david: good afternoon. jack lew says that the dollar will stay the world currency. auto sales are on track after the reported strong november sales and why art stocks keeping pace? and that european commonwealth avoid steve holding on its debt. it is waiting to file for bankruptcy protection. let's go to julie hyman. julie: stocks are coming off the highs of their session a little bit. we're seeing the major averages around half a percent each.

because of disappointing manufacturing numbers and we are taking a second leg downward after initially slumping. here's what is working and what is not. followed by consumer discretionary and financials. telecommunications shares, those of the drags on the major averages as we see them wavered to some extent. david cole any of this standout? note, barclays has a recommending buying. johnson & johnson, eli lilly and merck all is higher. using these companies to beef up the drug pipeline instead of financially driven m&a is preferable. things like tax inversion for example. we have seen some high-profile ones of those as well.

fairfield innovation will support feeling pricing. we will likely supersede drug pricing concerns on election season rhetoric. maybe some of that will die down. also wanted to look at some individual drag on the overall average. -- records and percent. credit suisse saying apple has been cutting in supplier orders and checks reconfirm that. finally, getting a downgrade to an underperform. just to be specific this is a fork engine maker industrial uses. the analyst at bank of america not optimistic on that market in the u.s.. thank you. let's check on the first word news. mark crumpton is at our news this with more. president obama trying to

cool off the heated dispute between the president of russia and of turkey. his urging turkey and russia to focus on the common goal of fighting islamic state . >> we all have a common enemy. i want to make sure that we threat. that i wouldn't make sure that we remain focused on the need to bring about some sort of political resolution in syria. the president speaking at a news conference following the global summit on climate change. the diplomatic crisis interrupted last week when the turkish government shutdown a russian warplanes. turkey says it was in their airspace. russia say they were in syrian airspace. mr. cameron said he would not order the attack unless he knew

he could win a vote in the house of commons. this has led to a split in the opposition labor party who -- whoserbyn opposes leader, jeremy corbyn, opposes the attacks. the crash of an air asia flight on a malfunction and pilot error. investigators say the pilots wrestled each other for control of the lane as they tried to deal with an electronic system failure. attorneys for the convicted boston marathon bomber have requested a new trial or their arguments were heard today. dzhokhar tsarnaev was sentenced to death for his role in the attack. he did not attend the hearing. get more on these and other breaking stories 24 hours

a day at the new bloomberg.com. from the bloomberg first word desk i am mark crumpton. david: thank you. the u.s. treasury and u.s. agency for international development are hosting a financial inclusion or of an washington today. moreoal of that is to get into the financial systems. we had an exclusive interview with jack lew. which of the activity to ask the secretary about the dodd frank act and what proposed changes to the bill would be. reflectof the proposals a desire for clarity, which legislation can provide. i think it is important for regulators to use the flexibility that they have to clarity.he kind of certain requirements in dodd-frank, suggestions have been made that a $50 billion

.hreshold you have a $200 billion institution that is on the large brick to be careful not to get into a conversation where we -- thoseling back that protections that make our system safer. david: the secretary talking about the flexibility baked into this law. these five years old, rulemaking is still happening. and are using these regulatory offices around washington dc. you asked him about regional banks. i know there have been regional bankers saying that this law adversely affects them. >> it really comes down to how you define to small. as the secretary pointed out, he

wants to take the threshold of $50 billion and raise it to $500 billion. that arelooks at banks smaller than $1 billion in assets and committed just considers them community banks. the american banking association says banks are disappearing every day. one thing we are seeing in this conversation in d.c. right now about to whom you give your tribe believed that -- you give regulatory relief is how you define small. it is actually really difficult and very expensive for small even read the regulations and figure out whether or not they are exempt from the regulations. on the other huge of the register of the fdic. small the matter how bank, a hedge fund will find it, buy it, and use it to trade on the bank's books and the definition of regulatory relief

is just how willing you are to concede what small is. had a wide-ranging conversation with the secretary. you asked him about the news out of the imf recognizing the chinese currency as one of its reserve currencies. this, from the imf can was to bring china into the global financial system. to encourageerhaps other central banks to start bringing in their own reserves. reserves in foreign the yen, euro and pound sterling. i asked the secretary would we ever consider the u.s. treasury asking -- adding to our reserves? this was his answer. >> we made clear that we thought it was important that china meet all the standards to be recognized as a currency and a

