scarlet: i am scarlet fu. what we'reis watching at this hour or oil prices sliding to the lowest level in nearly seven years. scarlet: gains in regional elections in the first round of voting since the attacks on paris. have how the mighty fallen. still a billionaire but the former head of btg is now living in a rat infested prison. a look at his new reality. ♪ first, we want to get a check on today's market activities so we had to matt miller, who has got the latest. about anot stop talking

$48 handle. 38. matt: i believe it fell below that. averages.w you major we are down across the board. the dow jones industrial average off .75%. negative year to date. while the s&p still holds on to its gain, the dow jones industrial average is now down your to date. the nasdaq, still up it percent year to date. i have got the imap function up, which shows you what is going on throughout the year -- i'm sorry, throughout the day. big loser. that same picture year to date as far as energy being a loser is off 22% year to date. i.t. and consumer discretionary are the big gainers year to date. scarlet: now. alix: now get to oil.

of course, falling on opec but the markets, i cannot imagine what the positions are right now adding in today. do not know why we come to me on this one we have you on set. on crude, 3807. we have been below that. obviously the implications of the opec meeting happened on friday. not being able to put a ceiling at all, a lower ceiling, or any kind of ceiling. for -- plus, the stronger dollar. gold also reacting to the stronger dollar. 10 75 even asown, the chinese continue the buying rampage of gold. and then just check out the dollar index. looking against other currency i will assure you the dollar is up and the dollar strength not helping any assets there. scarlet: the question is what is

moving each individual commodity. is it supply and demand? what has the biggest drag on that? you have got supply and demand factors, plus the stronger dollar. let's check in on the bloomberg news. we check with mark crumpton. mark: returning to work this monday. five days since the restaurant inspector and his wife opened fire on a gathering of coworkers at a holiday party. investigators are still looking into what led syed farouk and last minute -- less wednesday trying to reassure americans and quiet critics. the president called the shootings a new phase in the fight against terror and repeated his call against tougher gun laws.

bloomberg's washington bureau chief joins us live. what has been the latest in terms of how the president's remarks were received on the hill? >> very uneven, which you would expect. we have got a ton of republicans coming out and attacking the that he has not been forceful enough in laying out a strategy. now that we have homegrown jihadists, which it looks like a couple or launching these attacks, i am not sure he hit the right notes for the american people or the lawmakers on the hill to settle the issue of how it he is taking this forward. mark: is there a sense of the president's speech assured americans? the speech was nuanced.

one of the most surprising things about it was the amount of time he defended islam and encouraged people to take a hard look at themselves. it made up about five or six minutes of a brief 13 minute speech. i think that, in keeping with didtone he is taking -- it not really satisfy people looking for a lot more red meat on exactly what new steps were being taken as well as incidents we have seen in paris. mark: what about the call for stricter gun control laws? is that a nonstarter? >> it was a difficult bridge for the president to cross. every route he tried, and they looked at being stymied by deadlocked congress. the president knows it will be difficult to get anything done on this. best.l try his

it is simply not easy. it is a very polarized issue. joins usan murphy live. thank you so much. that is the latest news right now. you can get more on these and other breaking stories 24 hours a day at the noon bloomberg.com. alix and scarlet, back to you. alix: as matt miller just showed us, oil rippling to the markets. policy normalization, the strengthening dollar could matter more as the european central bank promises more easing if needed. for awe're joined now perspective. we always have to talk about, is it really about the federer the euro weakness on the ecb? scarlet: you were at the speech mario draghi gave in new york. you saw some star power because it was packed to the gills. what did you learn from mario draghi that we did not get from the ecb announcement the prior day?

definitely wanted to calm the waters after a to mulch was down thursday to hit cop is that through a couple of different factors. he first explained how he thinks about inflation and explained that the oil price increase is a contributor in europe. but he also focused on the fact that the ecb will do everything it possibly can to prevent deflation and get inflation back on the right track. reassuranceas the that helped markets, along with the notion he's leslie said his speech on friday was a direct result of the market on thursday. very cleararket was in what it wanted. the two-year deals, negative .4%. orher the ecb knew it ignored it or misinterpreted the signs and what you think? both seem worrisome from where i sit. >> absolutely. i think the president was trying to say the market interpreted

his speech and comments going into the meeting and he had to pull them back to a level of reality and he did that explaining what the base levels were. you noted he used the word calibration quite often, something we should key in on as the fed has not really trained us to be data dependent and how it views its next move. word, it is a great implying there is a scientific calculation being done here. if you look it up in the dictionary, you will see it is most often in a scientific term. he is trying to show the indicators he is looking at are the ones the market should also look at and take scientific levels of certainty, that they will do certain things as the numbers develop. alix: you look at the off the beat track ways to confirm and deny. janet yellen has said the u.s. economic recovery is on track, gaining momentum. when you look at things like google searches, what do you find? >> we look at google trends,

great indicator. we broke down to three components. economy, labor market, and inflation. in the economy, things are quite good. people are searching more to buy a car and buy a house and go on vacation. labor markets, same thing. fewer searches for unemployment and more for asking erased. good on that count. if anything feels tenuous, it is on the inflation side. in thes for coupons klein. searches for cheap gas or cheap clothes, she's anything, also declining. that means users are not looking at that rock bottom price. --t seems to us >> we look at all the measures of inflation expectations but we do not spend a lot of time thinking about price rising. we think a lot about whether i can get a better deal, but people will also -- often confuse gas places -- gas prices

with inflation. of inflation are different for different people. to give in college, your kids inflation is very high. educational inflation is very high. even though it is only 4% of the cpi basket. if you do not have current health care issues, health care would be zero of yours. experiences about inflation are as important as the macro numbers. alix: thank you so much. what is on your google search? i am embarrassed to say. bargains on purchases, how about that? winter boots for a 14-month-old. hard to find. coming up, is the u.s. economy really ready for an interest rate increase this month? one factor that janet yellen may not be taking into consideration.

