capital the belgian remains locked down. pfizer and allergan are said to be close to a deal. it would be the biggest pharmaceutical company in the world. argentina elects a pro-business president. investors hope for opportunity. good morning. this is bloomberg "surveillance." isnow the big focus

commodities. tom: everybody is talking about brussels. i can't imagine the tension. imagine you have kids in brussels. i can't imagine the tension. there is a jump condition. that is one of our fame's. not only the usual the client in commodities, but real deterioration across the industrial metals. we are getting a belgian auction in about half an hour. 2 trillion is the new figure. amazing, isn't it. vonnie: good morning. the french president has the u.k. on board in building a coalition to fight the islamic state. wants to join the us-led airstrikes against islamic state in syria. they will meet with president obama in washington.

on wednesday, he meets with vladimir putin. the city of brussels is under lockdown because of fear of an eminent terrorist threat. the subway system remains closed today. warnslgian prime minister the government expects a paris style attack with multiple attacks taking place at once. young people in france are lighting up to join the military. the french armed forces say the number of applications have triple. few will be accepted. it they will need about 15,000 recruits next year. benjamin netanyahu says jonathan pollard will make it to israel. he was released from prison in north carolina. he earned 30 years for spying for the israelis. he is barred from leaving the

united states. argentina has voted for change. for improved stage relations with the u.s.. they want to attract international investors. you can get the stories 24 hours a day at bloomberg.com. thatit's amazing to see shift in argentina. let's get started with the data check. francine and i could spend 20 minutes on this. 17,008 hundredow 23. the euro is weak or. the dollar strength is a foundational con's this morning. the fix is 15.7. we don't have a 199 on copper.

all you need to know is off the chicago rice. like dow 10,000. it's a big deal to see chicago giving a 199. of we don't have that. the chinese are moving their currency. you've got another view from london? euroine: i'm looking at dollar. copper, i love this copper figure. if you look at the spot price , it goes back4500 to china and central-bank action. a lot of these commodities are following in lockstep. futures are down. tom: you mentioned aluminum. price a european global in the united states. let's lookmediate,

at the jump condition in copper. i want to take a few seconds on this area the bloomberg commodity index, this is a candle pin chart. this is like bowling in boston. these show a jump condition. there it is at the end of august. then we go along normal and then this morning, that jump condition. it just gives way. vonnie: i've seen metal fatigue. this is the accumulation of so much negative news. very very good. there we are in commodities morning. francine: it's not an illusion. brussels remains unlock down today. the city is on maximum terror alert. schools, shops, the metro is

close. they are basically looking for a terror suspect. authorities cannot find him. that's why the city is still close down. they have said over the weekend that they have precise information about a threat that is similar to the one in paris. that's why they have shut down places where they figure people will be gathering. the metro is very hard to police and keep secure. they were asking shops and schools to close down. francine: they are going to work closer together western mark --? jones: cameron met with the french president this morning. the upshot is the u.k. is on board with the airstrikes against isis syria. that is very good news for the coalition.

the french president is still trying to build that. he has meetings with other world leaders. he should make prep -- progress this week. go to germanyu and belgium? how do you go to paris? you just get in the car and go, right? you could go by car or by train. most people go by train. there is a very efficient train system here. while the trains are still running, the airport is still open and the trains are still running, there is extra security. there are a couple of lines of policeman checking your bags as you go from brussels to paris. there is much extra security. they are trying to keep some normal stuff going. at the same time, we have this terror threat hanging over us.

for more, let's bring in bob. great to have you here in studio. we talked to you about x months ago. you were bearish about global growth. putdo the terrorist threats one capital in lockdown affect your thinking. for it can't be good confidence in the run-up to christmas. the thing that's been most effective to me is inappropriate, are we going to see physical loosening from governments because of the refugee issue and the specific events on friday. it's no better time to talk about it. what does that mean for how we view the world? looseningve some

because of the refugee crisis. i could see some additional spending on military and defense. me is thefor multiplier in that kind of spending is going to be very low. how you reframe the end of the year with all of this lockdown in brussels, how you bring it over to the market analysis? bob: the last time i wrote 30 pages, i had black hair. that would be a while ago. retweet for 2016 given what we've seen? bob: i don't inc. this issue on its own will have in a norm us economic influence globally. spectrum, you've

talked about commodity prices, i think the commodity story is very interesting. i don't think it's controversial arabia and thei oil price. some of the weight these people have been financed and funded, our leadership globally is going to have to address. andink there is a physical in europe. in terms of driving economic growth, i think it's a limited impact. what does it tell us of the way we view risk? it's changed in the last five or 10 years. i'm going to oversimplify this, the only risk we care about is central-bank policy. maybe that was too strong a word. my -- spend my time

talking about investment decisions. it's not a good business model. it's the business model of the world. the conclusion was it would lead to saturation and the real economy would suffer. that's been the outcome. we're still betting on which central-bank is going to start. tom: in our next hour, to get a set up, the jobs report. i want to quiz him closely about that wonderful phrase, go to cash. stay with us. it's bloomberg "surveillance." ♪

francine: welcome back. this is bloomberg "surveillance." greenene is in new york let's get to the business flash. europe's economy is the strongest it's been since 2011. manufacturing rose to the highest level in 4.5 years. one point of concern, prices fell for a ninth month this year. mark carney will get his latest assessment of the british economy. his deputy said if the doe had not made any decisions about record low interest rates. it would be the biggest deal ever in the pharmaceutical industry.

