebook. do you see this as a good thing or a bad thing? some original investors cannot

even get out. evaluation does not mean anything. ronald: uber is a great idea, a great company, it brought convenience and local movement to major cities across the world , a real boon to people needing transportation. it's not really worth $55 billion. it is an apt. -- an app. stephanie: how do we realize the real value? ronald: two things, one is another competitor, be it yellow cabs having their own, another uber type is this for people just realizing that at this price, they could take their money off the table and go someplace else. you?anie: can when it's a private company, can

you take your money off the table? , whou are a seed investor is going to step in and say i will take your uber position? ronald: we invest in these kinds of positions, i believe there is a mechanism to sell positions. don't rely upon that. stephanie: what kind of tech are you interested in? ronald: tech that improves the quality and service of the companies we are in. we are the world's largest couponing company. we are beginning to attach a video coupon -- digital coupon with a print coupon. you will be able to scan the coupon and put it on your smart coupon -- usethat that coupon wherever you shop. stephanie: many people think the gaming industry is in a down cycle.

some say it is dying, but for you, you've gone in big. why? ronald: i love it. scientific games is three sectors -- four different sectors. we are the world's largest scratch card company and the second-largest online lottery company. we are one of the five largest social interactive -- not for money gaming companies. company andtems systems integrator for the gaming industry and for other industries. we supply slot machines. the slot machine business has been very soft to the past those who years, for a number of reasons. the economy, the state of the industry, the position that caesars is in. the most important product is business is content and we

have the best content in the world. for us, it does not matter if you play our content on an ipad within the bounds of the casino or on a slot machine. think about walking into a casino and getting an ipad any place you want, you can play any game you want -- anyplace you walk, you can play any game you want. a particular slot machine, a particular roulette. you can play live on that table three your ipad while in the swimming pool having a drink. stephanie: let's turn to pharmaceuticals. it is safe to say you are an investor of btv. how do you see, the question of pricing in pharmaceuticals going forward? ronald: you mean from the standpoint of price gouging?

stephanie: yes. david: some people say that is the next area that has to have extensive regulations. ronald: it has to have -- it has to be because there is so much price gouging. you see companies we have been offered that have old-line products, but most of the players have gotten out and it's down to two companies that provide products for a generic arthritis visited -- medicine and they find out they can raise their prices, and they are doing that. disgraceful,is because the people that need those products other people that cannot afford to pay them. i think that's going to bring in regulation. thatyou take a product potentially will cure alzheimer's, or at least control

years to betaken 20 developed, you have a different pricing model because you want investors to invest in developing these products. you want there to be a pot at the end of that rainbow so that they will continue. stephanie: how do you get investors to support that? until two months ago when valley -- took a -- when valley and hit, analysts loved the company. suddenly, they are price gouging and everybody wants them out. ronald: that's america, what is good one day is that the next. it depends on how you look at it, where they were making all

their money, which was good for the company, and for the investors, easily tolerable by analysts as it was doing so well. it was because they were charging too much for the product. stephanie: i never hear on investor day people asking questions about ethics or morals. ronald: they should be. david: with obamacare, which has been good for a lot of people getting their own insurance, the government is much more involved in paying for medical bills. 18% of the gdp now. is it inevitable that they will start clamping down even on the rare drugs that a lot of researchers put into? ronald: sometimes the baby gets thrown out with the bathwater and we hope that does not happen. there are prices set by medicare. you can selectively raise the prices were lower those prices as need be without heavy regulation. i think the public outcry is going to be for more regulation. past, we'ven the

seen you support democratic candidates, hillary clinton, -- ronald: you guys move fast. [laughter] now, jeb bush and lindsey graham, why? you could throw hillary in there because i'm a big fan of hillary. i've always been a major supporter. attention with the around deal -- with the iran deal. i was opposed to that transaction. i think that it's a bad deal for us as americans and the whole world because they are the greatest supplier of funding and technology and training for

terrorists around the world and they are proud of that. they just to want to see the destruction of israel, they want to see the destruction of america. lindsey graham has been a friend of mine for a long time. she is smart as a whip. i thought he had a position that had to be heard on national security, on the state of the world, the state of the military and on the iranian treaty. jeb, i think is a fabulous human being. i think he is dedicated. i think he is committed and smart. i think he would make a great president. unfortunately, he is getting clobbered with the noise that is occurring in the republican party, right now. stephanie: really loud noise.