clinton is urging silicon valley to disrupt islamic state extremists. how will the stance fair with tech executives. scarlet: party is leading in theonal elections and national movement continues to rise. the potential economic and locations. ♪ -- economic implications. ♪

alix: welcome back. scarlet: it is time for the biggest this in stories in the news right now. slightlyeconomists less bullish about prospects for

economic growth next year. for 2.6%ge forecast is next year, down slightly from a survey conducted in september. they expect the jobs market to continue strengthening with the unemployment rate dropping 4.7% by the end of 2016. now stands at 5%. scarlet: citigroup moves to semper fi a legal structure, will probably leave it under direct ecb supervision for the first time. that is according to people with knowledge of the matter. reason, the u.k. citibank international would have $67 billion in assets, well beyond on the $32 billion threshold for oversight. alix: recalling hundreds of thousands of for debt -- of ford fusion models. may crack and lead to a fire. almost all of them in the united states. scarlet: you can always get more

business news at bloomberg.com. let's head over to the markets desk where matt miller has a check on the energy sector. the pain is spreading to the equity markets. look at oil, we are seeing a big drop as we have been showing you all morning long. almost 5% right now. 38 dollars, 4%. it leads to a lot of big energy losers. you look at the index, sorted by losers versus winners, you see the biggest percentage of losers are all oil names. the low since 2011. consol energy, the lowest since 2002. chesapeake, the lowest since the year 2000. before scarlet and alix were even born. big loser today, but an interesting story. the company is buying up land, basically the size of los angeles and oak, and wyoming,

for $2.5 billion. the stock is off 7.5%. 80,000 acres in oklahoma for $1.9 billion seems steep. 200-3000 acres in the river basin and wyoming seems like a good deal that i would make as well. the low energy prices do not hurt everybody. as a result, airline stocks tend to react positively when oil prices are down. jeta, american airlines, lou up almost 5% even though they hedge. it is an interesting day today. i do not know if it is interesting. everything is happening exactly as you would expect with oil down 5%. alix: those were natural gas guys and not necessarily oil guys. that was interesting because we are not at the lows we saw back in october. they could beat to the downside as we retest lows. i love the fact that you pointed that little slice out. matt: coming from you, that is a

real compliment. thank you very much. scarlet: the federal reserve wanted dovish rate hike. harmdual pace that does no to the economy what gets the edge straight off the zero bound. is it possible? that is what larry summer asks in a recent op-ed in the financial times in washington op-ed post. alix: he wrote i am far from confident that there is substantial -- scarlet: policy are saying interest rates are lower than they first thought is still underestimating the mutual interest rates, a theoretical rate at which it does not boost or hold back growth and that is still a question that everyone is grappling with. alix: it feels like we moved on

from december and are grappling with what is the real interest rate and the fed has an actual chart on this that shows a wide range of it. it overall looks to be around zero and that winds up meaning two things are the fed cannot hike very quickly because it would constitute cooper tightening. it would go above the pace we are already. and yellen expects the pace to rise. the question is by how much? slowly?move quickly or if we are in uncharted territory and if you consider the economic expansion is mature this point, people are anticipating what tools the central bank has left to fight the downturn and recession. the fedmmer also writes will not be able to raise rates one hundred basis points per year without threatening to undermine the recovery. the if it were possible, chances are high the recession would come before there was room

to cut rates enough to upset it. you typically need 300 basis points to offset the recession. alix: if you wind up being able , you will have to cut it anyway because we will be in every session, or we will not even get to that place because the recession will hit first and then you will have to decrease the rate and cut rates even faster. the op-ed talking more about potential fiscal policy, and that needs to be the counter for this. scarlet: that has been the theme throughout. the fiscal side has to step up. when it comes to monitor policy, he is more ambivalent. he said monetary easing has an aspect because stimulus requires interviewing cuts in rates. there is only so much you can do, as we saw that the national interest rate, that is constraining them. you cannot hike on a progressive event will constitute major

tightening. that is where the dilemma potential for fiscal policy. scarlet: much more is coming up. president obama is calling on silicon valley to aid in the fight against terror. that conversation is next. ♪

scarlet: welcome back to bloomberg markets. his: last night was only third oval office presidential address. president obama called on silicon valley companies to join the fight against the islamic state. obama: i've ordered

the department of homeland security to view the order in which the female terrorist in san bernardino originally came to the country. that is why i will urge high tech and law enforcement leaders to make it harder for terrorists to use technology to escape from justice. scarlet: joining us now to stone frombrad sansone -- from san francisco. before that, hillary clinton made some vocal comments about this as well. >> in a speech to the brookings institution in washington, she also came out and said it is really up to the tech companies -- what has been the reaction of the tech companies? sothey have not said much far, but you can kind of predict what they will say. they will say they do a lot all ready, hateful propaganda, threats of violence, you cannot post those on you tube or facebook or twitter. those websites do a good job of taking them down. the next claim is, should they fromgroups like isis

