from bloomberg's world headquarters in new york city, good afternoon. i am david gura. a historic year for the fed, as the central bank raised rates in nearly a decade. what is next? policy makers may be wrong decision. an importer rico, they will millionon about 37 dollars worth of bond payments due on january 1, -- in puerto rico. and what assets can be salvaged? first, let's take a look at the markets. julie hyman has a look. julie? watching have been

markets go down. the s&p, the dow, and the nasdaq all down today. and it unexpected build in inventory, and it is down by about three point 4%. the declines we are seeing in oil today that we have seen recently mean that the tw-year performance in oil is particularly notable. you can see a decline of nearly 63%. that is a record two-year decline for oil prices. haveow that commodities been one of the big stories of the year, and i mentioned that inventory. if you take a look at the terminal, i show you this throughout the year because it is a remarkable one. barrel a 100 million gap, so when you talk about supply putting pressure on oil prices, the chart tells the story.

and the other thing i went to tell you about is the 10-year note. we are seeing it little changed and goldman sachs has a yield that climbs to 3%. with the increase in rates from the federal reserve, that is what we're going to see happen. finally, taking a look at the basket ofrsus the currencies, that is about a quarter of 1%. that does not help oil prices either. david: that is julie hyman at the markets desk. let's check in with raymond. raymond: bill cosby has been charged with sexual assault. said that he drugged and a salted or in philadelphia, the alleged attack happening in 2000

four. they decline to charge him then, and several women have come forward with similar accusations. afghanistan, security is shaky, and they may ask for more soldiers, and the general says he will keep as many troops as possible through 2016 and will ask president obama to slow the withdrawal of soldiers. he says they are needed to counter a resurgence by the town the band. and in turkey, police say they have foiled a possible new year's eve suicide attack. they have arrested some islamic , and militants in ankara there were also suicide vests that included bombs. issues betweeng north and south korea, there was one man killed in a car accident, a diplomat, and it is raising suspicions in the south. areh korean officials

investigating. david? david: there are plenty of headwinds from overseas, including the second largest, allowing it to grow. massive losses on domestic stock prices, and the former morgan stanley ceo remains bullish on china. here is what he said this morning on bloomberg . >> what is going to happen in other emerging markets? my view is if you have not been to china recently, go there. it has slowed down, but long-term, it is a growth engine. a chief am joined economist. it is great to talk to you again. let's start with growth. looking at the outlook for 2016, let's start with emerging markets and what kind of growth you see in the new year. to be ank it is going

difficult time for emerging markets and developed economies. we saw the imf coming out and saying it is likely to be a very disappointing year in 2016 from a growth standpoint, and i think many of the lingering themes that will be in overhang, the convergence of central bank policy, a very strong u.s. dollar, and domestically, we continue to face ample regulation and inventory overhang, and all of this is unlikely to change in the next 12 to 24 months, so we are anticipating a very disappointing 2016. david: yes, christine lagarde writing about that. julie hyman just talking about the strength of the u.s. dollar. do you see that persisting? >> i do. especially when we think about the divergence. a risingmbarking on environment, while we see other central banks thinking about adding potential stimulus, and

so as we see that divert and sketching you to grow with the fed presumably hiking may be two or three times route the new year, i do expect the dollar to maintain the strength. you.: let me ask was this something you were in favor of? >> we have been in the 2016 cap. -- camp. to justify the increase. certainly, it was widely expected by the market. goingwas a probability into that, but the rate increase was affected by the very dovish statement. at aconomy is just moderate growth space with neither of the fed will mandates yet met. -- dual mandates yet met.

u.s. economy still muddling along at 2%. i think the fed would have been on the sided to err of caution to see it come to fruition in the numbers rather than based the lift off on expectation. david: janet yellen yellen addressed that head on. did she do a good job of explaining that? she did a goodnk job explaining the rate increase. waiting too long could force them to tighten down the road, which could eventually lead to recession, and then why would the fed ever be forced to too aggressively tighten, so there was a little bit of double talk there. but i do think the fed did a

very good job in expressing the .ventual pathway for rates she said time and time again this is going to be very gradual, barry slow, buried tepid. ears like itng the f .ould be a 2004 style she said it could be years before we get back to a new normal. they are expressing expectation for the longer-term pathway. david: what about this playing out in 2016 when it comes to the pace of these hikes? >> i think we're going to see an increase quite soon. after all, the fed does not want to be seen as one and done. i think we will see another 25 as march, andy they are basing this on expectations and not actual