are merging.lergan $150 billion.rth it would technically by pfizer. that would take it easier for company to locate outside the u.s. for tax reasons. thanks for joining us. explain to us the technicals of this deal. --zer is buying out again allegan? ruth: that's what we hear. i think this comes in the backdrop of these new treasury rules and people are asking how does that impact the deal? share holdersegan -- it does not impact the company.

the stock is ticking up. people are looking and have the sense that this is not something they have to worry about for the immediate future. francine: this is something that is common in the pharmaceutical world grid --. are they coming under scrutiny? ruth: they are. if this deal goes through, it aversionhe biggest tax deal. it would go down from 25% to 15%. much.sion is very the latest rules that have come out don't seem to back this deal as of now. francine: we are expecting something today. are there any hiccups? is this going to be smooth sailing? we think it could come today.

it's going to be mainly a stock transaction. there is a little cash element there. francine: there has already been a divestment in generic business. would there be any more divest? it seems too good to be true that this would just sell through. ruth: we have been talking about pfizer's putting it off up and they have a generics business. we think that could possibly happen. we will probably find out when the announcement comes today. tom: we talked about the tax delta. let me ask the dumb question. is the american taxpayer funding this transaction? ruth: not that we think so. expect ande don't issuance.

a lot of this m&a seems to have been pushed ahead because we have central-bank conditions that are favorable. bob: i think this is entirely about using cheap leverage. trying to extract some enterprise value for matt. i'm not going to comment on specifics. issues aree of the we've got some that markets. they are worried about some big issues. i guess the issue for me right now is the debt market doesn't seem willing to accommodate that scale of issuance. tom: i don't mean to interrupt. we've gotten to a new scale. you wonder what the financiers

are going to do with it. hide --hink it's a high-yield deal. i understand the process has been quite difficult. i do think the credit investors generally are more cautious than other investor blocks. i think you will have discussed and talked to people. sometimes the credit arc it gives you a signal. tom: i can't begin to say how much i agree on that are in you get a signal from the bond market before anybody else. a $150 billion transaction. look for that this morning across all bloomberg media. you may not know the name. he is a fed governor. he is not a monetary economist. and much more about banking

regulation. good morning. ♪

francine: welcome back. tom keene is in new york. as our morning must-read. i'd picked up something from chris patten. he is the former hong kong governor. strong there is a argument for nato to realize that one of its members has activatinghereby article five.

let's get straight to hans nichols in berlin. you are finding the movements of the french president. how much support will he get? much it depends how credence the argument gets in various capitals. this idea of article five has been mentioned were. you have joint defense. how do you translate article five to the notion of preemptive defense? that was the logic of the bush administration for invading iraq. that is a difficult argument to make. what we will be looking for is how much concrete support the french president gets. he will get a lot of rhetorical support. how many sorties will president obama commit to? tom: which institution is he

going to turn to? is he going to nato western mark -- western mark --? hans: they have opted out of nato. you'll remember when the outing of lockerbie, they were not allowed to fire from french airspace. is more likely to go the eu quarter. francine: everyone agrees that we need to fight terrorism. it's a sticky situation what we deal worth -- with assad. hans: that thursday audience with vladimir putin is the most crucial. what assurances are you going to get?

the islamic state has strongholds. it seems there has been a shift. president obama is skeptical. this is where he is a diplomat. he will be translating washington to moscow and could be an important role between. francine: thank you so much. up next, we are joined by the former argentina bank governor. we will talk about the implication of the most recent election. marxists are out and the businessmen are in it? ♪

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here is vonnie quinn. vonnie: david cameron wants to you k to join the fight against islamic state in syria. he met with the french president in paris today. he will allow parliament to join us-led airstrikes. we are right to take decisive action to stop terrorist when they are threatening the lives of innocent and's. the u.k. will do all we can to support her friend and ally france to defeat this. vonnie: they promise to increase counterterrorism operation. meanwhile, cameron will make it easier to fight terrorists. the army will be restructured. they can be deployed him easily. he wants to buy more fighter

planes and a new generation of drones. whatlgium, there is a warning. they expect a terrorist attack evidently. brussels remains on lockdown. schools and stores are closed. police are searching for an islamic state sert -- terror cell. at least three of the paris attackers live in russells. would trump says he return to tough interrogation tactics. those tactics pale in comparison to what islamic state does. they don't use waterboarding over there. they use chopping off people's heads. isna is rejecting claims it in the south china seas. they need to protect the islands. the u.s. has challenged their claim that the islands are part

of their territorial waters. it's back to you now. francine: thank you. argentina has voted for change. the opposition leader has been elected president. joining us now is a former central-bank governor. he served as an economic adviser to the pleasing candidate. great to have you on the program to get your perspective. you were advising the guy that did not win. this is one of the times have seen argentina shift to the right. marrio: you can say that. they moved more to the center. francine: it's a big ship. , thisu explain it to us is because the left was punching in popularity because of the

tanking economy? verio: exactly. people are tired of the regime. they have been in power for 20 years. was -- people were tired. they were looking for change. the candidate that lost was part of the old regime. he was quite independent. he was seen as part of the old regime. person, but her was in the previous regime. tired and concerned about the economy. it's been aced them or state for

four years. i am sure when you taught it often university, there was a lot on currency devaluation. do you assume the more business oriented government will do policy id valuation? o: it was announced, they exchangex the foreign extraneous. -- constraints. importantt devaluation now. currently, you have five or six rates. that you will see very soon devaluation.

