scarlet: good afternoon. alix: here is what we are watching. top hedge funds are cutting back on stocks. what does that tell us about where the market is heading? investortesting appetite for unicorns. a market value of $4 billion. alix: unveiling for new models. will they have them unveiled a luxury market in the u.s.? scarlet: first, a snapshot of market activity. i know you were super excited because of the headline crossing now. alix: falling for the first time below $40, we were kind of waiting for this to happen. bouncing off the four dollars level to get the inventory number and boom.

down. scarlet: i struggle with inventory numbers because there was a smaller than estimated build in crude inventories. bigger than estimated in gasoline. it is difficult to make out what to make of it. it is sort of difficult to figure out what is going on, technical levels in the $40. i know you will work on it. thank you. moment,rading at the energy had been the best performing group within the s&p even with oil coming down now, it seems as though major averages are holding up well. the are certainly near highs of the session. i have been watching volume seeing trading volume down today, the fed minutes coming out at 2:00 p.m. the only place we see a substantial surge in am is

industrials. all the industry groups are seeing pullbacks involving them today and overall for the s&p 500, lower than the 10 and 20 day averages. it is interesting that again we are seeing stock market holding up. besty is no longer the performing group. it is now health care supporting the gains in financial doing well today. alix: we have got to talk about work, to see how traders are positioning themselves in december. fed minutes coming out later in the afternoon. we see probability falling slightly near 66% is where we stand right now. look at the trajectory here. around 70% hovering or so ever since we got the jobs report. ofheard from a number different fed governors today who were speaking at a

conference at the clarion south. one of them said i am comfortable with moving soon, conditioned on no market deterioration in economic conditions. emphasizing the idea that the fed is ready to go as long as we do not see economic data getting significantly were -- worse. you would disprove the idea they are raising rates in december rather than having to convince them to do so. good stuff, julie. julie will be back in 10 minutes. alix: let's check in with mark crumpton from our news desk. a suburb of paris known for its architecture and multicultural population. in the hours today please gone, it was the scene of massive rate with searching for the person who they believe was the ringleader of last friday pop is deadly terror attacks. tito's people were dead and

seven were arrested. it is not known of the alleged organizer was among them. one of those who died blew herself up with a suicide vest. , it ishe raid took place not far from the soccer stadium where friday's first attack took place. joins us live. what is the scene like now? we seem to have had a technical issue -- go ahead, i'm sorry. brendan: happened this morning. they were held outside of their homes. you know, people here are as jumpy as they are everywhere else in france right now. into theied to walk

supermarket with a cord dangling out of my pocket. people were morning trying to figure out what happened and trying to figure out what was going on inside the city. now, most businesses are closed on their cell phones and talk to each other. said, 23% of the people who live here are born outside of the eu. a sub-saharan african population here, a north african population here. i was told residents tend to mix a little better than they do at a suburb of paris, but also the youth here have a troubled relationship with police. there has been a heavy police presence here even before the raid that happened this morning. it is tempting to think of this place as troubled and poor. but the crime rate is just a

.ittle above the average this is home to many immigrants, many of whom were confused or shocked. live brendan is joining us from france. of course, you can get more on these and other breaking stories 24 hours a day. alix and scarlet, back to you. scarlet: more now on blackrock's decision to close its global hedge fund. it lost 9.4% this year, the worst since its inception in 2003. alix: stephanie ruhle got some reaction from the ceo and from asset management. >> it shows how difficult it is to make money in the macro space now. it is a big low for blackrock.

classic you look at the performance of hedge funds, this past quarter and this past year, the past decade, leon cooperman and howard marks, two of the greats in the hedge fund world, who are not a macro -- both said 30 years ago there were 100 hedge funds. today, there are still 100 hedge funds creating alpha but the difference is they are creating hedge funds. fundsre were a few hedge that had significantly more information. --, >> we are now in a different interest rate cycle. it will be all to make money going ahead.

scarlet: there are several big macro scenes driving the markets this year. the take-up has been fairly consistent. seemingly not able to capitalize on that. >> if you look at the other funds, fortress, they got slaughtered by the swiss franc if you take a bet on a government doing something and you do not have any edge against it, that goes against you and these lightning bolts can hurt. , i do notook at this know if you want to over extract relate from this one's demise. i think they are probably 20 to 30 points under the index at iss point and blackrock long-term. credit suisse, $700 trillion

worth of investment -- worth of hedge fund investments. larry finkguy like might look at the book and say, i need somebody in there who knows -- who has got a salable product. is better off without one then he is trying to lean the track record. the court -- the cruelty of wall street. >> it really speaks to the heart of the problem. they do not work. bonds and stocks are moving together. are all these external factors that markets no longer is made sense in some ways. you would expect the swiss franc -- ande can roll back the tape that was one of my favorite drinks to sit there and say, eventually they fail and that is one of the great lessons and mac. is like an that, it