organizing or recruiting on the networks and that is where gets messy. they will argue you cannot put them in the position of going through millions or even billions of post every day, every week, and adjudicating what constitutes this kind of extremism. they will say this is too difficult. they have a good point. they uphold principles of free speech. it is not just muslim or islamic extremism. it is all forms. ofse are difficult questions what really constitutes harmful behavior. what hillaryear clinton had to say about some of this. hillary clinton: we will need help from facebook and youtube and twitter. for thenot permit recruitment and actual direction of attacks or the celebration of violence by the sophisticated internet user. they will have to help us take down the announcements and these

appeals. to what extentt the government should be involved? well, you know, i think they do it they can and you have kind of a question of, well, is it to gocal, does it scale through these many millions of posts every day to figure out what is allowable and what is not? her veil, weeads will see that these kinds of questions are really difficult. if you believe people should have the ability to speak and organize freely online, and we want to maintain our constitutional principles here, it will ultimately be a very difficult question. >> that is different than technology companies that have encryption data like apple that makes it impossible for them to police things like messages or face time. there is a station between

policing things and not making it for people to actually see what is in the content. >> on the question of encryption which we had in debating for 20 years, scientists say if you weaken the encryption, you open up the back door for all kinds of criminal activity and the fairlydustry has been aligned and vigorous in arguing they do not want to weaken encryption. the obama administration has sided with them and we will see of the pressure increases. scarlet: thank you for joining us today. alix: still ahead, a concrete bed and a rat infested cell? they let -- a look at the life behind bars for andre estevez.

>> from world headquarters in new york, welcome back to the markets, i am alix steel.

scarlet: i am scarlet fu. mark crumpton is at our news desk. mark: the department of homeland security is announcing a new terror alert system. saystary jeh johnson details will be released soon. this will be the third of terror alert system put in place by dhs since the 9/11 attacks. the highly criticized color-coded system was replaced in 2011 by the national threat advisory system. the man accused of stabbing to the people at a london stub way stop while screaming, this is for syria, was in court today. he was charged with attempted murder. he had beensay associating with islamic state on his mobile phone. supreme court steering of a politically charged fight over gun rights. the justices turned away a challenge to a law banning semi automatic assault weapons and large capacity magazines in the

chicago suburb. the highland park illinois restrictions do not infringe on the constitutional right to bear arms. attorney general loretta lynch announced a civil rights investigation of the chicago police department. this has been requested by number of state and official community leaders. through per luminary reviewed and careful consideration on how the justice department can best use our tools and resources to meet chicago's needs. mark: her action comes two weeks after chicago released a video of a white police officer shooting a black teenager 16 times. the officer has been charged with first-degree murder and mayor rahm emanuel asked for the police superintendents resignation. that is a look at our first word news right now. storiesd other breaking

24 hours per day at the new bloomberg.com. i am mark crumpton, alex, scarlet, back to you. alix: on course for an unprecedented victory in the first round of regional elections. ais shift opens the way to three party system in france, challenging socialist president francois hollande and his rival nicolas sarkozy. scarlet: in paris last month just after the attacks, he joins us now for perspective. a knee-jerk reaction -- it is tempting to call this a knee-jerk reaction to the november 13 attacks? hollande is only a 35%. starting from the lowest approval ratings in modern french history. the national front has been slow and methodical. i feel like every year or so we

are shocked, and then they do slightly better the next year. they were 11% in the last regional elections. this is a long-term development where they are slowly building working their way toward respectability, being an actual third-party in france. there are some consequences of the attacks. , oneok to teeter places was a national front. the other one was nicolas -- nicolast party sarkozy's party. it went to francois hollande's personal approval rating. it's possible to say there was a winner and a loser. >> what is interesting is it is not just a french issue. with the rise of donald trump

and the backlash of president becomehow terrorism has the first and foremost when it comes out to presidential elections. >> about two years ago i talked to a professor at oxford who called these entrepreneurial parties. pulling at 39%, it is in power. the u.k. independence party, the national front, the freedom party at the netherlands, they are all doing the same thing. center-right and centerleft in european countries, they all agree on a couple of things. more european integration was really good. there was no party to pick up those issues and speak to the people frustrated by the pace of integration. it is not possible to say this is a france problem because this was a friend -- this was an attack in france. it is all over the continent. includeow platforms

anti-immigration and establishing european borders. they have been doing better through regional elections. there have to be nuances we don't pick up on each time. >> i would actually look at the tea party for comparisons. her father was not acceptable. every once in a while they would get a surprising result. he was very much a man who talked on television, but was less interested in the harder grassroots work of building up regional party basis. this is something his daughter is moving forward. idea, a shockingly increasingly popular idea, and turning it into regional politics. this is just what we are looking at in the first round. at twolooking likely provinces run by the national front. they aren't in power

nationally, you learn how to -- you learn how to govern. that mother question i am faced with now is what does this mean for the economic repercussions when it comes to france? this popularity is not because of november 13. particularly here in the u.s. who had not been able to make ends meet and get their job back. those people who feel like these type of populist nationalist parties are able to speak to it in a way that the actual establishments are not. are focusing on immigration in a way that the tea party did in the u.s.. they are doing something different in europe and some have managed to latch onto the european union. their ownlaming economic misfortune on what is happening in brussels.