i don't know if this will imply a currency war. it will be a shock in the system. remain a argentina discrete economy? will argentina get more investment this time around western mark --? : we will try to reincorporate and integrate with the rest of the world. we will have to be taken care of. a group of creditors -- this is limiting the accent -- access. ofo expect a relaxation negotiation at this point. this will lead one way or other

to an agreement and this will come back to the capital markets. it's a problem in the country now. this is the lack of investment. opportunitiest of in the country for profit. the country will quite rapidly go back. tom: thank you so much. francine: we are back with bob. when you look at argentina and the new president. is devaluation the only route? bob: the entire world is trying to play that game. draghi is actively playing it. the fed is on the other side and the chinese are playing it. why shouldn't argentina? they have been left behind over the last 20 years as a country.

the reality is devaluation is not the answer. there is deep rooted structural reform and that country. on: he has a wonderful book the fractures politics of euro. when we look at depreciation in argentina, we can look at the same thing in europe. what does it mean for the politics of europe? bob: that's a question. i think in the context of the euro, the strength of the economy in europe, i would love to overlay the euro yen chart with data from a europe and japan. fromally, you are stealing one hand and giving to the other. the global economy is not growing quickly enough. devaluation is a race to zero.

i think in terms of the story, it's a question a lot of people are expecting parity. they are expecting to overdeliver next month they are expecting the fed to deliver. we might move to parity. i don't know if they will stay there very long. the question is at one point does the u.s. say i can't tolerate this much dollar strength. it's on the other side of everyone. we are to pick that linkage little bit. francine: thank you so much. we have plenty more to talk about. joined by jerry storch. this is the iconic canadian department store. this is at 1:00 in london. this is bloomberg "surveillance."

we focus on business, finance, and economics. ♪

francine:francine: here are some of the great stories you can check out right now on bloomberg.com. money managers are holding position. the long wagers shrunk. jack ma is said to be in talks south a stake in the china morning post. are at ansions

advanced state. saudi arabia sold 4 million metric tons to china. you can check out those stories on bloomberg.com. it's time for the morning movers. the plot has deepened with industrial metals. in stuartlet's ring wallace. these commodities continued to punch? stuart: a lot further. if you are a mining company or an oil producer, you really need that cash flow to keep paying down that debt. producing onare profitably, they've got to keep going. if you are a bank and you've given this debt to the companies, you don't want to take control of a gold mine or an oil well. you will want to see a gentle reaction from the banks.

we made a chart for you. it traces a lot of these metals and mining over the last four years. if you look at sync, copper, nickel, they are in lockstep going lower. is there one that could not loses much? stuart: they all have similar dynamics. that has been a poor state for a lot of metals. you have some of the smaller metals like 10 that are much more susceptible to individual policy. economic an a indicator. i think the chart shows there is a unified bearishness out there. glencore, i will let you pick them, are we any more transparent in 2015 of their

accounting in their balance sheets and their liquidity demands than we were 10 years ago or 20 years ago? stewart: absolutely. i remember when we had to try very hard to get any basic information about these companies. glencore has ipo to. more.ave a lot they have made and to update their trading position. deal more great transparency then we were used to. tom: mr. wallace covered the spanish armada, just so you are aware of the historical reach. francine: i used to cover opec with mr. wallace. he is a wealth of knowledge. it's quite phenomenal. stuart: the saudi regime would remain irrational longer than any other producer remains solvent and --

francine: what does that mean for the price of oil? bob: it's the opposite of the dollar. touch $20.ould bob: that is a number i think we will see at some point. if the saudi's give up now, they lose forever. that is the perception. the dollar.tioned i got a sense thursday and friday last week of a ship from commodities being the horse leading the cart to the dollar being the horse. what price point are you watching on the dollar western mark is it versus europe? bob: i think they all matter. this seems to be the limit of what the fed and treasury are

willing to tolerate. it depends on the underlying dynamics. course, we've got other issues. europe is competing with japan it, not the u.s.. the chinese are committing -- competing. there lots of different motivations. u.s., the concern i've got for the u.s. is we've got qe. the fed is about the hike. it could well be in this world that we've got that the payroll is something we are concerned about. that is based on a lack of profitability in the u.s.. you've got all of these things converging over the next three or four. with crude in particular, you've got this other factor, this sunni shia factor. that something we could spend

days discussing. tom: very interesting. thank you so much. we're not there yet. stuart wallace, i'm sure will put out a headline when we get a 199 handle. coming up, we will speak with an important author of a really important book area he does all sorts of cool things. his new book on america's bank's must-read. stay with ♪

tom: good morning, everyone. it's a jump condition in china. waking up to a jump move in many commodities. we welcome all of you to bloomberg "surveillance." now to our business flash. allergan arer and on the verge of the biggest deal in pharmaceuticals. it's valued at $150 billion.

