from bloomberg world headquarters, good afternoon. i am david gura. the u.s. economy showing signs of strength, adding more jobs than forecast in november. oil plunging. opec holds off on setting an official output target. drinkers areer trying to stop the megamerger of sab miller and another company, saying it will leave them paying more for lower quality. matt miller has the latest from the markets desk. have a rally on our hands but not enough to make it for losses we had on wednesday and thursday. death of 300 wi-fi points in the dow jones industrial average. the us of a 500 of 1.9%.

daydow is having its best since september 8. not doing poorly at all. i will use our trusty function to show you that every industry group is gaining, with the exception of energy. even energy is not doing so badly, down .6%. financials are firmly leading the way. ofid: you say tech is kind leading the way. anything stand out? standsicrosoft really out to me. people who have been in the market for a long time are used to talk of microsoft of kind of a dog of a stock. i want to show you the comp microsoftcharts for versus the us of the and the here.ch stocks you can see, over the last 15 years -- microsoft has risen to the highest level since march of

2000 -- the past 15 years, microsoft has outperformed by 59%, almost 60% of reinvested dividends over the s&p. it has been the index by a lot more. microsoft is doing quite well. i wanted to mention a couple of other tech stocks moving today. microsoft is really the main stock i am looking at. tesla is the biggest loser as far as points in the nasdaq 100 index. it is recalling 7000 cars for seatbelts. it is not a huge recall, but people have been very sensitive to recalls over the past year. david: thank you for that index. let's check the bloomberg first word news with mark crumpton. mark: one of two people blamed in the california shootings pledged allegiance to islamic state. that is according to a u.s. law enforcement official. just being the league used in

alias to post the pledge of facebook -- tashfeen malik used an alias. she came to the u.s. in 2014 to marry syed farook. both died in a shootout with police. investigators have found that farook adopted radical islamic views and was in touch with a number of people in california who were subjects of federal terrorism investigations. authorities have been scouring their online communications and phone records as they try to determine a motive for the attack at a social services center. 14 people were killed and 21 others injured. police in new york say a traffic stop resulted in the arrest of a man posing as a federal air marshal who had an assert -- an assault rifle, body armor, and 8300 rounds of ammunition. the suspect had a pistol, knife, and the assault rifle in the car, along with body armor and a tactical vest with three high-capacity magazines. he was stopped on a long island

highly. dozens of authorities searching for two new suspects linked to last month's terror attacks and terror -- and paris. they used fake identity cards and were traveling in a mercedes with another suspect when the car was checked in early september at the hungarian-austrian border. one of the fake id cards was used to send a money order to one of the suspects killed in the police raid in a paris suburb to the campus police officer killed in the planned parenthood attack in colorado is being buried today. he and two others were killed last friday during a shooting rampage. thei's wants and worked at university of colorado in colorado springs and rushed to help after the gunman opened gary swanson worked at the university of colorado. you can get all the breaking stories at the new bloomberg.com . back to you. david: yesterday before the joint economic fed committee, janet yellen indicated 100,000

payroll gains would be a magic number. the november payroll gains are more than double that number. 211,000 yard where does that leave the fed? let's talk about that with our guests. we to moving? >> probably very close. the jobless rating has held. i think some progress needs to be made in the labor market. that looking at the gradual pickup in wages, we are coming close to full employment. david: what are you looking at to improve? >> a pickup and wages. we are in the low 2% range. we want to get close to 4% if possible. i want to see a reduction in broader measures of unemployment. it takes up slightly this month. we want to see that gradually come down. number is very important to janet yellen.

exclusive of these numbers, which will be important when the fed meet next week to talk about raising rates, what other indicators are most important to her? list.hole it will focus a lot on inflation. ppi is coming out next week. we need to see continued stabilization of inflationary pressure. mario draghi is speaking today. we are looking at china and with the dollar's move. these are key factors in the broad picture. david: we talk about the divergence and monetary policy, which we saw this week. mario draghi speaking. we have the fed preparing to wind down. what are the applications? the global picture matters very much for the fed. it is critical. when we look at the policy actions that other central banks are taking, it is helping to support economic growth. a bit of a strengthening in the

