welcome to bloomberg "markets." ♪ from the bloomberg world headquarters in new york and i am scarlet fu. here's what we are watching. crude oil flirting with $36 in $36 a barrel. dow chemical and do point have terms in the largest deal ever in the chemical industry. federal regulators have to ok it. things could be facing lean years. are there should thinking they will struggle with possibility until 2020. we will tell you why. first, more on today's market activity. the latest. we had a down week prior to yesterday. we saw a little recovery in the stock indexes prior to selling.

>> now the markets, after session lows down across the board, 1.5%. the falling price of oil is bringing down energy stock. 1.4%.p 500 is down the nasdaq is down 1.6%. we did get good u.s. retail sales data and consumer sentiment. as well as lower unemployment numbers. that is not to turn this around. for every one stock of, 8 stocks are down. for the week on this friday, the worst performance since november 13, we are down by 3.5% and 70 points. the index is going 20 six sessions without back to back games. the record is 28 days. that was set in 1970 him and he

hit it in april of 1994 and again this march. two more days and we will tie it again. three days, and it will be a new record. oil, a lot of superlatives in the market. nymex crude is down 2.9%. it is down for the sixth day in a row. this is its longest losing streak since march. it is the lowest since february of 2009. natural gas is falling, it had broken below the two dollar mark, and it has risen above that at two dollars and one cent . the last time that we saw these were three years ago in april of 2012. scarlet: thank you for that recap. we want to get to the bloomberg first word news. congress is playing beat

the clock when it comes to a federal budget. the government spending authority ends at midnight. the senate has agreed to extend the deadline until thursday. the house is expected to do the same today. negotiators are working on extending tax breaks. last week's mass shooting that claimed the lives of 14 people, a dive team searched a lake three miles from where they opened fire on coworkers at a holiday luncheon in san bernardino. they had been seen near the lake. electronics orr any items that may have been left behind. secretary kerry will hold talks with president putin about syria .nd ukraine secretary kerry will travel from paris to moscow on monday after attending a meeting on syria in the french capital. secretary kerry will see

president putin and the russian foreign minister on tuesday. it will be his second trip to russia this year. a press poll of republican voters say that donald trump is not likable, compassionate, or honest. some called him decisive and call tot hear to his block muslims overseas are hurting is business overseas. his posters were taken down in dubai, and they are rethinking their partnership. you can get more on these and other stories 24 hours a day on the new bloomberg.com. scarlet: thank you. as we look at the markets, the oil is extending its slump with crude breaking below $36 a barrel. the speculation of

opec's decision to keep the market oversupplied and maintain production. joining us from new york is francisco blanch at the bank of america merrill lynch. thank you for joining us. what does an 11% plunge and a drop this week show us about the direction in 2016? francisco: we think there are many factors that are putting pressure on prices. even before opec, we have been talking about a week or chinese .uan pulling down oil we have been talking about a fed hike potentially being a negative for oil and emerging markets. we have a lot of iranian barrels coming into the market. i think most of us had assumed that saudi would try to accommodate a little bit of the iranian oil. after the meeting in opec, it was not clear what the intention was.udi

the meeting turned out to be more acrimonious than anyone anticipated. scarlet: your $50 forecast you said in beds -- you said embedds rational economic behavior? francisco: our assumption has been that saudi arabia wants to keep gaining market share at the highest possible price. that is around $48 or $50 a barrel. we have already taken out $118 billion around the world. we are going to take out another $50 billion next year. if they keep going lower, the pushing out ofep the industry but at an increasingly higher price to them. it will be expensive for the cartel to maintain the policy of

oversupply. continue to use production. the supply is already falling. why do they want to flood the market? that is not rational behavior. our worry is that politics is being messed with economics. -- is being meshed with economics. scarlet: it will be a different mix than we have seen in the past. how appropriately positioned for that new mix are minors could -- are miners. francisco: the chinese going into a service economy means they will demand more gasoline. commodityre intensive. we won't see a lot of buildings or factories in china, and that is pretty bearish.

that is the differentiation that we are making. 9%nese gasoline demand is up year on year because more chinese are going to the movies and on vacation. we have a fast-growing service of economy. the commodities will struggle under a slower construction cycle and a slower manufacturing cycle. china has a lot of spare capacity. the goes the chinese central bank will have to keep a lower interest rate, we will have to allow for a weaker currency, and that is negative across the board. negative for oil, but it is negative for the rest of the mining complex as well. scarlet: we have seen how glencore has cut their profit, you say that won't be enough? francisco: we think we see a few more mines shutting down in the corporate space to stabilize

prices. we have had a big announcement and week with glencore anglo. another important point to remember is that it is hard for commodities to rally exclusively on production shut ins, on gradual production shut ins. that is why we think the market will still rollover. china has 50% of the worlds copper and iron ore demand. onare more constructive copper. copper, in some ways, is like oil. it is scarce. coal ories like thermal iron ore. scarlet: i know you recently downgraded your price on hold on the fed getting ready to tighten, but there is a turning point? what are the conditions and how

likely is it to happen? francisco: when it's the happen for gold prices to rally is that thefed needs to slow down hiking cycle. we expect a hike this year and three or four next year. we think that will negatively impact gold. if the fed stops, i think it will be positive for gold. if it is a reversal, it would be very bullish. gold, in some ways, will hold the key to the cycle and it may start earning before the fed changes its mind, just like it ago, three years ago, when gold anticipated the 3. of qe they will react a few months before the fed changes their mind, we will try to speculate on that. we do not think the fed cycle

will be that strong over the next three quarters. maybe some people in the market of listening to what you are saying about gold. it is up one third of 1% right now. your review on what capitulation could look like in crude oil versus copper. we aren't there yet, but how will we know when we are at capitulation versus crude oil and copper? francisco: in oil, we need to see the structure of the brand market -- of the brent market coming down. it needs to start widening so that we can see it to weakening. then that will signal capitulation. to full storyose capacity, frankly, when the inventories fell out -- there is nofill up, other place to put the oil.

