war, or gender pricing. do women pay more for the same thing? ♪ welcome to christmas eve on "bloomberg ." i am david westin. stephanie: and i am stephanie ruhle. we will have a big show. we might have a shortened trading day, but we have a big show. here to join us is bloomberg's chief economist, the jacket, the bracelet, the tie where i cannot handle it, rich is here, richard yamarone. yesterday, it sounded like we were going to end the year on a positive, and now we are dropping. think --

richard: i think there is a little trading going on, maybe we do not know what the incomes are looking like. a lot of uncertainty in the global economy. i think we will get to it. remember, at the end of the year, this technical training, we were trying to tie up loose ends, wrap up the portfolios. we will dig into the economy -- emerging markets, oil, hedge funds -- how about giving you a little news with ms. vonnie quinn? blamed on at deaths powerful storms is what across the u.s. midwest. 14 tornadoes touched down in mississippi alone. tornadoes were in mississippi, tennessee, and arkansas. saudi arabi does not know what spot -- saudi arabia does not know what sparked the fire to hit their hospital, more than 100 hurt. and the ninth suspect charged in the terror attacks in paris.

he had been in contact with the cousin of the suspected terrorists ring layer purity global news 24 hours a day powered by our 24 journalists worldwide. i'm vonnie quinn. matt: we are looking at futures shouldning into, well, i not say into the open because it is only somewhat a.m., but when a half hours before the open. on the s&p, dow jones, but a little bit of a turnaround now to unchanged with a green tent. take a look at oil. it will be the story of the day that we will be talking about. here you see crude taking a little bit of a turnaround itself, getting about .1%. but crude had been up all morning until our 5:30 meeting got out, then all of a sudden it came down. if oil stays up today, that will be four days in a row of gains. that is the longest streak we've seen since april, and that is a long time. you have a baby between april

and now. take a look at currency boards. one of the reasons that oil was showing a little bit of strength today and the dollar is showing a little weakness, there inverseally an relationship. we've seen oil cheaply over the past quarter or two -- or year, i should say. if you have the weak dollar, you have more expensive oil because here you see the oil gaining against the dollar. the yen unchanged. it was showing strength against the dollar earlier. the pound is showing strength against the dollar as well. take a look at natural gas. it is only part of the story and sometimes moves instantly with oil. but also, this warm weather has a much stronger effect on natural gas than it does on oil, and it is like 70 degrees right now. however, natural gas rallying with activity over the past few days. over 2%.

if you take a look at oil over the last four days, you can we what we have seen this week, so this is a big rally. this is why yesterday a lot of people were freaking out. 8% gain. that is the senate was rally that david was talking about, although really s&p -- that is the santa claus rally that david was talking about, although really the s&p had rallied as well. take a look at why the s&p had been up. here is one month of the energy index, but over the past week, over the last four trading days, we have seen energy stocks rise, and that is why we have seen the s&p rise as well. so energy stocks have been s&p a boost feared equities have benefited really from oils gain over the last couple of days. david: thanks very much, matt. oil has been all over the place. we need to take a close look at

this, and we are joined by our colleague over in madrid. stephanie: wow! david: if you can say puerto rico -- thanks very much for joining us from a dread. tell us what is going on. why is this bouncing all over the place? correspondent: yesterday, the main reason was a big drop in inventories in the united states. the positive signal, we have this drop in inventory every december. u.s. companies try to reduce the amount of oil that they have all the time ahead of the -- this year is not different. the market was very short. there was a lot of profit taking. some never met the amount of the increase in their inventories, and that is what truly triggered the bounce, but as we see today,

the gain, we have traded more or less flat. so the market is looking again at what we have for next year, and i think the tension will remain on the downside. er, to make iti clear, we have not had the lows in your opinion. if anything, we are continuing to slide down into 2016? javier: absolutely. rallying,when we were the most popular option traded for december was the $20 and $30 a barrel on the put side. so investors taking advantage of oil prices going down. if we take a look at what is going on in the typical oil i go to the traders, and what they see as the beginning of next year, more oil coming into the markets. iran will be back up after the lifting of the sanctions. madrid, it is the same in new york, london, there is no demand at the moment, and that is going to be weighing on

prices when january comes. david: rich, we do have four up days. is there anything structural that would indicate on the supply or demand side that would give hope? richard: i do not think so. this is the thin trading at the year-end. anything can happen. people are just not trading this stuff right now. if you look at the factors, the underlying economy around the world, there is really very little to suspect you are going to see the sustained appreciation and oil. in fact, i would argue you with the $20 oil before you see $50 oil. stephanie: when we see $20 oil, what is the global economy going to look like? richard: it is probably not much different than it is now. one thing -- it is temporary. we pretty much appreciate this. it is a considerably warmer winter, so we do not have the demand there.

we do not have the demand globally. particularly in china, the guys who used to drink this is like it was nobody's i business. lowave this inordinate demand, inordinate supply because again, new discoveries, opec is cheating, these guys are just dumping so much on them. so you have the economics of it, the supply and demand factors, and the other thing that nobody ever talks about is the efficiency of our plants and our factories and our ships. stephanie: that has not cut out of the system. richard: right. over the last 10, 15, 20 years, we have been building new factories and plants at her so much more efficient than they used to be. we just do not need that much energy. orid: when things go to $80 $100, we hear the sky is falling. when it goes to $20, which does not make that much difference -- richard: higher is uglier,

especially for the consumer. david: but why is low good, for the consumer, for example. richard: it is a wealth of xp or you are getting some money, but you are not if you are filling up your gas tank once a week. you are only seeing it in 20-gallon increments and gasoline. thosee not realizing all -- appreciation of all the funds that you have saved over the last year. stephanie: matt? a veryere is glco, simple bloomberg chart that shows you all commodities prices, and if you look at metals, obviously we are in a huge storm. palladiumn 25%, even with the big bone ion in cars. one of the reasons a lot of analysts give me about the big

the price of oil is lower, the input costs to pull these metals out of the ground is cheaper, and the if theyan make a profit produce as much as they can. i wonder if the cycle also feeds back, javier, into the price of oil when the price of other commodities get lower. are oil pumping input costs lower as well? is it a vicious cycle? javier: absolutely. it is a vicious cycle, and you are absolutely right here you look at drilling a well, one of the biggest prices is steel. theyis a big factor to why are storming down, why companies are coping with very low prices. a lot ofing to see restructuring in the oil industry. the cost ofely,

using oil is coming down because the commodities are coming down. the rally is still one we need to watch. stephanie: javier, let's talk about trading commodities. oil right now, it seems each rate is only going one direction. at what point, at what price are we going to see some pushback and real buying and selling? that is one thing that is affecting the markets. javier: absolutely. the sentiment is very negative. we see it on the options market. prices are going down. when you to see the catalyst for the markets to turn around. whether it is a bigger restructuring in the oil industry, a big company failing or having to go into big trouble, cutting expenditures significantly, and that is going to be the market of the supply-side reacting. we maybe need a big producer like saudi arabia or russia announcing production because it is working. so far, we have not really seen anything similar.

i think the sentiment will remain very negative. david: matt, you had something? matt: i wonder about everybody being on the same side of the trades. point, i said look, i do not see any bottom said we and this trader do not see any top for the dollar. i love that everybody is on the trade. i want to take the other side. when does the market equilibrium, rich, really come out? as i said, we need to see some change in attitudes from the producers, whether it is u.s. producers getting into structuring or opec changing their attitudes. one thing you're are absolutely right is everyone is on the same side of the trades. everyone is very negative. if we have any sentiment change, and also we can think about geopolitics. if something happens, there is an explosion, we can attack. the market is so short that the short company is going to be huge. i will not be surprised if they

we wake up and that happens in saudi arabia, the middle east, up.we see oil $5 to $10 the market is very dangerous, and everyone has to rush of the exit at the very same time. stephanie: javier, thank you for joining us for your data not know, matt miller, i do not know anybody who wants to buy or sell into a market heading in one direction. matt: if the market is all going in one direction, shown at we reach the right price? tophanie: when are we going reach that because we do not want to be the only person -- matt: you do not want to be catching falling knives. stephanie: try and use your fingers. javier blas joining us from madrid, thank you. is not goingone anywhere. we are heading to london to get you the latest on european stocks next right here on period ." -- right here on "bloomberg ." ♪

vonnie: welcome back to "bloomberg ." puerto rico's electric utility eight $.2d a deal, billion worth of debt. the agreement will assure -- eight point $2 billion worth of debt. the agreement will assure bondholders. the deal will cost obligations by more than $600 million. a boston to fully where people isl sick with the norovirus being allowed to reopen. it passed inspection yesterday and can reopen today. it has been closed since the summer seventh. -- december 7th.