u.s. dollar. and otherng easing regions helping to improve growth of their, so that is positive for the fed's outlook. david: what about the unemployment as an indicator tom and we saw that there was increasing construction jobs, and to get of that housing is doing better. >> housing is actually doing quite well. it was beaten down the mustering the recession and struggle to during early stages of the recovery. we're seeing strengthen construction tiered weakness in other sectors, like manufacturing. services have helped swamp that weakness. david: i have to ask about energy and how that manifested itself in this report, weakness. aroundaw a drop of 11,000 mining jobs. this is over -- holding back overall job gains. pressure in oil prices. there is a risk that we will continue to see weakness in the energy sector, holding back

employment. but the good news is this is a relatively small share of the overall economy and jobs. the economy is, still expanding and improving on the back of the services sector. david: we had mohamed el-erian and some other contributors on this morning. he talked about what this might mean for the fed. ini expect the fed will hike december. they will announce it on december 15, 20 five basis points. i think the second height will be pretty soon thereafter. then they will wait and we will , ae this loosely stifling shallow path, stop go, and they will be well below historical averages. david: are you and the december camp? and he talked about the loosening. what do today's numbers talk about the pace? the fed has every

justification, and today's job more reason ton go in december. we think they will go into december, perhaps a little bit to see how it impacts the data. we do see three rate hikes in 2016. relative to previous cycles, it was quite modest. positive, butwas there is still restrained wage pressure. until that is fully contained, there is no need to be aggressive. david: to be speculative, what could derail it? think it is relatively low at this point. the data has been strong. some kind of unexpected event that could move things, i think it would be in the global economy. .t would be a shock to the fed an undue tightening of financial conditioners. i think you would need to see large move to get the fed off track from the hike in december.

david: thank you very much for joining us from merrill lynch to talk about the latest unemployment numbers. soon, more of bloomberg markets after the break. ♪

david: welcome back to bloomberg markets. time for the business flash, some of the biggest's nest stories cared more job cuts on the way at barclays and the new ceo a cut another 20% of investment bank staff. 7000ays is already getting of the roughly 20,000 jobs in the securities unit. erniemade of's items -- made off's victims getting a total of $1.2 billion in recovered funds. largest payout to victims and

more than three years. it comes on the seven years after his arrest in the 17 point $5 billion ponzi scheme. barnes & noble could use a bestseller or the reported a quarterly loss in weaker cells. sluggish online orders in cells of an e-reader fell 32% in the last quarter. you can knows get more business news at bloomberg.com. let's go to matt miller. affectedot of this is by pop-out site events. for example, oil is moving down big time today because of the opec meeting in vienna. we had a report earlier on bloomberg news that a delegate came out and said the production field has been raised to 31 point 5 million barrels. it was already 30 million barrels and they were producing 32.5 million barrels. no good for candor morgan, a pipeline operator. r kinder morgan, the

biggest loser on the s&p today, .own 7.5% bad news for railroad stocks today, not just the rejection by norfolk southern of canadian pacific's takeover attempts hear it in general, bank of america merrill lynch has downgraded the because uniony pacific was part of the downgrade, down 1.2%, and these railroads carry a lot of energy, a lot of coal, and also a lot of oil. nrg energy has had its worst day ever. this stock is at an all-time low, the biggest percentage loser on the s&p, down as much as 19.2%. it has lost 17.7% right now. investors may be questioning the

strategy going forward. david: thank you very much. we will talk more about railroads. norfolk southern has her back to ere $2 billion takeover offic feared joining me to talk about the news is ed. strikes me as a modern man with his eyes set on a new transcontinental railroad. he has been going after this. >> for a long time, and he is very vocal in his support of doing that, even though everyone else in the industry says there was no more consolidation to be done and there was only four players left. harrison is like the john malone of the commodified rail transportation industry, if you can imagine such a thing. he is a sort of larger than life character.