many commodities are hard to store. eventually saudi will capitulate on its policy. the saudi's will have to give up complete control of the oil market and control of their currency. that is a hard thing for them to swallow. my view is that we are a few capitulation, which may come in february or march. that is the point when i think we will turn and go into a stronger driving future in the u.s. into june and july. scarlet: potentially a turning point in the first quarter of 2015. the head of thinking and commodities in merrill lynch with his 2015 commodity. bitcoin in a few minutes on bloomberg television. in the next 20 minutes, dow

chemical and dupont are officially tying the knot, closing in on a colossal deal. will the regulators give them the green light? a crazy year for some of the biggest banks. will they worsen? the recent findings. alibaba. the "south of china morning post" to try to reshape china's media. ♪

scarlet: welcome back to bloomberg "markets." ion scarlet fu. it is time for the bloomberg business flash. hoping for a job at barclays, you may be waiting for a while. the ceo has extended a hiring freeze indefinitely. boostave been trying to

profits at barclays. he is considering whether to cut another 20% at the firm's most profitable unit -- least profitable unit. lurcher hathaway may make a thread on norfolk southern. union pacific has offered, but .nion pacific has reject did it he says his railroad will not be sitting on the sidelines. and americans starting to use some of the money they are saving from cheap gasoline. /2 of 1%.les up 1 anht major categories showed improvement. internet retailers, apparel shops, and computer stores are showing the major gains. you can get more on bloomberg.com. let's go to our markets desk. what are you going to start with? >> gaming and tech stocks.

gamestop is lighting. it is down by war .8%. .hares -- by 4.8% shares are at their lowest since april of 2014. videogame sales are down $1 billion. also, there is saying that software sales and growth will remain a challenge. at division shares are falling down nearly 4%. in electronic arts are rising. electronic arts is up by 1.2%. that is because they are pushing into the growing market for ease sports. a new competitive gaming division was announced for games , and nfl., madden gopro is giving back some gains from yesterday. it is now down by nearly 9/10 of 1%. that is because shares were

downgraded to neutral and the price target was slashed to $22 per share. saying that the prime got it wrong and the new product launches may not come for several more months. the stocks of facebook, amazon, google, may not be a great that for next year. they have an average gain of 86% , which is good for those in the long. the s&p would be down more without them. theis reminding people that last year's top 10 winners underperformed in the next year. we will look ahead to that into next year. scarlet: as you were talking, our colleague was compiling superlatives of what we are seeing in stocks.

what is notable is the biggest selloff in the index is since september 28. for the week, the worst drop of the month. rent oil falling to a seven-year low. the commodity complex is seeing the biggest weekly losses in a month. we will continue to monitor these movements. it is not surprising that energy and material is leading the decline. dow chemical and dupont will join in a merger of equals. it is the largest deal ever in the chemical world. it will create down-dupont. -- dow-dupont. >> both of our companies, we --en't known strategically

we have known for a long time that they strategically fit together. our stocks were trading on top of each other from a market cap standpoint. we could do a tax efficient transaction by merging first, capturing synergies, and doing a three-way split. it is very efficient. scarlet: or more, simon casey, who covers agriculture. he made it sound so simple, combining and splitting into three. it is actually quite complex. simon: what they are saying is that it makes sense for a merger for next year. then a series of tax-free spinoffs will separate a large company into three separate companies in another two years. there is a lot of detail. scarlet: you reminded me earlier we have seen these two companies try to merge before.

there was an overture made in 2006. simon: holiday was the boss of dupont this morning. we spoke to him this morning who said that the facts are true. it turns out he flew out to delaware where dupont was based and try to make an overture. nothing came of it. but, he has kept that aim in mind. the dupont ceo that resigned in october and ed green took over, that was the opening. he said he was courting me the first day i was in the job. not to pounce.ld thank you for setting the scene. we will be speaking with an analyst later on this dupont dow merger of equals. ♪

fading, aespite some busy year for bitcoin. express, andcan beset all invested in the start up. what is next for 2016? joining us is our tech editor from san francisco. what do you see as the number one factor in 2016? the threeooking at factors. there's a good chance we will really dollar bitcoin company on the private market. institutions are starting to embrace the technology underlying bitcoin. what we will also see is a slowdown in the number of new bitcoins coming to the market. scarlet: that is a big one. of thet is part

underlying software controlling how the currency works. the number of coins that can be mined in 10 minutes, this happens every four years, it will half. that slows down the number of bitcoins on the market and lift the price against real-world currencies. a less supply and also a unicorn in the bitcoin world. what about the idea that dcs don't have as much money to give to these startups? are we looking at busts? reed: i think there will be sound. it is a risky endeavor. it is not a slamdunk for any company that wants to build a business around what is still a mysterious and complex technology that has not gone mainstream. scarlet: how will wall street

come into play? they have to make money off of this. one thing bitcoin has going for it is that the underlying technology verifies transactions. that is something wall street is interested in. it could be used to verify anything. that is what is attracting wall street to the technology. scarlet: thank you. reed stevenson in san francisco. investment banks could be facing lean years ahead. ♪

scarlet: from the bloomberg world headquarters in new york, i am scarlet fu. mark crumpton has your first word news. u.s. officials and

lawmakers are trying to piece together signs that might have been messed that could have prevented the mass shooting in san bernardino. the couple that with on a rampage that left 14 people dead had discussed martyrdom and jihad online as early as 2014. the couple never surfaced on law enforcement radar. loading to pass a spending bill and tax package. they are trying to iron out taxes to the plan. government funding expires at midnight washington time. passed a six-day extension yesterday. the house is expected to do the same today. in paris, the conference on been extended has for one more day. the french foreign minister will present a final draft of the agreement tomorrow. how to get deeper cuts in social

fuel production and how rich nations will help poorer ones clean up their error are among the issues that still need to be worked out. second placeie for for chris christie. marco and ted cruz each have 11%. donald trump is still ahead of the field with 27%. just in time for star wars, and online sale you cheering items related to the iconic film series. running from $100 to $35,000. the lots include more than 600 years from the collection of a japanese fashion designer and entrepreneur. figurine has ar presale estimate of $18,000.