some of new york city's priciest homes are losing their luster. the medium prices fell to $3.6 million in october, down 2.2% from a year ago. this is according to an index top 20% of thehe market. prices have fallen every month and everywhere he -- since february. david: now to global . caroline hyde, we see what markets you have are down somewhat, but you have had a pretty good week overall. david, $250s, billion adding to the market capitalization, quite the so-called answer rally -- santa rally. you see ftse clinging onto the green ahead of the end. we have only got, like, 10

minutes left of trading before we shut up shop early. spain in the green. across the board, industry groups are trading lower. media stocks, have a look at this, down by about 3%, david. david: any particular company driving that media? caroline: not in particular. but one stock you have to keep delivery today is mail companies. it may be a good time of year for them, delivering record packages. the reason that this stock is now 14% higher, at one point having its best day in four years, is because there is some speculation in m&a. could the u.k. rival royal mail be eyeing up another company? david: over here, we are talking about the santa claus rally. did he go over there? caroline: he certainly does. it is a painful disruption,

isn't it? but you have got to be a believer. it has driven up the stocks the past few days. currently, as we will see, it is just up by basically .1%. over the course of the week, check out how much we added. we did at about 3%, yesterday you saw the drive higher. overall on the year, we are seeing up 6.88%. the calls, we can see 16% added next year. citi saying it could be 23% gain. stephanie: rich, many say europe will be the land of opportunity in 2015. is this northern europe, or is this the fact that we are coming from such a low base? mario draghi has done whatever it takes, but take yourself to spain or portugal or greece on the ground. things are still not very good. richard: there is definitely a bifurcation between the north and the south. i have said this for a

maybe even on the show once before -- this is not going to end well. stephanie: boom. richard: this big, massive qe, whatever you want to call it over there, it is not end well. stephanie: it ends well enough for market participants but not the actual economy. those are two different things. richard: it is heroin. andare giving them heroin inducing this stockmarket rally, and that will be great for those with access to the stock market. those who don't, probably not so much. not even have to know the details for this. if you see a 500 pound man on the street corner eating a box of donuts and smarting a pack of cigarettes -- stephanie: i am going to ask him out. [laughter] richard: you do not have to be a doctor to say, "wow, this is not going to end very well." yellen does not

think she is on heroin, does she? stephanie: no, they are just try to keep him alive. richard: and the thing is, that is all she can do, or all they can do. response.o fiscal that is the problem. historically, the fiscal would calm in. we never even had a fiscal stimulus in this country after we had an extension of unemployment benefit insurance, and we have -- you know, we gave food stands out. david: and do not look for one in an election year. richard: well, they should be doing that. they should be ramping up expenditures, but you probably will not that this year. stephanie: caroline hyde, i know you're itching to get out of here. london trading is closing. merry christmas, happy new year, thanks for joining us on global . when we come back, we will bring you what is hot and bloomberg news survey. i will say it is not chipotle. ♪

david: welcome back to "bloomberg ." it is time to take a look at the top trending stories. rich, what is your favorite? richard: the story regarding the stronger dollar against all currencies. that was the expectation of most people on the street. i suspect that -- these are the top five. stephanie: perfect. matt: put them back up! david: these are the top five. you've got to read on your bloomberg terminal. it is a grab bag today. it is interesting. the dollar weakens after the oil rally. --phanie: for you, rich across the board, what do you think is the most pressing thing that you are following? richard: that is what it is, it is that, the dollar strength.

this was the year of the dollar. stephanie: but by default was at the year of the dollar, or was it the year of the dollar because the u.s. economy is so strong? richard: definitely not because the u.s. economy was so strong. we are the cleanest dirty shirt out there. david: the to virgins and monetary policy -- richard: in addition to high interest rate policy. you will see the dollar strengthen. i suspect you will see even greater strengthening in the dollar. deflationaryd flashers. matt: can i just jump in here? i feel like riches to bearish for christmas eve. the quote is "what is supporting the dollar's outlook is the economic growth outlook for the u.s. that is behind the monetary policy divergance. " stephanie: some people believe

it is a false policy of -- false positive. richard: the federal reserve tells you it is only going to be 2%, and previously, and up until this recent period where we have this big qe injection, any time a year-over-year percentage change in gdp fell below 2%, you go into a recession within the next three quarters. posthas not held up in the depression -- matt: thanks to the fed, right? david: is this real growth or financial engineering? coming up, we will have your morning must-read exactly on this topic. stephanie: the dollar is making him holler. ♪

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sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. to discover the best shows friends together and movies with xfinity's winter watchlist. later on, we'll conspire ♪ ♪ as we dream by the fire ♪ a beautiful sight, we're happy tonight ♪ ♪ watching in a winter watchlist land, ♪ ♪ watching in a winter watchlist land! ♪ xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. stephanie: some people like the grinch who stole christmas, i like welcoming him to "bloomberg ."

tom keene has joined us. tom: i remember the original bridge. .- grinch stephanie: a great movie. richard yamarone is still with us. but first, the first word news. vonnie: this is the third day of the government defense trying to retake the capital. the man accused of taking -- of killing three people at a planned parenthood wants to act as his own lawyer. the results of the medical exam is pending. u.s. airlines is using the biggest planes to cope with the surge. about 3% more passengers than last year. global news 24 hours a day powered by our more than one at a million viewers around the world. david: it is time for the

morning must-read. we were just having a robust that is exactly what this must-read goes to. it is up your alley. tom: stephen roach is defending modern economics. only by shortening the timeline can the fed hope to reduce the buildup of systemic risks. the sooner the fed takes on the markets, the less likely the markets will be able to take on the economy. yes, a steeper normalization path would produce an outcry but that would be far preferable to another devastating crisis. stephanie: walk us through that. we have bond vigilantes and equity vigilantes and real estate vigilantes. inc. about the movie, the big short. but what he is saying, forget about the theory and get the

courage to tell the markets what to do. stephanie: what? richard: you throw in the book. we threw away the book to get to where we are now. the qa? -- the qe?e? david: it goes to the point you are making. the fed has gotten so accessed with an asset value that they are not paying attention to the underlying economy and they are becoming -- thehanie: and that supports market, not the real market. what would be look like without qe today? richard: i argue that maybe we never should have had qe. let the economy fold. we shouldn't have had any response from anyone. david: no. stephanie: no bailing out the banks.

sub primes? take a hike? richard: and then warren buffett , ald come in and -- well warren buffett would come in and say, i will buy gm. -- one of the most important books ever published on the economic indicators be look at everyday. but a lot of people push back against him on that. there is the counterfactual of , a lot of've happened people would have been out of work. even if it was for a short -- for a short amount of time. richard spent a lot of time reading the road to serfdom as a kid, and he thinks lungsuld have taken our

then and the recovery would have been stronger. stephanie: or at least it would you often take and the fed would have tools left in the box if they needed to use them. because now, what do they have? matt: we talk so much about qe. if you look at the fed balance sheet normalized versus the ecb qe ore boj, japan's balance sheet growth was much bigger on a normalized scale than what we had with the u.s. and with the ecb has done. so the size of what japan is at the scale of it is more serious. richard: and how are they doing right now? matt: they are still waiting. richard: they are in the third lost decade. it doesn't work. matt: that is only one tool. and the u.s. economy at least

hasn't fallen back into a recession. tom: let's go back to stephen roach. one of the great things about this is the third mandate for the fed, the asset bubbles. there are a lot of people who say that we really don't know what we're doing with asset bubbles. stephanie: we do know what we are doing. the fed is creating them. tom: you are assuming there is an asset bubble, a lot of people don't agree with you. -- suggests "would you wish for. need a huge humility on our analysis of asset bubbles versus richards good comment about what to be accomplished with qe? richard: we have done a lot. we may have temporarily saved the united states economy. sectors thated were dying, the auto sector.

but they never made money selling cars. they made money -- they are banks. they made money by financing. everyone is home with their families. and the older kids yesterday are saying, is this all we got? it is the economy. the economy is 2%, 2.2%. david, that is not good enough for a large part of america and certainly not the kids coming along. richard: and that is why the kids are coming back to the nest. tom: they are not saying. they are going. december 26. are more andere more young kids who are not buying homes. they are saddled with debts and they don't have other options. richard: that's exactly right. that is why home-building is not happening in the single-family home.

it is happening in multi-units. and ask around. even internally. how many people are living with each other? stephanie: without a doubt. if you look at lack stone, they are putting big real estate investments in multifamily homes. brought up a morning must-read today. we have to share what it is. this is a paper on the rationale between -- here we go. i will give you a quote. this article finds that the key contributors to declining interest sensitivity are structural shifts within industries and a weaker transmission mechanism between short-term interest rates and the economy in particular, two segments of the transmission channel appeared to have operated with a longer live since the mid-1960's. "

can you translate that for us? richard: it is a little bit too much to digest. david: monetary point is not as directly linked to economy as it once was. richard: that is because we are a service dominant economy. we don't how to measure productivity, we don't know holly hours work people work. we used to because be clocked in. stephanie: but those jobs aren't coming back. richard: that's right. we're still looking at the wrong metrics. we have lower interest rates and that doesn't work in a services dominant economy on employment. backts the economy going but it doesn't work on employment. tom: richard brings up a good point. the divergence between not much and buying everything at 80% off, but the service is

not through the moon. it is not too severe. the disparity between good inflation and the service sector inflation -- david: a good point. but this whole thing is like the man in the arena speech. it is easy for us to look at janet yellen and tell her what she is been doing. it is easy to say that we should not have had qe. but if you are staring -- richard: it was a little tongue-in-cheek. stephanie: hold on. 10 seconds. economists these have a humility for those serving the public sector. it is tough out there. even more and summers has a great humility for tough decisions. has a greatom keene understanding of what 10 seconds means. happy new year and merry christmas. thank you so much.