he has come into canadian pacific here at he has done a very good job there. he brought the share price up, although it is down substantially this year. seen this could potentially get done, but he has met a very reluctant counterparty in norfolk sound -- norfolk southern. isid: how salient is what said here, that the offer is not sweet enough? there are real high regulatory hurdles. >> it is not only that the offer is not sweet enough, but if it was sweeter, it still would not work. the regulatory issues are too high. i say there is no way they will let this through. it would be too big. they have come out and said unpleasant things about the kind of hunter harrison business philosophy and this certain of cost cutting. and they said it would be very

bad for them. the way i understand it, norfolk southern sees them self less of a commodities business and more a business with good relationships and being flexible tears of cutting back the workforce, they say it would not work. has made things leaner at canadian pacific. is norfolk southern right for that? >> i suspect performance could be improved, but that would be true for almost any business. but they are saying it could not be improved in the way hunter harrison would care about improving. they say it would damage their relationships with customers and damaged the business. they say norfolk southern, since this approach was made, they have canvassed customers about it. david: thank you very much. let's go to mark crumpton with breaking news.

in a few moments, and his conference scheduled to get underway in san bernardino, california here the police and fbi -- let's go to them now. >> -- trying to bring some concern to the area, people talking online about cells, and law enforcement not sharing information about a potential threat and a movie theater, something of that nature. i saw one of the tweets. i want to a dress that. on monday night, tuesday morning, before the incident, so november 30, december 1, right around midnight, 1:00 in the morning, there was an incident at the regal cinema in downtown san bernardino at fourth and eighth streets. a gentleman described as appearing to be middle eastern came up and spoke to the security guard around the time the theater was closing, and he was asking questions about the movies and times and things like that.

the security guard kind of thought it was awed. that person ultimately left in a four-door vehicle, 2012-2013. the security guard thought it was weird. shortly thereafter, the security late 1990'sd a red dodge durango driving around the area with another person that was possibly middle eastern and appearance that appeared to be taking some photographs in and around the theater. so the security guard notified our police department. we got out that day or that night and took a report, and we olo to every in a b law enforcement agency in the about suspicious circumstances noted. that is all we have on that. then it went into the regular investigative channels and local peopleh being notified and doing

follow-up investigations to try to determine if there was a real threat. at this point we have zero , zero evidence or information they can next that is it was what happened here at the regional center on wednesday morning. i want to make that clear. as a result of what happened on wednesday, the police department a situation where we have every officer in the department working. shiftsn 12 on, 12 off for all officers. we will maintain that until we think it is appropriate to stand down. we do not have critical information to indicate a thread to this region right now. i wanted to address that. things came out implying we were hiding information. we are not hiding information from anybody. ok? last, what i want to do right now is this is going to be an of this transfer

investigation and gems of information and how information is going to flow on this to the fbi. we have talked about that partnership. i want to make it clear that our agency, the sheriff's department, the fbi, and other federal agencies involved will continue to walk shoulder to shoulder in this investigation to make sure we're doing the best job that we can. but in terms of information regarding the investigation on this incident at the inland regional center, the home and residents, the search weren't, the officer-involved shooting -- --s is an fbi information investigation. my sheriff will talk about local safety measures and security. with that, i will turn it over to the assistant rector interject the fbi. -- to the assistant director in charge of the fbi. >> good morning, everyone at first, i want to stress again to the families of the victims, to the friends of the victims,

let's remember their first in this scenario. we had victims who lost -- one gentleman lost six children. one gentleman lost a baby, and he was taking his first trip to disneyland next week. other people do not have a chance to have that. every one of those lives counted. we want to offer our sincere prayers to those families. secondly, i want to stress the partnership. you have seen this united fronts, which is incredibly important for an investigation of this complexity. this is a very competent investigation, a very long-term investigation here at my partners from the san bernardino sheriff's to parma, county sheriffs to parma, san bernardino police department, and the atf have been incredibly important in this investigation. we're lockstep and how we are handling this matter. i do want to go forward today and tell you that, as of today am a based on the information and the facts as we know them, we are now investigating these

poor if it -- these horrific a cts as an act of terrorism. ofs led us to learn extensive planning. obviously, we uncovered explosives, multiple armaments. you know that it you know the ammunition that was out there, the high-powered weapons, the explosive devices. we are continuing to go down the find allnsure that we of the evidence of that pertains to this matter. we have also uncovered evidence that these subjects attempted to destroy their digital fingerprints. for example, we found two cell phones in a nearby trashcan. those cell phones were actually crushed. we have retained those cell phones, and we do continue to exploit the data from this hell phones. exploit the data from