that is a look at our first word news. you can get more on these and other breaking stories at the new bloomberg.com. i am mark crumpton. were talking, we are looking at the dow at session lows, just off of session lows at the moment. it is down 300 points, it has to 289 points. all 10 industries in the s&p 500 are lower as nymex crude and brent continue sinking. or global banks, 2015 has been a year of management shakeups, hefty legal costs. bringxt five years will even more challenges. joining us is longtime wall street analyst, the former cfo of lehman brothers, and now at a

school for business. with the factart that we have seen cost-cutting caloric. entire groups have been laid off . management salaries have been laid off. what is next? that is your issue. when you did your survey, not only was that they would not reach their capital, but the analysts believe that they have done an adequate job cutting compensation. they don't tie together. was a demand among institutional directories for a more strategic change. they are talking about reengineering, meaning that they outcome is asian people to come in and think outside of the box, which is not only the idea of ringing cuts to

people and you're roa will go up. it was surprising. one was the recognition that regulation would change. if you and i had talked five years or six years ago, we would assume regulation would change, we would have a new platform, and the markets would go back to normal. we seem to have dynamic regulation that is getting tighter. the banks cannot evolve fast enough. that is why they are lagging. are there any thinking outside of the box and achieving what investors want to see? i michael: deutsche bank was under pressure. they said that we will reshape our businesses. in the back office they said they have more than 30 tech systems. they will try to bring that down

and go through with a fine tooth comb rather than laying off people. to start from the back and work forward. scarlet: that tech investment comes off as a big scene? hans: the banks have not been -- not been banks have investing in technology. that does not generate profitability. what you have is a pie that is ineloped into -- developed 2. legacy systems that are getting older. that leads to the next thing. you're going to have to come up with a different solution. a very of dtc said it is good time to be the ceo of a utility. i thought that characterized it. no one wants to do the back office stuff. a good timeis also

to be in compliance. the bull market is in compliance. the change in regulation has made that the hottest part of the debate? thought the rules would be done by 2012, but they keep changing. they keep hold played in the capital rules. you have changes to the stress test. that has been in place for a couple of years, then it is changing again. they time the banks inc. are done, something else comes along. brad: i bet you have more reporters covering regulation? scarlet: is that of potentials of that banks do not get too comfortable with risk taking? brad: that is an impolite question. scarlet: you are not an equity analyst. brad: the stress test is a restraint. every time they add another cushion, they are tightening the

constraint on the banks. the banks do not know where the stress test is. of anthe equivalent invisible fence in the backyard for your dog. if the dog doesn't know where the invisible fence is, he won't go near the edge. at some point he will cower in the middle of the yard. what has happened is as the , itss test gets tighter brings down the are a way of the bank. scarlet: what is the story going to be like for fixed income currency commodities? michael: not great. the third quarter was rough. many banks forecast at the fourth quarter as more of the same. morgan stanley, you see them other people. there has started to be a drumroll of, maybe we have finally hit bottom. where it turns.

interest rates going up, maybe that helps with that entity. scarlet: is rising interest going to be good for the fixed business? brad: surprisingly, it is. convention is that rising interest rates are bad. clients cluster to the short end. think about what happens initially. all clients have some level of duration. when they raise rates, you will see a flurry of trading that can go on for six months or eight months. we will actually do reasonably well. fixed will do well for a couple of quarters, then we will have the slowdown effect. the fixed income market is not going away, the equity market is not going away, clients will need to pay for things. period, itevolution is just longer than we thought. scarlet: three know who they are

selling to? are they selling to new players, is it getting bigger? or is it smaller so they have to consolidate? michael: a lot of the businesses are getting wound down. you are seeing some new players coming into specific markets, but on the whole, it is a shrinkage. brad: people are beginning to not accept conventional wisdom. i have to cover the earth sherman williams model. -- they are fixed if i want to be in incomes after the all around the world, you are seeing them pull out of primary markets. some will win, some will lose. if you look at the capital markets, they are healthy. at some point it will be a good business, just a long time. scarlet: thank you. brad hintz the adjunct professor

at the new york school of business. and michael moore. we have breaking news. shire will hold talks with the salted that could lead to a deal. they are said to be discussing an offer that could include cash . it could happen in coming weeks. they are said to be making progress. the stocks are moving in response. you can see a jump in baxalta. is moving as well. you saw the reaction was immediate. there seems to be more m&a in the pharmaceutical industry. ♪

scarlet: breaking news and health care. shire is had to be holding talks with baxalta that could lead to a potential m&a deal. they are still fairly early, but if you look at how shares are reacting, shire shares are tumbling. they are down 2.1%. baxalta, on the other hand, up .y 6/10 of 1% it jumped up initially, but has given back some of its advance. give us more context. is this defensive or offensive? >> shire has been pursuing baxalta for months. they make rare blood product drugs. it was spun off from baxter. it was its own independent company for a month before shire came calling.