rocky movie. you watch it eight times and it is always the same ending and someone gets hurt pretty badly. you just do not know when. with respect to the overall trend, you are right. one of the big risks is people historicallyack one of my favorite statistics was since lehman brothers, 701 global rate cuts. every time, it is a rate cut. somethingral banks do 701 times, your model will assume 702 unless you are fundamentally based global mac low person. them will be based on an unrealistic situation once they reach zero. 700 rate cuts around the world. odds are the fed will do something different and your algorithm has to go back half a decade to find last time you made any sense at all. that will be a real challenge. scarlet: how to you

measure performance? you cannot compare to an index like the s&p 500. do you just compare it to itself? >> i think you compare it to total returns and compare it to its volatilitynd level. if we look at the blackrock fund, you had quite low returns and sharp volatility levels. the reality is people look at inside baseball, but the ratio how much look at volatility is on the downside. a few have a 10% move up and another 10% move up, people do not mind that. it is another 10% down and another 10% down, that is a big deal. how much retirement -- how much return in my getting -- am i getting? alix: hedge funds have high fees. are we seeing investors interest but they wantnd,

to do it and play it in a different kind of way? is a key point. u.s. stocks have been this concept where there is no alternative. environment,ate particularly blackrock, what precisely will work in your portfolio in this environment is he did the a legitimate rates michael turn -- rate cycle turn? is a place where these guys probably want to be. it is a challenging space and there are fees associated. the manager with an index fund. there are no real alternatives to human beings running macro funds, then it will be aggressively against 701 rate cuts and you are setting yourself up for a difficult but rocks environment. you are seeing money coming out of the black boxes and working more and more toward fundamental

thematic investment. that is what people want to have in their portfolio. >> great perspective. thank you, adjunct professor at columbia graduate business. scarlet: coming up, is the market all wrong in the way and values apple? it explains a shift in what is happening and how it could mean upside ahead. group and square, will they live up to the hype? scarlet: bmw unveiling four new vehicles to under the hood with one of the automaker's top executives. ♪

>> it is time now for a look at the biggest business stories in the news. barclays will pay $100 million to a bank regulator to resolve allegations of practices on electronic currency exchange platform. they will also terminate the head of that unit, unsafe and unsound conduct in connection to its trading platform in a settlement today with the department of financial services. it already paid $2.2 billion of regulators in the case. scarlet: the billionaire who --trols the commodities considering ways to finance a buyout of the remaining family shareholders. she owns 81% of the holding company. of globals about 10% shipment. objected% of workers to the contract.

officials say they're so hopeful that a strike can be avoided. it includes across-the-board raises. you can always get more business news at bloomberg.com. scarlet: julie hyman has a check on company movers starting with apple. >> exactly. interesting, she says we need to shift the thinking about apple to a services company. she is adding the factor to a conviction by list, 100 $53 per share. shares are up nearly 3% today. the company whose revenue is more recurring and more sticky than credits would give it credit for, as we see it introduced, more things like installment plans for users of the phones, televisions, music, perhaps even bundling it together, that that will cause

an increase in revenue. also looking at the revenue per user. you take a look at the bloomberg terminal and you're looking at apple revenue per segment. the big orange bar really makes up the bulk of the revenue. it shows you how the company classified service is and only accounts for 8.5 of its revenue and includes5 things like apple pay and itunes. her thesis is we need two shifts in thinking. she says the average revenue per user, if you classified looking at a services model, it would be 42% on an operating basis currently and could max out if each user uses all of the services at $153 apiece. by 2017,that means maximum revenue could be $553 billion. this is revenue for the company at $233 billion. analysts are forecasting it

could go to $268 billion. $553 billion is far above that. that is a maximum scenario, not the basic ace scenario. she is making an argument the market is not valuing apple anywhere near where it should be valued. so much.you >> still at, a slow year for tech ipos but our match and square be setting the stage for 2016? both priced after the bell. begin trading after the bell. we will speak with cory johnson next. ♪

alice: welcome back. match group is set to price tonight after the bell as is the mobile payment startup square. pricing'sill the ipo

meet up with expectations. discussing the transition to the public market. happens, andat this is the reason i think there is a quasi-bubble in private, public markets have a lot of interdependent feedback where people can see other people buying and selling and so they can stabilize at a price. private tends to be the player who puts the czech forward. it is easy to get an inflated valuation because someone gets particularly