those cell phones. looking to see of this will take us to their motivation. that evidence is incredibly important. i want to and sure that everyone understands that just because the fbi is now taking the leadership race on the trajectory of this case, we are not just taking this on our own. we are going to continue down the same path we have been, a lockstep operation with these partners. that is important. they protect this community to it we have the mandate to investigate terrorism to its fullest extent. we are working hand and hand with other federal, local, and state partners, and also working with our foreign counterparts to make sure we find any connections that pertain to this matter. next, i would like to introduce to you that we have a national hotlinece -- a national that i would like to invite the public to call if they have any information that pertains to

this. i would ask the public to please be judicious and make sure that even if it is small, send it to us. please do not send us things that are obviously not meant to this matter, because we have a lot of work to do. if you think, in any form or fashion, what you have to offer pertains, please call us with that information. call-fbi. 225-5324. number, reach that choose option four, and that will take you where you need to be. i want to ensure the public that countycal, state, and officials will continue to come -- to uncover every stone to make sure we find out all the facts pertaining to these two individuals. i do not have all the answers now, but i will take some questions. >> are there other suspects you are looking at? >> [inaudible]

>> we do not know all those answers yet. >> it has widely been reported, some of the links of terrorism. [inaudible] communication with, people that have been watched, people overseas? >> what i am ready to confirm if there are some telephonic connections between these two individuals, at least one of them, and other subjects of our investigation. >> [inaudible] still do not have the answer to that in so far, the answer is no. >> [inaudible] isis or al qaeda or something like that? >> i do not have the answer to any direction. were they inspired? we do not yet know the answer. imf aware of the post on

facebook. we are looking into it. -- i am aware of the post on facebook. but we do not know all the answers. >> [inaudible] >> i am not going to confirm that at this point. >> [inaudible] a number of pieces of evidence that have essentially pushed us off the cliff to say we are now investigating this as an act of terrorism. >> [inaudible] >> i will not get into that today. other suspects currently under arrest. it is possible that maybe some and the future, but we do not know. >> is someone detained? >> [inaudible] the explosives at home, where they damaged? how important is information you potentially find on a hard drive? question.

some of the digital media was damaged. yes, we are continuing to go the the path of finding motivation for this attack. that will tell us a lot. as important, if not more important, is, are there others, and are they based in the u.s. or outside the u.s.? we do not know the answers. >> [inaudible] night -- we executed a search warrant on that in department -- on that apartment it we turned that over to the residence of the apartment it we are not in it anymore. we do not control it. items leave a list of seized. anytime we execute a lawful search words, we have to leave the residents list with all the items seized during that search warrant. , doith all the ammunition you believe they were planning a second attack somewhere?

>> i do not want to speculate, but it is certainly a possibility we are looking at. >> where they acting independently? to the goes back direction question. we do not know that. we're looking very carefully at that. >> [inaudible] bigo i believe travel was a part of this? i don't know. he traveled overseas in 2013. >> [inaudible] >> remember, folks, we are in day three. we're barely 24 -- we are not there yet. remember, all these resources you see back here, that is why we are utilizing all of those in partnership to try to find every season of evidence, from digital us,a, which should lead hopefully, to motivation, to connections via phone, e-mails, anything like that, to human intelligence that may give us

some -- that is where we are going, but that takes time. it is not a three-day process. >> [inaudible] they were in an nearby trashcan. they were found by our investigators. >> [inaudible] >> was there a secondary target? [inaudible] >> we don't know. that's what we hope to know, a working theory and then ultimately, some sort of design of what they believe they were going to do. a3, we just don't know -- day three, we just don't know. we don't know yet. it is a possibility but we do not know yet. we're still exploiting the data.

time, but i truly believe that will be the potential golden nugget but we just don't know yet. do we have any information that there may have been something planned for that particular day? >> december 7, you said? >> yes. there was a christmas party that took place inside that room, so you had a lot of people, a lot of management, a lot of people and employees in that room at that point. [inaudible] >> he was not under active surveillance. i'm not aware, and i don't believe there was any type of an investigation pending on him. >> did his name,?