the deal is structured so that allergan is technically lying pfizer. that may make it easier for the company to locate in a lower tax country. the combination will create the largest maker of atm and security systems. they will have a bigger presence in europe. as thela could see oil mid-$20 a barrel. the oil minister says opec it needs to do something to stabilize the market. intermediate is trading around $40 a barrel. bob.ine: let's get back to he is a client advisor. we talked about how you factor commodities.

you are a pair. outlook for growth, that's where we start, isn't great. that includes the u.s.. there may be some upside in europe. europe is the biggest beneficiary of the following energy prices. the u.s. is not a beneficiary anymore. story ishe inflation very subdued lovely. everywhereinflation we may be looking for the fed to hike rates. every time the dollar goes up, that's deflation hitting the u.s.. the big concern i think over the next two or three months will be if we see a continuation of the earnings trend. net income.

the u.s. corporate sector will stop hiring and start firing. i'm not sure how markets will like that or not. francine: you're not arguing we will see a correction in a eddie's because of all the cheap money being pulled away? i think the fundamental story is week. the balance sheets are in the mix. we've got a situation where i think the market genuinely expects groggy to be there forever. i think we've priced him out effectively. i think with japan, they are at risk of disappointing market. i think the bank of japan will do more. that is my view. holdnk the fed will be on at perhaps looking to cut rates this time next year. i think all of that is in the mix.

i expect to see a 25% correction. maybe from a little bit higher. people will be asking where is the fed? i think they start to talk about cutting rates or adding balance sheet again when the s&p drops. tom: tell me about the when elusive consensus. -- and pillars of consensus. bob: i must have missed the story. ago you wrote it a few days you were talking about the twin pillars of consensus. pick it up. bob: i didn't write anything recently. the as one we will normalization in the outlook for growth. i think the other that exist out there now is central banks will

be your friend forever. francine: when you look at some of the great minds talking about markets. it's incredible that he called for a 25% correction in stock prices. that means the fed will have to reverse the height it sees in december. bob: the fed is caught between a rock and a hard place. qe wasncremental creating a massive and bigger exit problem for the fed. the story five years ago was that exit. there is no easy way out. francine: the biggest risk for that year's monetary action. we go back to markets. bob: i think you are absolutely right.

the outlook of the global economy is disastrous. it's wonderful again. the truth is somewhere in the middle. i think gradually we will see an increase in outlook for volatility in markets. i think a rounding pattern in equities. i think that will result one way or the other. it will be that way next year. toncine: what an honor it is have you in the studio. bloombergntinue on tv. to michael as we continue the conversation. ♪

tom: for its third day, brussels continues a lockdown.

the belgian interior minister speaks of a wider threat. among china, beijing weakens the renminbi. the changing of the guard -- the marxists are out, the businessmen are very in in argentina. good morning, everyone. this is "bloomberg surveillance ," live from our world headquarters in london -- in new york. french and likewise in london. we will get to belgium in a moment. what a historic and difficult weekend for brussels. difficult, and it goes back to how you look at the european business confidence since 2011. then you look at brussels, still in luck down -- and lockdown. people feel the -- people are fearing this will go on. paris, mali,es in now and in brussels.

vonnie: david cameron wants the u.k. to join the fight against islamic state in syria. he met today paris with francois hollande. he says he asked parliament to let british planes joining u.s.-led airstrikes in syria. david cameron: it is absolutely right to take action to stop terrorists where they are threatening the lives of innocent citizens. the united kingdom will support our friend and ally, france, to defeat this evil. vonnie: they promised to increase counterterrorism operations. hollande will meet with president obama this week. brussels is in lockdown because of fear of an imminent terrorist attack. citizen -- shops in the city's subway system remain closed. the prime minister warned that the government expects a paris -style attack. those who people are dead after

the crash of a u.s. military helicopter. a south korean news agency says the helicopter went down near wanju.ty of one in new orleans, shooting europe that at a playground where a music video was being filmed. 16 people were wounded. police say it was gang-related. argentina has voted for a big change. the opposition leader has been elected president. that sets the stage for economic reorganization. has promised to attract international investors. news onget breaking bloomberg.com. data check.et a equities, bonds, currencies, commodities. the euro we are both focused on at 1.0631.

francine, this shows the dollar strength in the junk conditioning and commodities today. francine: touching the weakest level in seven months against the dollar, and then look at commodities. we have been talking about it all day. that slump deepening on the back of the dollar but also on the back of concerns on china. let's come over here and look at the terminal, which we like to do. a junkust oil with condition in august. commodities tamping down. todayen a normal event like we saw in august. francine: gold is not moving. you can imagine how much more -- really, a little more added in as well. to our international relations. a week ago friday on paris.