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it is the lowest among all its peers. well behind verizon, well behind facebook and well behind amazon. that thesis says apple could be making $153 per person. right now, they're making $42 per person. if you do that, it would be more in line with its peers. one point of distinction, that $153, that is for the u.s. there is a discount to the rest of the world. one thing i found interesting come a couple of people have questioned the timing of this move. wondering if it has anything to -- they just question

that appeared this not a new idea that apple should not be valued as a hardware company. alix: a fun note. i liked it this morning. scarlet: our solar panels ready to shine with homeowners? the missing link may have been found. ♪

. . . alix: welcome back. scarlet: the missing link that would make renewable energy a competitive alternative would be cheap storage, finding an has beene way considered the holy grail for the green energy industry. the future is looking a lot better these days. especially for solar. when you talk about solar, you're talking about an industry that, there probably

should be 30 to 50 million american homes somewhere on the roof. right now, the biggest players are 200,000 dollars a year. the runways huge it is just the industry is getting caught overall in the downdraft and a couple of week names as well. jonathan is the head of north american powers and utilities. how do you store alternative energies? what is your vision for fixing the problem? jonathan: three key points, first is the cost of utilities scale, wind and solar, has fallen remarkably in the last five to seven years. two, as those prices have demandd, that creates for storage. three, the increase in demand for storage should lead us to much increased manufacturing volumes, corresponding fall in price, and that let's us poor --

put more renewables on the grid. scarlet: a lot of people wonder whether prices have declined because of public subsidies. windhan: when we look at or solar, these are sources of energy that are cost competitive without subsidies, as compared with conventional alternatives. you need both on the grid but competitive, and you see companies in the united states like excel energy and open procurement taking things like competitive solar energy by view it as a cost-effective component of their staff. alix: how much more downsize could it be? prices cominghen down, utilities and home panels wellll and utilities are below home usage. how much more downside do you think there is? we want to look at the purple dotted line.

the decline for wind prices over .he last few years how much lower does this go? jonathan: the answer is the wind manufacturers know that aired we started doing the study, we and peoplehe data from around the world called us and said, your prices are far too low and no generation turbine runs at 30%. it is pretty windy if you want to take a look. now we have got turbines that run at a 50% capacity factor. the bodhi of the wind and solar technology companies to continue to make engineering advances has been impressive. in your report, you listed five different types of solutions like lithium, lead, these are always you can store and use as batteries. was your estimate for how

much capital costs will decline actually on a compound annual growth rate. are you betting all your eggs on lithium now? jonathan: it is tough to predict which chemistry will win. what is interesting to us is how much we demand will increase because that let's you scale up manufacturing volume. anecdotally at some point, tesla's giga factories apparently will double the world's capacity for manufacturing lithium-ion batteries. from what industry can one factory doubled installed manufacturing base? that is an immature industry if you think about it. people have been asking for 30 years, how do i make my cell phone last longer and my laptop computer last longer? you're talking about consumer demand to industrial scale demand. we will see what happens within the specific technology as we get the scale up. fit intohow does tesla

the landscape? is it just another name in a competitive industry? jonathan: it is a good question. they are trying to get the benefit of economies of scale given their need for lithium-ion batteries and then trying experiments on using storage on a residential basis. alix: m&a, on the alternative energies base, counts have been down around 79 deals so far. jonathan: i could not speculate on m&a deal volume. in thethe global leader energy space, it is clear from what we say in public that we are very busy. most industries continue to consolidate. about the link to andprice, wti falling below oil prices continue to dissent.

does that make the onus on alternative energy come down a little bit? jonathan: oil is used for transportation uses for the most part and natural gas is used to generate power for the power grid. the united states is not usual because we have unusually low gas prices and great natural renewable resources. wherearts of the world you have good renewables, energy is much more expensive and it increases the relative attractiveness of renewables. thank you so much for joining us. scarlet: for more, tune in at two: 30 eastern time for an interview with tom warner. werner. ♪

alix: his 1:00 p.m., six clock p.m. in london -- it is 1:00 p.m. in new york on the 6:00 p.m. in london. scarlet: welcome to bloomberg

markets. from bloomberg world headquarters in new york, good afternoon, i am scarlet who. -- scarlet fu. alix: how close is the central bank to raising interest rates? scarlet: more than 30 governors want to block syrian refugees coming creating a huge problem for president obama. california dreaming. will the nfl let him move on his it was rams -- moved his st. louis rams to los angeles? scarlet: with one hour to go before the fed minutes, julie hyman has the latest check on markets. julie: we will see if the markets will be disappointed. we will see how it goes. we got a rally. that is something to be excited about.