the loss of national powers, it is hard to say whether that is merited or not. one thing that is absolutely going to happen is it is going to be even harder in the very near future to steer a policy from brussels. this agreement over two months ago. you have to order party in power. they are not taking any refugees whatsoever. it is hard to the center-right party negotiations. go to brussels and hand out a compromise. that may not be as easy. >> there is a second round that takes place next sunday. it tends to down well in the first round, but they have difficulty sustaining gains in the second round. >> when you have a coalition with the socialists, but it

looks like the socialists are going to win overall. a you know, it is not that they are not going to be in power. there is a good bloomberg news article. how is it they have slowly marched into acceptability? they are encroaching on that. not some extraordinary win when they are going to take control in france. most important from the french red french presidential election. -- from the french presidential election. >> bt is set to be in talks to sell a credit portfolio on the countries just tanks in an attempt to unload assets after the arrest of its founder late last month. alix: let's talk about the fate of mr. estevez prieto the 47-year-old billionaire has been in jail for 12 days. the conditions are pretty

different than what he is. he is living in a rat infested cell with a concrete that you he is using a collective squat toilet. the list goes on and on into what happened to him since the fall from grace. infamousaying at an prison known for -- >> he is known for staying at an infamous prison known for violent thing violence could he may be alone in his cell. it was because of the reports that he was getting special treatment. >> what speaks to me about this story is what happened to the ruling elite in brazil due to the car wash. he used to say better than goldman. this is a high-profile

arrest. this is a big shift for a country that lived in corruption for many years. this is schadenfreude. is.hat's exactly what this >> i have spots for brazil over the last five years. you can see this enormous rise. we are off the highs we were in back in september. this encompasses the problem that is plaguing brazil, mr. f is as that mr. estevez -- mr. as making brazil, mr. estevez. coming up, ge scrapping the sale of its appliance business. what is behind that decision. >> nominations for the grammy awards were announced this morning. angela mars the top nominee.

-- kendrick lamar is the top nominee. >> looking at oil prices around $38 per barrel. ♪

here's what we are watching

right now. what is oil go after opec district targets? we have an outlook from the exchange. and a new ceo says he may be considering more job cuts at the bank, on top of an existing program to reduce 7000 positions. in a general election polls the plug to is selling its appliance business due to regulatory concerns. start with oil. prices still as volatile as ever as opec holds off on specific out put targets. terry gave his outlook. >> i think oil is kept to the upside. rallies is no different than the input cost change. people get back into the business. >> the new ceo is considering even deeper cuts as the tanks security unit. people say reductions are considered which would mean the illumination of the units

bankers. those would be in addition to an existing program by 7000 through 2016. >> mario draghi is defending the central bank's decision to expand its stimulus program, even if it is disappointing. the ecb will do more if action is needed. >> we consider the package proposed by the committees has exactly the right one. package that was meant to a dress market expectations. was meant to address the reaching of our objectives or inflation. >> general electric is expanding plans to sell its appliance business. the deal with estimated at $3.3 billion and the move comes amid legal battles to get the acquisition approved by regulators.

it had proposed measures to the justice department that should have pushed the deal over the finish line area >> and moving closer to lifting russia's credit rating out. derivative traders are taking a different point of view. the cost has climb for a second straight week because of slumping oil prices. the reading suggests russia should be forced of slower than its score. that would be wonderful short of investment grade. and that is your global business report. visit bloomberg.com. to abigail doolittle, live from the nasdaq where she is looking at food stuff. just pull he has been in a rough couple of days. >> you have been right about that did shares are down sharply after the company rescinded its 2016 forecast created by e. coli outbreak first reported in late october.

consumers are clearly staying away from the once hot chipotle. they are afraid of getting sick. a key question is whether or not this e. coli situation will affect profits next year. the current stock texan suggests we could see that decline in earnings. suggestion says we could see declines in that burning. some of these companies including panera bread, buffalo wild wings, jack-in-the-box, and when these are all up and are outperforming significantly on the year. >> to police in thing explore later on. the news gets worse. it is like yum brown -- yum!

brands in china. alix: a lot of targets below estimates. how do the company's deal with it to scan like this? we will address those issues later on. -- betty bank we'll get his take on the story. scarlet: will get his take on the story. alix: the nominations were announced. we will announce the number one after the break.

scarlet: nominations for the 2016 grammy awards were announced this morning and rapper kendrick lamar earned most nominations with 11.

we are by bloomberg intelligences paul sweeney. kendrick lamar leading taylor swift in nominations. a bit of a surprise. about thewe learned state of the music industry? >> i think what a lot of the big isists are try to figure out what is the best way to distribute their music. to consumers actually want to buy the music, such as they ifld through an apple store? they do rented, the big thing for the artist is how do i get paid. >> taylor swift totally shun spotify but lamar let's spotify. >> we have seen different models

with adele and taylor swift. what they said is they are not going to make their most recently released music available on the streaming services, particularly the ones that have a component to them. the bigger selling artists, the one with more clout, they are trying to preserve the value of their music and trying to ensure they get paid what they believe is fair value. they are concerned the royalty rate set does not do that. -- if you are a big stomach adele you can throw your weight around like that. >> they have withheld their music from streamers, but they are willing to put it on apple. it one steptook further. they said they don't have a problem with streaming, they have a problem with the free streaming services like spotify. apple music does not have a free tear. they believe that is an environment that protects the

value of their music a little bit better. what some of these bigger acts are doing, we know streaming to be the- that seems only growth area for music consumption. they have to figure out an economic model that works. every artist will probably tell you they are not being paid enough. >> who is this a bigger issue for? the artist to are trying to i think is the artists. for the artists it is a big issue. the days where you make five dollars an album and didn't make money on the album sales, that is over. the streaming economics are pack,good for the larger but the second and third tier acts have a hard time making economics work.