our guess joins us by telephone this morning. exceptionally pessimistic. which institution are you looking for to assist mr. : i think mr. hollande can only hope to get some help from fellow leaders in the member states and the other european name -- the other european nations. that is where the power lies. that is where he got the most notes and signs and signals that support from. the uris -- the european institutions in brussels are not meant to address these kinds of contingencies. -- have an important tom: who is mr. home on's closest ally at this moment? i seems toosest ally

be britain. now determined to join the fight, the military fight against isis, but that is only on the external front. the most important assistance comes from the member states in terms of homeland security. there you can see a pretty concerted effort europe-why. there is a lot of police coordination. , assistance ises strong and cooperation is intense. francine: the search for the key hasect in the paris attacks been keeping belgium in lockdown. brussels finds a new sense of normalcy? jan: it is quite important for people, the economic effect, of

course, when companies shut down and banks and governments. all of that has an effect on people's lives and the way they do business in the way they conduct their affairs. on the one hand it is important for governments to demonstrate strength, to demonstrate that they are on top of the story, and this is what the belgian authority for a very long time -- they have turned a blind eye, which they are demonstrating now. it is quite astonishing what they are putting on the streets. that is the one thing. the other thing is that for the life, despitesels being nervous, they seem to continue with their lives. we have seen that also in london and paris, that people are resilient and they are also resilient in bren belgium i have never felt unsafe or in any way threatened.

normal life is going on as always. call it the now european jihadi capital, brussels. how did it come to be so, and how do we tackle that? is: in belgium, the problem for the most part of the functionality of the state. belgium is a very difficult political construction with two major cultural and linguistic communities. together in one nation. very few things happen the way they do in other federal systems. there is a lot of gridlock and a lot of lackluster performance. that has been the problem. we have seen this most importantly in the integration of foreigners into the mainstream society, and also the administration of justice and police work. that is where the shortcomings are. it is partly built into the kind

of very difficult political construction that belgium is. but then again, the belgian phenomenon is not really a belgian phenomenon alone. we have seen similar shortcomings in france, and germany, and elsewhere. here the population is smaller and the percentage of people who are radical and have radicalized themselves is quite high, but the phenomenon is by no means exclusive to belgium. tom: jan, thank you so much. jan techau. "the big short" last night. has hiss joins us and harvard tie on. had the harvard football coach on for so many times this past season.

we talk about francois hollande and other leaders. he's a true leader who has led these people, nine straight victories. short," thereig is mortgage backed securities and all that. in the m&a world, $150 billion, tax-derived deal. as i similar to what you and i saw in 2005 and 2006? the inversion is something the treasury has been trying to guard against your they are not going to be able to do it. the pfizer people said we want to do it. vonnie: the treasury will not be able to guard against it? tried to dozer after setting up before another inversion. they could not get that when done. vonnie: to be clear, you own pfizer and you sold it?

michael: if you've years ago, yes. i guess people are -- if 2016,00 seen we will see a lot more m&a. michael: with the continued slowing economic growth worldwide, you are going to get continued m&a. one of the good bloomberg stories this morning is on china m&a. that is picking up. .libaba picking up he is selling something and buying something. dealmakinging to be in an extraordinary fashion in the coming 12 months. tom: in the single-digit world, what is your equity market conviction? michael: you still have some juicy dividend yields among the world's best companies, big, fat yields among the world's best franchises. apple,re companies --

microsoft, google -- these are companies who can double their earnings over the next five or 10 years, but their dividends will grow faster than that. tom: you sort of look like christian bale. michael: thank you. tom: i say it. "bigel holland here with short." coming up, daniel an important conversation on banking. stay with us. francine lacqua in london. i am tom keene in new york. this is "bloomberg surveillance ." ♪

tom: what am i watching this morning? how about commodities? -- a big deal.

2.0120 right now. decidedly -- here is vonnie quinn with the business flash. vonnie: the blockbuster takeover of allergan by pfizer is reportedly a done deal. the company said finalized in agreement worth more than $150 billion. pfizer would shift its headquarters to ireland's allergan base. partnersay tvc capital will buy the pet supply jane's petco for $4.7 billion. petco was taken private in 2006. walmart is doubling down on cyber, offering 2000 items on the monday after thanksgiving. cybert will begin its monday deals at 8:00 p.m. the night before. walmart investing heavily in the moment in on the channel. where we will be

in january. i have no idea where we will be in retail in january. vonnie: sachs and lauren and taylor and stash and -- wed and taylor have a big surprise in some ways. the end of the kershner era. with us is an economist for bloomberg intelligence, jimena zuniga. onri gets inaugurated december 10. what is the biggest change he will enact? jimena: there is a policy package of world time reforms

and policy changes. there is a critical economic situation, so when isolating reform here or there will not do. what they need to do is a copperheads of policy package and announce it well. they are well positioned to do that on december 5. to the require approval from congress? a: not all of the policies require congressional approval. of --ds a credible reform vonnie: you can finally get the numbers, right? imena: exactly. tom: is currency devaluation where we are heading? a: i think right now the economic participants are focused on the value of the exchange rate. will probably have to be an adjustment in the exchange