special drying rights basket. we supported the action. we have also had long ongoing discussions with china about their currency and this is brutally have made commitments to us that they will not intervene that are in ways -- in ways that are unfair. they know we will hold them to those commitments. indication of how they will do that? is changing tactics and not being explicit about it. when china open the infrastructure bank they decided they were not going to participate. a lot of our allies decided to participate. the u.k., germany. when we are noted with the world bank and the imf is a move toward bringing china into the financial system as a carrot rather than keeping them out of the global financial system as a stick. that is not the approach the u.s. chose a year ago. we do not know how they are

prepared to do that within the global financial system. but the answer to my short question was no. david: thank you. you can see his entire review on bloomberg.com. coming up in the next hour of bloomberg markets, it was once one of the biggest hedge fund. yearsith one of the best ever for auto sales. but the brakes were put on cheap borrowing. can the island be the next blooming -- meet its next payment on january 1?

david: welcome back to bloomberg markets. it is time for the bloomberg business flash. we heard from chicago fed president charles evans today. he admits he is getting nervous about the next meeting on december the 16th. he reiterated he would prefer to have more confidence and i do today that inflation is beginning to have higher. regardless of the exact date and be well appropriate for the funds rate to be still under 1% at the end of 2016. the face of online spending slowed down on cyber monday. sales rose 26% and the beginning of the weekend. americans spent an estimated $3 billion.

by nonprofit funded isa-cola to study obesity disbanding. an e-mail showing that they edited their mission statement, and suggested content for their website. you can always get more business news at bloomberg.com. but get a check it -- of the markets desk. julie: chinese companies that are listed here in the united states. this company cannot with its earnings after the close yesterday. third quarter revenue list -- missed forecast. the company says it will temporarily suspend further forecast on revenue because of domestic jurors. he can see shares down by about

13%. at the decline. we are seeing an increase in another chinese stock that is listed here in the united states. shares of 3.3%. be near and to agreement to buy it. the sheriff's still not trading up to 27 where this deal in theory would take place. and finally not a chinese company per se but one that is heavily dependent on that country. the shares up to and a half percent after the stock was raised to outperform from market perform. as theck could do well investor focus starts to shift toward the split in the company. it is spinning off its chinese business and also in particular taco bell has been doing well in

the united states. it's chinese business has been struggling for a number of different reasons. including any supplier issue that affected the sale quite negatively. david: that was so long ago but it is still full of repercussions. today, blue crest capital management will return all outside client money and work on managing his own wealth. he says the lansing game has changed and we want to adapt to the environment as it exists. the landscape has changed. tell me about whether or not we see a company getting in front of that are responding to it? >> it certainly has changed and hedge funds are not the crazy wild west vehicle that we used to be back in the 90's. investors care little bit more about the month-to-month returns. they are watching you quite

closely. that is true. however, if that is the only reason you have your performance as fantastic and you were shooting at the moon, you might not come out and say it is that is my speculation. david: this has not been fantastic. >> it has been lackluster, certainly mediocre since 2013, fund, it hascro done a little bit better but certainly this has not been over the moon, nothing to write home about. david: when you look at this firm, how much is going to be left after spitting out external clients? i think they want to say several billion dollars. but the exact number is a little unclear. billion. the firm is 8

aey have already had about billion -- outside of that fund is about a billion. we do not know how much is in the fund. it is a little unclear right now. way that investors appetites have changed, is that what is responsible here? they wanted to see the returns they were getting in the 90's into the 2000? >> investors do not want to be losing money. they are paying two and 20 to be invested. david: explain what that is. >> they paid 2% management fee, the money of any of the client puts into the fund, and on top of that 20% of performance in typical hedge fund fees. that is a lot of money when you can do something cheaper. david: when you can see how is

allocated, what does it look like? this --ir prime form focus is making big bets on the market. mosthas been difficult for management. it has been hard, not a lot of volatility. passing that come back full force this year. we could not get it. is the job of managers, to take advantage of whatever volatility there is. so i see both sides a little bit. david: lastly, how long will this take to happen for these outside clients? the outside of

client's money should be returned by the end of january. about 90% by the end of the first order. the timing after that is a little unclear. you want to make sure that investors are not getting a bad deal. david: thank you. marketsead on bloomberg , u.s. automakers are kicking into high here. delivering record sales in the auto economy. ♪

david: welcome back to bloomberg markets. vw reported auto sales that fell 25% today. elsewhere has been a stellar month thanks to strong economy and lower gas prices. set to log its best november yet. let's talk about what is driving this. as an auto reporter i hear those puns it so often.