i love donald trump, i've known him for 30 years. i would consider him a good friend, i know his kids. he has great kids, i think that is one real indication of a man. strengthd show a great and sense of character that he's got. he does like to talk. he's got points of view that i agree with and points of view that i do not agree with. stephanie: would you support him if he became a candidate? ronald: yes. a lot of his positions, i really support. i don't support throwing out the mexicans and building a wall, but i do support a lot of his positions.

when he is ready to talk, i would be happy to talk to him. he can talk to me anytime. david: there is an invitation. like his: people positions, but could he get a lot of these things done? ronald: i had dinner on monday night with two of the smartest people you know. stephanie: who? ronald: not going to tell you. andis very much to the left one to the right, and both of them were crazy about donald trump in a good way. david: interesting. ron perelman is staying with us. next, we discuss philanthropy and good business. ♪

vonnie: welcome back.

service oil inventories are at the highest level in at least a decade. the cartel says supply exceeds the backlogs that a community in 2009 after the financial crisis. prices have fallen 40% in the last year. countries are still pumping near record levels. attendantsby flight is forcing cancels of 930 flights today. the strike is that the last through tomorrow. strikers are striking look on this tape benefit -- pay, benefits and retirement plans. coli outbreak, 45 people got sick and at least a dozen were hospitalized. that is your bloomberg business flash. stephanie: if you have questions for ron perelman, please send us a tweet.

now it is time for good business. ron, you are a guy that has done very well. you've also done a whole lot of good. you given away hundreds of millions of dollars. philanthropy is getting a different name and face right now. it is not just giving money and help it does good, it's about impact investing. where are you giving that you feel like it's creating the most impact? give in three different orientations. -- giving as ag marketing tool. stephanie: i love this. ronald: it has proven to be phenomenally effective. stephanie: how? ronald: we decided that the revlon walk, which we decided to do 20 years ago, was no longer effective. we took the doctor that we had

designed the run walk around, who we single-handedly supported in the creation of her -- which tears about 37% of the women with breast cancer, and he is very close to a great room on curing the other 60% of women with breast cancer. he's very important to us. we gave him a gift, and outside of that gift, we did an online who -- whatsee charities had signed up and could raise the most money for their charity. we were going to match that with another $1.5 million. we don't know who the winner is yet, but that campaign reached $500 million. stephanie: from whom? ronald: the public who got on

and said they wanted their charity to be the winner. it was sort of like a matching gift, but probably done on the internet. it proved to be enormously successful. stephanie: when did you employ these strategies? in the past, people did not think about philanthropy this way. ronald: this idea was the idea of lorenzo del potro euro, the ceo of revlon. he's a real out-of-the-box thinker. innovative.usly he came up with the idea. he came up with it himself, and he asked me for approval and i said i loved it. year, been great and next we are going to do it again and hopefully it is twice as good.

what do i love to give to? i like to give to things that personally, i think, where funds are needed, but not attractive to other people. that drug,n of nobody else would of given to a scientist at ucla should never come up with a cancer drug before. we did, and it was successful. the emergency center at nyu. after the sandy storm, it blew had noeir room, so they emergency facility for the entire downtown sector of manhattan. people don't like to give to emergency rooms, it's a bad vibe. you go there sick and injured. people complain about the service, everybody is unhappy. -- i said yes right away because they needed it and

nobody else is going to do it. it has been the model. i got sick two years ago with an infection from a surgery. i was taken to new york hospital. they thought i was going to die. i had a temperature of 104, i was septic, they did not know what bacteria i had caught. it took one hour for me to be treated. after we set up and why you -- down to 15 minutes to be treated and taken into a room at nyu. i think it upon myself to go to new york hospital to parallel with the jobs done at nyu, and the actually hired one of the senior operators of the facility and now they are at par with nyu. it is one of my proudest moments , that i am helping to get people seen and serviced at

record speeds in emergency rooms. your efforts, how do you make sure the money is all pulling in the same direction? ronald: that is the biggest problem, and you can't do that. where youu give to feel comfortable. i think you try to give as far down the chain as you can, so that the money is really used for the purpose that is defined to be used for. i will not give to the american cancer society because there is too much administrative cost. by the time the dollar gets there, it is used up. you had a picture of barbra streisand and i. heart disease is the number one cause of death amongst women. within all the king -- more than all the cancers combined, most women do not realize that.