richard, we're not letting you go anywhere. , the ceo says that we should not be worried about china. up next. ♪

vonnie: welcome back to "bloomberg ." i am vonnie quinn. hkreli new the government was involved with him earlier this year. he talked to lawyers without a lawyer present. meanwhile, his former company says the interim cfo is resigning and nasdaq is delisting the stock. -- goldmanhs has

sachs has a word of advice, don't worry about inflation. prevents --s predicts that they will raise four times. apple pays a new year's resolution is to grow in asia and europe. the service which allows users app has slowed. it will be introduced next year in hong kong and singapore. david: china had quite a tumultuous year. it had multiple scares and volatile swings in the market. but despite all of that, the latest round of data showed fresh evidence of stabilization. in a best of go interview, lou gerstner also voiced an optimistic tone on what lies ahead for china. this have to separate

absurd focus on this growth rate of 7% to 6.9%. 1980 had $3 billion worth of gdp. is $11s later it trillion. they have compounded. there is no way that they could have maintained that growth. it would have consumed the world. slowrowth was going to anyway but they are going through an incredible transition that they are managing. they are managing away from exports and production to consumption and internal investment. and it is a tricky change their ising to make that my guess that they will pull it off. it won't be easy and they will thatsetbacks, but remember

5% growth of the chinese economy this year is equivalent to 14% growth in 2007. so you have to focus on the real numbers. not the percentages. david: but are they as victim of their own success? they had such a dramatic growth, this is a larger economy than anything they had to manage before. how much confidence do you have in the people managing it? it is a tricky thing for anyone. theell, they have experience of the last 35 years when they took a backwards economy and brought it to the point when it is the largest in the world -- the second largest in the world. they are the largest producer of almost every tangible industrial product in the world. they are now one of the leaders. they have done pretty well. but you are right. they do have a number of serious issues. what to do with the state owned enterprises. they have a protected sector of

their economy that is tied up, not just in the ideology of the state and the importance of the state, but tied up in the economics of the providences and the cities where the state owned enterprises have served political and social purposes the aunt economic ones. david: and employment. >> very much. the chinese market isn't worried about what they are doing in the stock market. they don't follow the stock market. what the chinese government is focused on is jobs. they need to create 15 million new jobs every year. 300 --y have brought they have brought 300 million people into the middle class in the last 20 years. they want to do that one more time with another 400 million people and that means creating jobs. more: and that is

difficult when you move away from state owned enterprises. when you are trying to privatize it, it is harder. >> much harder. it is a move from industrial production, which is easier for the state owned enterprises. the move to consumption and services, a much diffuse type of economic infrastructure, there are different skills required. and so creating a services-based economy is going to be more difficult. on the other hand, the latest data suggest that the service industry is going to present a 10% a year.rowing the largest consumer of luxury goods in the world today. the largest consumer of red wine. they are building a consumer economy that is powerful. stephanie: i know you want to take it to this terminal, but

you just mentioned data. those who love to hate on china say never look at the data. how much do we trust the numbers we get from china? >> not 100%. but over a long. -- over a long amount of time, it is hard to hide. again, i don't know whether the number for this year will be 6.9% or 6.5%. but i know it will be better then 5%. please, that we could grow in the u.s. at 2.5%. it is slowing down with a purpose and a strategy behind it. china hast happens in an effect on what happens here. when you look at 2016, what are you looking at? richard: the biggest issue that china faces is not economic. directly. but politically. , asr biggest problem is

just mentioned, you have 300 million people into the middle class and they have to create 15 million jobs in one year. stephanie: is that realistic? personalmy issue or my concern is that they bring these people from the western provinces down to start building things. now you are employed and do not money and now the economy slows down and we don't need you anymore, you can go back to the western provinces and people say, no. i don't want to ride a bike. i want to drive a car. the --ir biggest fear is square park to -- square part two. stephanie: and now they are able to mobilize much easier. we are going to take a quick break but before we do, a live look at the bethlehem parade on

perceived. -- parade on christmas eve. when we return, all is not fair in gender pricing. stick around. ♪

stephanie: welcome back. you are watching "bloomberg ." it is time for news and we are talking about retail. from genes to razors, a price disparity between men items and women items are apparent. a new study states that women pay 8% more for adult clothing and 30% more for personal care items. now, chris ross are hris rovzar.

basically, females will pay more than men will. end, it isn't the materials, it is just a tradition that goes back to when the labor and the material did cost more. stephanie: so even though women make less money, we have to pay more for our personal items? richard: one thing i've noticed is that because medics, a lot of women are buying men's cosmetics. mascara?: men's richard: not that one. but if the leaders and things like that. they are cheaper and in many instances, the products. -- promotes women stealing this from their boyfriend. aris: and then we have

boyfriend gene or a boyfriend ishirt which is the same but more expensive. stephanie: is it the same at luxury brands? at burberry, amen suit is more expensive because men want to go to burberry. 85% of the luxury market is women. so you have to build that cost into the clothes. david: in the end, it is supply and demand. this is price elasticity. clothinge that women's is not as price elastic because if it were, they would come in with a cheaper garment and they would buy them. richard: that is the story. women are responsible for most of the purchases in the household. purchases in a household

are made by a woman. did you know that men do not buy their own underwear? stephanie: yes, because if you have ever seen the man who buys his own underwear, it is 11 years old and disgusting. david: i take this personally. i've never had anyone by my underwear for me ever. i'm a luxury editor. [laughter] richard: i let him slide on that. all i'm saying is that if you go to macy's today, you will not see men there. you will see girlfriends, whatever. you don't see men buying underwear. david: why does that mean if they are more frugal? if they are controlling the budget? vendor, i am'm the

going to sell it to her because i know she is buying. she is making the decision. david: but why is she not conduct -- not price conscious? richard: she wants to give me for herself and also for the mail area did stephanie: we have to leave this. and we think we will see this equalized at any point? do we see this regard -- do we see this reverse? chris: no. not unless there is a policy about it. the brands are not doing well and they will fight anything that looks like a threat to the pricing structure. way, i can'tother get a size 14. stephanie: is that what he just said? we are going to talk hedge funds only come back. ♪

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sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. stephanie: hedge fundsstephanie: are heading for the worst year since 2011. we will break down the winners and the losers. and a railroad battle -- norfolk

seven rejected a bid from canadian pacific. we will be hearing from the ceo. needles -- beatles fans, the wait is over. the music is now streaming. ♪ stephanie: welcome, you are in a bloomberg world headquarters with us. i am stephanie ruhle. david: we have a full house because we have a big hour. bobby a boy. boy -- we hall be a savoldelli.

kolhatkar.e sheelah one doesn't than when it is powered midwest and parts of the south, it was a destructive storm causing at least eight deaths. fidelity's were reported in this is the beat, arkansas and tennessee. saudi arabia officials are looking for the cause of a fire in a hospital. at least 31 people died. some of those killed were in the maternity ward. is planning as he major shakeup of his campaign. he tells the associated press that they could be less go. global news 24 hours a day powered by our 2400 journalists and viewers around the world. futureske a look at the

here. we are up across the board. , but you see gains the dow jones putting up 16 points. this is a reversal of what we saw this morning. we were down and now we have turned up and oil has come down. oil has been volatile today. we are still seeing a gain. barrel. it has been a strong week for barrel crude oil. we have the longest streak of gain since april. the same is true of the dollar in the inverse. take a look at the dollar index, we are down 1% almost. that is the longest streak of drops for the dollar since april.

what and the dollar tend to have an inverse relationship. i was just graphing 10 years of the bloomberg dollar spot index. if you look since 2005, we are at a serious high. it doesn't mean much in the big term scheme of things. as you can see from this chart. -- i shouldtrength say, the dollar weakness has had an effect on the commodities. as you see dollar weakness you will see more strength in the commodities. here is the dollar against the euro and the yen which is down. ¥120.45.ow buy the dollar is stronger against the pound right now. a low but getst a lift from the dollar weakness.

$10.73 a pound for gold. let's talk about unhappy hedge fund managers. they have been planing about the lack of liquidity and follow tall markets. that is how they explain some of the worst experiences for the financial market. but a significantly bigger portion out there are claiming it is volatility and a lack of liquidity. guess what? this is not an easy business. this is how you show that you have real alpha. the fact that there is no longer momentum, that is when you prove that active management make sense. >> this is the best opportunity. trending, yout can't make money. so i look at volatility as a friend.

and not my enemy. the other thing that is different is that the recession, you could work on a micro level. postrecession, you must put a macro overly in there. in the sense that we really have to understand the impact. we started to see in our --nding pulse at mastercard , but theake that interesting thing is that we saw 18 months ago, china slowing in the spending. that indicator that we gave to the clients gave them the understanding of where you can look at the markets that will be negatively impacted by that and from that, then you can start to readjust the portfolio. 11,000ie: you have that hedge fund managers. is this the year when that gets realized? are we going to see that number dropped significantly? >> i think people continue to show up with a dollar and a

dream. part of that was the waves of layoffs. within the financial services space where people made that transition. but yes, for a lot of funds it will be a challenge. small and big. it will be another 2% here. 3% forhas had up of decades. it is getting a little long. funds net in flowing? shouldn't they be gaining money? they are. but we have had a several year time of them underperforming. people have been continuing to dump money into hedge funds. and finally, this year, it looks like we are cresting over the

home and inflows are slowing down dramatically. i would argue that it will be good for the industry. it will shake out the weaker players. and the people who are not getting a bank for their fees, they can go elsewhere. there are too many funds. stephanie: the funds who are getting the big inflow now, if you are tightening up said adel bemillennium -- there may concentrated bets. what you are finding is that these teams -- a lot of these are having a harder time with that. it continues to grind it out. the average, -- has been lazy and doesn't belong in the industry. stephanie: you are giving sarah

a lot to talk about. >> etf just pulled the largest positions out. this is a brain-dead way of -- it is getting slaughtered. all this is doing is taking the largest amount of money in a hedge fund and slapping it together. it is down double-digit's. because if you are in these crowded trades and you are not doing original research, and this being christmas, you could recommend the big short, and thinking outside of the box matters. if you are doing what everybody else does, you will get slaughtered. that is what has been happening. sarah: no doubt about it. but again, it is thinking about where you should have been. you can see the emerging markets were slowing down. therefore, that means less demand for oil.