shire has been the target of m&a and number of times. it would probably be valued in the $30 billion range. it will let shire get bigger, add to their poor polio, keep them are becoming a target. it looks like we could be getting a deal into the beginning of next year. we have been told we may see progress. there will be an added cash component. there has not been cashed previously to the deal as they try to get something done. scarlet: is it a moneymaking company? >> they have products on the market, but it is not an rmb deal. they make drugs and sell things to people. it will be an additive to shire. they do have properties that shire is interested in, but this is a way for shire to get bigger and become a larger drug company. scarlet: shire is humbling in

their shares. they reached up before it did not get anywhere? in july whened out they first made the initial approach. what was said at the time was 's chairman said this would be excessively disruptive. we aren't going to do it. now, they are saying, maybe we are willing to get together -- scarlet: if the price is right. >> exactly. we have all played this game before. companies first reject, it is an outlandish proposal. the new come back with a little bit better offer, and everyone is talking. shire is already located in dublin, it is not a tax of asian company, but they have a lot of operation in the u.s., but has an advantageous foreign domicile for tax purposes. if you want to buy a u.s. company, you have a big

advantage when you pay a lower tax rate. it also makes you an attractive target. that is why they are also fending off deals. shire is said to be in takeover talks with baxalta. i am scarlet fu. dow chemical and dupont are uniting in a $130 billion chemical megamerger. what is the global impact. alibaba is snapping up the top english-language newspaper in willkong, but says they not be making editorial decisions. how has the emissions scandal at ?olkswagen affected sale let's start with the $130 .illion dow-dupont deal after it is done they will break up into three publicly traded companies. the ceo of dupont discussed the advantages. >> we have said publicly there

will be consolidation. you see what is in the press about china, whether it is true or not. we have a first move advantage. we know for sure we will be one of the lead players. we have locked that position. scarlet: alibaba agrees to buy the south china morning post. financial terms were not disclosed, but alibaba said they will scrap the editorial pay wall and allow editorial freedom. the interest rate unchanged at 11% despite them battling the recession and the persistent slump in oil sales. -- for the first 11 months, sales dropped. volkswagen has been hit by the fallout from the admissions scandal that erupted.

david: it is time for bloomberg quick takes. today's topic is the federal reserve. it has kept interest rates at historically low levels for more than six years. is it time for the fed to get ?ff of the mat policymakers have been waiting for signs that the recovery is strong enough for the fed to pull up interest rates. pushed down to a new zero after the crisis. they're looking for the december meeting for what many are "liftoff." what we talk about is the one that big banks pay for overnight loans, the federal funds rate. it has been at low since september 2008. it has affected all kinds of things. how can the fade raise in near zero rates without causing chaos? the answer is very carefully. raised on more than $2.6

trillion that is part of the fed reserves, they plan to raise the interest rates that pay on those deposits, enticing banks to make loans elsewhere at a lower rate. the federal borrow from them at a high rate. that is a form of overnight .oans known as reverse repo the international monetary fund has warned that a premature rate increase could derail a recovery. some have reported uneasiness about a liftoff. the president of the chicago fed admitted to nervousness. that janet yellen has said further increases after liftoff will come very slowly. if the timing is wrong, he could be disastrous. --2011, the raise was the rate was raised, and it has been blamed cents for slowing the economy in europe. scarlet: you can get more on

bloomberg.com. the treasury 10-year yield the climbing the most since september, at which the central bank may no decision on interest rate. prices are rising. we are seeing a rally in the safe haven of u.s. treasuries. 8e 10-year yield is off by basis points, falling the most since the september federal reserve rate decision. let's go to bloomberg's abigail doolittle at the nasdaq. you're looking at a couple of winners? one stock hit a record high. adobe systems. chairs are higher after they topped the fourth quarter profit forecast as they signed up more customers for their cloud-based services. it is worth noting that shares trade at a premium. you could make that case they

are priced to perfection. turning from software to food, whole foods market, they are after after chopra sai -- sceti -- one of the worst performers at the nasdaq only you have to heading out of the negative territory proved to be an inflection point? scarlet: thank you. abigail doolittle at the nasdaq. we will discuss what the emerging market etf plays are 2016. ♪

scarlet: welcome back. i'm scarlet fu. emerging market etf's say that they would rather forget the chinese slowdown and the collapse in commodities.

our own specialist has a emerging market takes that may be surprising. my takes, i do not predict the future. we did have an event where we had specialists talk about what they thought would be good next year. india was common. everyone likes india. some who thought it was good where the issuers. locks says that he loves india. it has great demographics. have of the population is under the age of 25. it is an oil importer. it has a new leader. it.as a lot going for we are seeing $2 billion note to that etf. scarlet: is china on anyone's list? >> yes and no.

it is still splintered. we have heard some people say 8 shares, which is about 20. some said there is an etf that allows you to play stocks with very little state owned ownership. wisdom tree has a etf that has outperformed the shares. and the chinese internet is up 18% this year. scarlet: that is less than new york? >> the rest is in hong kong. it is mostly alibaba . of chinese mainland residents have the internet, here it is 87%. it is about picking your battle when it comes to china. guy from wisdom tree on the panel that admitted it was maxed out. it feels maxed out.

the currency has taken in $50 billion, half of all of the international flows. that is basically a quarter of all etf flows even though they only make up one quarter of the assets. these etf said then a benefactor, but it looks frothy. scarlet: thank you so much. our bloomberg etf specialist. coming up, george zimmerman, the former head and founder of men's wearhouse will join david at 2:00 p.m. eastern. he always says that if you like the way you look, you like the way you look. guarantee it. ♪

in new: it is 1:00 p.m. york. welcome to bloomberg markets.

from bloomberg world headquarters in new york, good afternoon. i am scarlet fu. this is what we're watching this our great central banks indicated they may loosen. dupont announce a megamerger. we will hear from the companies ceos. and bruce springsteen is always a hot ticket. today his latest show sold out in 20 minutes. how much fans are willing to pay for the tickets. markets go over to the desk where we have been tracking this selloff in equities. >> we're just barely off our session low. i would say that it is just a fraction right now. take a look at the big board right now. the s&p 500 is down 1.7%.