>> the site said lamar raked in anywhere between 920 $1000 and 1.2 million from spotify streams in a single day. you can monetize it. >> you mentioned third and what about an artist that is just starting off? >> they are just looking for distribution. they just want to get their music out to as many people as possible. historically that has meant touring. of course making all of their content available to the streaming services and any other service that will take it in an effort to build up the audience and drive apple sales. >> what about the grammys and how that works where they and the putting their music?

>> it is a little like the oscars. there definitely is an economic relationship between getting nominated, winning grammys and oscars and seeing an impact on the very near term, and impact on the content. i suspect the ones that were nominated, they will drive album sales and downloads on itunes. >> i think some of the people who were snubbed, they had their moments back in the day with gremio or nominations. >> oil trading at its lowest level in six years, what is next.

6 p.m. in london and to a in hong kong. welcome to bloomberg markets. -- and two a.m. in hong kong. welcome to bloomberg markets.

from bloomberg world headquarters in new york, i am scarlet fu. alix: here is what we are watching at this hour. oil prices plunging, wti falling below $38 per barrel. set production limits. how low is it going to go? scarlet: what is his outlook now? we caught up with him in miami. fallingipotle shares for a fourth straight day. love kennedy to bring back customers and restore faith in france? -- what it can just bring back customers is faith in france? matt miller has the latest and we are back at session lows.

--h: with the index is here the indexes here, you can see we are down 1% across the board. take a look at the dow jones to see where we are and where we have been area down session lows, so down 200 points. the interesting thing is not all the price action, but the volume as well. if you take a look at the terminal, that shows a breakdown of volume compared to the 20-8 average. energy is up. which is impressive considering it has been that way every day for the last two or three days. >> oil is the story of the safety at doesn't appear to be a particular catalyst that would decline.his

>> everyone was trying to get arehead around what this they raising that feeling, which is a report we had out on ride a? releasingike opec is its power as a cartel and it is every man for himself. only.coming down the biggest losers are chevron and caps on right now. really taking its toll on the indexes. much movement not only on the downside but here today. what are people buying right they are vying that. -- if you seeout

a mountain. it is not so bad. i have been looking at bigger picture stuff. if you look at the 10 year yield, if a 16% when we were kids. scarlet: it is like friday never happened. i feel it has missed some. math: one day you don't pay attention to the market and it doesn't matter. alix: mark crumpton has more from our news desk. mark: the woman who carried out last week's mass shooting in california with her husband attended an islamic religious school watch was fixed in pakistan. that is according to intelligence officials and the schools. few details have emerged about her life in pakistan, when she lived from 2007 through 2014

before leaving for the united states on a visa. sanctions imposed after turkey warplanesa russian may cause the country $9 billion annually. the prime minister says that is a worst-case scenario. he said the more likely outcome trade, for overall translating into an economic impact of around 4/10 of a percent. beijing has issued a red alert because of heavy smog. is the most serious in a four to system adopted a few years ago. the alert imposes limits on factories and traffic, and school officials were urged to cancel classes. three consecutive days of severe smock are predicted.

cole, fire, and power plants get most of the blame. won theanders has online readers poll for time magazine's person of the year. the presidential candidate won with over 10% of the vote. a pakistani activist came in second with 5% of the vote. on -- more ofre these and other breaking stories on the new bloomberg.com. back to you. >> matt miller has more of details on breaking news. math: staples was willing to offer more concessions to get ,his merger with office depot the person that office depot three. a6 $.1 billion deal. if the like the cough that office evo has been in over the last you days.

office depot shares down 16%. a staple shares should be down as well, at 11%. some powerful have have been pushing for a tie of. he look like the ftc cares that much. >> thank you so much. take six year low, falling to its lowest level since 2009 scarlet, unbelievable. under 38. react allilseeds to the opec cuts announcement on friday. why are we getting that outside >> announcement in spite of

everybody following the oil market saying there will not be limitation on production. the reaction is enormous, it is caused by a panic selling in the marketplace. who has the courage to be buying either oil stocks at this point? hot for -- they are so the highest and short positions. >> at what point are we going to have a massive snap back? >> it has been part of the reason i have been trying to find a autumn unsuccessfully in the last few days in some of these oil stocks, precisely because the people that are short our financial people. the ones who are not short are the ones you want to be shortly

if he doesn't do any commercial player any good to self oil at $30 per barrel. that comes out of the ground for a futures market makes anything good by selling oil for 38,000. they are actually selling for the back months, the carrying game. commercial guys are not short here. and you wonder who is going to continue to sell the market down here cutera driving prices lower from here. mru chasing whatever losses or gains you have until the end of longear? >> those that are , oil stocks in general are taking out some sort of further hedge in oil. >> versus the s&p index and energy stocks, the mlp is getting beat up more than oil

prices and more than the s&p energy index. >> they caught it perfect storm because they are income producers of the fed rate rise that has been promised in december. investors whoome tend to run for the hills more quickly than other investors. the largest independent pipeline country. have a price target of $150 per barrel for oil. what did opec's decision due to that? does it change your thinking on it? is ist the saudi plan they opened up the spigots to the market.

not only shale players but offshore players from brazil, and so on. what we are seeing in the second round is opening up in acceleration of that strategy. delivered intoot those opec producers. they are ramping up the battle another level and looking to accelerate the construction going on. i think that is what the market is reacting to, some of these players are not going to make it. what we thought might survive this now looks like they won't. >> they did a three tier thing. they say we are going to have a supply adjustment. then we are going to have a financial threat. are we looking at operational stress? that would mean $20 per barrel.