and nasdaq all near the highs of the session ahead of those minutes. at december looking unless something in the data dissuades them. rallyas been leading the has been changing over the last few hours. energy was the best-performing group. health care and financials are the best performers right now. followed by consumer discretionary in technology shares. the oil price has now gone below $40 a barrel. this morning's inventories report -- a couple things not report. production continued to climb. even though overall inventories did not rise as much as have been estimated. i know you were looking at the import data.

imports were down, which means inventories should have drawn if there was demand in the u.s. today's data was more of a weaker demand story. one of the other big themes today has been deals. i want to get to that also. semiconductor deals. we have seen so much activity already. semiconductor purchased for $24 billion -- $2.4 billion. dealer semi conductor battle, micro semi raised its offer for the second time. it increased the cash component of that offer as well in the string to top it off with skyworks solutions. all three of these stocks now trading higher.

such a surge of semiconductor activity. year, we have seen deal volume nearly $92 billion in announced deals. it has been an enormous surge among the semiconductor companies. scarlet: thank you so much. alix: i want to check in on the first witness. mark richt and has more from our news desk. that's mark crumpton. mark: 195 people remained hospitalized after last friday's terror attacks in paris. three are in critical condition. overnight police raids across the country resulted in 25 arrests and the seizure of 34 weapons. the most intensive raid took place in the paris suburb. two people died and several were taken into custody.

known if the alleged organizer was among them. the white house stands by its decision to welcome 10,000 refugees fling the conflict in syria. president obama sent out a week thing they will be led in after they pass the highest and most stringent security checks. slamming the door in the face of refugees would betray our deepest values. paul ryan says the republican bill will not limit syrian and iraqi refugees. speaker ryan told lawmakers debate that under the legislation, syrian and iraqi refugees can only be admitted to the u.s. if intelligence and law-enforcement officials can certify that they will not be a security threat. a new front in the fight against islamic state, cyberspace. hacking collective anonymous says it has accessed and taken down more than 5500 social media accounts associated with the militant group.

the hackers declared war on islamic state after friday's carnage in paris and are threatening to track down the militant group's. says the with airstrikes have destroyed 116 isis tanker trucks in syria. leaflets were dropped to warn the driver's ahead of time. these bombings were in the area as part of the operation called tidal wave 2. you can get more on these another breaking stories 24 hours a day at the new bloomberg.com. alix: thank you so much. just under one hour, the federal reserve will be releasing minutes from its october decision. while street will be paying close attention to any reference to the fed's anticipated pace of hikes. alix: joining us are two moselle open -- tim o'sullivan and lisa abramowicz.

is it going to be gradual? will that be the buzzword we are looking or? >> gradual, shallow, call it what you want. fed officials have shifted the emphasis to how fast. emphasizing that it will be gradual. that comes with conditionality. they are not guaranteeing it, but they are hoping and suggesting that it probably will be gradual. i'm skeptical, but that is what they are saying. scarlet: the bond market has finally come around to the idea that it has to happen. >> if you look at fed futures, fed fund futures, there is currently a 66% chance being priced in that the fed will indeed hike rates next month. right now, what are fed officials doing? try to overwhelm us with words -- over communicate as much as they can.

they still cannot get it right in terms of a cohesive forward-looking guidance. the market is looking at that two to three hikes in 2016. economists looking at three hikes. which one wins out here? jim: i take the over on those. i think it will be more like six. there are eight meetings a year. measured pace was 25 basis points every meeting. none of us know for sure. they can talk about their expectation, but it will be gradual and they can choose their own projections. they make it clear that that is conditional on what happens in the economy and financial markets. seeing an increasing weakness and default rate that is starting to pick up. signs the weakness goes just

e.on -- goes beyond just energy companies. including retailers that have incurred billions of dollars in debt. thathave to face the facts their model is changing. i don't know how the fed could be aggressively raising rates. >> that continues. if you contingency credit spreads right now with people icing and more and more probability of a downturn, that would be inconsistent with tightening continuing. the fed will be looking at the same conditions that ultimately determine whether those spreads are justified or not. in the end, if the economy continues to shrug along, there will be a limit to how much those rents should back up. alix: which market is the fed most sensitive to? they care about financial conditions in total. that includes the equity market come includes bond yields come

includes the dollar as well. it includes the banking system. that is the key part of the mechanism -- they look at all those things. alix: is there one they give more weight to? -- if the equity markets tumbled 30% in the morning, that will get the fed's attention. if that happens next three weeks, they will not be tightening in december. alix: thank you so much. lisa abramowicz and jim o'sullivan. scarlet: we have more coming up on bloomberg markets. thatle group's unwanted facing a growing problem -- unwanted debt. alix: a jolly but busy holiday season for package delivery companies. can they keep up with the 10% boost in e-commerce sales? scarlet: 30 governors have