down.w similarly the nasdaq the biggest loser, down 2%. we are basically seeing our biggest selloff on the market since september. price ofactor is the oil which is bringing down the energy stocks which is the biggest laggard on the s&p in terms of energy stock. en are seeing every t stocks have a loss. routt an idea of the let's get a look at the dow intraday. it is now near session lows. this is the biggest drop since september 28. you can actually see right here right after the 10:00 a.m. marc a link of with consumer sentiment data came out showing that it was the best in' past four months or so. but right now you can see we have basically lost all of that

going into the afternoon hour. the reasong, oil is for the selloff in equities. this, down 3%. we are off of session lows. only just barely right now. this is the longest losing streak since march and its lowest february 2009. not only that crude is seeing a. seven-year -- a full low, down 4.5% in his longest losing streak since july. the global glass will last through 2016. and on this friday, before i send it back to you let take a look at volatility for this whole entire week. totally of and. theof for the week, it is worst rise ever since late august. a lot of superlatives to keep a track of. thank you. we will check in in a few

minutes on individual movers. let's move to the first word news. we have that from our news desk. the russian foreign minister is praising the us-led coalition for increased airstrikes on islamic state positions. during the news conference he to see thatwas glad the western coalition has activities a few months after russia launched its campaign in syria. he is pleased to see the u.s. and its allies are targeting oil facilities and trucks in territories controlled by isil. inside he arabia on saturday when that will be able to vote and run in a national election for the first time. about 1000 women are running for seats in about three

municipalities. climate change talks in paris will run into overtime. the french foreign minister said it is in a final draft of agreement at will present it tomorrow. some syrian refugees spending their first day in canada. brought 163nt plane refugees to toronto last night. they were greeted by the prime minister great he has promised to resettle 25,000 syrians by the end of february. the u.s. plan to accept 10,000 syrian refugees in the next year and that is being met with opposition in congress. candidate benal carson is reportedly threatening to leave the republican party over the possibility of a brokerage convention. politico reports that he became angry after reading an account of top party leaders meeting to discuss an alternative to front. he started if this was the beginning of a plan to super the will of the voters and replace

it with the will of the political elite, i assure you donald trump will not be the only one leaving the party. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. from bloomberg first word desk i am mark crumpton. scarlet: thank you. one story we're keeping a close eye on his apple management locking the doors. they are trying to liquidate this fund. this would mark the biggest failure since 2008. lisa, joining us now. this is the manifestation of all of those years of worries about liquidity in the credit market. lisa: this is the result of this bond being able to sell assets at prices they deemed

worthwhile. it was responsible of them to say we are not going to sell bonds for one penny on the dollar simply because nobody wants to buy them right now and , and itnow what we have will bid us down. they do not want to do that. they are saying to investors, you are part of this new liquidating trust, you cannot get your money, but we will manage this for a longer time so you can get more back in the long run. freert: this is spreading across the credit market. it is tumbling today. and carl icahn committee go inside the bloomberg terminal, tweeting that he sees a meltdown in high yield and how it is just beginning. if you have not seen danger watch on the bird.com, carl icahn says it is just beginning. how significant is this fund itself? >> it was at 1.3 $.5 billion. it is now trying to about $788 million. it is a large fund, but it does not big enough to cause any sort of systemic risk whatsoever.

the issue really is about the thing that is worrying the credit market today, is what fund is next. is there another fund? here is a thing about the lehman moment, when people talk about catastrophic terms. it really takes a really big lack of liquidity to cause the market to crash. this is not that. the real risk is if many people start to pull their money out of funds and his snowballs. that is a big if. scarlet: is this enough to give the fed reason to buy? pause? >>? some think so. for sheddingk you light on 3rd avenue management, making it impossible for people to read the withdrawal their funds from the fund overall. bloomberg gaslight can be seen on our bloomberg terminal pretty good also search on the web. china now the country signaling the way it is changing

and managing its currency. causing the chinese currency to topple the most. they will value the currency against a broad range of other speculationfueling it will let it weaken further. joining us now is a research firm that specializes in china .or you ca daniel, all week long we have seen signs that china is guiding its currency weekend before fomc raises interest rates. is today a precursor to the chinese dumping the dollar peg? a long game it is playing. the president of china i about every senior official has said that china intends to have a strong currency policy for the long-term. is a strong awareness in beijing of a little bit cheaper currency

will not help china in any fundamental way by boosting exports. the country already has a $6 billion trade surplus. that is not the way forward. for china to be the only economy on the planet to follow the dollar of in what everybody pretty much agrees is baked into the cake in terms of u.s. rates pulling the dollar up within this month as you well know, it would not make very much sense. china needs an elegant way from a simpleing dollar to a basket which includes the dollar, but many other currencies as well. it seems there reasonable way to proceed to us. scarlet: more volatility? >> of course. when you switch from doing things in a way that is tried and true and already knows with the rules of the game are to a new era, a new approach to dealing with the valley, there's going to be volatility. people will need to distress this to see how the central bank of china behaves when it is can truncheons with market forces

that confronted with market forces. but over the medium-term we can expect beijing to back up its own president and their claims that they plan to be strong and stable. exchange -- foreign exchange reserves have been falling steadily. large begins a giving the, large but not inexhaustible. what is your exchange rate policy? >> china has more buffer to work within any other economy on the planet. it gets a lot of credit and seriousness from the market because of that. $4 trillion to work with, you could burn through that in five years. it is beijing's conclusion that $3.5 trillion it needs to be constantly rolled over in the treasury market is not necessarily in china's interest anyway. i think he model in beijing is something like accepting the

trove of forex coming down for the big $400 billion a year, but not in a massive way over a short time. the leverage is still on china's side in terms of how it chooses to define its currency policy intentions. until we get well down into the $2 trillion range, we could say that it is their narrative to define. scarlet: the data we get out of service consumer economy to industrial, you have trajectory trending upward. what lessons are policymakers learning along the way? learned one already thing, that the new sources of value for china going or worse, the things that are going to make up people go china's marginal growth cannot be managed and controlled the same way the old things were. you can use a five-year plan to tell people what steel output

will look like. thecannot use it to tell market were the equity market should be. it does not work that way. it will be a different kind -- not of chinese economy but of chinese participation in the marketplace going forward. globally, the lesson that everybody should be learning right now is that china may be doing many things, but it does not standing still. ofre is a tremendous amount adjustment taking place between old-line industries and line industries. communicating to the markets, what is intentions are on the biggest risk. speculators, on the version signed to rule the conversation and thicknesses all smoke and mirrors and just matter of time before china devalues, just a matter of time before china collapses, if the that thin, then designs in a lot of testing

of that thesis which is not in china's interest to see whatsoever. cleaning need to see some fairly full demonstration by beijing. ball will be the key word for 2016. scarlet: thank you. coming up in the next 20 minutes of bloomberg markets is a magazine business, is it dead? we will get a take from the journalists. of the chemical merger gallon dupont. what will this look like? and the bruce springsteen concert tickets sold out in 20 minutes. ♪

scarlet: welcome back to

bloomberg markets. i am scarlet fu. it is time for the bloomberg business flash. the biggest business stories in the news right now. cheap oil does not appear to be going away anytime soon. the international agency has a surplus will persist until late next year. opec shows renewed determination to maximize output. rise even mored after iran continues exports. concerts --ors have concerns about walgreens plan to purchase rival right. te aid. and this is the story we just broke about a half hour ago. shire will take over talks with back sultanate. they look to expand into rare

diseases and handoff larger competitors. it is repairing an -- preparing a renewed offer. the first was rejected about five months ago. you can always get more on that story and other business news at bloomberg.com. we need to head to our markets desk where we are checking on some individual names. what are the airlines that are on the move? >> a couple of laggards in the jetblue. first off is shares falling despite the drop in oil. they are paring some of their losses down by nearly 6%. they had been down by as much as six point point percent. this is because it is repointing disappointing november traffic even though that's rose 14% from last year. the stock rise right now is of the lowest since september 4 of 2015 according to the bloomberg terminal. per passengerenue

mile community does expected to fall 3% for the fourth quarter. jetblue is the fifth largest airline in the nation. dowrly in the news, and dupont may have sealed up the chemical merger, but look at the stock. never have guessed that it is merger -- this new looking at the stocks. it will then split into three separate companies. scarlet: thank you so much from the latest on some individual movers. still ahead on bloomberg markets, has been called the pioneer of new journalism. what does he think about the magazine industry today.

scarlet: welcome back to bloomberg markets. authority to lease revolutionize the magazine article in the article called a

frank sinatra has a cold. where does he think the magazine industry is now headed? --'s join ron johnson and cory johnson a carol massar with more. cory: thank you so much. book based on the story in esquire magazine that you published in 1966. this is credited as the best piece ever written. you also have an interesting as the about the state of magazine journalism. it is under two minutes compression. of can pick up a copy sports, and it comes in 80 pages now. what you think the state of magazine journalism is right

now? >> i can answer that by -- at the time i wrote the centerpiece, what was going on in 2015 among magazine writers or journalists by and large. one of the big changes is the technology. it has so confused itself on the consciousness of journalism, all forms. what happens as a result of this technology. they have been removed from people who are not education -- educated. you are dealing mostly with educated people from using the iphone from everything like washing the windows to cleaning their car. [laughter] for my time as a young man in we spent time with

them. narrow.it is more journalism is focused on the size of a laptop. he go in newspaper offices and you see people hunched over onir laptop or in the street show for their smartphone and not seeing face to face. people are looking down. and every street of the country people are looking down. not looking up and seeing above the ground. not talking to under huge educated people. the only people that make the news are sportspeople. that is a big change. carol: i want to bring in nina. you and i were talking before we got going, and you were saying oaks are making a comeback. >> we are. the death of the book has been protected since books began.

, saleslast year or so .re higher than e-book sales carol: what do you think about at this, willing we see a migration back? have order to do what we done, and we were all the we also has an expense account. they want to google the story. it comes with the technology. from getting to the tape recorder to where we are today, the writer's role has been

reduced to almost is to talk for -- almost a stenographer. we used to see what we were writing about, we asked them doubletime to get a better quote. we could travel. when i went to sinatra, i was so worried about running up so much money. i was in beverly hills and i was waiting to see him, i called the editor and says i'm up to a smaller hotel, as she said stay there, that would not happen today. cory: do you think that the decline in the quality of journalism has led to the decline of magazines themselves? >> yes because if you recorder you to talk to a start about half an hour and a q&a form of writing. that has ruined the larger

ability to have a voice. look at tom will of the violence he had. he did not see that anymore. at tom wolfe, and the voice he has. you do not see that anymore. cory: we toss it back to scarlet. scarlet: thank you. it is still ahead on bloomberg will hear from the ceo of dow chemical and dupont and what the future will look like. ♪

scarlet: from bloomberg world headquarters in new york, welcome back to bloomberg markets. let's charge with the headlines

on first word news this afternoon. mark crumpton has more from our news desk. mark: congress has sent president obama a short-term spending bill to keep the government open through next wednesday. approved justs hours ahead of a midnight deadline. the lawmakers rushed to approve a 1.1 trillion wife spending package. kevin mccarthy says they will vote on this no earlier than tuesday brady was officials say lawmakers are trained to piece together what signs of any were missed that might have prevented shooting in san bernardino, california. the couple who killed 14 people discussed murdered him and jihad online as early as 2013. 13. new any never surfaced in alerts.