this is heading out to be the third month in a row with seasonally adjusted annual sales of more than 18 million. that is pretty amazing right there. probably the at best year in u.s. history -- in human history for u.s. auto sales. discounting has had a lot to do with it true car estimates that the industry on average has raised the discounts it is giving on its vehicles to about 6% from last november. some of them like chrysler and toyota are raising discounts in double-digit percentage terms. david: you got to talk to the president of the americas along the assembly line. what did he have to say? workersis hiring 2000 at the assembly plant in .entucky to build more trucks to

you cannot control gas prices but you can control the way we finance of these vehicles. he had to say this about how long it will last. >> this has been a component of this industry over the last several years prices have been going up with the red what is happening is that consumers are buying more expensive vehicles and financing for a longer time or leasing. but to help the industry right now, look at transaction prices and the star rate. it is a very healthy industry. that can continue. interest rates will start rising again. we think it will be healthy for a few years to come. >> the interesting thing is that he should interest rates on his -- mentioned interest rates on his own. they put a blog post out saying

that we have 100 basis points will hurt gain, that carmakers by about 3% per month because on the one hand dealers have to pay interest for the inventory they hold on their lot and on the other hand it is going to make it harder to buy the strokes. joe hendrix did not seem too concerned about it. we are just seeing the average sales price rise and rise. now over $38,000 across-the-board. david: you see how impressive tracks have been for -- trucks lowereen they scaled back to rental car companies. not make as much money on those cars, and they are incredibly low-margin vehicles. general motors and board and others are moving the production

of these low-margin vehicles out of the country to mexico. that is what ward uaw tax was all about because their low-margin vehicles do not have to pay the import taxes that they do on trucks to bring them back in. they are just happy making and selling trucks here. 70% of all the vehicles they sell our trucks. david: to work. still ahead on bloomberg markets puerto rico avoid a default on their debt. what is the plan for the island going forward? ♪

david: from bloomberg world headquarters in new york, let's start with the headlines in the bloomberg first word news.

mark: russia is starting to realize that the price of backing syrian president bashar al-assad is too high. the war -- before leaving the climate summit he says they have not accomplished much since entering the syrian conflict. >> they have been there for over a month. i think a for a number of my for those who have lived of the situation, they would say that the situation has not changed enough again later. that presidentst assad can play no role in serious future. paris has extended the ban on the demonstrations around the site of the global conference until the end of the senate. 300 protesters were taken into custody after they defied the

van and fought with police. attendance was optional today at primary and middle schools. city officials in beijing impose limits on factory of it. only half of u.s. households use cell phones according to the u.s. to stick that show more the cord onutting land lines. only 8% of households have just land lines. 42% have both. you can get more on these and other breaking news 24 hour news cycle for day back on bloomberg.com. david: comedy markets are closing in new york. let's take a look at today's movers. weigh ony continue to crude prices. looking at the opec meeting investors are expecting the defensive market share rather than support prices. rose to a three

week high. demand client for u.s. exports over supply and waiting chinese demand metal producers are battling to stay afloat. we entered the million-dollar question, are we at the bottom for commodities? >> i think the markets are still searching for the bottom. it is going to be the driver. supplies good to take some time to work out. china is going to take some time before we see what happens with the chinese economy. it is a soft landing or something more disruptive? we have a market making event over the next 30 days and that will see what happens to u.s. interest rates and what does that mean to the u.s. dollar. that will be the immediate catalyst i would be watching in all of the drivers out there, what is guiding us in terms of commodities? really interested in your perspective. i do not expect a call from you, just what are the overshoots and the downs? >> i think copper at these

copper linesf the are keeping their heads above water. a quarter of them are probably not or are struggling. and aluminum, about half of the aluminum producers are underwater for a cash flow perspective. of the producers are keeping their head above water. it is not just -- if there are some people that are struggling, ist percentage of that there? >that is what has happened over the past 40 years. the pain threshold. we some percent away from this? >> we thought we were a year ago. the prices kept going down and

the industry adapted. david: puerto rico wasn't data avoided the dusty any goody but like tsonga this has many chapters. they are up against another deadline. debt today inhe full. they avoided kind of on their direct debt. off anyps hold potential lawsuits that they could face. david: how was the governor able to do this when you see the maneuvering that made this happen. >> was the commonwealth will start doing is taking money from revenue that goes to repay other debt, noncentral government debt. their highway deaths, convention center debt, and redirect that revenue to make sure that general obligations and direct debt is paid. the next big payment is

coming up january the first. the likelihood they will be able to make that? have madet that they the payment today is a good sign that they will also meet january 1 but a lot happens from one bid to the other in puerto rico. it is still a waiting game. we're still going to have genies deadlines coming up every few weeks. david: we had a hearing today on capitol hill. washington showing interest in this but no overtures to provide bankruptcy report. >> they will hold a hearing but it does not go much beyond that. lawmakers are still saying that puerto rico needs to show changes before they start helping out. david: t1. -- thank you. my next guest has millions of experience -- years of experience in this.