announced that syrian refugees are not allowed to enter the state. what goes and that vetting process? we will break it all down. ♪

alix: welcome back to bloomberg markets. scarlet: it is time for the bloomberg business flash. pay $150 million -- barclays. the firm will terminate the unit. have already paid $2.4 billion to a variety of regulators. people familiar with the

dreyfus that she owns 81% of the firm's holding company. scarlet: the labor agreement is in jeopardy after united auto workers members voted it down to the one. union officials said three quarters of the ballots are in and 52% are voting no. uaw mounting a drive to rectify the contracts. you can always get more news on that story and other business news at bloomberg.com. head to our markets desk where julie hyman has a check on the company movers looking at the stocks missing out on today's rally. julie: there are not a few. let's start with all,. south korea's fair trade commission says qualcomm is violating local competition loss.

technology licensing is the primary way that ball, gets its revenue. -- qualcomm gets its revenue. it is sending the shares down by more than 8%. the company will be cutting 1000 jobs and plans to spin off its go to business. the shares down 9%. it had planned to try to sell that go to business. it could be disappointing that it has decided to do a spin off instead of that. restructuring involved with that job cut not be greeted favorably. go pro is another one we are watching. and analyst call from piper , she is cutting her price target to the lowest on the streets, $15. there is further price pressure on the company. there has been pricing pressure evidence on amazon and this

growth or products has appeared sale sale sites -- flash sites. it is trading well below its type your price, down 716%. price, down 7.6%. concern about targets online sales growth shares online last were growing 10% is a stock a spike in the shares following the earnings report initially and then they have come down as investors digested that e-commerce news. now trading lower by more than 6%. areonly target but walmart having problems grown their online sales quickly enough -- growing their online sales quickly enough. their penetration is so much lower versus amazon. analysts have been disappointed with that growth. scarlet: thank you for the context there. alix: it was not long ago that

investors were running after yields. times have certainly changed global instability, slowing china and almost certain right hike this rate hike on the horizon has -- scarlet: morgan stanley in bank -- hereca were forced to explain what investors are --ing is mobile on that nabil o. deale banks marketed this for two weeks, $5.5 billion debt package. even after two weeks, investors were saying we don't want it. they were offering the best deals of the year. investors were still like, no thank you. there's too much debt, this is too risky. we would rather buy something else. alix: is this company specific and deal specific as a general

comment -- versus a general comment? >> people are nervous. it is focusing people's minds more on the quality of things they are buying. we had an amazing that bench for the last five years. people have been gobbling up everything and everything -- anything and everything. i'm full and i will be selective about what i eat. scarlet: what does this mean for carlisle? >> the deal will get done. these banks have promised the funding. it's the banks on the hook. the deal will close january 1. the deal itself is not at risk alix: what does this mean for actual investors that wind up diversifying and junk bonds? -- in junk bonds? >> there are buyers of liquid

assets. those you can still upload. you are seeing the buy and hold guys coming in. hedge funds looking for opportunities in areas like energy. if the quality is there, they are coming in. alix: thank you so much. a fascinating article. abila. scarlet: paris is prosecutor saying that terrorists had planned another attack let's listen in as we had to break. >> many investigations led by the inquirers. ♪

scarlet: welcome back to bloomberg markets. delivery companies are prepping for the huge influx of wreckage

is this holiday season. the busiest weeks of the season are predicted to see volume increases of up to 30% versus last year. i always procrastinate and have to order online. cory johnson has more. provides world-class treatment and an upscale setting. this is the bloomberg advantage. ourant to welcome all of viewers on bloomberg tv. thank you so much. let's talk about the package delivery system. it is a big deal and big industry, big demand with the upcoming holiday season. the new chief executive officer for the u.s. operations for dhl express found his way to our new york studio on this wednesday.

talk to me about your biggest plans and the things that will be taking up your time over the next two months here. >> we have been dhl pioneer retiring, the ceo. that has allowed myself and mike to move up. i don't think we have to dramatically change the strategy. we've been focused on growth and quality and we need to continue that. we double the sales worsen the last two years, we have to make sure we see the revenue growth come from that group. we've seen huge inbound follies coming in. we need to continue to invest in our infrastructure within the u.s. to manage that. where i might see 5% volume growth i'm seeing 30% on the inbound. i'm investing in infrastructure. we may be did not have them before because people are buying from all over the globe and

getting them delivered to their homes all across the u.s. >> interesting. you ought to have the advantage of the super low fuel prices right now. how do you deal with that in terms of hedging and imagining where things will be going forward? we are seeing oil trade below $40 a barrel for the first time since august. in our aviation department take a look at the hedging of fuel and making sure that we control our costs and understand our costs and make your we can be effective we have had a good run this year with fuel. were that will stand longer-term is still one of the things we've been looking at, not just the price of the barrel that drives that. we are looking and power density is changing and a lot of markets. density. it is adding the requirement for more fuel an.