but you could see that there was no doubt that we are continuing to pump more oil. but who does that benefit? obviously, the consumers. why is the u.s. doing well? you get a gasoline savings consumer and $.72 of each one dollar is being spent. so readjust your portfolio to portray that. >> you make it sound easy. sarah: people are over confusing because they get so micro so quickly. you have to then find out how to execute deposition. funds become a victim of their own success. they get so big that by the time they are huge and you read about them and you read about the fund manager buying a million house, you have missed your window to achieve the best time in the

fund manager career. stephanie: in their defense, there is a mismatch. hedge fund managers who raised money in the last five years were forced to give short-term liquidity. you are right, and we are fundamentally negative on the economy, it capitulated and now they are screwed. >> no one is going to redeem a fund that is making money. stephanie: you are a smarty-pants. >> yes and no. it is really tough. look at the guys who have gotten hit. everyone on the investment side level. do you have conviction? riding out any decline? you have 700 and one breed cuts rate cuts. so just double up and sooner or

later you will be right. doubling up isn't working anymore. >> but look at different data points. you had a little thing come into the white box and say luxury prices have dipped in manhattan. we see this all over the country. luxury is not doing well. take an indicator from that. david: i have great news, everyone here is staying with us. we are going to be talking about emerging market economies. that is next on "bloomberg ." ♪

vonnie: welcome back to "bloomberg ."

-- is writing down part of the goodwill. they are reducing fourth-quarter earnings. france's biggest bank says it is settled -- it is setting apart more units. this will have an effect on regulatory capital. payeiterated the plans to dividends. mitsubishi is delaying delivery of the new passenger jet for a year. they say it will be ready till mid 2018. mitsubishi says technical issues must be resolved. mind bobay bring to darley but it has a new claim to fame. the stock market had a better year, it and it was bolstered by foreign acquisitions and a rebounding economy.

that is your bloomberg business flash. david? david: thank you. political corruption, collapsed commodity prices. many emerging markets had a tough year. is it too much to hope that 2016 will bring recovery? we are joined now by fabio savoldelli, sarah quinlan and sheelah kolhatkar. it depends on if you are a polar bear. stephanie: this is a really big topic. [laughter] stephanie: right here on bloomberg. the consensus shows a mild rebound across emerging markets. again, it depends if china can of a bouncee bit back in the growth from the stimulus policies.

should have a little bit of a rebound. and -- >> there is no chance of that. saudiality is that the government has readjusted the fiscal policy to make sure that they can continue pumping as much as they wish to pump. and we are not something -- we are not stopping pumping. therem that perspective will continue to be a floating boat of oil everywhere. hopefully there is hope for the other markets in emerging markets who don't rely on oil. stephanie: who doesn't? >> india is a big import of oil. they will benefit. you want to be long india because they are big importers and their implement think fiscal changes, and reforms, that should be benefiting them. they are easing the monetary policy. stephanie: one of my favorite

pastimes is to frantically ignore matt miller when he is raising his hands. matt: everyone says there is no chance that oil will rebound. because so many people are pumping so much. but look at the great account here and you can see over the last five years that there has been a slight drop-off of people pumping in the u.s.. a small one. if you look at crude inventory, you saw another drop of 6 billion barrels. so there is some reduction of pumping out of the u.s. which is why you have seen the reversal. we are up almost 10% since monday. it is your turn. with lateral drilling and fracking, the lake count drops because each rate is able today can sideways whereas it used to

drop down. drilling didn't get invented last year. and look at the rig count. that happened 5-6 years ago. fabio: no but the oil price it self -- soon, go home. >> we can't forget iran coming online. david: that brings us back to brazil. brazil is a mess. >> in my notes i have hot mess. everything that could go wrong is going wrong. we had the resigning of the finance minister. now we have -- who doesn't have the confidence of investors. he couldn't pass the things that needed to be passed in order to avoid the country losing its rating. i think there is a bigger

issue down there. 62.5% of their gdp is consumer spending. stephanie: and consumers don't have the money to spend. >> it is critical and raisetand, they have rates seven times and it has had no effect. inflationsuring the at around 15%. economies --three they buy on installments. so it is a lose lose situation. david: they lost $1 million -- they lost one million jobs last year. their gdp was down in the third quarter. >> it could still decline. we reported that november was down. >> passing austerity measures that need to be passed will be

kicking them while they are down. >> but there is a silver lining which is the impeachment. stephanie: no. wrong. what is that going to do? it is a disaster across the board. but at least it is an end to the nightmare. >> know it is not. david: somebody with nobody. >> the impeachment bid right now is occupying a lot of congress is time. and this is something that analysts didn't see coming. it is taking their time away from what they need to do with the budget. >> don't forget the $3 billion matching -- billion missing. stephanie: so maybe we get a little bit oldish and go long. one billion --e those are the one million people who lost their jobs. the financereplace

minister with -- from the new school who was helping to cook the national accounts, when she was up for impeachment the first time, you have lost your investment grade rating. ,o changing the administration if congress is busy doing that, i can't think of anything more productive. >> the picture sounds grim. what is the answer? david: the prognosis? stephanie: ok. >> their prayer is that china recovers and starts to increase demand of exports. >> that isn't even their main problem. their problem is domestically originated. their problems were cooked domestically and all of the analysts prove that and show that. that is just adding to the woes. yes, it would be helpful.

yes, there isn't a surprise with the fed hiking dramatically. it is simply political. they need to get their act together. stephanie: let's go to argentina. when we saw argentina and venezuela and was ill -- these were great investment opportunities. matt: i have to come back here. [laughter] stephanie: let's go. this better be good. david: i have an idea, why don't we go to matt? matt: at least the inflation in brazil does look so bad when you drafted against venezuela and argentina. is at 16% and venezuela, which by the way, they don't release official figures, but what it to 24% is

the rough guess? but it could be 200%. >> brazil had a history of hyperinflation. they had inflation up to 3000% 20 years ago. so what happened? if you have a country where this is in the recent memory, inflation expectations will exasperate that. stephanie: say that again. >> certain food prices are up 1500%. this is being taken out of the everyday consumer. so any discretionary spending is zero. and that is the real issue. remember, it is the same thing in argentina's numbers. around 50%.g 26% is the consensus now. >> that's what they have announced.

stephanie: all right, we have to leave it there. katia porzecanski, thank you. and thank you to this great group. we will be back with "bloomberg ," we have a lot more to cover. ♪

david: coming up next on "bloomberg ." norfolk southern rejected a bid from canadian suffolk. we hear about that next. ♪

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sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. to discover the best shows friends together and movies with xfinity's winter watchlist. later on, we'll conspire ♪ ♪ as we dream by the fire ♪ a beautiful sight, we're happy tonight ♪ ♪ watching in a winter watchlist land, ♪ ♪ watching in a winter watchlist land! ♪ xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. david: welcome back to "bloomberg ." it is very warm here in new york if you don't know. still here with us is sarah

quinlan, i am told she is the duchess of doom. we also have alex sherman and sheelah kolhatkar. savoldelliand fabio is still here. think about all of the things we have covered. hedge fund winners and losers. what do you have? matt: -- is a winner right now. regardless. job claims. was000 and the survey 270,000 so not only are we well under 300,000 but we are under the street forecast. continuing claims were 2.19 5 million. things are looking better.

these are initial jobless claims. lowern see that we are than we haven't seen since the beginning of last decade. you thatmist will tell holding under 300,000 is great for initial jobless claims. it means you can continue to add more to the economy. now, let's go to vonnie quinn. vonnie: thank you. afghan officials say -- holding on to a key district after two airstrikes overnight. crews are fighting the taliban. the militants had the soldiers surrounded until reinforcements arrived. the u.s. embassy in beijing says it has received a threat against westerners in china. a british and french embassies have issued similar warnings. are using their biggest planes to cope with holiday travelers. 38 million

passengers between now and new year's. that is 3% more than last year. bloomberg news. i am vonnie quinn. i'm sorry. i'm guilty. gave me time to build an index. let's look at the time of oil. it is a little bit of a volatile morning. 5:30-6:00, we came down but now we are back up. $37.76. take a look at the 40 chart for crude. -- at the four day chart for crude. we were excited when we got to $34, but $33 didn't happen. take a look at nasdaq, even

though it is 70 degrees today, natural gas above two dollars right now. i am building an index on the terminal that gives great returns for any index. i was looking at energy over the past four days because they have been take winners here. -- southwestern, console these are the big winners. -- you where santa claus coal in your stocking. david: turning out to the railroad battle. norfolk southern has rejected a bead -- a bid by canadian pacific. erik schatzker spoke with the ceo last week. it is time to talk turkey.

and they are going to have to talk to us or we are going to have to take another tactic. >> if they refuse to engage in -- in the conversation that you want to have, what is the other tactic? our think that we have done polling and they have done their polling. i think they're of the view that if they are waiting is out, they are going to wait a long time. can we fine-tune the offer? there is a little bit of wiggle room. but then the point is that we have to go to the shareholders and leave them out of the process. >> you raise two important points. the amount of room left to improve the offer, there isn't a ton of room. how much is there? >> very limited.