improvement, and i do expect a total of maybe two or three the route the next 12-month period, and they expect further improvement. -- two or three throughout the next 12 month period. david: we got some new data on housing, sales declining, and here we are talking about contracts. how worrying is that? well, it is a big concern to get we saw existing home sales fall in the latest report, but the national association of realtors came out and said it was a one-off, a matter of changing regulation, that as we see that perpetual decline, that does suggest further weakness coming down the pipeline, independent of that change in regulation. now, of course, if demand is already faltering, we now embark on a raising-rate environment, which will make it more

difficult for the average american to afford a large-ticket purchase, like a home, so we do expect this to be, at the very least, under pressure. david: is this spending in the new year? consumers are out spending. we have seen some positive sales as we round out to the new year, but that was coming off the drop of several months of very minimal spending. this is around 3.5%, which is still positive, but down from a 4.5% ace at this time last year, so we continue to see a theme of a loss of momentum with the second derivative decline. still, consumers will be more willing to spend other than businesses, as businesses are still very much sidelined by security and rising health-care costs, just to name a few. david: a chief economist joining us from minnesota. coming up on bloomberg television, a developing story. says it will default

on some of its bond payments due by january wide. and then after bill gross left, how is the pimco total return fund doing today? and filing for bankruptcy, the latest on the saga with shkreli's, coming up. ♪

david: welcome to "bloomberg markets your quote i am david gurua. boys has 800 locations in more than 30 states. and a chief economist and i were

just discussing contracts to why u.s. homes unexpectedly fell last month, showing the interesting situation. index fells, the 9/10 of 1% following a revised gain of 4/10 the previous month following an increase of 7/10. apple has agreed to pay millions to settle a tax fraud case in italy. that is according to a person familiar with the matter. apple was accused of evading taxes through an irish subsidiary. apple denied any wrongdoing and said it does not use, quote, tax gimmicks. and shares have increased since oprah winfrey joined the watchers,or weight and it had a video that renewed optimism, hoping that she can turn around the long-struggling company. and a big turnaround at the box

"jurassic park" and "star wars clone this beats the record set in 2013, and i will have more on that story. and that was your bloomberg business flash. and pimco after bill gross left. ♪

david: welcome back to "bloomberg markets." i am david gura. says it will be defaulting on bonds due january 1. i am now joined by laura. on the scale of bad news,

approaching this deadline, how bad is this news? laura: i do not think it is that bad. i think they knew there were going to be some payments they did not make an did some tactless to figure out about the payments not made, and more likely than not where it would be, so i do not know that it is that surprising. david: you mentioned the town kilis, and it has been torturous, trying to figure out whom to pay, what to pay, and what not to his point, people asking about, wait a minute. bonuses toing these the government employees. how do you not have the 35 million to pay the bondholders? and in some perspective, you can have some differences of opinion. they are saying these were mandated by law, as well, so all of these are mandated. the job is to go through and say which ones have the biggest priority, which ones to a have

to met, because it is clear i cannot make them all. they had been very clear that they will try and try to make that. after that, there were other payments, and there was a disagreement on what the priority would be afterwards. every revenue streams were dedicated to different kinds of bonds. this is why you go back to this idea of wouldn't it be better to have a control board or a chapter 92 force and have a judge or some kind of authority to say this is who we must pay first legally and not just a politician. david: what about the other? laura: there are the public finance bonds, and this is part of it. it is what is called the infrastructure agency.

david: the governor was not shy about blaming this on congress for not getting something into the spending bill. we have the democratic counterpart saying they want to have a hearing on this situation as soon as they get back on the fifth of january. laura: there has been a lot of lobbying. he has been in front of different committees to present what he feels is right, and there have also been to print hedge funds and mutual funds who have gone through and leaned on their contracts -- contacts in congress to do that. you have this mass of people trying to influence congress, and they say they are going to address this, but i think how quickly is the question, and we -- exactly.s is not

when that will actually transpire, i think that will really be the issue. lore, thank you. she covers distressed debt for us here at bloomberg -- laura, thank you. muddy from the pimco total return fund, and even though pimco was the biggest loser in terms of withdrawals, it has actually outperformed over 80% of its peers, beating the benchmark index for the past months. funds from los angeles, john, it is good to talk to you again. today,te of this fund house apprising is it that it is doing as well as it is? ahn: it is hard to do this at time when people are pulling out money, because it kind of limits your options. what happened with the high-yield funds that ran into trouble is that they had high redemptions, and they ended up with like the worst product, and so they entered this death

spiral. now, pimco total return is much more investment grade. same issueshave the as the troubled bond funds, but the parallel is it is harder to go up when people are pulling money out. david: how measurably different is this fund? when you look at the composition of it, has it changed radically since he left? john: well, the management team is pretty much the same. easel --her and mark mark. a steady teamare and that they are keeping the boat running the same way. they also rely heavily with the outlook that pimco has for years, so they will argue that they are going along in the same direction, and, in being nots like

reliant on one strong personality. it is a team that is running it now. great quote was a during your piece. clearly, it feels like they have turned a corner. like they have turned a corner, and they also feel like the opportunities have turned a corner. as far as the opportunities, a in seeing opportunities energy, emerging markets, sectors that have been beaten down a lot, so now prices are attractive in some of those areas. as far as turning around the ship, that is something that takes a long time. we'll panic and pulled a lot of money out fast because of bill gross leaving. so they were under a lot of pressure to do a good performance and show that they could keep the ship going in the right direction in terms of getting returns for investors, investorselieve that

will return. you,: all right, thank john, covering this for us from los angeles. coming up, the rise and fall of the so-called ad boy of pharma. that is next. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. 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. david: live from bloomberg's world headquarters in midtown manhattan, you are watching bloomberg television. i am david gura. we have more from our news desk. cosby, theill comedian charged with sexual the firstom 2004, criminal charge in 2004. he was once considered america's favorite the dad, but the comedian has been talked by allegations of sexual assault. those charges were listed today. take a listen. >> the charge we are proceeding

on today involves one victim, involves a victim that went to mr. cosby's -- home, a felony of the first degree. the 70 eight-year-old comedian had previously said he had consensual sexual assault employee.emple and the fight against islamic state intensifies, and mr. biden is joining turkey. the u.s. is pressing turkey to do more to fight the terror group and tighten its border with syria. the u.s. is accused of launching -- is accusing a country of firing rockets near ships firing through the strait of hormuz. someone fired less than one mile away from a aircraft carrier.

and a family of 12-year-old tamir rice is suing the city of cleveland. and the two white officers are involved in the shooting are facing a departmental probe, which could involve termination. meanwhile, they are trying to get cleveland native lebron james to join the protest by sitting out on his basketball games. local news 24 hours a day powered by our 150 news bureaus and more than 2400 reporters. david: julie? julie: a dramatic impact. let's look at oil prices. exhilarated throughout the day. 10:30 this morning, we got the weekly oil inventory numbers from the u.s. government, the energy administration, and we saw the unexpected build in crude inventory last week, and

that put more pressure on crude oil prices. there is one etf here in europe see itacks, and you can is down 2% as well today, so that is what is going on with oil prices, and russia is quite dependent on oil for its economy. take a look at the etf, as well, which is interesting because it is only down not even half of 1%, even as crude oil has fallen. more dramatic, however, is the fall of the russian ruble, and there we see underperformance. here it is on and intraday basis. we have seen about a 19%, 20% increase of the dollar versus the ruble, and on a closing basis, it has been trading near a record low, the ruble versus the u.s. dollar. david: that is julie hyman at our bloomberg markets desk. taking over and trying to rehabilitate, a company now filing for bankruptcy. ♪

david: live from suburban world headquarters in manhattan, you are watching bloomberg television. ura. david g was on bloomberg markets on november 25, just days after buying a company, and he told us why he thought it was a good investment. potentialere is a drug for leukemia, and we are really excited to see that. hopefully, the patients who have this really awful, terrible disease will get better, and maybe in q1 or q2 if our trial works. they have been struggling for a while, and there are many different ways did could invest, and why

you go about this in this specific way? martin: we could not get the calls back, and we needed cash, and we see that a lot in corporate america. there is a lot of irresponsibility, especially in management teams, so we named ourselves the new management of the company, and now be company has the cash to do this trial for this life-saving drug. but one thatgs, was given away for $1 million and then sold for $20 billion just a handful of years later. i think it is a promising drug, but we still have to do the trial to find out. operate thisant to as a separate company. any offers down the road? istin: three year survival 20%. most people do not have a good shot. david: i want to bring in drew

armstrong. he was there then and is here now. compressedsed by how this timeline is. it was only weeks ago that he bought this company. yes, -- drew: the stop was on its way to never being heard from again, and it closed at about $39.50. to beingrom nothing worth millions just because he stepped in. and now we are looking at bankruptcy. it was gone, it is here, and now it looks like it is gone again. there are some remaining assets. they do not go away. but, yes, that was a wild ride. david: he was talking but the inefficiency of the stock market. what is the latest on that?

drew: we saw "e-filing today. it is a way of preserving the company, because they will say that this company does still have assets. of's see they win the appeal being delisted. that is a good thing. they have two drug candidates that had some potential and pipeline possibilities for treating some very hard to treat, aggressive forms of blood cancer. it is not that there are no assets. however, this company was martin shkreli. he took it out of obscurity and turned it into a hunch million dollars of possibility. gone now as well as two directors on the board, who reside. it is kind of hanging on. david: how much are these aggregate assets worth? drew: the only reason i think

people are paying attention to this is because of martin's involvement. he is a massive name in the news this year. watching him over the last several years, leave one company ing, with the controversy over drug pricing, take theto kaobios, stock up to $100 million, get arrested. it has been kind of insane. we would not paying attention to the company otherwise. they have very early stage assets. it is a gamble, just like every , and what it is worth we may not know for years. at this point, no. this is an exceptionally, exceptionally --

a gamble for anybody who is investing in these assets. david: so i read through the filing, which i ensure you did, ios there it said that kalob had an imminent threat. is that the arrest of martin shkreli? o is underce indictment, and it is about to lose its ability to trade on shares. martin was able to buy up a controlling interest. he has a vast amount of the capital that is in this company, and it is his on the and his ability to fund the company that makes it a possibility. with the federal government has said is that they will seize any ill-gotten gains that he has acquired. if you're looking at from the funds,hat kalobios has that is certainly a threat there, which they could seize.

david: we have talked about this company in the abstract and have talked a lot about martin shkreli. : this is not a big company. he says he run for little, tiny pharmaceutical companies. and he has made them much larger. his old company that is part of the indictment, where he allegedly load shares, gave shares to investors at his old hedge fund. these are relatively small companies, especially compared to the whale sized companies in big pharma. david: drew armstrong, thank you. one of the years signature all -- signature moments. a very profitable farewell tour.

♪

bloomberg'sfrom world headquarters in midtown manhattan, you are watching bloomberg television. i am david gura. i went to go to abigail with the latest from the nasdaq. abigail? abigail: the outperformance of the index relative to the other major u.s. indexes. the dow is down slightly, and the dow transports them about 15%. the reason for this outperformance will he go to our amazon, is facebook,

netflix, and one stock not performing is apple. in fact, apple is on pace to close down with the convergence of an index that shows quite dramatically. on news ite is down has paid 318 million euros to settle an italian tax claim. apple's tax dealings, even after they have said in the past they gimmicks, and there is the ongoing bearish commentary and asset reduction on the possibility of week iphone demand in 2016, causing apple to close down a again for the first unlikely since 2008, putting all focus on the company's fiscal first-quarter report in january 2016. david? there,my colleague abigail do litter, thank you.

corey johnson joins me now from san francisco. i want to start with this quotation from the op-ed, mark zuckerberg singh who could possibly be against this, this being facebook's push to bring the internet to india. cory: it could be one billion people opposed to this. sorry, mark zuckerberg. the indian government pushing to the second week of january, but it is still a question. mark zuckerberg lobbied very hard to get this deal. mobile carriers low datawith a capacity offering that will have just a handful of offerings set up for this free basic. mark zuckerberg says it would be

open to anyone who wants to program with these constraints, and it would also involve g, and facebook, of course owned by facebook. some people say it is not about helping india but helping facebook and doing so by providing free internet service. other competitors, not just twitter. david: mark zuckerberg has been in this position before. i think of the amount of money he gave to a school system, and that sort of backfired, and a whole book was written about how that did not go as he wanted. cory: what is interesting here is the notion of net neutrality and what it means. fellow isa stanford as fundamentally, mark ackerberg might have

charitable aspect very much in mind and think about the way it can help people, but he is sort eye to thea blind people who are saying, you cannot have all of the internet. you can only have this little bit. true to a lotgs of indian people that they are being offered something less than the best, and to those people who know what the internet is, they say forget it. -- wenot what you're many internet.t your mini a sampling of what the internet might have is offensive to some people. that was certainly the contention today earlier on bloomberg television and bloomberg radio. david: when i hear about this, i think about the one child, one laptop program. we can build a scaled-down laptop for less than $100 and pass it out this is basically mark zuckerberg, there was a

report that said this could really elevate people and property. cory: one in 10 people who get on the internet lift themselves out of poverty because of what they can find they can do with the internet. addressed this in speeches he has given on this topic, but this is an interesting battle, and as if india is not big enough of a shooting match, and it is with over a billion people, and it may be a model of what can happen with activists, like countries in areas like brazil, looking at this as a way to wage hey,ht and a way to say, we can actually ask for more and there are the wireless carriers offering this. this is being seen as a way to

hook users to pay for more couldive plans, and that be a problem with licensing in india. david: lastly, i want to ask you about internet.org. what is it question or is it just a charitable arm of mark zuckerberg? cory: it is not just mark zuckerberg, but it is a charitable organization. when you look at the laws of the big numbers, and you look at the giant companies like facebook and apple, what they are trying to do, and where they are trying to go, there is a certain point where they reach the audience that is out there on the internet already, so the only way they can grow in the distant future is by adding a lot more people to the internet, and whether it is charitable or for business reasons, it is certainly true that the only way facebook can have meaningful growth for decades to calm is if a lot of people who do not have

any kind of internet access whatsoever get to the internet. cory latercan catch today, anchoring "bloomberg west." film industry is toasting its best year yet, box office topping $11 billion, revenues raising more than 7%. reporter who covers this joins us from los angeles been we have been following with rapt attention the success of "star wars" over the last few weeks pre-how is this attributable to star wars? wars accounts for part of that billion, but if you look at how much it took us to crossing this record mark, the yields are about 3% or 4% before out, so about a

2% increase over 2014 due to this one film alone, which is quite remarkable, and analysts are expecting this movie to affect the box office into 2016. this is kind of phenomenal. important is this metric to studios? this has to affect growth versus attendance. how do they look at it? reporter: you know, there are two key measures. one is the box office. ticket price inflation over the past decade has scheduled to enormously to the box office and this new watermark of $11 billion. there is feeding, luxury seating, people going to see more movies in 3-d, so this year, it really drove "madgoers, so movies like

max" or "jurassic world." is something else that wall street is concerned about. behind the box office numbers, how profitable are these films? when you take away the cost of making them and the cost of marketing them. we havell the films mentioned thus far have been revivals or remakes of past movies. sequels have been popular not just this year but in years past. is that where studios are putting their chips? therter: that is definitely issue going further. warner bros. and fox have made out a series of tent poles for the coming five years, and disney, and you will see another star wars movie. you will see more marvel movies that isomics movies, so part of the hollywood studios. comics' movies.

universal has had a record year, and it sought out quite a lot of unique films, like "straight out of compton" and "50 shades of grey. when david: joining us from los angeles. and its 50th anniversary of the grateful dead, and one last time, with a chance to reminisce, but they were also important to their legacy. ♪ dissented indheads santa clara, california. the start of the grateful dead farewell tour. ye, and there is

plenty for sale. snowboards. we have skateboards. we have shoes, from sandals to tennis shoes. we have our new guitars, so there is a long list of licensing. reporter: 20 years after jerry garcia died, the grateful dead merchandise is still a cash cow. not just for the band, but also for an entertainment group that is a division of warner music. >> they want the trademarks to be out there, but, yes, they want to be compensated for it, as do we. reporter: that entertainment company got a 10-year deal with them in 2006 to have their trademarks, websites, studio albums, and live recordings. a brand-new deal.

this was one of the original ones. is where they saw what really made the grateful dead the grateful dead. a long time, the grateful dead made most of its money off of concerts. they controlled to get sales and merchandise, and for a while, ran its own label. >> it is not like they had a hostile relationship with the record industry. they were saying we need to have you become consummate musicians and put out good records, and their attitude was, no, no, we consummate musicians. report: everything changed in 2005 when jerry garcia died. the band stopped touring, and the remaining members were less interested in running the day-to-day business of the grateful dead. >> it was probably a sense that they need the kind of outside help that that company could ring to there, and that trying to do that in house would

probably would have taxed them too severely. report: with their help, they have sold 35 million albums. that will be enough to assure another lucrative deal. >> it has been a great ride, and i am confident we are going to work with them for many years to calm. do that, they have to grow their fan base. >> this music is really, really they and there is a reason were the number one touring band for 10 years. it was because these are great musicians playing great songs. david: and their final show brought in $55.2 million. over 250ift had million dollars, but that was for 63 u.s. concerts.

coming up in the next hour of the 2016g markets," economic outlook with a guest. that is coming up next on "bloomberg markets pure love

york,is 3:00 p.m. in new 4:00 a.m. in hong kong. welcome to "bloomberg markets."

betty: welcome to "bloomberg markets." good afternoon. second to last trading day of the old year, 2015. doubt turned negative for the year and the s&p clinging to yearly gains. economic hotspots in 2016, from russia's efforts to boost its economy to argentina's new president promising reform. are any of these countries good places to park your money? hedge funds have had a rough 2015, with seneca the latest fund to return money to investors. is this a game changing moment for the hedge fund world? markets are closing in less than an hour. on to head to the markets desk, where julie hyman has the latest.