>> this is a longer battle than anybody expected, including me. i don't think that requires oil to do that. all you need to do is hauled prices anywhere in this general area, at least under $50 for the next eight months. the defaults, the outright bankruptcies, the huge restructuring deals that need to be done, they will start piling up one by one. >> it is difficult to predict what is next. what level of control do they have over the global oil market? >> they are the ones who can most adjust their production the quickest. iranians have no interest in adjusting production. financially speaking we will have no choice but to adjust production.

i think they are wrong by a factor of three. we will see a production drop over $1 million per day. that's why am still sticking to this target. if you add in the production sayingd what the iaea is , you have aprofile swing of $5.5 million barrels per day. >> something that was perplexing is are we seeing some kind of demand issue creeping into the market? is it pure opec pure supply? >> it is based on supply and this panic in the supply energy space that you see during the capitulation move.

i think this feels like 2008 when prices hit $230 per barrel, when everyone was predicting $15, $10. all of a sudden we need this stuff to power the lights. >> perfect day to have you here. special thanks to the president and author of shale boom, shale bust. as inflation stays low, apartment prices keep skyrocketing. we will break down some hot realty investments. hise will bring you comments from our boggle in miami. >> chipotle suffering from more e. coli outbreaks. look and save the quick service chain. -- what can save the service chain.

>> devices ceo says the carrier would take a look at yahoo! if the company were up for sale. it's too early to know what yahoos board will decide. a strategic fit horizon. investors that gun enthusiasts will buy more firearms on restriction increases. carrie green mountain says it will become a sale to an je dtor group led by the holding company. the price tag is roughly $13.9 million. the 70% premium presented.

>> you can always get more .usiness news matt miller has some news with movers. matt: let me kick this off with a couple of stocks we are watching very closely. i'm shaking my head because i feel it you did every story i'm going to hit. this is one we are watching us headlines just came out, saying they are going to bring suits to stop the merger. both shares are down big. it might be cutting the dividend after they have an executive laid.

often times, after these acts of gun violence, people concerned about gun legislation go out and buy more guns. usually in the end there is no gun legislation so investors by the stocks. >> a bit of a knee-jerk reaction we have unfortunately become accustomed to. ahead, the american real estate fund has a 12.15% return over 15 years. the senior portfolio manager joins us next.

alix: real estate prices

continuing to climb. since 2012 single home family prices have risen 36% and apartments are rising 46% per year. let's go to bloomberg radio where cory johnson was in new york for a change. >> you are listening to the bloomberg advantage. i'm along with cory johnson. we are going to talk about real estate right now. in steve brown, he is here with us. we are all anticipating higher rates. what are you anticipating? at one point we want to get on the fed program of raising

rates. they are down for the year. we had the strong jobs credit. 1.5% on friday. a lot of news about higher rates being part of the fed initiative. >> does it change your ability reason to putght it into your fund? >> we do spend time thinking about an environment of rising rates. we want to be more focused on the shorter term lease. be a way from the net lease at the health care sector. a five year track record of

12% on each year. you are much beating all of your peers. how much money do you receive based on the trajectory on how quickly we raise rates? i feel there is a 99% chance that is going to raise rates. the next question, is the fed raise four times in 2016. i think it would be an interesting place to be. if they are going to be talking the talk -- if we think it is necessary, then that could serve as a modest headwind. see, if the fed had a tough time in moving forward and raising rates, the

economy is not running away. gdp growth is at 2.5%. is a modest recovery, but a long recovery. they want to raise rates. i think next year we have good fundamentals and we have a good growing economy. >> so you mean better? >> i think it will have a return next year based on economic growth. the concern was the fed wants to raise rates. in the concern for this year. that's why we had a positive pop on friday.

that will be the big question on next on our mound -- next on her mind. until you get more clarity of where the house fed wants to go, that could be a question mark. sector,you look at the a high rate of environment, it changes the math of where people put the money. starting to look less attractive in an environment where you return. them if the specter of higher rates causes bond prices to go , the average reader is 3.8%.

they have 20 month leases. the rent is still over buying. >> we send it back to you guys. you are listening to the bloomberg advantage. carol massar and cory johnson. ahead, art is not an investment. we are going to hear his reasoning when we head to miami for one of the biggest events in the art world.

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for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. alix: from bloomberg world headquarters in new york, welcome back to "bloomberg

market." i'm alix steel. scarlet: i'm scarlet fu. let's go to mark crumpton. san bernardino officials say they will increase security at facilities after workers return to work after last wednesday's mass shooting. there will be more security guards and those guards will now be armed. these san bernardino county sure ups department will also increase the trolls of county building. 13 were killed and 20 others wounded in what the fbi is calling an act of terrorism. homelanddepartment of security is replacing a warning system to alert citizens and companies about terrorist threats. --secretary johnson: we will replace the color bars with a national advisory system, a system that we have

never used because it depends on a specific, credible threat to the homeland. i believe in this environment, we need to get beyond that and go to a new system that has an intermediate level to it, and i will be announcing soon what our system is that reflects the current environment and current realities. at mark: secretary johnson says the united states has no specific, credible intelligence that a to thest attack similar one last month in paris is being plotted in the u.s. the man accused of stabbing two people at a subway stop in london was screaming "this is for syria" appeared in court, murder.with attempted he had images associated with the islamic state on his cell phone. he was ordered detained until another court appearance on friday. vice president biden has assured continuing support