barbara called me up one day and asked me to help with her heart center, which i agreed to do. i said i would do that only if she helped with my heart center, with the women's program in new york. stephanie: when i see you two, i would not think heart center, i would think carnegie hall. you no longer serve as chairman there. ronald: running all was a different -- carnegie hall was a different animal. i had been associated with it for 30 years. -- when ihairman became chairman, i had three goals, diversity, transparency, and compliance. i was met with an institution that had difficulty with all three. stephanie: why? ronald: that's a good question.

it's a question that i thought with constantly to try to get changed. i realized that we were on two different pages, and i probably could not win another election as chairman, i decided why create controversy and run? said, you are on the board for many years, why didn't you see it? ronald: number one, most board members don't go to the board meetings. i went to one, because you just hearhere and you either the information they want you to entertained by some scientist or some music critic or whatever. neither one interested me, so i never went to the meetings. i was in the dark as a board member. when i got to a position of

authority, i could not get accomplished what i wanted to get accomplished and at that point, i did not run for reelection, neither did the general counsel. a lot of these charities don't actually carry these board -- this one your money -- they just want your money. stephanie: ron perelman, makes a lot of money and spend it well. an extraordinary philanthropist. up next, scott bok from green list will join us for the full hour. ♪

. .

♪ david: we are 30 minutes from the opening bell in new york. welcome back to "bloomberg ." stephanie: i love having said

perelmen, but one of my other favorites is here. >> the best is yet to come. he sitting with us now. scott bok, ceo of greenhill and company, one of the most successful boutique investment banks. scott, glad you could make it. scott: thank you. david: time for the first word. >> thank you so much. in theng progress assault on an islamic state stronghold in sinjar in northwest iraq. the kurds say they have retaken the mayor's office and part of the road. u.s. airstrikes are backing the operation. suicide -- a man who stopped a suicide bomber in afghanistan will receive the medal of honor today. the former track star was critically wounded when the bomb

exploded. he learned to walk again after33 operations. president obama is selling something on ebay, his new trade deal. an e-mail asked ebay members to support the transpacific partnership, saying it would help them connect to buyers in southeast asia. you can get more on these and other breaking stories at the new bloomberg.com. >> take a look at pictures. turning negative an hour ago now. down six points. dow jones futures down 75 points. if you go through all the big commodity numbers, you can see drops as well. ,rude oil coming down almost 2% the lowest since august 27th. crude is down six of the past seven sessions. gold at a five-year low because

of expectations of an interest rate hike. seeing gold continuing to fall now. copper also down six of the last seven sessions, to the lowest point since july 2009. a lot more people over the last couple days have been talking about copper. it is generating more and more buzz as it drops further and further, plunging to a six-year low, down 2.5% now. liberty media is setting up shares into three separate tracking shares to help investors target investment in either the atlanta braves or in serious xm or other media properties, so those will be the three separate tracking stocks. then we also have viacom out with a miss on earnings. down about 2.7%, because of a drop of growth in the cable business and also it failed to match the success of, what was it, what was the film they had last year that was so big, where

the cars changing into robots? "age of extinction." stephanie: did you actually not get that, you? i am aelieve it or not, little too old. stephanie: i did not know you were to offer anything. [laughter] matt has to take a break. time for him to play halo while we get to the top five stories. >> the top five stories. liberty media creating three new tracking stocks, one for the braves, one for the sirius xm radio company, and one for live nation and the minority investment in viacom and time warner. he stated purpose is to give investors more choice and enable john malone to raise more capital in a targeted way while maintaining an optimal capital structure. optimalk, nobody does capital structure better than john malone. but do you believe in tracking stocks? scott: probably not really. if you go back in history, these

o,tter stocks 30 years ag general motors did one for andes, did one for eds, they never really worked that well. it is kind of like a spinoff, but a lot of investors would rather invest in a spinoff company. erik: they don't actually get the assets. scott: people do them because you keep the tax consolidation. if you have tax losses or something, you can keep the same tax loss for all companies. scott: it makes me wonder. this and so many other examples, we were talking about the genius of john malone yesterday. why don't more companies do what he does? scott: well, i looked at this recently for a prospective client, talking about the letter stock. tracking stocks, as they are more often called now. we look back at examples. essentially only malone has done these for the last several years. going back 10 years, you can

find more, but in recent years only him. most companies feel they don't want to be overly distracted by pure financial engineering. if there is a real strategic benefit -- we are advising alcoa right now, separating into two different companies. like ifpanies feel there is a strategic reason to be separate,, let's be separate let's not try to have it both ways. erik: he is a wizard, john malone. we had talked about it earlier today, ecb president theio draghi saying central-bank is ready to boost stimulus as economic prospects worsen. speaking in brussels this morning to the european parliament, he said, "signs of a sustained turnaround in core inflation have somewhat weakened. downside risks are clearly visible." apart from just what happens with stimulus in europe, what