rate, but i think in the context of a macri government that will be part of a comprehensive package. immediately there was an impact on inflation without much of an effect on the economy. in this case there will be first a monetary policy plan in place so that when finally currency restrictions are lifted and the currency probably climbs to a higher level, that will not necessarily translate into higher inflation and they will be a stimulation of nominal variables. francine: when you look at argentina, the fears -- the first thing investor c is the default. not too earlye for investors to come back in in argentina? how much time do we have to see whether the new president means business? jimena: investors are forward-looking but they will

pay attention to first becoming -- to the coming announcement in the coming days as well as the economic policy announcement that will be made in the coming days. that he has the advantage that he is not the ruling party's candidate. i think investors will recognize a fresh start for argentina, and i would like to give him the benefit of the doubt. marketere do emerging investors fit in? we have a humility about it still, don't we? michael: yes, humility caused by scars from episodes like this where things change and do not seem to get any better, even though the changes are in the works. what we have learned also is that when people are most pessimistic about emerging they are very optimistic that everything is wonderful, you end up with

losing money situations. theuld be interested in best economic for the next several years in terms of growth for investors, virginia p -- for passed.all of this gets argentina's stagnation -- it is not just a cyclical decline caused by declines in the whole region. argentina, you have currency restrictions, so you have to allow yourself to change to operate in the country. with a real estate company or a company in the real economy, you can read expatriate your dividends to your home country. importers need to find a product

that they can justify to import. there will be a lot of correction. michael: and that will release of growth. jimena: exactly. tom: thank you. we are going to look at retail in america. stay with us. ♪

francine: i am francine lacqua

in london. tom keene is in new york. you are looking at live pictures from the city of london. we are not seeing fear, but cautioned today in london after the clampdown continues in brussels for the third day. this has to do with finance. clive crook writes in "bloomberg view" -- he actually continues that if you apply that mindset to electricity generation, the absurdity would be obvious. you do not generate electricity for its own sake. is this true? be almost a vicious circle, where wall street serves only its purpose. michael: there is a lot of truth to that. i hate to say it because i am part of the problem. there is no doubt that over the last 25 years the evolution of

what clive crook is talking about has made it a caricature, a means to an end, not in end -- end to itself. tom: i saw "the big short" last night. i will have a lot more to say about it. there they are, a quote from the movie for cmo's. has anything changed, mr. holland, from 2005? the guys looking for derivative margins are being creative, aren't they echo michael: very creative. one of the big problems for universities over the years is that many of their best graduates went to wall street as a result of this. one thing that is happening right now, a lot of the smart people are doing things other than wall street for a variety of reasons. they are doing things in silicon valley and with teaching.

the induction has already started. these things go in cycles. tom: francine, quickly -- seven years ago, the only one who knew what a tranche was was you. francine: it is true. michael: when you make up your own language, it is pretty much near the end of the craziness. it is not going to go away quickly, but it has already started to happen. tom: very good. michael holland with us this morning. coming up, harry tchilinguirian on commodities. he has seen junk conditions before. that is what we have this morning and commodities. stay with us on commodities. ♪

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our monday. bloomberg first word news with vonnie quinn. vonnie: french president francois hollande getting on board to fight islamic state in syria. david cameron says he will ask parliament to let british planes joined u.s.-led airstrikes against the militants in syria. he will meet with president obama tomorrow, angela merkel on wednesday, and vladimir putin on thursday. the army will be restructured into two strike brigades of 5000 soldiers each. they can be deployed immediately. cameron also wants to buy fighter planes and a new generation of drones. belgium's government issues a warning that they are expecting a paris-style terrorist attack. brussels is on lock down today. police are searching for an

islamic state terror cell. at least three of the attackers lived in brussels. he wouldump says allow terror suspects to be water boarded if he were president. he said thousands of muslims in new jersey cheered the 9/11 attacks. presidential politics or star wars? for americans, it is a tough choice. according to polls, americans say they are as excited about the iowa caucuses as they are about the star wars movie. the caucuses are about 10 weeks ag away. star wars opens next month. similarity -- r2-d2 as a gop candidate. we love this. this is a huge deal, francine. francine: huge news, tom. i was looking at some of the younger kids in the newsroom who were telling me google is

basically wanting a new tool for the upcoming release of star wars, where you can choose whether you are the light force or the dark force. that is where it becomes two dollywood for me. i do not want to necessarily become a character. harry tchilinguirian has all sorts of experience. destruction of the commodities market, we continue to go down, rationalize down the long-term inflation. the china recovery, lehman brothers, and we rollover. how close are we to liquidity events and balance sheet adjustments in commodity, and particularly commodity trading houses? harry: it is a difficult one to

call. currently a lot of commodity markets are in overcapacity excess supply. metalsit in oil and base in particular. in terms of the more precious metals, we are looking at in light of the economic data, including the fed hiking rates. i think adjustments always come slowly. clearly there are number of announcements that produce restraints in the base metals sector. these have not necessarily come forward. that is what it is about. it is a slow adjustment process that has brought through the market mechanism. tom: but then price clears. what price do you have in your head when commodities begin to clear? harry: if we take that by sector, we still have a lot more pain to go through in the base metals. some of the metals like sink -- .ike zinc