and announced the release of an .dditional $190 million of aid the vice president also declare the u.s. will never accept pressure's annexation of ukraine's crimean peninsula. speaking after his talks with the ukraine's petro poroshenko, mr. biden urged the ukrainian leadership to continue its path to reforms and ramp up the fight against corruption. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. i'm mark crumpton. back to you. alix: thank you so much. this past week and, more than sony 5000 people descended on miami for one of the biggest events of the year. year jimjust last chain o said he is shorting subsidies to hedge against a

bubble in the art market. alix: here he is talking to stephanie ruhle and miami. >> it probably works on both sides. stephanie: let's talk about how tricky it is. chinese buyers, russian buyers, even though we saw a chinese buyer pick up a painting for a record price last month, is that reflective of the whole our market -- art market, or are there pocket? -- are there pockets? john: we have a bifurcation. we have artists who are a second-tier or lower. i think we're seeing another split. i think we will see that between well-known works and lesser-known works, but we have

seen softness and lesser-known works of famous artists, and yet the marquis stuff continues to do well. getting, justps in terms of the equity market guy, it gets worse and worse. in terms of a bubble, last year we were at seven, where are we this year? john: six and a half. stephanie: we are below? john: yes. stephanie: why? john: a lot of this stuff is selling below the headline price. there's an awful lot of stuff that we are not moving and i think that is why we are lower. stephanie: -- stephanie: art is an investment. is it still a good time -- john: it is not an investment. it is decorative, very expensive decorative work. let's put it that way. all of the time periods we have

on art are fatally flawed. by definition they go by subscribership bias. the four dogs playing poker on the walden not get picked up as a series, right? withe really cannot say any kind of definition art has superior returns over stocks or bonds. i think the problem with the dataset is problematic. stephanie: who is more valuable right now? john: it depends on the arts. [laughter] things being equal, one of my concerns about contemporary art, artist are still producing it. stephanie: it is a supply and demand issue? john: we see that over and over again. realanie: if we see a correction next week, will that be reflected in arts? john: the stock market is pretty

much hat in hand with the art market. you look at prices of sotheby's. , it tracks the financial market almost one-for-one. the past year was the biggest diversions we have had in a wild. really attracts wealth inequality more than overall levels of economic growth. stephanie: how so? john: studies have shown that the market does better when the 1% yours are doing disproportionately better. out in that that plays the international market. divideie: as the wealth grows more extreme, do you think the values a very high-end art only goes up? the wealth divide stays where it is, yeah, i guess, art will do ok, but i would not want to count on that. stephanie: do you see it changing? do you see it correcting? john: every market corrects.

i think we are in a unique market right now because it is a contemporary market, but that is, to me, interesting, because the arts are still producing work. you have almost an instant amount of supply and that is why i worry more about this market. right,-stephanie: all quickly, we are going into the end of the year. how do you feel about the global markets, the equity market? john: you are ambushing me about the stock market. i have no idea. it is like trying to pick artists's. the best you can do is know what you short and have an opinion about that, but trying to verdict for the s&p 500 is going to be in three weeks, i have no idea. [laughter] john: and the 100 --stephanie: .nd the $100 million question

are you buying anything this week? john: a few small pieces. stephanie: does a hedge fund manager ever pay the full ask? john: i would hope not. scarlet: that was stephanie ruhle with jim chanos. with pep breaking news boys. matt miller is our markets desk. matt: just to refresh your memory, bridgestone back in october announced it was going to buy pet toys $15 a share, but friday, carl icahn said he took a 12% stake and then they have been in talks it for six months, he has offered 13 $.50 -- $13.50 a share. now it looks like he has come a share offer. none of this should matter. if you look at pep boys, it is worth more than that. carl icahn wants it at a discount. i think he is saying he will pay

more than bridgestone would. if we are going to offer discounts, i would say, i would take it at $12 a share. maybe you could come in with a $10 offer. there is a little bit of a reverse spike there. alix: and of course, the boys should sell its retail business to a competitor, then it should -- matt: he bought a line of auto parts stores and suppliers up in canada earlier this year and has tried to start the ball rolling , and that istion what he wants to put together pep boys. alix: thank you, matt miller. scarlet: i had no idea that carl icahn was that much of a car guy. to pull a sales tumbling. what does the chain need to do to win back customers? the ceo of a ask

semiconductor company why he is betting big on the next generation of auto markets. wti below service, eight dollars a barrel. it looks like the witch doctors are getting hit the hardest. ♪

scarlet: welcome back to "bloomberg markets." i'm scarlet fu. alix: and i'm alix steel. scarlet: time to look at the biggest business stories. alix: fed president james bullard says unemployment will

continue to fall. bullard says that unemployment will reach the 4% territory. he took audience questions following a speech in vienna. scarlet: ford is recalling thousands of fusion and mercury models. the fuel tank may crack and leak gasoline, possibly leading to fire. most all vehicles affected are in the united states. gox: general electric may outside the u.s. or the private equity to find a buyer for a system. they were abandoning a deal with electrolux. ge canceled it because of a legal battle to get the acquisition approved i regulators. electrolux says a regret ge's move. scarlet: you can always get more on that story and other business news at bloomberg.com. alix: now matt miller has the latest on markets. matt: we are still down across the board. take a look at the major indexes

here. there they are. down 1% across the board. the s&p is 2069. even with this drop, we are not far off. the dow has a little further to go. right now we are it 70,660 five, but down one full percent today. quickly about couric-green mountain, a story getting this morning, bought out for $92 a share, 78% premium. you see the stock of 72%, 73%. there are a number of interesting players in the story that make it more than a simple deal. first, coconut a huge stake. och had a huge stake. mondalez will be

one of the buyers. they will share -- preachers of coffee holdings in this new g, greenmount and roasters. soda stream, unrelated to the deal, but in the same business. they both want to create cold beverage technology that maybe we will all use on a day-to-day basis and eventually put coke out of business. soda stream up 10%, up a lot more today. kroger and whole foods market's, whole foods of a one-month high, kroger at an all-time high. traffic and more whole foods market's and companies like kroger are getting more of the whole foods that the client willing to pay up for something organic or better for you. alix: great, thanks so much, matt miller. matt: thank you. scarlet: chipotle struggling to contain the damage from an eagle eight -- e. coli outbreak.

the company also projecting its first quarterly sales declined since it went public in 2006. alix: i want to bring in our guest, vice president of economics. you look at the food industry all the time. what is aaa doing and what does it need to do? unfortunate thing for aaa is this has been in the news for a month now. i thought it would be a minor story, but they have not found the cause for what is driving this. it has spread to nine states. i think what they need to do is figure out what is wrong and where the contamination is. decontaminating the stores, but for a chain with a

"food with integrity" tagline, this is been a real hit for them. scarlet: what should be the involvement of the cdc and other government agencies perhaps? david: the challenge is, when you have so much local produce. the "food with integrity" tag involves a lot of local produce withvery much resonates the consumer. the cdc has to make sure at a local level of these farms and producers, they are producing products that meet or exceed guidelines. there is definitely a role for the cdc to make sure that the product is safe. scarlet: perhaps we need to adjust our expectations, because it includes the risk for foodborne illnesses. is that something the public should adjusted to? yeah, it certainly resonates. certainly almost every major chain is trying to move toward a fresh position. you're right. it is healthier. it is perceived as better for you. it,public is clamoring for

and it really behooves the chains and the government to make -- that is where the consumer is that. fresh is very important to consumers. that will continue to grow. alix: for these companies is really about store openings. that is what makes them a sexy growth stock. outbreakhey have this -- what does it do to curb their ability to open new stores? scarlet: good question. stephanie: to some degree, they are a maturing train. you cannot expect to belay to continue to grow double digits every year. you just run into the law of large numbers. provideink they need to some guidance to investors and the public that their growth will not be as great. you saw the stock sliding before this hit. from a yearallenges

ago. it has been excised batted -- exacerbated. harder for them to grow regardless of the e. coli situation. ofrlet: what is the response the competition and what should it be if this continues to dog aaa? qs are, whether you are fast casual or more of a traditional qsr, you do live in fear of a food safety outbreak. not seen people dancing on his misfortunes of jubilate because everybody could be in the same situation. -- misfortunes of chipotle because everybody could be in the same situation. environment is increasingly competitive and consumers have a lot more options today than they did and that is one of the things weighing down on aaa right now. scarlet: more options means more

complications. david, thank you, joining us from chicago. alix: coming up on "bloomberg betting big on the surgeon self driving cars. freshl hear from a.c.l. off a $12 billion acquisition. ♪

alix: welcome back to "bloomberg markets." i'm alix steel. scarlet: and i'm scarlet fu. a chipmaker just closed a transit section -- transaction. nxp joins us of now. selfis a big bet on

driving cars. >> is interesting, the combination but sporty percent of our revenue on automotive. as we think about autonomous driving or assisted driving, i think one of the key things that be theke place will assistive portion for a number of years. i think that's driving will clearly develop, but in the we will reduce the number of accidents, we will save lives, we will make driving smarter and safer. scarlet: what is the timeline on seeing the assistive portion coming through on your sales? >> we see some of it already. cars beginning to talk to each other, radars being used in high-end cars. i think it depends on how quickly the car companies develop it and frankly, how

quickly the insurance companies motivate the users to have a more complete solution. good looking at operating income from high-performance products, and really, if you take a look at that orange line, it is really surging quite high. your standard product is quite low. >> the standard products will only be 10%, a lever percent of our revenue. it will continue to be a smaller share of our company. it supports our capital .tructure when we think about what our focus is, it's about providing security, security like in bank cards and the internet of things, so it is secure

connections for what we call these smarter world or the internet of things. we are trying to figure out how to make life safer, but also easier. will see in fermentation of security guards to protect -- like when we use your smart phone, or you access your bank account three or mobile wallet, you want to make sure it is safe. that is what we're focused on. scarlet: you announced to be pre-scale purchase, and since then we have seen a slew of purchases. tell we -- tell us where we are in this consolidation sector? >> we are still in the middle. there are companies that do not have the significant ability to invest in significant r&d or ip or drive the scale associated with it. when we go from double-digit growth to mid-single digit growth, i think consolidation is natural and we will continue to see it over the next few years. alix: what is next for you

consolidation was? >> the key step is making sure we effectively implement -- -- alix: no purchase is on the horizon? >> we want to get our deposition to where we can do another transaction, but we want to make sure we've done this one correctly. alix: thank you so much. commodityoming up, markets are getting ready to close in about 30 minutes. ugly, ugly day. unbelievable, six-year low on oil. we will look at what is driving the prices, aside from opec. ♪

>> it is 2 p.m. in new york and 7:00 a.m. hong kong. welcome to "bloomberg markets."

from bloomberg headquarters in new york, good afternoon. i'm david gura. here is what we are watching. how much lower can oil go? scare hurting jubilate. shares down again after the restaurant chain scraps is forecast. a top verizon executive says that they would explore buying the troubled tech company if yahoo! were to put itself up for sale. let's head to the markets desk. after that blockbuster friday we are down across the board looking at the kleins of 1%. but nearssion lows, session lows.