the defense has rested in the first trial of the officers involved in freddie gray;s death. new york state has won the latest round in fantasy sports sites. they have to shut on their site or now. a judge ruled they cannot keep operating while the states are trying to shut them down for good. new york's attorney general says the fantasy sports sites break state gambling laws. nasa says it three-person crew from the international space station has landed state the\ -- safely in kazakhstan. they returned to earth after 141 days in space. scott kelly and two others remain on the station. they will be joined by three new

crews members next tuesday. these andt more on other breaking stories 24 hours a day at the bloomberg.com. from the bloomberg first word desk, i am mark crumpton. back to you. scarlet: thank you. we go back to the big story of the day, the two largest chemical companies are combining into one, called the dow dupont. been discussed, while dow has been seeking a merger for nine years. in an earlier conversation the ceos of robust conversation -- of both companies talked synergies, which means job curtts. >> when we did do the synergy numbers, a lot of that is in the gna area. i will say it might not be as big as you extrapolate because the way we are putting companies together we have a lot of cost to take out on the cost of goods inside of the house which is not

people. it is leveraging the manufacturing and that the throughput. there is a lot of opportunity on the material science side of the business we were also very to go deep at all in the r&d side. we do not want to affect the growth of these companies what -- companies. on the low-cost side, the proposed materials is a natural fit for us. and we can bring what was not there before. on the output, we now have all the layers of a packaging firm for food and medical safety by putting the businesses together. headcounte cost-reduction.

have either of you spoken to the department of justice yet? >> we have not. but our legal teams have been calling this all along. it is interesting is that as big as our two companies are, there are very little overlap. we sell into the same and market end market, but the actual ohducts do not overlap hardly at all. except the side where we are merging, but when you look at the math and look at everything, we do not have a concern. likeink about it complementry adjacencies. we do not into busy -- anticipate any issues. be looking at the combination under one company or as a package deal with a break up into three? will those be done simultaneously? is hard to answer

but they will take into account that we will be broken up into three businesses. this mean fordoes the industry, will we see more m&a and agriculture? mark,.to it is never a merger of equals . which company is out on top? >> from the standpoint of the i do think that with respect to each of the individual companies, clearly one comes out on top depending on the company. dupont comes out figure because they are coming in bigger. of material side down startup bigger. of the specialties, it is 50-50. when the dust settles and 30 months and will be a legacy company on top. each of the three individual companies, but today they are equal. scarlet: what is the president

for something like this, where we see big companies join and then shortly thereafter break up into three separately traded public companies? -- pharma areait there has been some precedents, but this is darn unusual. complicated. it wanting about nine months to form these companies, and then after that 21 months to write them up. it is a process. scarlet: and it may take longer than expected >>. 30 months in all. there is no sense of urgency. let's say you think this is a great transaction, as i believe it is rated with take 30 months before you can benefit from that. scarlet: in the meantime there's a lot of job cuts to be realized. how big a component is russell and is asian of cost -- a component is rationalization of cost? >> i think that the game you play in this effort is to start low and work the number of higher.

there is no reason to start high and have to go low. that does not do anybody any good. i think the $4 billion number could be out there down the road. it is also true takes $4 billion to get that annual savings of $4 billion. i think it will be messy from here to 31 south -- 30 months out. would it make a difference if there were no drought and no plunge in crop prices? >> i think it makes sense. sittingwo activists here and i think they would say that they thought it was a good idea before the downdraft and commodities, before the downdraft in oil, before the downdraft in the court price. scarlet: there was a story published not too long ago about warren buffett's performance shares if this holds. there is a catch, that those shares need to close above but theyr 30 days, want to force the conversion. how big a factor is the?

at? >> that has been hanging over them ever since that paper was issued. i do think that the dow hopes that this transaction will keep the share price about that trigger price for those 20 consecutive days. we have one day down, 19 to go. .hat would be terrific it will take time. i do not think it is a key component of this deal. i think that andrew would very much like the day it happens. scarlet: is there any precedents for antitrust regulators to weigh in on this? any real reason to object to these plans? the two executives spoke before, i think they're basically right. this is pretty much an end to end transaction. there is some overlap, yes. i think it is complicated on the agriculture side and i think there was potential likeliness that the seed business will have to be sold because of the overlap that seems to be the easiest 2.2. o point to.

i think there will be several interested, like the gentle. they have a small seed business. relative to their proper chemicals business, i think there are balanced in this respect. i think suggests it would be interested in taking a look at the books and figuring out what they could do. scarlet: when the ties between them and monsanto? inthe interest was back 2012. they would say that this comeesting transaction has up, but we were interested in buying that my long time ago before anything you referred to earlier. what montana do would say is driving our interest in these chemicals companies is what they call integration. a tie-in between scenes in crop protection chemicals. i think that monsanto would say

this helps us in this respect, but we were on this case a long time ago. scarlet: what does that add a sense of urgency and even desperation to get something done to act quickly before you then get a push by something you do not want to deal with? >> i think that is true. and you have three alternatives. one is to do nothing, one is to companyion with another that has expressed interest in and one is to go back to out what wasfind going on there. i think it. alternative is not really an alternative and i think you are left with two. ,f you are the syngenta board what you're asking today is who do i want to own me? scarlet: time to face the music. thank you so much. coming up in the next 20 minutes of bloomberg markets, springsteen fans will do almost anything to see the boss perform, including paying through thewe will show you how much were shelled out and tickets.

and ford is betting big on electric vehicles. tells us what is behind a $4.5 billion investment. staying on cars, just how much would you pay for your dream phil." -- a vehicle? ♪

back to welcome bloomberg markets. it is time for the bloomberg business flash, the biggest business stories in the news right now. a job are looking to land at barclays you could be waiting for a wild. they are extending a hiring freeze indefinitely. that is according to people familiar with the matter. they have been tracking profits at the number two bank.