does this do to the dollar,? and what does that do to deals? scott: certainly -- what does it do to deals? scott: it makes the dollar stronger. at a time of the fed is raising rates whenever one else is cutting them, you have a dollar that is stronger that hurts u.s. earnings, but i don't think it does much to transactions. companies tend to take a long-term view when you buy things. you would think logically looking at currency rates that europeans would be less likely to buy in the u.s., but i think they love the u.s. economy. it has had a much better track record. you see that europeans, notwithstanding a strong dollar, are spending extra money to get more assets in the u.s. --t: i want to function a point at a function we are familiar with, wirp, showing the probability of rate moves. if you go down to eurozone, you can see it for europe as well. a lot of interesting data. click on future implied probability, and you can see a really cool heat map.

this is where we are now, and this is where we think futures will go. separation in probability of moving up or down from there. ands negative now, according to futures markets it will continue to get more negative into next year, next september. stephanie: is it your favorite function? matt: no. stephanie: i wish it was, then you could give your own edition of "watch me wirp." three, high-yield bond issuance has plunged 37% from a year ago, putting the high-yield loan market in the u.s. and europe on pace for the slowest year since 2011. is this because borrowing costs have gone up so much? scott: we had a tremendous period of borrowing, and now people see rates about to start going higher. that's problem number one. number two, they see the economy

starting to slow down. gdp here, in europe, more stimulus coming. so high-yield investors are worrying, am i going to get paid back? for the first time in a long time, we see a little more restructuring activity. presage an this uptick? scott: i think it does. after many years of almost none. i joked a long time. , it's on most impossible to go bankrupt in america today. but that's coming again, believe me. erik: that some thing to look forward to. [laughter] the fourth story markets are paying attention to. opec says oil inventory surpluses are the largest in at least a decade because of increased global production. stockpiles are 210 million barrels higher than the five-year average. going back to transactions. , does this mean perhaps more consolidation in energy? scott: absolutely. more restructuring, because of what we just said, how are you

going to refinance yourself in a falling commodity market? absolutely more consolidation. you saw the bid for apache. anadarko stepped back from that. we are looking at quite large transactions in the expiration and production space. david: a powerful op-ed today by john reed, former ceo of citigroup, saying the jpmorgan and credit suisses are on a "quest" for a formula that will enable them to return to the pre-crisis glory days, but there is no such formula and the destination will prove unreasonable. scott, you are not a refugee from a global banc, but you did work for morgan stanley, a much bigger firm. do you agree with john reed that two things have famed you -- failed universal banking, one, that by becoming bigger costs will drop, and they have not, partly due to regulation -- and the second is the culture clash,

and this is maybe something you can speak to more directly. bankers and investment bankers are different breeds of people, and they really cannot occupy the same space, says john reed. scott: i think that's right. i was at morgan stanley 25 years ago. in bad years, we held for 20% roe and in good years you hope for 30%. andy morgan stanley is 10% the europeans are basically breaking even. that's not going to chain soon. stephanie: hedge funds 20 years ago, you had titans returning to any 5%, and now they are 6%. scott: the numbers have gotten so much bigger. the hedge funds used to be small. now they are gigantic, and frankly the people who run hedge funds are more focused on assets under management which generate fees than they are on carried interest. erik: we have a lot more to cover. scott bok, ceo of greenhill and company, and those are the five

stories that matter to markets now. stephanie: buying a car just got easier in nashville. take a quick look at this. a car vending machine. it is five stories high and holds a collection of 20 vehicles. vana developed it, and claims you can buy and drive off in a new car in just 20 minutes. are you kidding me with this? if this is not a bull market move -- on a planere getting today. matt: that is cool. david: it reminds me of transformers. stephanie: it does not remind me of a business transforming -- what do you think of this? scott: i don't think that's how i will be buying my next car. [laughter] erik: this is peak something. i'm not sure what it is. scott: it is marketing. we are all watching it. stephanie: there you go. 45 seconds ago, i did not know what carvana was. next, we look at what is leading

in the premarket. [laughter] ♪ ♪

♪ stephanie: welcome back to "bloomberg ." >> here's your latest bloomberg business flash. teractive values angie's list. are rising in's the premarket. they got a boost from back to school sales. they are down 29% on the year. openrt stores will thanksgiving night at 6:00, but doorbuster bargains are being dropped. instead, sale items will be available both in-store and online.