we are very close to where we think -- we are not in love with this deal. sight of who we are representing here. and that is the canadian pacific shareholders. >> because you are already giving norfolk southern 47% of the company. right? >> yes. so there will be a point that we are approaching where effectively we have to say, that is all there is. and if they don't want to accept the offer, then they have alternatives. a will potentially use different instrument to sweeten the pot. we will see what the reaction is. >> like what? >> something that starts with "c

." >> but not cash? >> no, more of a guarantee of their position. a cbr. >> do you think it will take a proxy fight to make this fight friendly? replacing management to get norfolk southern to agree to our terms? >> it seems like it. >> it does? a proxy fight is required? >> when someone won't talk to you and there is no indication that they are going to talk and no indication that price helps, and now they've started a , ilogue with -- northern don't see it happening any other way. willing hassay are jumped in there, -- when you say burlington northern has jumped

the ceo spoke last week saying he wouldn't be sitting on the sidelines. what do you think he meant by that? >> well, he is a good friend of mine. he is trying to muddy the water. the one thing you can say about being in this position is that they are consistently inconsistent. if you look over the last 3-4 years, the statements they have made, some of them are ridiculous. last october they said that gold standard was a single light hall. you can't have that without a merger. but then they said mergers were bad. to talk to start people, they might get into the fray. >> do you anticipate that he will make an offer for norfolk southern? >> no. >> when you say muddy the waters, you think this is a red herring?

i'm trying to interpret what you are saying. >> i think what they are trying to bring up is downstream effects. maybe they are trying to send the wrong message. stephanie: there you go. let's bring on our own alex sherman. he covers and monday. alex: i love his authentic canadian accent. look, i disagree with what he said at the end about muddying the waters. i think what the intent might be be,urlington northern might is that if you accept this by regulators, if you are going to approve this merger, you have to realize that there are only about seven large railroads to begin with. if you approve this, the world is going to shrink. side, approve a deal this

you have to realize that there are downstream effects of this. and maybe that is why he is getting in there. saying the world will be even smaller. it is interesting because you heard him say he is not in love with this deal but he is threatening proxy fights. that is a lot of time, money and energy. >> he is absolutely in love with this deal. he is committed to this deal. he wouldn't be talking about different financial instruments to engineer this -- he is working the regulators and he is working norfolk southern. he is trying to make it all work at once and that is the objective. he is trying to game the system. in the sense that he is trying to make sense of everything and make sure all of the stars align for him. >> he is trying to get his ducks in a row. some solid concentration. the biggest risk is regulatory.

you have 97% of an important market in the hands of seven people. but look at the human beings. the guy is 71 years old. cfx inrebuffed by october of next year. he wants to do something and he wants to make a mark on this industry. >> and the other main human being on that side is bill ackman. stephanie: yes. >> he wouldn't want to stir the pot. [laughter] >> between the two of them, you have two different guys. one of them wants to stir the pot. >> i was a risk arbitrage administrator and what we would be doing right now is making a map of every single market and breaking it down onto a local level and trying to do an analysis of what the chances are that this would get approved.

it sounds like there is a good chance it would not. there is skepticism in the canadian press. i'm curious to know, what is the endgame? if he knows there is a good chance that it may not be allowed to proceed, what has he accomplished? he and bill ackman have made a big splash with this. >> they have proposed a unique vehicle to house this. typically,ing that when dealing with regulatory risk, you say, we are offering you this and here is a big break if it doesn't go through. instead, they have offered to put a combined company in a voting trough and have hundred harrison run norfolk southern. what bill ackman is saying, by him running the recommend -- by running the railroad, you will see the effect. two years for

regulatory approval. you will see the shares go up. time,en in that amount of that should convince him of the deal. stephanie: this deal isn't going to happen until two and 16 -- until 2016. we will be back with just a little bit more with the best of bloomberg go. ♪

stephanie: welcome back, you are watching "bloomberg ." i like to call it the best of go with this all-star cast. huge.s. economy has made

strides since the financial crisis. but we want to find out just how well we are doing. andpoke with ben bernanke john mack. take a look. >> the amount of liquidity in the banks, i really don't see how this can happen again. unless that changes, the speculation that is going on in the streets is dramatically lower than what it was in 2006-2007. i don't see that. stephanie: do you see the economy doing that much better today? >> it takes a long time to get out of the hole that we were in. but i think we are doing pretty well. we have done much better than any country. more than our highest gdp. david: there is a sense across much of america that we are doing as well as we should be. is that wrong? >> there are a couple of issues. one of them is the

distributional issue. the fed can't do much about that. the other is the reason that the growth is slow is not because of the recession persisting, but the productivity gains are very slow. that requires a broader set of responses. stephanie: when you say the distribution, you mean the rich are simply getting richer? because keeley was its ordinary the first time around but we have had low rates for so long that it has been great for the financial industry. again, i would say that there is a huge difference between the u.s. economy and recovery. in europe, it took them six years longer to do qe. basically, this is a long-term trend. it has been going on for 30 years or more. it is related to things like globalization. david: i want to take advantage

of a special moment. we have ben bernanke and john mack, on opposite ends of phone calls on a sunday in the fall of 2008 when you were facing a dire situation that affected all of the financial markets. bank after bank, financial institutions, they looked like they were going elio. you were fighting to keep morgan stanley a float. i would like to go back. because you actually talked with each other at a time when you were saying, we have to do something. and perhaps you should think about selling your company. take me back to what you were thinking. after the lehman brothers, a lot of the pressure turned on the remaining investment banks, on morgan stanley and goldman sachs. one of the things the fed did was to make the companies take

holding companies which was loosely symbolic. it essentially assures the market that the fed would be overseeing those companies. but morgan stanley and goldman sachs got private investors and that was key to strengthening the firm. david: but it didn't happen right away. >> it didn't happen right away, but it was in the works. it wasa conversation and a forceful conversation of what they wanted morgan stanley to do. which, as he remembers, i was not going to do that. they wanted us to sell the firm for two dollars a share. to jpmorgan. in all fairness, it was tim who wanted that. was jamie dimon interested? >> he was not interested? he said he would only pay two dollars a share.

tim kept saying, called jamie. i didn't want to do it. but when the head of the new york fed is pushing you to make those calls, you make the calls. stephanie: when we look at the past few years and the problems that the banks have faced since these acquisitions, is it fair? because only look and see the fed pushing them into these trades -- >> no, it is not fair. to get us in this position? when you make money at the market is going your way and you can buy and sell and securitize and people are making 20% or 30% with their stock, someone has to blow the whistle. they got carried away. leverage was wild. when you think about the leverage that these firms had, it was absurd. everyone wants to play. i will member calling tim on a leveraged loan deal that we were

trying to make and we were uncomfortable with it. ourept passing and finally, guys said we have to be involved. we passed on the last three deals. we got involved at six times the leverage and then once the sponsor had the leverage, they turned it again. we dropped out. i called the head of the new york fed and i said, we are out of control. 3 deals. no to 1, 2, but on the fourth deal, i have to play. david: so you knew that morgan stanley was overleveraged. >> only a fool would not know. >> it was becoming increasingly obvious. but with the fear of the panic, people were dropping securities and that made the situation a lot worse. stephanie: there you have it. hindsight is 2020. >> i would like to address the

first part where ben bernanke is talking about the economy right now. the thing is, the economy is doing extremely well. what people don't realize is that it is small business driving the economy. if we keep spending at businesses with $50 million or less, it has outsold whole retail 40 months in a row. the consumer is shopping small and that doesn't get picked up by government statistics. we can up in our report. the interesting thing about that is that you can't get a volume discount when you shop small. that means that people are willing to pay more. we have seen a decline in the growth rate of the deep discount retailers. so they are growing but growing slower. luxury is hurting but actually, when we look at the main consumer, the middle class consumer, they are spending all of the time. that is the thing where we see

the confidence coming back in what matt is showing. because postrecession, if you don't have a job, you don't spend. we are seeing 6.4% year-over-year. is driving consumer the process. but the answer to this at the end of the day, the answer to this crisis was dodd-frank. 2300 pages of monstrosities. when you actually run the , one out of five people who borrowed money to buy house will not meet the new dodd-frank regulations. so you are really impinging on that bottom. when you look at the increases in fees, free checking -- banks , butto offer free checking the free checking is going away

and the bank fees are going up. and you are seeing the risk of the bottom end of society being driven out of the bank as a result of the cost of dodd-frank. it is a painful and expensive exercise. sure, you can shut down risk. but in the end you are talking up everybody who is not incredibly profitable. david: is it worth it? do we still have the same risks in the system? >> there are a lot of people who feel that we do. the major banks are larger than they were before. i think people have a short-term memory. it is easy to forget what was going on. bigave just had a time of hiccups in the market and there were a lot of analysts who said, dodd-frank maybe has helped. it didn't take anyone else down. the crisis is work isolated to -- the crisis was insulated to just one as this. are healthierets

than they have ever been. including the consumer balance sheet. >> i will tell a quick story about john master. stephanie: we don't have time for a quick story. >> i'm never telling it ever again. stephanie: thank you so much for joining us. we have more on "bloomberg ." we have a whole other hour ahead of us. moree going to have "bloomberg ," in just a few. stay with us. ♪

. . when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. so your business can get back to business.

sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. minutes from the opening bell in new york. welcome to the third hour of bloomberg . i'm david westin.

stephanie: i am stephanie ruhle. we will have a guest from jp morgan asset management. 2016, guess who else is in the house? keri geiger, giving us the latest on where the wu-tang album is. hope we can get into that. drowned19 refugees today when the ship sank near turkey. six of them were children. at least 3500 people drowned this year trying to reach europe. syria's foreign minister says his government is willing to join talks aimed at ending the country's's civil war. diplomats will return to geneva next month to consider a russian proposal. it is not clear up the future role of president bashar al-assad. the man who admits to killing three people at a planned parenthood clinic in colorado his own lawyer.

results of his mental exam are pending. news 24 hours a day, powered by 150 euros around the world. world.aus around the matt: let's look at futures, unchanged on the s&p. dow jones up nine points, nasdaq up a little bit, really, little changed on this christmas eve, a shortened trading day. i forgot to remind you around the world, that at home i am sure you know that markets are closing early today. look at crude here. it continues to rise. it is $7.83 a barrel. $37.83 a chart -- barrel. this is a chart, showing the longest streak of games for crude since april. crude versus brent, we saw an interesting inversion starting tuesday night, where crude, dove $37.87 ai crude,

barrel. $37.66 a barrel. nymex trading more than brent crude, production and inventories decline. i am right now e-mailing with jim be on lookout -- jim bianco, putting together a pretty sweet chart. has been rising in sympathy, finally back over two dollars per, like, million btu's of nat gas. use the dollar weakness really everywhere. the euro gaining against the dollar, the japanese yen gaining against the dollar. for theonly buy 120.33 dollar know. over the last 10 years,

though, you see the dollar is at a good place, if you think dollar strength is important, compared to where it has been against a basket of 10 currencies over the last decade. with that, i will hand it back over to other view on this christmas eve. have i said merry christmas yet? or happy holidays? whatever you celebrate, i hope you enjoy it. david: i like your christmas tie, red and green. stephanie: and we have to have a holiday chipotle lunch this afternoon. matt was excited because there has been no line at chipotle. matt: it has been a blessing. stephanie: time for the top three stories that matter to markets. number one, crude. we talked about it all morning, trading up and heading for its largest weekly gain in more than two months as u.s. inventories decline, which happens every year. the number of active oil rigs fell by three according to baker

hughes data. earlier this morning on "bloomberg surveillance," dan yergin spoke about the demand. dan: oil demand this year has been much stronger than last year, well over double the demand of last year. americans are driving more miles than ever before. the number of sports utility vehicles and light trucks, it's now about 60% of total new vehicles, so demand goes up when price goes down. at the same time, we are seeing this really big cut in companies by all as they batten down the hatches for this storm that swept over them. stephanie: should we be excited that we see a gain, or is this just the end of the year wrapup? all in all, consensus has told us it's going down. >> when we talk about this later in the program, oil is going to be on one of my three winners, though i would use the term "winner" very -- winner-ish.

what's happening now, we see that demand is not the only part of the equation. demand is a significant part. and you are seeing energy and information agency saying we are producing half a million barrels of oil last per day, and demand continues to go up, about $1.5 million -- 1.5 million barrels a day. you mentioned oil rigs are down. they are down overall from a peak of 1500 back to 500, almost a 70% cut. the supplythat, dynamic is feeding into the market, with implications for oil directly and credit. david: we have reduced supply in the u.s., but iran might be coming online. that's a lot oil potentially. oksana: potentially a lot oil. the demand continues to increase.

there has been a lot of talk about china exiting the commodity super cycle, but world demand continues to be up. stephanie: when will we start to see where we have supply lessening? if everyone is cutting down a little bit? yergin said demand is up. when does that make a change in the price of oil? oksana: that is anybody's guess. we have seen experts have to bring their estimates down for oil. nobody knows exactly what that point will be, because oil has been in a world oversupply glut for quite some time. we didn't see it in prices until late last year and this year, so that's very important to watch here, and why it is important to get into the credits related to this market very carefully, in a disciplined manner, focusing on

high-quality. it is precisely because we don't know when that inflection point will be. matt: i have been showing the baker hughes rig count. it fell off a cliff. i got an e-mail from jim bianco, who said to look at total u.s. production, because the rigs are just there to put wells in. total u.s. production is increasing here over the last five years, continuing to rise. in yellow, i have inventories bouncing around a little bit, but also at a real high-level, even as price comes down. continuedproduction to rise after the price at peak -- had peaked. the price just came down, and production kept going up. david: though there is a drop off. matt: it drops off a little, but compared to the last five years it is massive. david: one big change in the

world economy is the u.s. became a net oil exporter. the u.s. dollar is forecasted to strengthen against all major peers except for the pound and canadian dollar in the first quarter of next year. sharplydiction differs with the current trajectory of the dollar, on the longest losing streak since april. the dollar has been coming down a little bit, oksana, but don't we expect the dollar to stay pretty strong? oksana: that seems to be a perfectly understandable conventional wisdom. as rates move up, you expect the dollar to strengthen. history,you look at what happens is the dollar rallies into the rate hike, and after that it tapers off. the dollar, before the fed made a move last week, the dollar was up about 13%, so it's not surprising, very much in line with what we saw in 1999 and 2004. david: but if there were two or three rate hikes, that might suggest it would go higher. oksana: it would suggest it

would go higher. it's also important to remember, the ecb is still in a different policy regime, actually easing, so that may put some upward pressure on the dollars well. but we definitely don't believe that the dollar is going to be, and i will talk about this later on, that the dollar will be a stronger dollar that will derail this economy. stephanie: are we expecting it to have a dampening effect for our growth expectations, both in the u.s. and globally for 2016? oksana: remember, when we talk about oil, and oil prices being so soft, that puts more dollars in the pockets of consumers. we have seen consumer spending up year-over-year, around 2.5%. wage growth as well has been up a little bit. not tremendously exciting numbers, but certainly still up. so in the long term, it actually can be a positive for the economy. as far as the dollar itself, we are obviously not a

manufacturing-centered economy. we are a service-centered economy, so we don't think a stronger dollar will completely derail the economy. stephanie: number three. last week, investors pulled more money from u.s. mutual funds than they had in any seven-day period in the last two and a half years. what does that mean? net redemptions reached $28.6 billion, the biggest weekly outflow is june of 2013. oksana, whatever you think about the markets aside, technically speaking what is this telling us? oksana: first of all, it is tax loss harvesting season. not surprising that we are seeing this. look at how this falls out, between equities and bonds, and it is somewhat equal between the two if you take hybrids aside. remember, high-yield bonds and loans saw some of the largest outflows last week and the week before.

stephanie: where's the money going? mutual funds are supposed to be relatively safe. is this a safe haven play, just tax issues? so right now, money markets are experiencing an inflow in terms of where the money is going. remember, overall this entire equity rally has been one of the most heated rallies, and people continue to look for reasons why it's not going to last. bonds are a more iffy place to be, given the trajectory of easing, so there is uncertainty, and going to the end of the yearbooks are closing and people maybe want to take money off the table. high-yield credit and loans suffered in total about $6 billion of outflows last week, almost -- inflowsere will we see in 2016? oksana: i will tell you where we should see inflows in 2016, may

be different from where we will actually see them. i think that when we look across, certainly be fixed income landscape, my area of focus, where are the largest, most significant margins of safety when you think about the fed, rising rates within corporate credit and particularly high-yield. we can debate this issue. there are a lot of opinions out there, saying it is a powder keg, stay away. keri: what does that mean? oksana: there are opinions that fundamentals are not as fantastic as three years ago. the reality is that high yield fundamentals continue to be very stable outside of commodity and energy sectors. we have growth. profitability perspective, third quarter of this year was about 14%, the best quarter for profitability since the third quarter of 2010 for high-yield names outside of commodities and energy. so stable fundamentals, and you are earning 9%, starting to look comparable with what you can

learn in equities, frankly. high-yield tends to do well in low growth markets, even better than equities, and we are in a low growth market. finally, right now the average price of high-yield if you like a high-yield index is just under $.88 on the dollar. that historically has been a good point to get in. let's say it continues to experience further weakness and goes down several more points, into the low 80's. well, a year from now if you go through that experience, your total loss will be around one point. because that's the power of yield in a 9% market. we will talk more about that, but that's an area investor should not be shunning. stephanie: i like to hear that, don't shun the high-yield market. those are the stories that matter to markets right now. next, we take a look at what is moving up and what is moving down in the pre-market.

we are about 17 minutes away from the market open. stick around. ♪

stephanie: welcome back -- vonnie: welcome back to "bloomberg ." filing for an implement benefits -- unemployment benefits has fallen. applications dropped by 5000 last week, below the median forecast in a bloomberg survey that called for 270,000 filings. goldman sachs has advice for fed chair janet yellen -- don't worry about the lack of foreign inflation in 2016. hsbc recently warned that overseas inflation will limit the fed's ability to raise

rates, but goldman predicts yellen will raise the rate four times. apple pay has had a slow start in the u.s. since its debut more than one year ago. it will be introduced in singapore, spain, china, and hong kong next year. matt: a couple stocks to watch as we head into the open, just about 12 minutes away. sunedison up 3.5% right now, a stock down 80% year-to-date. it got absolutely crushed, and there are reports now they are to get financing of up to $650 million. the market like that. sunedison a gainer today, though year-to-date absolutely destroyed. speaking of getting crushed,

mcnamara up about 2%. port-mcmoran up about 2%. one of my favorite stories has been the m&a stories around pep boys. bridgestone agreed to buy them, and then carl icahn offered more. they are in a bidding war. icahn says he will pay $.10 more than whatever bridgestone offers. the stock is not moving a lot, but a report said it will probably get broken up into a muffler business that might get sold to monroe, a parts business that might get sold to maybe o'reilly, after the buyout. that's interesting, because i thought carl icahn was trying to consolidate these businesses. he bought a canadian auto-parts

business earlier this year, so it would be interesting if he broke up pep boys. is netflix a friend or foe to traditional media? we will have some of the titans of that industry weigh in when we come back on "bloomberg ." ♪

david: we will talk about netflix now, on a bit of a tear this year. it is up almost 140%, the second-best-performing stock on the s&p 500. over the past few months, we sat down with some the biggest names in media to ask them about netflix. is it a friend or a so? >> netflix has been an aggressive buyer of our product. >> they are a friend and also a competitor. >> this great content. the problem is, broadcast television has lost the lock because there's so many cable channels and alternatives. >> there are so many places

doing content. netflix, amazon, other cable networks doing original programming. >> we are in the golden age of television in terms of the number of great shows on broadcast and cable and alternatives like netflix. >> about five years ago, there was something like 220 scripted shows. now there's over 400 scripted shows, comedies and dramas. >> there's too much for any one person to watch. >> netflix has been an aggressive buyer of our product, and in our case we sell three types of products to them. off network, for instance programs that have been on abc, not in season but past seasons. we also make original program for them. we are actually producing them, and they are buying some fantastic marvel series. the latest one is jessica jones. "daredevil" last year. and they have an outlet deal for our movie products, starting with product we release next

year. so they have been great to us as a buyer. >> i have to be more of a seller than a buyer. the guy who runs all access is don't that every day, sell to netflix. i have another guy who sells to netflix saying, please, netflix offered us a zillion dollars for these 12 shows, this is a great package, or amazon or hulu, let's sell it. stephanie: netflix knows it takes 3.5 episodes to hook me to watch 78 episodes in a row p do they share that with you? >> of course not. having that data to them is more important, not to share. once again, netflix is in the business of producing drug content as well. so as much as i love -- of producing their own content as well. so as much as i love them as a buyer of my content -- david: they are having a direct

relationship with the customer that you gave up? >> they are a friend and a competitor, as are most companies. >> long-term, we believe they will continue to be aggressive buyers. they will also compete with us, because time is finite for people. they will be spending time using netflix that maybe they are not spending watching some of our other channels. but it could be they are spending time on netflix consuming our product. that's not necessarily a bad thing. >> we look at them carefully, in the sense that we want to see where things settle down in terms of, call it the competitive nature of the relationship. but short-term, maybe midterm, they are more friends and fellow because -- friends than foe because they are a great consumer of what we make. david: netflix is spending about $5 billion this year on content, 90% going to people like bob iger and les moonves. oksana: it's a remarkable story.

it was a company that was down and out three years ago, and it went through a dramatic transformation. as people continue to unplug and go a la carte, it makes a ton of sense to try to discern who will be the winners and losers three to five years from now. netflix's example illustrates how difficult it is to do, frankly. at the end of the day, what are they doing? the same thing they were doing several years ago, delivering movies to your house, just via a different medium. original content has also taken a much more significant piece of the business, but you have fierce competition. amazon prime does a lot of the same stuff, and to the extent that, a comment on the media space in general, to the extent that we believe china is exiting the commodity super cycle and entering a services super cycle, media is part of that entire landscape, so it will be those companies that can penetrate that market meaningfully that will probably be the winners. stephanie: put netflix in

context in your world, six income. we are now living in a 9% world. oksana: it illustrates just how differentiated that market is. you want to stay high quality. it also illustrates, here is a company that trades at 5% in a 9% market, with a $50 billion equity capitalization and about $2 billion of debt. so this is a company that has way more cash than debt, offering a 5% yield. not fantastic, but not terrible in a 2% world of treasuries. so stay high quality. stephanie: netflix, she gives a thumbs up. [laughter] ana is staying with us. up next, what to expect from the fed in 2015. ♪

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sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. to discover the best shows friends together and movies with xfinity's winter watchlist. later on, we'll conspire ♪ ♪ as we dream by the fire ♪ a beautiful sight, we're happy tonight ♪ ♪ watching in a winter watchlist land, ♪ ♪ watching in a winter watchlist land! ♪ xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. you are watching "bloomberg ." we are about 24 seconds away from the market open. david: nailed it! stephanie: the dell will not

just ring today, but the jingle bell. the big apple circus is at the nyse. futures are up. people are smiling. this is a way to welcome christmas and welcome you back to bloomberg . we still have a lot to cover. we have another 30 minutes on air. we have to talk about the fed, which lifted rates for the first time in almost a decade last week, clearly signaling their confidence in the u.s. economy. there are economists out there who argue that the hike and those to come in 2016 are based on expectations rather than actual data. janet yellen says she is data-dependent, so what does this mean for investors? lindsey joins us now from chicago, and oksana aronov is still with us, as well as keri geiger from bloomberg news. we will send it to chicago

first. is it based on expectations, not actual data? lindsay: that is exactly right. a lot of economists were calling for the rate increase, and that is based on the expectation the market would show improvement by the end of the year. others, myself included, expected the fed would wait until 2016 for liftoff against the backdrop of a still modest economy. now we are splitting the difference. with a modest economy but the a higherbarking on interest rate environment. it is clear that underlying fundamentals were not the justification for the liftoff, but instead an expectation-driven model that the u.s. economy will gain momentum by the end of 2016 and into 2017, so a very preemptive move by the said, who themselves have categorized the u.s. economy as very moderate, with neither side of the dual mandate

met. , is the said ahead of itself? oksana: it's remarkable that nothing sort -- short of an emergency rate of zero has become acceptable for some investors. think about it. that is an emergency level that was instituted when the financial system was about to fall off a cliff, and the economy was in its worst recession ever. the reality has shown very little evidence to suggest that continuing to stick to a zero rate really does anything for the economy. also, there's a difference between the fed trying to curtail an economy that is receding, versus the fed injecting a book -- a vote of confidence into an economy in the process of healing, however slow and anemic the process has been. here, we are dealing with the latter. the move last week was very important in injecting that confidence into the markets. we have seen the equity market rally and bring itself into positive territory on the back of that move.

stephanie: there are a number of myths associated with rising rates. i will try to address some of them. first of all, there is the belief that rising rates are going to tank the housing market, because there's going to be -- it's going to be difficult for people to buy houses. the reality is that mortgage payments, first loan interest payments today, comprise only about 12% of household income, compared to the 20% average historically. so there significant room there, and probably not until we are doing with a 1% hike should that even be a concern. david: i want to go back to lindsey and let her respond. without regard to what the effects were, it is not justified by the data, is that right? lindsey: that's exactly right. the fed told us all along they would be data-dependent, waiting for that to come to fruition. i'm certainly not arguing, as that a near-zero

interest rate is always appropriate, but we are basing this on what the fed told us all along. now they seem to have switched gears. going forward. we expect a few interest-rate increases in 2016, still maintaining a very accommodative level. i want to reiterate that the justification for the rate increases we expect in 2016 and 2017 are going to be based on expectations fed's for further improvement. it will be some time before we see improvement in the fundamentals of the consumer, businesses, etc. keri: so regardless of the justifications for the rate raise, is there any real inherent danger to the economy in doing this? the markets reacted relatively positively, and it seems like a huge weight was lifted off the market because of this. seems like kind of an easy give at this point, when the market is putting a lot of pressure on them to do something. lindsey: i certainly think it

was priced in. the fed did a very good job of communicate in the expected rate increase in december. we had an 80% implied probability heading into that december meeting. so i don't think there was a lot of "harm" as you say down to the market. the bigger fear is the longer-term pathway for rates, and he said will need to continue to reiterate the expectation of it very gradual increase -- a very gradual increase from here. the fear is we will see a 2000-4-styled -- 2004-style n aggressiveycle, a tightening strategy. this time, with a backdrop of a 2% gdp number, the economy would arguably not be able to withstand that type of aggressive policy. so the said will have to -- fed will have to continue a gradual, accommodative policy level on the funds rate for some time.

stephanie: slow and steady is what janet yellen communicated. last week, there he think of blackrock said she nailed it. of blackrock said she nailed it. larry: it was not too hot, not too cold. just right. it was very well scripted. in the q&a, she nailed every answer very well. stephanie: larry says she nailed it. oksana: i would agree. she absolutely nailed it. you had exactly what you would want from that hike. the bond market did not freak out. the equity market has reacted positively. i also wanted to comment on the whole idea that the u.s. economy is not strong enough, or this was not the right time. the reality is, we have, u.s. average hourly earnings are up 2% year-over-year. u.s. real consumer spending is up 3.2% year-over-year.

we saw the number come out this morning about jobless claims coming in quite strong. we are at 5% unemployment, and the fed has always telegraphed that. they are looking for the uninformed number to get better, looking for inflation to be on the right trajectory towards that number. so i think absolutely, she nailed it 100%. keri: so you are contending the data backs it up? oksana: the data backs it up. the market reaction was very positive, if that's any indication. frankly, neither the equities nor the treasury market are telling us that there is impending boot -- doom or an impending recession. david: don't be data go into different directions? inflation does not seem to back it up, but employment does. headline employment does, but janet yellen said we are not yet at full employment. we are talking about a multi-decade low in the participation rate, and while the average hourly rate is ok, if we absorbed lingering slack

in the market we would be talking about 4% or 5% average hourly earnings. 2% gdp with years of accommodation does not sell to me the idea that the u.s. economy is on a very strong footing. you have consumption around 3%, 3.5%, which is positive, but down from last year. manufacturing is bouncing along at break-even. we have seen very disappointing home sales numbers. as you point out, inflation remains virtually nonexistent when we look on a headline basis from the cpi or the pce. so there are kernels of improvement, but the fed admits the data does not yet support the liftoff. they are basing this off their own internal forecast of improvement coming down the line. stephanie: with the exception of asset holders, had she not raised rates, how would that help the economy? who would it have helped? lindsey: well, this is one of the problems we have seen for quite some time.

why hasn't the economy benefited from near-zero interest rates? used to ben bernanke talk about this in many of his speeches. the differential between monetary policy and fiscal policy. typically, the fed brings out, the zero interest rates, sparking investment on the business side. individuals go take out loans, putting cash to work, starting businesses, growing businesses, taking on new employees,. as that happens, you draw down on the pool of available labor and wage pressures begin to rise. that's the typical wage price spiral the fed is looking for. this time around, with ample regulation, uncertainty surrounding tax policy, a rising health care costs, it is the differential between monetary and fiscal policy that has continued to sideline consumers and businesses. so essentially, the fed did everything they could to stimulate the economy. what we saw on capitol hill continues to shoot the economy in the foot. david: thanks.

we are almost 10 minutes into trading. we need to check in with markets. matt: we see little changed, that red arrows on the s&p, down about two points right now. the dow jones industrial average down about 36 points, and the nasdaq actually gaining a little. i will go down there and get abigail's take on what's going on in a minute. i will look at a couple drug stocks, starting with real itself -- relipsa. astrazeneca might be eyeing them as their next purchase. they make a hyperkalemia drug, for high blood potassium, which can be fatal. maybe they will buy this one. the stock is up only about 0.5%. there's another drugmaker, revance, which makes some kind of drug to illuminate frown lines, and also a drug

that stops you from sweating too much. is that a good thing? in any case, trials did not work out very well. they noticed some not so good results as far as people taking placebos experiencing the same kinds of results, so down 8.5% on the anti-sweating drug results. i want to touch on oil very quickly. it continues to rise into the open of the market. right now, we are looking at about $30 a barrel, $37.97. this will probably be the last time i show you crude oil in 2015. let's go to abigail, live from the nasdaq. abigail: it's not everyday that we can talk about falling egg prices hurting a company, but that is the case today for the largest us are bitter of fresh shell eggs in the u.s., missing first-quarter estimates and cutting the dividend. the ceo said egg prices moved

lower-than-expected, prompting bb&t capital to cut estimates. what really stands out is the tension between the whopping 56% short interest and the stock's 27% move up your today through yesterday's close. only time will tell whether the bears or bulls will win in 2016. turning to bed bath & beyond, shares are trading lower. we reported yesterday the company pre-announced results. negative street reaction again. price target cuts from morgan stanley and jpmorgan. bed bath & beyond is one of the worst performers in the nasdaq in 2015, down 35%. at this time, he does not seem like a turnaround is insight for 2016. stephanie: thank you, abigail doolittle. lindsey piegza, joining us in chicago. you are noteri,

going anywhere. coming up, winners and losers coming into 2016. ♪

vonnie: bnp paribas is writing down losses by nearly $1 billion. france'ss biggest ban is setting aside more capital for italian and consumer banking unit. they reiterated plans to pay 45% of profits in dividends. mitsubishi is delaying delivery of its new passenger jet for one year. it said the mrj regional playing will not be ready until 2018.

mitsubishi says technical issues must be resolved. and, jamaica is not just the land of reggae. its new claim to fame is a stock market that had a better year than any other around the globe. the jamaica stock exchange surged 80% in 2015. $5.3arket capital is just billion. that's the latest bloomberg business flash. stephanie: we will bring you the winners and losers of 2016. with all the investors sitting on cash, what should they do with that dry powder? let's start with the bad news, emerging markets and gold. oksana: the emerging markets are unfortunately facing a trifecta. stephanie: three reasons why they will have a terrible 2016? oksana: we will weigh the pros and the cons. they face it potentially stronger dollar, falling commodity prices, and on the

back of all that more difficulty obtaining sources of credit. so that is not great news. however, their currencies have already taken it on the chin pretty significantly over the last year, down something like 70% to 20%, so perhaps there is not more terrible news there, but certainly not a favorite of ours at the time. keri: is there an opportunity to jump into emerging markets? obviously investors look for low points to jump in. could this be an opportunity for 2016, besides losing value? oksana: the question is what is priced in. to the extent that we think the believe is that commodities are going to continue to get weaker, if the belief is that rates in the u.s. will continue rising, as the fed is promising us with rate hikes, that will make it difficult for a lot of them. i would say emerging markets fall into several different categories. that will filter out, those who have been more disciplined and less debt-laden, so if you are

looking to get into that sector sovereignsook at that are not as the holden to commodities. beholden tot as commodities. david: we hear about brazilian capital. china has been extending credit very fast. housing to begin is that in 2016? oksana: it is significant, havese corporate e.m.'s dramatically increased dollar-denominated debt. that's why it is important to watch how aggressive the fed will be with rate hikes. guns, fed sticks to their it will be difficult for e.m. corporate. stephanie: if that's what you don't like, what do you like? oksana: we mentioned corporate credit, high-yield specifically. i would say the higher quality of the high-yield market.

in a few weeks when mutual fund managers and traders sit down at their desks, thinking about where to make money this year, that will be top of mind for everyone. we are perhaps starting to see a bottom forming in oil. oil is a significant part of the high-yield market, by various indices 15% to 20%. however, outside of oil, and commodity-related names, you still have defaults of only about 1.5%, and you are getting paid in something like 7% almost. yesterday was a huge day for the markets, and it is somewhat tighter today. even if you expect some downside, because of the income you are earning now it is able to absorb a lot more pain, especially in an environment where the fed is raising rates. by the way, this is the most spread we have ever seen a sector offer going into a rate hiking cycle. keri: what about all the people

who say that the high-yield blowup will start? carl icahn tweeted, i believe the knock-down in high-yield is just beginning. there's two camps, so where do you see convergence? oksana: i think people see what they want to see. they look for the data they want to find. if you look at the high-yield sector, ex-commodities -- it does not mean sectors are a mess. it is bad stocks. it is so tiresome. there are some bad companies that issue deals that became too tight. the entire sector should not move in one direction. if you think it should, you should not be paying to invest in it. i'm so tired of saying high yields are a miss. some companies stink!

oksana: thank you, stephanie. ex-commodities, leverage is at 4.2%, not an all-time low, but steady. it has not been rising or falling. keri: that's the main point. it is where companies stand on leverage, where you get credit quality health. oksana: leverage varies. in the triple-c sector, you see leverage in the high sixes. that's where the defaults will be. profit ability from it at the. tda standpoint, there is a tremendous amount of differential. stephanie: we will take a commercial break. oksana is staying with us, as well as keri. when we come back, we have some final thoughts on "bloomberg ," on a very special christmas eve show.

guess what else we are talking about? the beatles. let it stream, that it -- it stream. the beatles can finally be streamed on music streaming services. albumsoriginal beatles to say my favorite one, "the white album." a very merry christmas first -- for sir paul. back with a lot more. stick around. ♪ ♪

david: it is time now for a very special final thought. as we know, today is christmas eve, a day that a very famous boy was born in a manger. but there was another born today, somewhat later, that is

our own stephanie ruhle. it is your birthday. i have something for you. i want you to open it. stephanie: on tv! david: this is a gift unique to you. stephanie: this is not hbo. are you sure we can open it? my goodness, my favorite! you got to be kidding me! smith sneakers, which i have been wearing with my dad since i was five. signed by the one and only stan smith. let me tell you, i am sorry to my husband. you lost, and it has not even begun. this is a great gift right here. thank you. david: what are you doing on your birthday? stephanie: i am having lunch with my husband and my children. these where a special gift, these boots, but i might have to change them right here. david: stan was delighted to do

this. stephanie: i did have a chance to meet him. stan, stan -- stephanie: you have to come to bloomberg go in 2016. this is a great way for me to end my year. thank you. david: i want to point out -- matt: i want to point out, adidas is the best-performing stock of all athletic shoe makers, up 55% year-to-date. it is called that because it was started by adi dassler. david: stephanie, take us off. stephanie: oksana, thank you. keri geiger will be holding down the fort next week. david, i will see you in 2016. matt, happy christmas. ♪

>> it is 10:00 a.m. in new york, 3:00 p.m. in london, and 11:00 a.m. in hong kong. welcome to "bloomberg markets."

♪ from bloomberg world headquarters in new york, welcome. i am betty liu. this is what we're watching. the dollar down, oil prices up, and stocks around the world are largely higher, except for here. claims for front, first-time benefits fall into a four-week low. a bumpy week for autos, from cheating scandals to faulty airbags. we talk about the road ahead in 2016. high-frequency bait and switch scams, libor rating, aaron bond errant bond trades, what a year of wall street drama. first, we have half an hour before markets close for the christmas holiday. ramy inocencio is standing by. we are drifting lower. ramy: