♪ from bloomberg's world headquarters in new york, i'm david gora. central bankers headed in different directions. draghi tries to jumpstart your up with a rate cut. what is more messed up, brazil's economy or its political system? is still obama says it too easy to buy guns in wake of the california massacre. we will look at gun-control policy. first we will head to the markets desk. julie hyman has the latest. ie: we're looking at stocks that have been declining today. it seems to have more to do today with mario draghi than janet yellen. now hitting just about the lows of the session for the three

major averages here, all of them down by more than 1%. it would be tough to pin that on mario draghi since he spoke early this morning new york time. it's a broad-based selloff we are seeing today, we have energy stocks, health care stocks, financials, all trading lower and accelerating the decline. on.day has gone interesting situation here, without a sharp catalyst necessarily as we head into the afternoon. earlier affecting european stocks much more sharply than u.s. stocks, coming out with a quantitative easing program which he did not extend the size, he only extended the duration. many market participants were surprised. i want to point out the movement we are seeing in transportation stocks today as well. the dow transportation average down 1.7%, its lowest in about two months' time. more bad news from the

railroads today, credit suisse has been holding a two day industrials conference. yesterday we heard some of their railways giving their outlooks. union pacific the latest. it is talking about lower year volumes, business mix challenges, and a focus on core pricing and continued productivity. not just onweighing union pacific, but the other railways as well today. david: we have seea bin oil higher. julie: oil has been rebounding today. we still have opec ministers meeting. liftu can see here, this in these oil prices. energy stocks as a group are still down sharply. worst performers, chesapeake energy, which has been one of the worst performers. is doing a today proposed debt exchange, saying

to junior debt holders that you can exchange these for new higher ranks. the would be an issue, chesapeake still continuing to struggle. i talked to one credit analyst who said that this exchange was not unexpected and yet we are still seeing sure is down 10% as chesapeake and many of its competitors continue to struggle. david: that is julie hyman at the markets desk. let's check on the bloomberg first words news desk. mark: new details are emerging about yesterday's deadly shooting rampage in san bernardino, california. authorities say the two suspects had more than 1600 let's with them when they were shot dead by police. a dozen bombs and more than 3000 were latermmunition found in their home. the death toll stands at 14. the number of wounded now at 21. president obama has ordered u.s. flags to be flown at half staff

to honor the shooting victims. british warplanes struck islamic state oilfields in eastern syria. germany prepared to send reconnaissance aircraft to the middle east. as coalition forces stepped up efforts to fight the militants. the heaviest rainfall in more than 100 years has devastated major areas of southern india. thousands have been forced to leave their submerged homes and schools, offices, and airports remain shut for a second day. received more than 13 inches of rain over 24 hours. that is significantly higher than the average for the entire month of december. withonnecticut man charged jumping over the white house fence on thanksgiving day is not being allowed back in college. attorney says the 22-year-old has been refused reentry to the university of bridgeport. he was permitted to return to

connecticut to live with his mother under electronic monitoring an he has a curfew. a psychiatric evaluation has been ordered. you can 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. fails,when all else printed new money and buy government bonds, that is quantitative easing in a nutshell. that is what mario draghi is sticking with, at least until 2017. will it work? draghi is boasting it has worked so far. >> the cost of credit for the fell by approximately 80 basis points. that under normal circumstances, one needs a reduction in interest rates by 100 basis points. david: for more i want to bring in a former member of the bank of england's monetary policy.

you, everybodysk forecasted there would be action. some forecasted deeper rate cuts . what accounts for the disconnect? clearly overpromised, under delivered. markets were under the impression that super mario was going to do something. is not so response super mario. it certainly looks that the ecb has cold feet, the germans did not want to go down this road. play mario just draghi talking about the successes in europe. i wrote down 10.7% unemployment, half of euro area countries in deflation, and retail sales today cell today -- sale and france and germany. if that is good news, i'm afraid bad news dominates.

too little, too late. they are paying the consequences of raising rates too soon in 2 011. the fed must beware. david: mario draghi said they were doing more because, quote, it works. then, the inclusion of local and regional debt in the program -- explain the significance of that move. danny: the idea is that you can broaden things that the fed can't do. the intention is to try and make this qe program rather more effective, because in some sense there are limits to what you can buy, but this apparently is mostly going to be german and spanish debt they can purchase. the bottom line is it's not going to generate that much of an extra impact. negativen is that the

rate cut was very small. there really was very little additional qe going on, that is why the markets were singularly this issed, because just fiddling while many european capitals are burning, but they are struggling. fed chair janet yellen on the hill today testifying before the joint economic committee. she has her eye on the jobs report coming out tomorrow. janet yellen: job growth has been solid for a number of years. disposable income in spite of the fact that wage growth has remained in that 2%, 2.5% range, there's been a lot of job growth that is added to disposable income. david: she is saying she is still worried about slack, big jobs report coming ahead of the meeting. how bad a number would we have to get for there to be a bad

number that would forestall the feds raising rates this month? the fedt does look that is heading to raising rates. 75% probability that the bloomberg showing amongst economists in the markets. i think they should not be doing that, because the number we should be looking at is the employment rate, which is 3.5 ts below what it was pre-recession. the proportion of americans in jobs is much lower than it was. the amount of slack in the andomy is really very high, the logic is that wage growth is nowhere. have a view that we are a long way from full employment, and these jobs numbers should not be pushing the fed there. the worry is if they raise rates, they have a negative reaction from the markets, as

the ecb did today in france and germany. that will be over a 600 point drop in the dow. there are dangers for the fed, and focusing on a single jobs number is a mistake. david: let me close by asking you about communication. you mentioned that mario draghi overpromised and under delivered. there has been so much communication about what was going to happen today. heard from jenny yellen's colleagues on the board of governors. contrast the level of communication between these two banks. danny: communication is difficult partly because this is the committee and sometimes the governor of the central bank is speaking for themselves. janet sometimes speaks for herself rather than the committee. you can't exactly prejudge what the committee will do, because the plan isn't much of a plan to crisis, thishis

historic unbelievable levels of monetary stimulus. thingse trying to say if work out in the way we would like, then we will move in this way. the problem is the data does not move that way, and the committee does not necessarily go in the way that you think. both of them have issues. is rather more of a consensus in the ecb. it is starting to look like there won't be that many dissenters to that decision. communicating what a group of people are going to do is pretty hard. blanchford, professor at dartmouth college. well president obama take up gun policy? what impact will the banks crisis have throughout brazil and beyond? fed chair janet yellen was not the only way one -- only one

making headlines on the hill today. ♪

david: let's head back to our markets desk with julie hyman. julie: even though we are now seeing more of a downturn, i want to look at the more positive movers we're seeing in today's session. to mining is one of them, the company out with preliminary numbers and hosting an investor day today. some of itsprovided long-term production and costs forecasts and analysts are greeting those and saying the outlook is encouraging.

to cut costs should be viewed favorably by the market. especially on a down day, it is notable the shares were up by 5.4%. kroger has been making acquisitions to add on to its network. it has been pushing more organic products, including store branded organic products. 5.4%.ales up analysts have been looking for a gain of 4.5%. if i go also out with earnings that topped estimates. the company says demand for mobile phone components in particular. we talked about the big consolidation wave that's been going on within semiconductors. avago has helped lead it with its planned acquisition of broadcom.

broadcom shares are up as well by nearly 5%. turn to san bernardino. this morning president obama once again addressed the american people in the aftermath of a mass shooting. president obama: we will have to search ourselves as a society to make sure we can take basic ,teps that would make it harder not impossible, but harder for individuals to get access to weapons. david: today marked the second time in a week president obama has addressed a mass shooting. on tuesday he said he hoped the november 27 shooting would start, quote conversation and action on gun control. let me ask you about what we know about the weapons that were used in san bernardino yesterday. forhe feds identified weapons, two long guns, ar-15, military style rifles, and two

semiautomatic distills, one made by smith & wesson, one made by a lesser-known company. these shooters were well-equipped. they also had a vast amount of ammunition. it is the ammunition that's more important than the particular guns. it's a proliferation of ammunition that allows an attack like this to become so deadly. david: i remember in the wake of sandy hook, california was held up a gun-control advocates as a real example, a state that had done more than many others to prevent people who should not getting guns from having them. : california overall probably has the toughest gun-control in the country. that's why it is so difficult to deal with the mass shooter problem. california has already done the tinkering. assault weapons for the most part are already illegal in 1240. -- california. this points to the fact that if a person or perhaps people are

determined to attack in a public setting, if they plan it out, the precise nature of the law, how you go about acquiring your next firearm, probably will not deter them. david: is the future of gun-control going to be determined on a state-by-state basis? thatave had some states have placed new limits on people being able to get guns. it seems the president has done -- all he's able to do through executive order, and congress is not budging that much. will it play out on the state level? paul: we will see some limited number of blue and purple states moving toward marginal changes to their gun laws which will make it marginally more difficult to acquire a new firearm. the difficulty is that if the adjoining state or four states over its very easy to get a firearm, the trafficking guns does not necessarily stop because the activity we are concerned about is illegal activity, not a legal purchase

at a main street gun store. the problem is people who intend to commit crimes and at the extreme, people who'd intend to commit murderous mayhem. david: there is something predictable about what happens in the aftermath of this shooting. gun sales often tick up after them. president obama they're looking rather wary. conversation will once again turned, i assume, to talking about what the federal government can do. do we see any movement, potential for movement? paul: i do not see any serious potential for movement rate you will see symbolic gestures. harry reid and chuck schumer, the democratic leaders in the senate, were talking about having votes this afternoon on certain types of gun provisions, but the fact is those will probably not get out of the senate because they won't get the 60 votes that you need to

pass something in the face of a potential filibuster in the senate. right word for how the president sounded. he did not sound like a president rallying the troops and saying, we will charge up to capitol hill and change things. instead he sounded like he was exhausted by the subject. when the president sends that kind of signal, lawmakers will respond in kind. paul barrett of bloomberg businessweek joining us in new york. still ahead, getting plugged in -- we will talk to a stanford professor who says he has the answer for getting the world running on 100% renewable energy by 2050. ♪

david: i want you to google this. who is the world's biggest corporate buyer of renewable energy? google. the company is expanding its clean power portfolio to include

780 megawatts of eneergrgy in te nations. joining me is the professor from standing in diversity. he says we can get to 100% renewable energy back 2050. what is your plan for making that happen? to electrifyea is everything so that all sectors -- if we electrify it, we reduce our power demand worldwide by about 32% because of the efficiency of electricity over combustion. we can get another 7% or 8% of reduction of power demand by energy efficiency improvements beyond which would normally be expected by 2050. we are then reducing our power to a total of 39%, 40% rated the remaining amount of power for all sectors would be provided by wind and solar.

solar on rooftops and power plants. concentrated solar power, and power plants. some existing hydroelectric power, and tiny amounts of tidal and wave power. all sectors would be electrified. that means having electric vehicles, air source and ground source heat pumps for heating. we have developed 139 country plans so far. the ones we do represent 95% of all admissions. you can see these plants, a summary of them, on 100.org. dose plans, what they will is not only eliminate all admissions associated with fossil fuels and biofuels that will address global warming, because the ideas to convert 80% by 2030 and 100% by 2050, and if we do that we can get our carbon

dioxide levels down instead of rising to between 500 and 800 parts per million over the next 30 to 50 years. it will go slightly down to 370 parts per million by 2100. david: you are talking about technology that is existent right now. i wonder what the hurdles to this happening are. it sounds like the hurdles are not technical. mark: all the technologies we are talking about exist today and most of them are at low cost. costs are coming down. there's no technological or economic barrier to such a conversion. the main barriers are social and political. people are not aware of these plans. and, there are people who are opposed to them, mostly people in the existing infrastructure industries that have a financial interest in keeping things the same. david: you mentioned there are 139 countries you have developed

plans for. when you look at the map, are there any that stand out as far as having made plans already? mark: if we look at what countries are closest to 100%, in all sectors norway is about 69%. number two is paraguay, because they have so much hydroelectric power. aere are a few more that have lot of hydro. the united states is number 59 or something. only 4% of our total energy is wind, water, and solar. china is even further down. ♪

♪

david: from bloombergs world headquarters in new york, and david gora. mark? mark: police say they found 12 pipe bomb like devices at a california home being rented by a couple leave to have carried out yesterday's mass shooting. hundreds of tools that could be used to make improvised explosive devices were also found. they also left the device at the social services center where they open fire. the device apparently did not work. police say the couple had 1600 rounds of ammunition on them when they were killed by police. 14 people died at the england regional center in san bernardino. another 21 were wounded.

a warning from the u.s. secretary of state john kerry. he says defeating islamic state won't be possible without troops fighting on the ground. speaking in belgrade today, he called for a political solution in syria that would allow all nations to fight islamic state together. in a historic shift, all u.s. combat jobs, including infantry units, will now be open to women. today's official announcement by secretary ash carter and's a decades long ban on women serving in front-line units. secretary carter says the move was part of his commitment to building a military force of the future. secretary carter's decision overrules a recommendation by the marine corps to continue the ban. have untilrvices january 1 to present a timeline for implementing the change. five fifth-grade students in new jersey have been suspended for allegedly plotting to attack a high school. they're accused of bringing a device filled with vinegar and cinnamon to school. authorities say they were

planning to use it during a field trip to clifton high. the device was later determined to be nonexplosive, the one ,olice official, quoting here it was not a prank. the students were caught after teachers and administrators found written plans on the alleged attack. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. bloomberg first word desk, i am mark crumpton. back to you. the arrest has thrust the bank into a struggle for survival. corporate bond market has lost $5.5 billion in market value. let me start with you, and just ask about the current state of the corporate bond market. you had a piece out this morning talking about putting this into context. we spend so much time focusing on btg.

not the biggest player in the brazilian financial sector. >> is not even that big in brazil, it is the fifth biggest. in terms of in the u.s., it is relative to the size of keybank. in terms of that, it comes at a time when there is a serious collapse in confidence in brazil economically, politically, but now with this whole scandal, the car washed scandal, we never know who's next. that serves as a broker-dealer investment bank. they own companies and they own large stakes in companies. now what we have been seeing from them is here and there, they sold their stake in a hospital company. now our reporter in brazil is reporting that they are trying which is air bci, bank in switzerland.

they are trying to get as much liquidity as possible and send a signal to everyone that they're in stable condition so that people don't freak out. david: let me ask you about brazil generally, and all the factors that play their. we learned the lower house wil except the beginning of impeachment proceedings against dilma rousseff. the issue comes at a time when there is a credit crunch taking place in the country and there is lack of confidence. of confidence emerges out of two things, there is a political crisis, and that political crisis is translated into the inability of the government to legislate and to address some of the most urgent issues, like the large gap and

fiscal deficit the country has. now on the verge of a downgrade and losing investment grade. this has gone round and eroded confidence and generated a lot of downdraft inactivity. the economy now seems to be in a freefall. the need for some stabilization is urgent, the need for political resolution is urgent, and if they managed to put an end to the political uncertainty , for this impeachment process either way will be a welcome development. however, we think this impeachment is probably not going to resolve the political uncertainty because it probably will not succeed getting into the and of the problem and if the end, the president ends up with a very divided congress will not create facility of badly needed initiatives.

2016 will continue to look like a difficult year there. david: you just published a report on emerging markets. you say emerging markets still look broken as we head into the new year. i want to ask you about what mario draghi had to say today and how that will affect emerging markets. guillermo: certainly the fact that the ecb will not pursue expansionary policy as the markets were anticipating does not facilitate things. markets were expecting a significant injection of liquidity, and this would lead for fixed demand income securities, which is the bread and butter of emerging market financing. this does not help very much. at the same time, i don't want to over blow it has emerging markets seemed to be much more focused on activity by the fed, on what the fed does.