the thing is, in the end, there is probably lower to go in base metals. oil, some analysts are calling for lower for longer prices. 40's is wti in the low a solid floor because we are deep into the u.s. industry's cost curve when it comes to shale. as far as oil goes, this is relatively as low as we could get and possibly start turning up for the winter period. the base metals, it is a different story. zinc, these are all in overcapacity in a more fragmented industry, producers wanted to scale back production. the prices need to go lower before we see changes. francine: you expect oil not to fall further from this point? we have venezuela seeing they could see crude at mid 20's if opec does not take action.

whatever opece does, oil will not go to mid 20's? harry: again, it is how you look at it if you look at the price of $40 and subtract $10 to $15 for transport costs, if you are looking at prices at the whale head that is suddenly in the 30's, already in the 20's at the whale head. , to is the important thing distinguish what you see on the screen from what producers are facing in terms of their economics and production. wherew 40's is a level you start challenging those economics of production. that for us establishes a floor because we are looking at the economics of production of the u.s. shale oil industry. tom: harry, thank you so much. michael holland, it is a value trap. we have lived it and made collective dumb decisions. do you make a decision went to buy those names?

michael: the blue-chip is easier because you get paid a lot of money when you're holding. these things harry was talking about cost you. the comment i love was the oil comment. the oil comment, listening to some people this morning -- the saudi oil minister just said they are averting stabilizing the market. if they go through with what he is saying, the comments we just heard are going to be prophetic. dennis gartman is out with his usual on-fire monday morning letter. on china, he is pushing back against media idiots like me. michael holland is saying dennis gartman is onto something there.

michael: i was in hong kong just before this. visiting companies at the apple store in beijing, they are slowing simply because they are going from the manufacturing sector to the service sector. service is doing very well. manufacturing is causing some of the commodities stuff we just talked about. keep it simple. peopleernment and the are interested in keeping their jobs and staying employed. they are not about to do a reception -- they are not to do -- they are not about to do a recession game. they are still growing. companies are growing. you can talk about accounting and various things, but the fact is they are still growing. comment from bnp paribas -- the oil imports continue to grow. that is an important segment. francine: but to play devil's advocate, there are falling exports.

i guess the ability will boil down to whether the pboc is able to manage it. at this moment, we are not sure of that. michael: i think you raise all the good points with respect to what is going on in terms of the negative side. the flipside of that is that the pboc is going to do with the leaders tell them to do, and what they are going to do is keep people employed. that is the most important thing for them. so there will be a slowdown. they have had it for two years. they have to keep the people employed. the bad moments are going to be there, but the pboc, we have trillions of dollars worth of savings. arrows, to lot more use a cliche, then -- than any other large company -- than any other large country. tom: coming up roger lowenstein with us. always good. this book is nothing short of phenomenal. a superb one volume on america's

federal reserve. that coming up. stay with us. ♪

francine: welcome back. this is "bloomberg surveillance ." i am francine lacqua in london. tom keene is in new york. here is vonnie quinn. say 11 published reports pfizer shares will be included for each allergan share. billion deal is expected to be announced today. deep old is buying -- dee diebold is going to buy its german rival.

and the price of the barrel of oil could fall to as low as $20. west texas intermediate is now trading around $40 a barrel. tom: we are thrilled to bring in michael holland. he gets you framed for december and 2016 as well. part of that is long-term investing. s.t's use apple computer everybody says it is undervalued. i do not have an opinion. chart that wepple have god. what we know is the psychology the apple chart that we have got. how do you manage the courage to get in with one dip over or another dip over or where we are now? how do you add to a position or initiated position? youael: i hate to say that asked a great question including the word "courage."

you and i both know that the greatest -- the best time of -- you and i both know that the best investors are the ones that are like spock from star trek. right now people are generally optimistic overall, and i own the stock and i own it forever. as a traitor i would say it is probably -- as a trader, i would probably say it is something i would not do right now as a trader. is apple being supported by the federal reserve system? michael: the direct answer is of course. it is a simple statement. tom: what happens december 16? michael: i think the markets are going to say thank god they finally did it. september was a mistake. they should have gone. thank god they did it in december. we were at emergency levels in

2008. we are no longer in an emergency. tom: that gets us very nicely to a book on the fed. without question the book of the system.on your economic roger lowenstein is iconic for writing countless books with clarity and reality on finance and wall street. he has written a jewel, "america's bank: on how we invented the beast." even jay cooke is bewildered by the chaos and confusion. what did woodrow wilson do? 's time we hadok thousands of currencies. we had tolson said have one centralizing agency over finances. we have to have one reservoir of credit so that we do not have shortages here, shortages there. up 100% intes going new york. he said this is ridiculous. we have to have one central bank

to be the lender of last resort. tom: mr. wilson is beleaguered at wilson -- at princeton. tell us what he did. the drama is in 1907, but the real drama for you and america's bank is 1912, just out before world war i. roger: wilson clearly was a segregationist. he was a man of racial opinions of his day. he was famous for so much war. to theot relegate him evil of those of his generation. clearly his racial views were wrong, but go ahead and give me the question. tom: the question is on 1907 and jpmorgan. jpmorgan and writing that check -- jamie dimon would write that check today. what happened after the panic of

1907? countryanks around the shut down. they were issuing monopoly money. it took six years because people had such a fear of creating a central bank. this is a fear that went back to thomas jefferson, and that even evidence was staring them in the face that they could never rely on one guy, jpmorgan. francine: in your book, you basically say that the fed's unpopularity would make sense if it had failed to intervene, but the fact of the matter is the fed rescued the u.s. banking system from the financial crisis, after the financial crisis. unpopularityk the today is -- i get why people are

angry at paul volcker and construction firms are sending him to by fours. 18% was tough. but the fed today has ameliorated the damage. i think the anger today is ideological. golden era that never existed, but it is not because of any harm the fed has done to anybody. rogeret's come back with lowenstein and michael holland and look forward to what the fed will do. a historic december 16 decision as well. that will be a topic later this morning. daniel tarullo is a governor of the federal reserve. you may not know him. he is not the academic monetary economist. -big-twoarullo on a too fail. ♪

know now.you need to commodities on the move, and you see it in the currency market -- dollar stronger, euro weaker, 123.19. china weaker, managed out of

beijing. from bloomberg , here is david westin. david: we are joined by daniel tarullo, a fed governor, the man responsible for banking regulation, as well as fed policy. we will be joined by jerry storch. jefferiesvid servos, chief market strategist. we will find those commodities like you have been doing, and , allergan, pfizer. tom: michael holland is with us, and roger lowenstein, author of "america's bank. i know you know the history. martin, we hadey an independent bank. this bank -- has it sacrificed banks that william

machesney martin fought for? now really six years past the crisis. so i think it is really time for janet yellen to establish some independence. maybe the weekly meetings with the treasury, you spread those out more. maybe she take some hard decisions on rates, but i think it is high time that the fed and the treasury no longer have the same policy. they should serve different agendas. vonnie: manmohan singh is writing that the fed is risking tools to tighten on the screen. what do you make of the new tools of the federal reserve has been using, and are they the correct once? roger: there is always been the question, because the qe is the tools that the qe and the tools they used to ease are so novel. on theuld it be like

other end as we move back toward no malady -- as we move back toward normality? 26 steps and you see what happens. i agree with the premise behind the question. that was sort of new terrain. francine: i should have thought about this, but it really brought it home when i was reading part of your book. for most of the 19th century, the u.s., unlike most nations in europe, did not have a lender of last resort. the last toone of lenders last resort to be created. who has it right? is at the fed, the boe, or are they all the same book? ther: i think the fed and boe are close to the same boat. are nolear that there atheists in foxholes and there are no moral hazards in foxholes. crisis, have a moral

you need someone to come in. the fed came in aggressively, and the u.s. has come out of trouble faster than most countries. england was second. would we want to be where europe is today? obviously not. tom: roger lowenstein with a fabulous brief, short, focused history on the beast, the federal reserve history. holland, where did we get to a point where we could not be used to a correction or a bear market? ago on to be a few years friday night, the house stops so that we can watch you and mr. werkheiser. michael: roger lowenstein was adjusting what caused the last seven years of no interruptions in an inexorable bull market in

financial assets. the fed caused that 15 minutes ago. they set out -- the fed cause that, as laid out in a question you asked 15 minutes ago. they said we are going to support financial assets. when they did so over that period of time, we did not get these, what about a year and a half ago the training wheels came off for it with that one move on their part, we started to get more normal markets. vonnie: when was the last time you added to your apple position? michael: every time it goes up. at the if you look myriad of companies who are the great companies, start with the dow jones industrials. look at microsoft or johnson & johnson, exxon mobil, jpmorgan, incomes all yielding 2% or 3% or more. you end up with a portfolio that will be grown faster than

inflation. the cash flow will keep coming. the underlying franchises are valued at reasonable levels. tom: michael holland is with us. what a wonderful way to get monday started, with mr. holland looking at dividend growth. how quaint. francine, thank you so much, from london. a lot going on. and of course the news still in belgium and brussels throughout the day as francois hollande begins his travels to gain support. "bloomberg surveillance -- "bloomberg " is next on bloomberg television. on a monday, with futures at negative two, it is "bloomberg surveillance." good morning. ♪

aephanie: on the brink of blockbuster, pfizer and allergan prepare to merge in a deal valued at more than $150 billion. how low could it go?

there are speculations that we could see oil go as low as $20 a barrel. half of what it is now. they are in need of retail fail or be -- they are in need of retail therapy. department store chains. stephanie: happy monday. you are watching "bloomberg ." it is thanksgiving week. i'm stephanie ruhle. david: i have been fasting. stephanie: i am getting geared up. david: helping us kickoff this big program is jason kelly, in the house. jason: good morning, guys. i am trying to get ahead of thanksgiving. david: first we have to do the first word, and that is ie