>> how do you see the competition, whether it is ups or fedex? you are focusing on packages coming in and out of the united states. how do you view them because ups and fedex are also working internationally? >> those are both very strong competitors and big layers here in the u.s. best players here in the u.s. big players in the u.s. we are trying to build our name and make your customers know about us -- make sure customers know about us. >> what about pricing? how competitive do you have to play in that area now? >> there is more pressure on us to be competitive. all of us are looking at our cost structure and what it takes to some of the networks we have around the globe.

-- support the networks we have talk to meglobe >> about the split between b2b business and be to see business -- b2c business. >> when i started years ago, it might have made up percent of our business -- 10% of our business. 55-60% oflooking at all the shipment's that come into the u.s. going to the b2c world. ish that 30% growth rate, it driving a need to deliver to the consumer. scarlet: what are you anticipating for the holiday season? >> u.s. dollar strong. exports continue to be tough. it may not be a big holiday season. to see, we continue growth, 23% over our current run right.

>> thank you so much. >> thank you. appreciate you having me. >> the new ceo for the u.s. for dhl express. scarlet: thank you so much. , the latest on the investigation into friday's terrorist attacks. we have learned some new details. alix: presidential candidates weighing in on the syrian migrant crisis. jeb bush things we should block their entrance into the united states. ♪

alix: from bloomberg or woodhead kristin york, welcome back to bloomberg markets.

-- bloomberg world headquarters in new york, welcome back to bloomberg markets. says the paris prosecutor the ringleader of last friday's deadly terror attacks was not arrested. at least two people were killed, including a woman who blew herself up with a suicide vest. seven others were arrested during that standoff. the prosecutor says some 5000 rounds were fired during the raid. it is not far from the soccer stadium where friday nights attacks again. france and russia have stepped up their airstrikes on the city which has become islamic state the effect of capital.

the rock band interrupted by the deadly violence and says they are back home and safe. the eagles of death metal took to facebook to say they are horrified by the violence. more than 80 people inside the venue including several associates of the band were shot to death by attackers associated with islamic state. the musicians were unharmed. get anrry trying to appeals court to dismiss chargers against him. he is accused of abusing his power while in office. perry says charges are politically motivated and he blames them for his failed 2016 presidential bid. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. in the philippines today, president obama has strong words

for the more than 30 state governors who want to block the resettlement of syrian refugees. safety concerns raised by lawmakers in both parties have created real problems the white house. scarlet: one key element that appears to be missing from the discussion, details about the vetting process that refugees actually face. phil mattingly has been on the phone with administration officials. there is a lot of misconception out there. what exactly does a syrian refugee have to go through in order to get the u.s.? >> there's 10,000 walking into the country, 100,000 that could be here over the next six months. this is a program that has been in place since the 1970's. it was expanded in a big way in 2007 to facilitate iraqi refugees. there is a multi step vetting process. it starts with united nations refugee agency that identifies the most honorable syrian syrians -- vulnerable

refugees. after those are referred for potential resettlement, as many as 90 was agencies get involved. it starts with an in person interview. then biometric screening. retina scans, fingerprints. -- as many as nine u.s. agencies get involved. cross check with the department of defense database and homeland security database. then the process of resettlement starts. it is not like a vetting process does not exist. there legitimate concerns about tracking these individuals. nine different agencies involved in this process. part of the frustration you are hearing right now from both armies behind closed doors, there's not a lot of facts being tossed about. just a lot of rhetoric. alix: what has president obama do when he says we will provide after to 10,000 refugees

they passed the highest security check? what does he do what he wants to achieve that goal? >> this is a federal program. the united states can continue to do this even though 30 governors are saying no. here is what the white house is doing behind the scenes. they are trying to push out information about what this program entails. they had a conference call with the 30 plus governors last night trying to explain what happens in their states. you mentioned the comments in manila earlier today when he criticized and took swipes at republicans. i got an e-mail from a house gop aide that says this does not help. when it is brought to being political and looks like the president is criticizing on political grounds, that hurts public and leaders trying to keep this program going behind the scenes. becomeitics of this have extra nearly difficult.