what is your sense about what might happen? >> there is no doubt that puerto rico is more than they can pay. that some form of restructuring is coming. we think that the government of puerto rico is trying to keep the conversation or the dialogue with stakeholders under control. they're waiting to see if something happens out of washington. it sometimes becomes difficult to control. so we were expecting this payment to be made. we think that the payment the , that it is not guaranteed. we're going to study defaulting

on non-senior debt. are you satisfied that the government has a plan in lace to deal with future claimants -- payments or is it really wait and see what washington might do. >> the finest see the payment one at a time. you can make payments for salaries pensions and keep your seniors happy. the weakest link of all of that is the junior holders that lend to municipalities. these are complicated situations, more than restructuring that i have seen because there are so many stakeholders. their political by definition. iswill be ideal if there .ome dialogue

right now everyone is trying to this.to david: how large is the creditor action? assumes that it will ultimately be federal court. but the first step should be porter carico -- puerto rico. there are not that many presidents for failing. issue should be voluntary restructuring and orderly restructuring. for that you need someone with the power of coordinating. we be that is the role that the u.s. treasury could provide. here we have a problem, let's

put everyone together to figure out how we solve it without necessarily having to go the legal route. david: we saw the economy shrinking. the government frozen today. , used to work at goldman sachs saying that brazil faces an outright depression. is your outlook for brazil is because that? -- as bleak as that? >> i remember brazil when they wasted lula and her country depressed. some countries are prone to overreacting. think of situation is very serious. it is serious after several years of unbelievable wealth and investment. it is very dramatic. but when you put it in context of modern america they are having a recession. the fact that politicians are fact again -- to jail, the

that senior businessmen are going to jail it is showing that some of the changes that you will have been asking happen in brazil are finally happening. not everyone sees the mess, but my sense is once it is clear and the economy also bottoms out people are going to become very optimistic. david: when you are looking at the indicators of the health of the brazilian economy are you looking at what is happening lyrically are you looking at the corporate side of things? possible to this entangled us? >> probably not. brazil was a very sexy place to invest for many years. brazilh money went into on that money will not come back. do i think that brazil is solvent, absolutely. do i think that companies are settlement -- solvent, absolutely. but corporate will not be

solvent. it may give an impression of chaos but it is not systemic. have a lot of to adjustments that are taking place. the currency is valued at 50%. that can only help. in a way it looks painful, but i think it is going the right direction. david: thank you very much. coming up in the war of bloomberg markets. -- more of bloomberg markets. ♪

david: welcome back to bloomberg markets. while political outsiders donald trump and ben carson continue to lead the gop in the full's

detention is -- the attention is moving to marco rubio and ted cruz. let's talk about the contours of this fight between marco rubio and ted cruz. we sat down with ted cruz on the trail in iowa. talk to me about what he is saying when it comes to foreign policy. >> this has become the major battleground for some major factors. the fight between these young senators who are not necessarily fighting for the same voters across the board enters on foreign policy. interventionists party, who says he is not with rand paul, an isolationist, but he does say he is middle ground. he was a very high test for using u.s. power abroad. that debate of the role of the

u.s. military is the one country is having come as it is red-hot within the republican party nomination now. david: ted cruz very him to hillary clinton. is too quick to use american power overseas. there is a wariness within this certain, a faction, a certain stream that says america has had wars in iraq and afghanistan have not worked out well at the same time he see someone like donald trump who talks at times very aggressively about using american force, bombing countries without necessarily the kind of legal strictures that usually come from american presidents. -- that others are saying and then other times saying let russia deal with it. at times he wants to be a strong party using force, at other times he wants to be a come home america party that says we have used too much force overseas to that effect. david: you are following chris

christie around in new hampshire. is benefitingove his campaign. mark: one thing he gets credit for, although it has not been discussed is that early on he started to stake his candidacy on a strong foreign policy. strong u.s. attorney, he put his chips down early. said we are picking christie because they are the trunk,es who can beat hillary clinton and isis in that order. that projection of strength of being a tough guy is something he has used effectively to increase his chances. but he is still ready far back in the polls even in new hampshire. david: trump's campaign manager will be on your show tonight. whether trump might consider making a run as a third-party candidate.

>> what we are is that the gop establishment and the mainstream elite want to make sure that trump is not the nominee. they are using every resource possible to keep him off the ballot to dissuade people from voting or him. he's a clear and definitive front runner. he is running as a republican. wants to use their resources as we have seen have tried to do already to keep him off the ballot, there are recourses which he has the opportunity to pursue. running as ais republican. he will continue to run as a republican. he has been a clear runner in the last five months. mark: fascinating discussion that we had great they have been adding the sveum the last few days with some republicans sending signals that of trump won the nomination they would look for an alternative trump saying what they said once ago before he signs this pledge. as the establishment talks about protecting -- rejecting trump,

nhey talk about running as a independent. david: join us on all the respect to see that interview. in the strongest month of the year for equities. some of the big tech things -- names we know well rising. the first letter of each of these stocks, facebook netflix all rising today is the official numbers on the holiday weekend, cyber monday shoestring shopping.

if you look at broader etf that does not just the stock split offnology broadly is about 7% year to date. outperforming the s&p 500. a lot has been made of the fact that these large-cap tech stocks have a preponderance of gains in the year to date gain. but if history is any guide, that outperformance may not continue into the holiday season. if you look at amazon on my bloomberg terminal, going back 11 years december actually tends to be a relatively weak month in performance. this is the average for the past 11 years. it has been only a third of 1%. the only two months that were worse for january and february and it had a negative return. this is of course the average of the past 11 years. there have been useful when it has done better, years when it has done worse, but it is interesting to note that at a time of the year when it should

historically be strong for amazon is people are doing their holiday shopping and we're getting them the numbers in january and february, amazon does not necessarily do well. we will see what happens this year. david: thank you. coming up on bloomberg markets samsung is giving its mobile --iness a makeover, placing replacing its top executive. ♪

david: welcome back to bloomberg markets. its mobilegiving business in makeover and introducing a new smartphone boss. pace in fourwest

years. why is the company making this change now? a cyclical nature to how management is reached at the company but why go for a change? emily: they do this every year, but really we are seeing a lot of challenges in the mobile division. for theirn pace lowest profit in four years. the second straight year of decline. they are being hit on the high end by apple and on the low end by xiaomi. what samsung leads to focus on is differentiating the stop -- the software of their stock. they are going to find their competitive edge. the longtime global chief is out as the head of mobile. he remains co-ceo of samsung electronics. but the new guy is now in charge of samsung mobile. he is someone who is been focused on partnership of samsung. he has been focused on r&d, and presumably he is the guy who is going to focus on rebuilding

samsung phones from the software perspective. david: samsung in such a fascinating company because of the culture of their place on the culture of the company -- country the area they are based. been leading the company quietly. he has led a spree of deals for instance. this is the first big transition that he has spearheaded. these are the people he is choosing to lead under him rather than having to deal with the leaders that were chosen by his father. he was not named chairman as part of this transition according to south korean norms. that cannot happen while his father is still alive. is inreally the guy who charge of samsung, which accounts for 60 companies that span making phones to refrigerators. david: how did they get to the place?

focus more on software. what point did they dropped the ball and stop paying attention to the fact that software was falling behind? they are still the global leader and have3.4% of the market. we see that lead being chipped away. apple came out with a larger screen iphone and that really gave samsung a run for their money. that was for a long time the only edge they had on apple. they wanted a larger phone. with thethey came out iphone 6 and the iphone 6 as people are choosing to use those funds over samsung phones. i was just in beijing and i saw a lot of people with iphones. on the low end you have xiaomi differentiating itself as a cheaper player but also a better quality software player. and a lot of users say the xiaomi phones look and work a lot like iphones.

we're competing with insulin price. they are competing with samsung on price. why wouldn't you buy the cheaper phone? we are waiting for the galaxy s seven sometime next year. we are not expecting this leadership transition to have an impact on those products, but especially the next generation after that. chang, anchor of bloomberg west break coming up in the next hour of bloomberg markets we can see markets move this week thanks to the ecb and opec. christopher gives us his 2016 outlook. ♪

betty: 3 p.m. in new york, welcome to "bloomberg markets." ♪

betty: good afternoon, i'm betty liu, here's what we are watching at this hour. stocks moving in on relatively strong fashion, but will a fed rate hike sour the moves among about toughalk times for hedge funds, greenlight capital -- greenlight capital is poised for losing year. blue crest closing down, returning capital to investors. traders mayeven ubs be the first to face sanctions in the currency rigging scandal, putting them down by the end of the year. we are one hour away from the close of trade, at the markets desk julie hyman has the latest. julie, together we were earlier this morning, headed lower, but now we are making up those losses? 4 u.