that's your latest bloomberg news flash. matt: let me give you breaking feds here from jim bollard, president from st. louis. giving a speech at a cato institute conference entitled "permazero." he says he's concerned that interest rates may permanently be stuck at zero. he reiterates his support for a lift off in the speech, saying essentially that keeping rates low for too long, keeping inflation low for too long, he says we are close enough to 5% fed goals that heou says we should lift of rates, a simple approach to move policy closer to normal levels, and he says there's "no reason to continue to experiment with extreme policy settings." janet yellen, the fed chair, will speak at 9:30 at a separate

fed conference in washington. we will bring you headlines from that as well. as far as s&p futures, we are seeing drops. you see the chart behind me. right now it is down about 12 points. nasdaqy, s&p, dow, and futures are now closed, all closing down about 15 minutes until the open. we will be right back with more on "bloomberg ."

valuee for today's propositions, where we zero in on controversy. today's question -- even carl icahn admitted all activism is not good, so had you tell a good activism from a bad one? who better to answer that than two people on either side of the debate. from greenhill and

against which defensds activist investors. daniel, we will go to you. how do you tell a good investor from a bad one? [laughter] iel: thank you for having me. look, i think the clearest way to tell if something is -- someone is a good or bad actor is to judge by results, and the only result that matters is, do you create value for all shareholders? that's the yardstick for any kind of investor proposing a company make changes. that is the yardstick for a member of a board of directors, and i sit on a couple boards. that is the acid test. stephanie: value for shareholders when? at this point when we hear the hint of an activist stepping in, you see shares pop. but how long do you have to measure that improvement for shareholders?

daniel: look, stock prices should reflect the net present value of the pluses and minuses of a company. that is what stock markets do. they discount the future, sometimes more efficiently, sometimes less efficiently. but this dichotomy between short-termism and long-termism, which is related to the concert you are raising, i don't buy into that. i think the question is not is an idea short-term or long-term, and it is not, is the person proposing that an activist or a regular investor, the question is, is it a sound idea? when people use the short-term and long-term distinction, it is usually designed as a pejorative or a label. erik: scott, for a guy who beats up ceo's, daniel sounds reasonable. scott: a lot of activists do. nationalis a former debating champion.

r the good activists? scott: as a matter of policy, we work on the other side. not because we think they are all bad, but it is hard to take both points of view. you can take the corporate, or you can work for the activist. we choose the other side. i think activists conservative purpose where they get companies to think more broadly about what the possibilities are. should we be in all the businesses we are in, or should we do a spinoff? should we raise dividend or buyback stock? do we have a problem with management? do we have a board that has not evolved over time and is stuck in an old way of thinking? i think they can open up thinking, and it has led to a lot, to m&a, spinoffs, a variety of transactions over the years. matt: i want to point out a couple activist funds underperforming, shall we say,

the s&p index here in green. here in white we have the global x guru activist etf. activist fund in blue. it is a short time period, only looking to last april, when the etf was launched, but serious underperformance in that time period. david: what about real unlocking of value, as opposed to unlocking temporary value of, i will buy the stock because i think someone else will buy it? scott: we are long-term investors. we make long-term investment decisions. to give you an example, we are involved in a company now we have been very vocal, and calling for changes of the company. but we have owned the company years since four making a comment. air methods. it is a really great business, and a management team we admire and respect.

we think it is become too volatile as a public traded company, so we have been calling on them to make changes, but we are a long-term investor. we owned the stock for four years. stephanie: we have to leave it there. daniel plants. back with more in just a moment. ♪

>> greenhill ceo scott bok is still with us. greenhill advises companies on m&a, financing, restructuring, and capital raising. you say the stars have aligned for megadeals. tell us about that. scott: if you look statistically, is not a big increase, in m&a in smaller transactions, but $10 billion or greater, there's a lot of it. those companies have the best access to capital, often have the largest balance sheets and cheapest borrowing rates. large cap stocks have done quite well. they are probably struggling the most to get organic growth. they are so big, how do you get

it organically? they want to consolidate the industry. stephanie: if megadeals are on tap, is that bad for you,? they often need conflict financing and balance sheets, and that is what big banks can provide and you cannot. scott: we still get involved in some of them. we are advising the $40 billion deal with allergan right now. it is not great for us, in that our sweet spot is about $500 million to $5 billion. we do a lot in that category. we don't work on small things, and we don't work as often on the really huge things because they require a lot of financing. you have not seen a big increase. i think it will, over time --, over time. erik: what do bankers like more? the bigger deals pay a smaller fee in percentage terms, but you have to work a lot harder to get more small deals. scott: certainly the bigger, the better, which is why we shy away. unlike some firms, we shy away