-- name come up? [inaudible] >> yes, and i don't have any information that indicates that, no. [inaudible] >> you're going to have to repeat that. >> do you have any concerns about the press entering this morning? that locationn back over to the occupants of that residence or once we boarded up, anyone who goes in at that point, that has nothing to do with us. >> [inaudible] do you conclude it's the first time that isis has attacked america? a leap there.ng where currently investigating this case as an act of terrorism.

>> [inaudible] inwe know they were telephonic conversations with people here in the u.s. i'm not aware of all the overseas connection see it. -- connections. i can only hear one at a time. [inaudible] they question the veracity of their locations? good question. yesterday i said to you the fbi is an organization that is apolitical. we are a fact-finding organization and we deal in facts. i don't have all those facts yet so i don't know the answers of the question you just asked me. [inaudible] not unusual that they would. [inaudible]

i'm not surprised, i've not heard of that yet but i'm not surprised that they would claim. it only helps him to be able to attach themselves to an act like this. to attach be able themselves to an act like this. >> with someone who detained to was themselves -- them -- someone detained who gave them the rifle? >> there's a person who we know of their location who purchased those weapons. i will let atf comment on the guns. [inaudible] the person is not under arrest at this point. >> so they are in custody? >> why do you think they stop shooting? >> i don't know the answer. [inaudible]

i'm aware of the facebook poster mentioning. i saw the same thing you did. we are continuing to look into that. >> mark zuckerberg confirms said that post had been made just as the attacks were starting. >> yes, there was a pledge of allegiance. [inaudible] what does this say about the dynamics of the marriage? some people are saying perhaps the wife may have influenced him. i don't know the answer whether she influenced him or not. being a husband myself, we are all influenced to an extent. [inaudible] have you learned more about her? >> we've investigating it as an act of terrorism for good reasons. had the fbi been aware of her

before? not have her under investigation previously. i will take three more questions. [inaudible] i believe they were found near the townhouse. [inaudible] >> are you concerned that they were flying under the radar? of course i'm concerned. anyone of us would have loved to have stop this act. when you go into a crime scene like that it is one of the most highness things you'll ever see. things you'll ever see. [inaudible] of course i'm concerned. know.n't there's nothing we've seen yet that would have triggered us to know. [inaudible] >> what i can tell you is we are

not aware of any further threats in the u.s. at this time. to your point,ck you said the government spent a lot of money on surveillance. the fbi is a federal law enforcement agency bound by federal law. we don't do sweeping surveillance without legal process. last question. [inaudible] that is the assistant fbi director speaking to reporters in san bernardino, california, where authorities are updating the investigation. as ofg those assembled today, we are now investigating these horrific acts as an act of terrorism. we've uncovered evidence that the suspects tried to destroy their digital fingerprints. by davidd on the phone katz, ceo and founder of global security group, and a former dea agent.

thank you for joining us. one question asked of him today, he was asked if when days -- wednesday's attack is the first time that isil attacked the united states. quote, i think you're taking a leap there. what is your assessment? early to say.o i would not describe it as taking a leap. a lot of things are pointing in that direction. in his position, he needs to be circumspect. never forget that the fbi is part of the executive branch and who is the lead executive, the president of the united states. if president obama is not ready to make that leap, neither is the fbi. mark: mr. katz, he did say that the fbi's aware of a facebook malik. tashfeen she pledged allegiance to isil

and its leader. are you saying that there cannot be a link made between this being the first attack by isil on the united states and that facebook page? you can have philosophical allegiance. the question is, was this by isis. we've had lone wolf attacks in this country that have isis inspired, absolutely. there's no doubt a lot of people are sympathizers, they swear allegiance. it doesn't mean there any less dangerous. the interesting thing i would be pushing hard to find out is if this operation was directed, funded, or organized by isis abroad. dich also said the

uncovered evidence that the suspect is trying to destroy their -- the suspects tried to destroy their fingerprints digitally. how hard would it be for investigators to determine what happened or perhaps to their handlers were or who sent them on a mission to do this? that: i'm quite confident unless they vaporized all their hard drives and other electronics, they're going to get a wealth of information for a sickly. -- forensically. if you take the hard drive and throw it in the bottom of the ocean, that's about the only way you would began to that no one will find it and take information off it. either usely try to commercially available scrubbing program or maybe they tried to smash things. i don't know what he was referring to, but they will be able to retrieve the able information. you are a former agent of the drug enforcement at thetration, the dea, branch of the u.s. federal government and bureau of

alcohol, tobacco, and firearms. story been watching this since it unfolded on wednesday. is there anything in your opinion that authority has -- authorities have not done that they should be doing? david: i don't think there's any stone that will be left unturned. the dea wasn't part of atf. it's directly under doj. the way i would work this case is probably the same way that is being done. to look at number theyany electronic media can be retrieved and analyzed, that's a great start. review all phone records, land lines, try to see who they call, what link you can come up with there. try to identify every associate, every friend they have in this country, identify them, find out if there involved. the most probative they can be retrieved and analyzed, that's a great start. review all i think will be the electronic analysis, and

if there's any transfer of funds. people made something of the fact of, how do they afford this kind of attack? this was a few thousand dollars and you get this accomplished. it still would be interesting if you follow the money and the money was transferred from overseas, that's another step you can take to connect this to isis abroad. mark: does this also renew the debate about the scope of the federal government's investigative authority when you have incidents like this? how do you weigh the civil liberties versus the security of america? david: it's an excellent question. i'm dead set against just open-ended searches. that is something the founding fathers rejected. however, before you cross the line into this country, everything else is fair game. with respect to the international end of it, 100% monitor, collect, that is

perfectly constitutional. once you get into this country, it's a civil matter going before the court and just getting judicial approval. mechanisms in place where if it is an emergency, you can make that leap and then get a post action judicial approval. there are mechanisms in place to make sure the fbi and other agencies can do their job without violating anyone's constitutional rights. is this something they goes before the pfizer court? david: absolutely. mark: david katz, former dea agent, joining us on the phone. thank you for your time. "bloomberg markets" with david gora continues in just a moment. ♪

david: this is "bloomberg markets." commodity markets are closing in new york. let's look at some other movers, starting with metals. iron ore, prices fell below $40, eight ton despite weakness in global demand. copper futures are headed for their first weekly gain since october after the positive u.s. jobs report, rising payroll numbers boost prospects. goal jumping the most since april. -- gold jumping the most since april. ie big commodity story as mentioned is oil and i want to start with a bloomberg quick take. of the most-watched commodities in the world and a 3.4 -- in a $3.4 trillion market. --erep is the situation,ec

here is a situation, opec moving to defer. opec effectively stops trying to act as a cartel. opec has been struggling to react to the recent pressure on oil prices after hitting $107 per barrel in june. chinese imports sagged. europe on the break of recession and u.s. supplies hit a record. -- brink of recession and u.s. supplies hit a record. in 1960 tormed increase trade dominated by a few multinational companies. opec currently produces around 32 million barrels a day, well above earlier targets. why didn't the group cut production? mainly because saudi arabia holds sway in opec. members aren'tey willing to take on the risk that price will fall over -- fall lower.

for other quick takes, visit bloomberg.com/quicktake. get more on the chaotic opec meeting in vienna. dippedce of wti crude below $40 earlier. brent crude also down. my colleague is in vienna, he was there for the meetings. how did that play out on the ground? word.otic is the right it had a chaotic conclusion. one of the most chaotic conclusions i've seen of any opec meeting in years. it was a very contentious one. some ministers came out and said they had agreed to up the production ceiling. some ministers said they had agreed to keep the ceiling where it was. opec secretary-general said they decided to wait until their next meeting, which will not be until june, to set the production ceiling. their communique, the gospel through which opec communicates with the market, completely

omitted the subject altogether. i guess you could say the ministers are going to interpret what they did in that room, which is decided nothing the way they want to. david: i want to ask you about the players in that meeting. ahead of this you had it as well hoping to- venezuela get their piece heard by members of opec. what did they have to say today? venezuela was looking for a cut. 5% production cut. venezuela is hurting more than any of the other opec members. saudi arabia, this is good for them, their strategy has been go out, force-out those high-cost maybe somedayhat they get squeezed out of the market and that forces prices up. for iran it's a good thing, convenient for iran. iran is hoping to ratchet up its production after the sanctions are removed.

this gives them the freedom to do that. , what minister said they've effectively agreed to do is stop acting like a cartel, stop using their market power to dictate prices, and just kind of see where the price goes, maybe get together in six months, maybe get together for. -- before. it was all kind of up in the air. david: ryan chilcote live with us in vienna. if you're talking oil, there's no better person to turn to than the vice chair of ihs. let me ask you about that headline there. rumors report that opec as a cartel is now over. >> it's true. it's not the opec of the last 40 years. it's really never quite been a cartel because it's 1/3 of the market. now it's a trade association. david: we heard them say they will maintain, perhaps reassess.

was always a chance of last-minute surprise. a lot of diplomacy went on. you saw the gulf countries visiting russia. it's not only about oil, but is really about relationship between gulf countries. oil is part of that puzzle. david: i don't believe russia sent a delegate to this meeting. what role are they playing in the global oil market? >> they are right now the largest oil producer in the world, despite the sanctions, production has inched up. there's a dialog back-and-forth, but the russians give no indication that they want a cut. when the saudi's put that proposal on the table yesterday or so, a million barrels a day, if everybody in the world cuts, it was the sense that you knew that was not going to go

anywhere. david: you mentioned iran. how radically could that change the contours of the global market? >> that thing is moving at a faster pace because the rouhani government wants to get the sanctions lifted. you can see that they're trying and the u.s. and others are trying to get it to go faster. his side wins. that is the big question overhanging, the last big shooter is how much oil are the into thegoing to put market. it's clear there's not going to be a discussion about any kind of opec action until one knows how much the iranians -- it's for hundred thousandto -- 400,000 to 600,000 barrels a day. that's the question that has to be answered. david: let me ask you about indonesia, back again.

what role are they playing now? >> no role. extremely odd that they joined. david: why did they join again? >> it's unclear why they wanted to do it. they export natural gas, they export coal. maybe they just want to be at the table. arabia,ooking at saudi an offense of move, a defensive there are going to be things that way on their ability to keep doing it. >> the war in yemen, i spent a week and a half in that region recently. so striking to me that the word yemen is front and center for them right now. money, peopleing are being killed, and they see this as a proxy war with iran. that focuses there, it's not clear what the exit is, what victory looks like, but very committed to it.

that is the kind of very central, and that's what they're thinking in here. their view is there going to be encircled by iran. the amount of trust between the two sides is zero. david: if production is kept at the same level, what is the supply situation look like? other keythe variables, there's a couple of other key variables. we think that between april of last year in april of next year, it will be down about a million barrels a day. the other thing on people's , there's a very big overhang of inventory, so that has to be worked through. a key question for next year is what does demand look like. demand this year is twice as high as it was in 2014. if demand continues at that higher pace, it makes it easier by later next year to sort they supply. david: do you see demand changing? what would account for that? >> price is an important factor.

some things have changed in the world. over 70% of new cars in the world sold today are sold to fuel efficiency standards. chinese auto market is leveling out at 20 million cars a year. in see a lot of the impact the united states, three years ago, lesson 50% of new vehicles were suv's. last time i looked it was 66%. americans are driving more miles this year than ever before. the price goes down, people respond. done, with what opec has what has the effect been on american producers? >> i was going to use the word until you used it, deficit. i think everybody saw that they could become a lot more efficient, ihs numbers at the end of this year, this month -- every dollar spent will be 65% more efficient than in 2014.

at $60, people -- life goes on. where prices are now is putting enormous pressure, this coming quarter and the quarter after will be critical years for the domestic u.s. oil industry. david: thank you very much. coming up in the next hour of "bloomberg markets," mohamed el-erian will react. ♪

>> welcome to "bloomberg markets ."

good afternoon, i am betty liu. here is what we're watching at this hour. the u.s. economy boasting another month of sturdy jobs growth. 211,000 jobs created in november. all but guarantees in interest-rate hike. opec deciding to keep the oil wells pumping despite the world swimming in crude. an unusual move by opec. old jobney wants his and his old company back. the american apparel founder and former chief executive is exploring plans to revive the a groep retailer. -- bankrupt retailer. we will close the trading week.