taking overpaign is as the key platform for where this is discussed. scarlet: last night, jeb bush spoke about this. , ife have systems in place there is any kind of concern that i don't think we should eliminate our support for refugees. it has been a noble tradition. you don't want to ban muslim refugees. the answer is not to ban people from coming. the answer is to lead to resolve the problem in syria. that is the ultimate answer. scarlet: which of the presidential candidates is attempting to be met? best to do that? >> in louisiana, there is a governors race going on currently in a runoff. the election is three days away. the republican candidate put out an advertisement talking about

how the democratic candidate is supporting president obama who is letting thousands of syrian refugees walk into the country. you have a couple different elements here. jeb bush trying to take a more reasoned approach. this will peter out eventually but the administration, it's incumbent upon them to explain to people why this is more of a state issue -- a general mistrust of how the government handles like this. the other is concerned about what the president has done with syria in general. there's lot of effort needed on this issue. scarlet: thank you so much for putting that into perspective. alix: calls for countries to close their borders are accelerating. actually doing so could come at quite a large cost. one possible funding source come issuing security and mobility bonds. kierkegaardob explains why in a new piece.

-- the crisis of the open borders project is seen as a joint response ability and can only be solved at the european level. take us through your proposed jacob: it starts with the premise of saying europe has a point problem. unless europe as a continent reestablishes its external border control, it will disintegrate back internationally controlled borders and we will see an unraveling of european integration. europe needs to spend more on external border control. it needs to spend a lot more. the external border control budget is 150 million euros. compare that to the relevant agencies in the united states that have annual budgets of

somewhere between 30 and $35 billion. order of magnitude, maybe 100-200 times more. that is simply not enough money in the existing eu budget to do that. what we are saying is that one way to solve this problem and released this funding is to finance it with new joint security and mobility bonds. take full advantage of the fact that europe today borrows at zero real interest rate. therefore has the capacity to raise this kind of funding as a joint project to safeguard europe's political future. alix: this is not to shut down the borders. this is to have better regulation say you can let your refugees in, right? jacob: absolutely.

this is in response to the political reality that unless there is a comprehensive incredible external border control, you will have a reimposition of national borders by xena phobic parties. -- xenophobia parties. you need to have a credible external border patrol because europe needs to keep its relatively open borders and continue to facilitate significant inward migration. who in europe could or would lead this effort to issue these bonds? angela merkel's standing is falling. count on her to provide that leadership? >> i certainly hope so. it is probably germany that stands to have the biggest economic benefit. this is where many of the refugees ultimately would like

to settle. germany as the political leader of europe needs to take this initiative. it would also solve a domestic problem angela merkel. this is a european solution. she will credibly say look, we are solving this problem together. at the european level. just on the shoulders of the german government and germany alone. alix: that was one of the big issues of the robot. all the countries together would be in debt. -- the euro bond. >> ultimately, these bonds would be repaid by all the member states of the european union. at least those would be part of the area, those countries living there external border control. their external border

control. the political underpinning of such financing, the problem with eurobonds is they would be replacing existing national debts and not be financing a joint future project, which is what we are talking about here. politics of financing joint projects should be much easier than simply replacing existing national debt with joint eurobonds. scarlet: you write in your column today that one should never let a syrian crisis go to .aste a lot of extremist parties will also abide by that as well. they are pushing to this woman taking advantage of it and drawing more support to their site -- pushing to this, taking advantage of it. >> there is no doubt. we need to recognize that unless

the european union gets a grip on this refugee and border control crisis, you are going to see various extremist parties eventually take power across europe and that will mean the end of the operation -- the end of the european union as we know it. it might be that once that realization becomes your desk clear to the existing european realize thatill unless they act decisively with a banking union that european integration will unravel. once they recognize that the political ramifications of not credibly securing its border and not credibly coming to gather dust together to deal with this refugee crisis will mean the unraveling of the european union. only then will the political

will be found. alix: thank you so much for joining us. jacob kierkegaard. will be hearing from one top democrat who has been vocal about u.s. policy on syrian refugees. that is coming up at 5:30 p.m. eastern time. black rock shutting down a global macro hedge fund because of losses and redemption. what does it mean for the world's largest asset manager? scarlet: moving the rams to l.a. he has some big backers. will he get his way? alix: what will the fed minutes reveal? ♪

scarlet: welcome back to bloomberg markets. alix: time now for the bloomberg business/. building fell more than expected in october. housing dropped 11% to an annual rate of just over one million homes. the big reason, a slump in apartment construction. black rock shutting down its global macro hedge fund because of losses and investor redemption. the goal and sent him down 9% this year. on $4.6ds have fallen billion to under $1 billion. -- assets. alix: pimco has lost its title of the manager of the largest bond fund.

it was $150 million -- you can always get more business news at bloomberg.com. scarlet: let's head over to julie hyman at the markets desk. start off with the landscape. julie: the landscape ahead of the fed minutes and 13 minutes. best in 13 minutes. a lot of folks have been talking about these minutes today. to see whether we will get more evidence and confirm the fence intention to raise rates at the december meeting. stocks rise to their highs of the session. this gives credence to the idea investors, whether it be stock investors were other assets are getting more used to the idea of an increase in rates. ,ake a look at the probability

now at 60% chance that that is going to raise rates. -- 68% chance. you see the trajectory down here as well. one disclaimer here, there is a 10 minute lag on this. following the minutes coming out. we are watching the treasury market as a result of the anticipation for the minutes. a bit of a bump up in meals today. -- yields today. we have been seeing more movement, three basis points. if you look on the yield spread and twothe west 10 year year of g7 countries, the whitest it has been since 2007. idest it has been since 2007. the dollar index trading at a seven month high.

little changed at the moment. .88%, that is substantial. thank you so much, julie hyman. scarlet: we have much more coming up on bloomberg markets. the football point in l.a. may be coming to an end. at 2:30 p.m. eastern time. david will be interviewing tom werner. ♪

los angeles has not had a professional football team in

his city for 20 years. it may not stay that way for too long. the st. louis rams owner is looking to move his team to the city of angels next year. what i found interesting here is that he is from missouri. he would be moving his team from where it back to l.a. was based until 1994. >> he was instrumental in bringing them from los angeles in the first place. he became majority owner in 2010. he was born in missouri and keeps an office there. it is an interesting twist in the story. alix: why go back to l.a.? >> it is a huge market that has been empty for 20 years. one person i spoke with estimated the team would be worth twice as much there. putting it inbe

the middle of a huge development. he is a real estate developer by trade and he must put this idiom -- stadium in the middle of a retail office, hotel, everything complex. he feels like he was burned by st. louis. they had a chance to come up with a $700 million o funding to meet the terms of their lease and they said we don't want to do that. alix: how do you value it? as of the amount of people that go to your game? >> that is a guest. the team in st. louis is worth $800 million. l.a. is worth more than an nfl team in st. louis. look at with steve ballmer picked for the l.a. clippers recently, there is a huge him on having a marquee franchise in a major city. -- huge premium.

scarlet: who else wants to put a team in l.a.? >> the san diego chargers and oakland raiders would move in together. to put a stadium in carson and have it together. that is what the owners have to vote on. the league wants to have something ready for them to vote on by january. the goal is to have the team in l.a. next year. the timeline is real. scarlet: he was burned in st. louis. his use of public funds in l.a. a deal breaker for him? >> there have not been a lot of funds available in l.a. they just are not willing. he is willing to back the l.a. project himself with whatever funds he can raise on his own. st. louis has come up with a plan to build a riverfront

stadium for the rams that would and more than $1 billion they would pay public funds of more than $300 million. they are trying to figure out what san diego oakland and st. louis can come up with. and then decide who gets to leave. he owns the denver nuggets, the colorado avalanche, colorado rapids and something else. >> the crown jewel, the biggest franchisee owns is in english mere leaks soccer club arsenal -- english premier league soccer club arsenal. it started with the rams. makes shown an ability to his american soccer team is is the club with the english club. these are run as independent enterprises. the avalanche and nuggets share

their arena. ands really a sports nut has built his multibillion-dollar portfolio. the article can be found on bloomberg.com. it is in the latest issue of bloomberg businessweek. alix: we will have live coverage of the fed minutes as they are released at 2:00 p.m. is a december rate hike in the cards? >> or other noble energy market at 2:00 p.m. eastern time. speaking with tom werner, ceo of sunpower. -- renewable energy market. ♪

david: it's 2:00 p.m. in new york, 7:00 p.m. in london and :00 a.m. in hong kong.

welcome to bakersfield, i'm vavevave. mark crumpton has more from our newsdesk, mark. mark: most market watchers will be looking for clues on whether the fed will move on interest rates at december's meeting. there is speculation the fed will begin raising rates for the first time in a decade. michael mckee is in washington. michael: the fed officials have to be talked out of a rate increase in december rather than talked into one explaining the change in language in the october 28 statement that suggests that they would consider a rate increase at the december meeting, the minutes say this change was intended to convey the sense that while no decision had been made, it would well become appropriate to initial the normization process at the next meeting provided that unanticipated shocks do not adversely affect the economic output. weaker than expected job growth in august and september led to what the minutes describe as all members agreeing it would be