from the $100 million deals. there's the same amount of work as a small deal, but -- erik: when you see transactions, $50 billion of debt financing, bev, do you growth concerned as a boutique shop that we will see more and more heavily debt-financed deals? scott: not really. to put it in context, there will only be about 60 $10 billion deals globally this year. we compete with probably 25 or 30 firms, the mega firms and some a lot smaller than ours. that's a tiny part of the m&a market. there are thousands of deals in the hundreds of millions range, hundreds in the billion-type range. so it is a tiny part of the business, the megadeals, even though on tv and newspapers that's what people talk about. stephanie: the fact that m&a is how we see growth right now,

does that give you concern about the u.s. economy or the health of corporate america, that we don't see organic growth, all acquisition? scott: i do have a lot of concern about the u.s. economy. we just heard about copper and gold at multiyear lows. there is a pressure toward deflation globally right now, and companies are finding it very hard. look at the macy's numbers yesterday. really hard to get any revenue growth at all, so companies -- look, they want to grow their business. they don't want an activist to tell them what to do, so they are trying to consolidate their sector. , sabxtreme is inbev miller, consolidate and so one out of every three cans of beer sold on the planet. david: given all the competition you face, are you finding it more and more difficult to hold the fee structure? we see it in hedge funds. are you finding that in mergers and acquisitions? scott: not really.

one of the small miracles in our industry is that that has not happened. it has happened in every thing else. stephanie: that is a miracle, my goodness. a christmas miracle. [laughter] it is a miracle we appreciate. look, we paid a tiny percentage of the deal size. if it is a billion dollar transaction, it's probably less than 1%. a $10 billion transaction, a tiny fraction of 1%. so ceo's don't typically make a decision on who they will use for advisers over can i get it from you for 0.2% versus the 0.35 percent the other guy once. they want the best advising. erik: you talked on your recent conference call about the challenge of closing deals, and cited it as one of the reasons -- at least your today greek year to date greenhill has not benefited as much from the swell of merger activity as other firms. why is it hard to close deals?

scott: that is tied to the size issue. if what you are seeing is megadeals, and even a smaller range of deals, being very strategically synergistic transactions taking place, that is an alarm bell for an antitrust regulator. every time you do something highly synergistic, trying to win a much larger share of maybe a smaller niche of the industrial world or consumer world or whatever part of the business world it is, they get more scrutiny. so deals take a year or longer, sometimes. the glengarryit glen ross, every day, every night? david: the better the deal from a business side, the worst from a competitive side. scott: that's why a lot of deals are taking 18 months, sometimes, to get through the regulation. david: is the doj going to kill yingm&a goose that keeps la

golden eggs? scott: i don't think so. looking back at my career, very few deals are blocked. we advise at&t and t-mobile, which was blocked. space. one in the sec i would say once a year, every two years, there is a high-profile one. most companies who do the very synergistic deals are willing and prepared to do significant divesting to get approval, so the regulatory process becomes a negotiation. how much do i have to sell, how many factories, how many brands do i have to sell to make sure there's still reasonable competition? stephanie: we have a question coming in from justin on instant bloomberg. when do you see restructuring in oil and gas, especially when eo g, line are technically bust? scott: i won't comment on any company being technically bust. i will leave that to your people

riding in, but there will be restructuring going on. the banks gave them a pass early this year, thinking maybe it is a short-term phenomenon, but i don't think anyone thinks low oil prices are a short-term phenomenon now. erik: what's going to be the catalyst for activity? bloomberg points out in a story today, the majors alone have half $1 trillion, much of it in cash, that they could be spending it on deals, and they are not. instead, you see the likes of chevron pulling in their horns. scott: this goes back to the low interest rate environment. the oil companies are most focused on trading -- protecting the dividend. erik: cash flow, cash flow. scott: in some cases, they are selling non-core assets and trying to husband the cash flow to keep paying a dividend. erik: so what will the catalyst may, scott: smaller companies don't have all the flexibly these of the majors.

the majors will be fine, great companies 10 and 20 years from now. but the smaller companies that don't have that balance sheet -- erik: they are running out of oxygen. scott: they have to either restructure the existing balance sheet, or more likely they will consolidate. erik: we will continue. scott bok, ceo of greenhill and company. matt, the market has been open for six minutes. what do we see? matt: red across the board. dow jonesg down 15, down 150 at the open, and the nasdaq down 32, the major -- lowest level on the major indexes in about three weeks now. if you look, you see almost everyone is losing except utilities, the only gainer here. energy, materials, financials leading the way down. commodities are big losers. we have been pointing it out all morning. crude oil down more than 2% barrel -- $42 $.41 a

$42.41 a barrel. gold, dropping at we, -- as we speak. on the education that the fed will raise rates. copper crushing a six-year low, zooming right past it, taking a big hit. this is in reaction to the numbers we saw out of china overnight. take a look at some stock stories. i have a big beach for you and a big miss. kohl's, earnings per share of $.75. we were looking for $.69. it is a big retail week, and calls seems to be one of the -- kohl's seems to be one of the winners, the shares are down over 5%. looking at the headlines that may have crossed since the open. advanced auto parts is a big loser. not only did they miss earnings estimates, but also the ceo of eight years is stepping down and

retiring. advance auto parts is a big one when you talk about activists, because star board has been very involved. they will replace the ceo with an interim candidate for now, then look for a full-time ceo. let's go straight to abigail doolittle, live at the nasdaq with a look at movers at the open. iacail: barry diller's interactive made an unsolicited bid for angie's list of $8.75 in cash per share, a 10% premium to the close yesterday, but angie's list has already gone above that level this morning. consumermerge the review site with iac's home advisor. the company has recently come under pressure from activists investors. tcs capital, which owns 9.6% of angie's list, urged the company to sell itself last month in a letter, with the company president saying the company has been "running thin."

we see he has a point. shares are off more than 70% from the company's peak in july of 2013. today, angie's list is up more than 12%. stephanie? stephanie: thank you, abigail. before i go to break, i want to clear something up. we should take a look. i believe you were showing a screen earlier of kohl's earnings. matt: i think i had the wrong number -- ticker. kohl's actually up 6%. erik: important to point out, given the 40% drop in macy's shares yesterday. stephanie: they have something to celebrate. guess who else? india. it is the biggest and brightest national holiday, diwali, in full swing for hindus around the world. making artwork with colorful and colors.dyes

they made an image of the buddha to spread peace. david: that puts us to shame. that is beautiful. stephanie: rockefeller center, the christmas tree -- when we return, we will hear from the ceo of allegan on whether he will turn the tables and make a bid for rival vale ant. ♪ ♪

>> welcome back to "bloomberg ." jobless claims are staying near historic lows, as 276,000. abless claims have been at

four-decade low since july. 43 chip only outlets in the pacific northwest that were shut will reopen after people became ill. in china people are warming up to the new 100 yuan notes, redesigned to stop forgers. being collected into bricks and burned. stephanie: a victory this week for allergan shareholders. their lawsuit against rival investornd activist bill ackman was upheld. they allege they engaged in and said are trading -- insider trading. we had the chance to sit down with allergan ceo brent saunders at the summit. we asked if they would ever consider buying valent.

valent may be-- for sale. we do not do hostile deals. uy ourings we look to b growth assets. while there are new ones, there are also older medicines that have led to controversy of late. it does not fit perfectly with the allergan business model. stephanie: what if it became a friendly deal? they could be in a desperate situation. brent: it is hard to predict what will happen with valeat. they are down today, despite the call this morning. a plot of this has to play out, and we will see where it settles. there are quality assets in there, like the business you mentioned. we have to look carefully, and we are not in position to do that. >> drug pricing has been a major

issue in the news lately, and it is a proportion of your sales growth. how do you see this playing out in terms of your ability to push up prices, and what does that mean? grant: we are not focused on taking price increases in our drugs. most of our portfolio are new products, so it's really about volume. the top products, price increases are single digits. some more mature products, bute's more price, more -- we have never been a egregious price takers. i believe we have a social contract to make sure we invest in r&d and take drug pricing very responsibly. going to conferences two years ago, different investors would say can't to be more aggressive, about pricing like these other companies? we resisted that, and we will continue to resist that. we need to do it in moderation.

stephanie: is it fair to say, you have competitors that are priced gougers who could force regulation that would hurt your business? brent: we don't know all the information, but so far where we are seeing a lot of this is on the outside of the mainstream of the pharmaceutical industry. there are a few companies that maybe took it too far and deserve the attention they are getting now. i think it is good. transparency helps. stephanie: except it could hurt you. brent: it could. we have to be mindful of that. the pharmaceutical industry is a good investment, i think. as an industry this year -- curing hepatitis, immuno -oncology, the investments in and autism. look at company like volkswagen.that doesn't mean you take down the entire industry.

here, you really have the fringes of the industry that exploited loopholes, and they should be held accountable. stephanie: scott, let's talk about the reputation of an industry. talking about medications they came out with in the last year, but when we are talking about price gouging from companies, where are the ethics falling into the business cycle when you look at m&a, shareholders those faction. david and i talked earlier, i never heard an investor call were people talked about the ethics of their business. scott: bill ackman was talking about it yesterday with coca-cola. stephanie: guess what? bill ackman made tons of money on burger king. look, i think the vast majority of health care companies, pharmaceutical companies, are highly ethical, and what they do great is -- what they do is great for the health of americans. i'm not surprised to hear brent

say he's not interested in right now.ant there will be a lot of litigation, i am sure, and real uncertainty as to what the value is. it would not surprise me if there's significant asset sales, but it will be a long time before a company steps up and buys all of valeant. david: stephanie's question was, are they rewarded by investors for being ethical, or are companies punished when they are not ethical? stephanie: because people loved valeant five minutes ago. scott: unethical behavior catches up with you over time. if you look over time at companies that played it too close, worldcom, enron, and i don't say valeant is in that category, eventually it catches up with you. you can have a stock -- enron was the most admired company in america on number of times, listed in fortune magazine.

look where it ended up. eventually the market finds out if you are doing something wrong. david: we hope. from your mouth to god's ears. next, highlights from today's program, which should be good because i think we had a pretty good program. stephanie: i think so. david: the sun is rising over san francisco bay. we will be back with "bloomberg ." stephanie: almost makes you want to live in san francisco. almost. ♪

david: we are now looking at a live shot of indian prime minister narendra modi and u.k. prime minister david cameron hosting a joint conference in london. seems like every major economy goes to london. we had xi and now modi. now, some of today's top moments. >> id. think you can make a fair comparison between macy's, a

stellar -- i don't think you can make a fair comparison between macy's, a stellar retailer, and jcpenney. >> you have technologies threatening pacific -- traditional business models. at the same time, the macroeconomic environment has slowed. >> a chinese business person today is happy. private equity guys are happy. . it doesn't mean we all would not like it to be can again. but it is the second largest economy in the world today. >> the real economy has been steady. in spite of what we hear about headwinds and deficits and congress can't get along with the president, the real economy has grown 2% for 6.5 years. only bad news, looks like the real economy is losing momentum. i like janet yellen a lot. she has a tough job, and it's getting tougher. >> i am concerned about the economy. i see most of the companies that i know, that we deal with regularly, having softness in

volume. i see unemployment still in, real unemployment still in double digits. i love the u.k. i love italy. >> don't we all? >> in every aspect. germany i love. the scandinavian countries i love. >> what don't you like, then? >> france. china, we just don't do it right. russia, i don't know if there's a right way to do it. >> ron perelman, i will take you to my favorite point of the show, where we go to our biggest takeaway. ronald also loves donald trump. and much like ronald and donald, you are a graduate of the wharton school. what is your take on mr. trump? clearly the election has to be on your mind. scott: i won't be voting for mr. trump. i think he's a very successful business person. i don't think he has the experience to be president.

but i do think he has brought something positive to the campaign. one of the things people like about him is he's not scripted. sometimes he's extremely not scripted, and maybe that's not good, either, but i think americans are tired of politicians who never say anything. stephanie:? why wouldn't you vote for him? ? scott: i think you need to have a lot of experience to even have a chance of being a successful president, and i don't think his experience is relevant to the role. david: barack obama? stephanie: that is unfair. thank you so much. greenhill ceo scott bok. i loved having you here. that does it for "bloomberg ." tomorrow, cisco ceo chuck robbins. stick with us. we will see you tomorrow at 7:00. ♪

. .

is 10:00 a.m. in new york, 3:00 p.m. in london, and 11:00 p.m. in hong kong. welcome to bloomberg markets.

betty: from bloomberg world headquarters here in new york, good morning. i am betty liu. here is what we are watching -- banks --of two central the fed going one way, the ecb the other. so, what does it all mean for the dollar as global policy black want walmart best' friday bargains? we will talk about the holiday strategy for the world's biggest retailer. he is still a knockout. oscar de la hoya used to win championship fights. now he promotes them. we will hear about the business of boxing. we are about a half hour into the trading session. i want to head to the markets desk where julie hyman has the latest. we are also watching oil inventories. julie: they will be