much more driven by what happens to u.s. treasury markets than what happens for the european treasury market. in the end, emerging markets are closely linked to china. in my mind, china and the fed are far more important than the ecb. ecb action is not helpful for the next month or two. david: go ahead. for ang back to brazil moment, this question of whether an impeachment of dilma rousseff would be a positive or negative is something a lot of people have been debating this whole time, never thinking it could happen. investors don't seem to like instability, but everything is rallying -- all brazilian assets are rallying on this impeachment. i'm curious as to where you see this coming if this

scandal keeps unraveling an unfolding and we never know who's clear, who's out of the woods in terms of being investigated, politicians are no safe bet now either, i'm curious as to where you see the stability coming from. the market thinks there are two fundamental problems on that. the first is the impeachment scandal. an end to that process, nobody will really know who comes there. mostlyl last week it was politicians and a few construction companies and trouble. and everyonenker is wondering whether this is more judgment on the brazilian way of doing business much more than anything else. on one hand you have this corruption scandal. on the other hand you have the problem between the president and congress to legislate, inability to get something done,

the lack of political capital the president seems to have, the low popularity of the government. the impeachment, the way the markets have interpreted the impeachment is at least the impeachment brings possibility of resolution and one of two directions. direction one, the president gets impeached, she's out of office. a new administration comes along. potentially the new administration will have greater degrees of freedom to strike balance and get things done. that thevenue is president survives the impeachment, all the attempts at throwing her out will go to sleep for at least a wild, and if that is the case, the president gets to refocus legislation on reforms, the kinds of things that are needed. if that's the case, then we have a shot at improving things and brazil. it is not that the markets are rooting for the president to go out. the markets are voting for an end to these endless disputes between the president and congress and get into focus on addressing the deeply needed

structures of the country, in order to get out of this recession. david: thank you very much. switching gears, bloomberg's erik schatzker sat down with the ceo of marathon petroleum earlier today. >> and pickens says oil will be at 70 by the middle of next year. what do you say? is 60, 65 by the end of 2016 and 70 by the end of 2017. erik: what will make oil get to 60, 65 next year? seeou will continue to consolidation across the globe in the oil and gas business. in doing so, that's going to prop up the price going forward. just on a fiscal basis, the producers -- foreign and domestic producers, they need more of the $60 in order to make their balance sheet look.

if you're wrong and crude stays lower for longer, to refining margins stay higher for longer? 2016,i see going into refining margins and the refining space can do better than we did in 2015. i was surprised if you go back and that the, production of crude prices, therefore gasoline prices, that we were expecting to see a pickup and demand earlier. consumer confidence, and it took discretionary income that consumers had before they balanced and said, we think this is here to stay. you've seen tremendous growth. it was in the second half of the year. i'me start into 2016,

expecting the going to have the wind at our back, continuing this momentum of growth we already have in the first half of the year that we did not experience last year. erik: you are about to close this deal with firm on west. -- vermont west. what will that mean for the rest of the industry? will there be more consolidation in the midstream? ary: we believe there will be more consolidation in the midstream and upstream as well. neither you nor i can predict how far or faster rates will rise, and at some point the demand for yield product that has benefited master limited partnerships is going to taper off. what happens than? unitholders, these limited partners, are going to end up swallowing all of these assets at much more delighted --

diluted prices, aren't they? gary: you're right, erik, if you look at the mlp mess it comes back to what is the yield of the instrument. math it comes back to what is the yield of the instrument. again, it depends on what that rate of increase is. gary: i think we will always come back to what is the quality of the asset, and that's the point i make about marathon and mark west and this transaction, is that we have a tremendous backlog. of thisnswered 50% growth is in drop down. that's assets we already have. i sayors -- that's why there's going to be more consolidion. want to move towards the

quality-based earnings. erik: what about crude oil exports? gary: we will see what happens. the point i make about crude oil exports, we have to be careful in the industry, and as i said, we are a free market company. you have to be very careful in just peeling one slice of the it's kind of like squeezing something in your hand. it's going to come out somewhere. if you are going to try to fix one thing, repealing the ban, what is going to happen then, this renewable fuel standard, that is upside down. consequences, that's upside down. we need to understand the bigger picture. erik: de-integration has been great for marathon shareholders. it has worked for conoco phillips and phillips 66 too.