they have been considering whether to cut another 20% of staff at the investment bank, the least profitable unit. the merger boosts drugs for rare conditions. alibaba's jack ma is taking a page from the playbook of jeff bezos. he is making a move into publishing. alibaba is agreeing to buy the south china morning post newspaper. the terms were not disclosed we know the newspaper has trouble to attract advertisers. block the washington post two years ago. he could always get more on that story and other news at bloomberg.com. .et's go to the markets desk some laggards right now, because of analyst calls. this is all in the retail space. first i want to get over to apparel which is the high-end

plunged more than 70% brady can see it is scraping the bottom of the entire day. part of this is because barclays has lowered its price target from five dollars down to three dollars. they also missed third-quarter sales targets. next -- downrcent 12% versus the 3% expected. here today quit has not been doing well at all. down 82%. meantime, the container store is also tanking today. down 17.6%. this is because bank of america cut its rating to underperform. current sales incentives are not enough to make a dent in weak sales trends this holiday season. setting a price target to nine from nine dollars down to eight dollars. 6.5%. down

they are down to $16 versus $21, the recent slowdown since summer beginning credited. pier 1 down by 8.5%. analysts lowering price targets by 26% to seven dollars per share. he says lower prices or more promotional spending needs to be in order to restore sales growth. some investors are clearly long on the stock. scarlet: thank you. are you a bruce springsteen fan? who was not? a lot of people in new york and new jersey are, because they do not waste any time. tickets for the three tri-state area shows sold out in minutes. for more, i bring in the ceo at iq.

these are new york, new jersey, and pennsylvania shows that are getting sold out very quickly. the newest -- is he performing elsewhere? >> he is. albanyot want to leave out. it is the most expensive show at the times new union center that we have tracked, $800 average ticket price. the winner is the new jersey thousand dollar average price. msg is about $800. california is the other defensive area of the country -- expensive area of the country. scarlet: the last time bruce played inn this area was 2012. there is always pent-up demand. ,> this is an arena tour and it is half the size. prices are actually double

compared to last year. the average price is about $600. not a lot of want to take only about 750 tickets per show. there are a lot of tickets available sometimes, but i would not be surprised to see them stay steady and even rise in certain markets. scarlet: his business model is different than say, billy joel. he left the fans come to him. musician of the people. he likes to get out and see the people, and there are so many fans across the country that he can do that. billy joel is really a new yorker guy. bruce is an all-american guy. scarlet: he also makes special appearances. thank you so much. the bruce on springsteen tickets. the most expensive was the prudential center. -- our a flexes of flu ferrari flexes its muscles as an option. matt miller is drooling. ♪

scarlet: welcome back to bloomberg markets. a $4.5ght lord announced billion investment on electric dehicle saying it would ad 13 electric vehicles by 2020. why they are making this investment. >> even in an error where gas prices are low, fuel economy is still a big deal for customers and they have long embrace, they know the prices can go up. our view is that parts of oil will go up. we want to be prepared for that. we want to be prepared for the customer demand. also at the same time the second consideration is the regulatory and work. we have the regulatory requirements. scarlet: joining me now is matt miller. isn't it a little bit laced to get into the electric car business? matt: they are the in the country. they are getting into it in hopes that the consumer will

pick up on a lot more than consumers already have. and that they will meet the standards, bringing their up.age miles per gallon they can sell me a truck but they have to sell you a hybrid. what mark's point is is that consumers like these vehicles, not for the economical gas consumption before the sheer driving pleasure of had -- quittingstant for without the panel. an electric more can do that and a gasoline engine cannot. i like the smell of gasoline. i like explosions to drive me around. i like to hear very loud noises. for me it is not my thing. but for a lot of other people it is. scarlet: the question that we often ask rhetorically is how much would you pay for your dream car. it turns out that someone page

$28 million for a red 1956 for ra. -- ferrari. it was not the only high-priced vicious -- vintage car that was assault. what made this particular ferrari so valuable? >> eight interesting history. it is considered the masterpiece in the world of ferraris. it was in this house and mild -- thousand mile race, and for a specific driver. matt: not just a specific driver, but the best known driver of all time. as theonsidered by most best formula one driver of all time. some may think schumacher was a better driver, but he himself said that on geo is the best driver of all time. is incredibly special

for that reason, and also that he campaigned during numerous races and never crashed. many of these cars that had a real racing pedigree had been wracked and rebuilt, and this one has not. scarlet: it is in mint condition? see all they can beatings that it sustained. it was a very cool car. is not a number one show car. i am sure that they have repainted it. they have touched it up, but they have painted it in the original color. it probably has new rubber for sure. but probably something close to what he would have driven himself. but it is basically the original car. and i think $28 million is a pretty good price for this car because the record for a ferrari $38 million.s

that was not his car. >> and this car, the investment , and itto $32 million came in right at 28 million. scarlet: and there was a generous joplin porche that was recently sold? >> it was very cute, it was painted a psychedelic. she actually drove it every day, and used it as a stage prop. this particular piece attracted a lot of bidding. towas estimated at $400,000 $600 and it sold for $1.8 million. matt: i love the paint job. i'm not into the 356. ae wanted god to provide her

receiving balance, but her friends drove porsche. she was driving this the night before she died. that is dark. i did not mean that to be dark. silver, 356.e cold scarlet: thank you so much. investing for us here at bloomberg. so, metallica cars? should bersche silver, a ferrari should be rea. d. scarlet: coming up, george zimmerman. ♪

david: 2:00 p.m. in new york, 7:00 p.m. in london and three clock a.m. in hong kong. welcome to bloomberg markets.

from bloomberg headquarters new york, good afternoon. here is what we are watching this hour. u.s. stocks on track for the worst week in a month and oil falling for a sixth straight day trading at its lowest level in seven years. braced for next week's bed beating after which jenny owen is expected to announce the first rate hike in nearly a decade. -- janet yellen. we will hear from the ceos of dupont and dow chemicals. a year and a half after the company bought its smaller rival, scherzer poland their lowest level in more than six years. for anzimmer joins us exclusive interview. let's head over to the markets desk. right