if you were running exxon or chevron, would you break those companies up? if you were to aggregate the value of both individually today versus the super merge you talk about, we have way of performed. -- out-performed. it does not meet their strategy and long-term growth, but i like where we are positioned. david: that was gary hammond are talking to erik schatzker -- gary heminger talking to erik schatzker. the rent butly in accelerating in terms of decline. all three major averages are indeed lowered. the nasdaq -- down by 2%. the biggest drop we've seen in quite some time. we don't have a chart of the vix, but the vix has been .piking

it's a bit of a curious reaction we are seeing here today. we have these too may news events. mario draghi expanded quantitative easing in terms of duration but not in terms of size, disappointing investors to whom he signaled he was going to expand the program inside. that was one major news event. the other, jenny yelling -- yellen speaking before congress remarkschanging her from what she said yesterday in a speech before the economic club of washington. waseems as though draghi the main focus for investors, and of course his comments have not changed throughout the day but we've seen the direction of stocks changed to some degree throughout the day. if you look at the dow, onan intraday basis, we've only seen the declines accelerate. if you look at right around the european close of trading, ascks in the u.s. made a run

positive briefly before then snowballing as we got further into the session. take a look at the map on our bloomberg terminal. it's worth pointing out much right on your screen, health care is doing the worst although there's no particular catalyst there. we saw yield spike not only in sovereign debt in the eurozone but here in the united states a s well. david: we will have more of "bloomberg markets" in just a moment.

we were just talking about the decline in stocks. the biggest of them all is also

down today, not a particular catalyst for this decline in apple but we've had some analysts commentary recently that if you do supplier checks in asia, apple suppliers, there are some indications that it is seeing lower dand for its products and making fewer orders to its suppliers. those shares down 1.5% rate of one of its suppliers is doing well,, the chipmaker out with earnings that beat estimates. those shares are trading higher by 9%. we of the other tech movers been continuing to watch is yahoo! grade the stock had a big gain yesterday on reports it was seeking to perhaps sell or at least looking at options to sell its main business, giving up a lot of those gains today, about 4% lower. all of this means that the 's tradinghnology etf lower quite sharply today, the slk down by about 1.5%. this has been an out performer

for the year to date. if you look at my bloomberg terminal, you'll see the xlk versus sky. today's underperformance coming on the heels of its outperformance thus far for the year. stay right here on "bloomberg markets." ♪

david: welcome back to "bloomberg markets." paul ryan had his first major speech at the library of congress today. he went on to say that republicans must go beyond trying to undo president obama's agenda and get a republican in the oval office. >> a great frustration in our party is that we have not had a real national majority in seven years. we have controlled congress, but not the presidency. we ned to. david: joining me is john hohman

. i'm distracted by paul ryan's nwew beard. i am not sure you would look good with a beard. david: i probably could not grow it. >> u.n. paul ryan side-by-side? this was the republican jewish coalition meeting. how is it important here? earliere facing a race in the year, there were a lot of republicans -- we would call it cattle calls -- and i do not mean it to be disrespectful. getting together in one room on one day. late stage cattle call that matters, in the sense that 2016er fromo is a the front runners to the lowest level candidates are all there.

it's a powerful group of republicans, jewish donors, official, mostly people with a lot of who are in the republican donor set, and they are very staunchly pro-israel. many have not decided who they're going to support for president. even this late is an opportunity for the candidates to put their vision before these guys. it is sheldon adelson's group. he's probably the single most republican jewish donor that there is. hehas one of many groups sponsors and cosponsors. he pulls these guys together and what you saw -- what you will see on our show, where pulling together some of the best pro-israeli pandering moments on "with all due respect." this event, you have not seen pandering until you have seen this event. trump traded in some

jewish stereotypes. wastalked about how he happy to be in front of the group because it was full of negotiators and he wanted their support, but did not need their money. there was some laughter and the room. some people not clear if they were laughing with him or at him. david: thank you. join him tonight for "with all due respect." that's tonight beginning at 5:00 eastern time. in the next hour we will have the former president of the ecb. ♪

betty: welcome to bloomberg markets.

♪ bloomberg world headquarters, good afternoon. janet yellen laying the groundwork for an interest rate hike in two weeks. she signals the economy is ready for liftoff. but some say it was not the bazooka they were looking for. and sears is still struggling to get shoppers through its doors. the retailer posting another big loss. how much longer can this company keep losing money? from the an hour away close of trade. i want to head to the market desk where julie hyman has the latest on the janet yellen effect. but it was really the ecb effect. e: