loss in seven years, and shares fall to the lowest in a quarter century. we will be hearing from the bank's ceo. and it is the end of an era in media. sumner redstone calls it quits at cbs. ♪ welcome. you are watching "bloomberg ." i am stephanie ruhle. my partner, david westin, is out this week. corey johnson joins me. johnson joins me. cory: yes. england keeping it

unchanged at 0.5%. this was not unexpected of course. , so it wasted 9-0 unanimous to hold its rate at 0.5%. you can see how futures are moving right now. up across the board, not huge gains. also games in europe right now, the ftse and 81, the biggest gainer of the european majors right now, let me toss it over to mark barton, who is standing by in london with more. mark? mark: big news because ian mccafferty has been posting to raise interest rates each of the last six meetings. he joined the rest of the bank of england, and as you said rightly, the bank of england is now 9-0 to keep interest rates at a record low .5% am where has been, by the way, since march 2009. that is the for significant move. we have a more dou dovish bank f

england. reading through some of the announcements of the minutes of the meeting of course, we have the quarterly inflation report as well. mayays sterling decline reflect eu referendum risks. novemberlast inflation report, the bank of england has noted the strength of sterling, but sterling of course has been coming down the last six weeks or seven weeks. that of course is less they worry when it comes to inflation. it is watching emerging market growth, it is watching global downside risks, is watching for second round o effects of inflation. let's look at its forecast because it is forecasting 2.1% over the two-year horizon and 2.2% over the three-year horizon, but it has cut its near-term cpi forecast. it's medium term forecasts are unchanged. what does that tell us? yes, the bank of england is worried about the near-term impact of low oil rices, but it

is also telling of that the bank of england remains confident it will hit its two-year inflation goal of 2% over the horizon. does that tell us that markets are too bearish when it comes to the bank of england rate hike? as we know since the november meeting, and actually even since the last month, rate expectations have been pushed into the future, but the most significant announcement from this meeting is ian mccafferty has now joined the doves, and the bank of england this now 9-0 on interest rates. steph? stephanie: there you have it, mark barton. matt, i was making fun of cory for flubbing that beginning, and here i am doing it. matt: i do not think he flubbed it at all. stephanie: i think he had a very weak start. matt: we see futures across the board. not huge moves, but definitely green arrows. dow jones up 33 points, s&p

futures up what 1%. check out what we see in oil right now. the move here in london first, i said london is the biggest gainer of the majors, you see it up 1.2%, and you see the dax up germany, up about on .1% in france. shares on theell ftse. % right now, up .99 because profits were in line with estimates instead of really missing like we have seen other companies doing. bp actually gaining as well as total, both heavily weighted on the ftse, total obviously on the cac take a look on. at oil. profitutch shell's

today, this is oil over the last three days in white. you can see we had a massive run-up yesterday, and in yellow here, i just put the s&p futures, you can see how well they track, how closely they are correlated. it will be a major theme on the program today. take a look at the dollar as well because we saw a massive drop in the dollar yesterday. this is a three-month chart. i put the timescale up to show you the severity of the drop,, the biggest drop in the bloomberg dollar index in seven years. commodities price of dollars like oil, gold, and stocks here in the u.s. stephanie: matt, i struggle when we say oil has done so well. it is clearly off relative -- i want to hear from our guests now. it will help us break this down. renee haugerud and simon kennedy, bloomberg's chief

economics correspondent. hard because i gave cory a time for flubbing the beginning of the show here and i will be cursed for the next three hours. i was looking at data. they evaluated 14 500 companies. we are seeing more and more ceo's starts with knowledge we may be headed into a recession. do you think we are. ? : i do not think soak. i think we are chugging along. could we get to -.5%? the last time i was on hamas and everyone is looking for the extreme either to break out on the upside or go into a recession. we are maybe not chugging along as much as i thought -- 1% growth, really keeping the head above water. renee: right. cory: if you look across the

world, if you look at central america, if you look at the petroleum-dependent countries, the effect is going to be a disaster. renee: it will be. gophanie: i want to sort of around the horn with the different factors that have investors so concerned. when you look at china, oil, for you, what stands out the most as what could put us in the worst position? simon: for china, the black box. no one really knows what is going on. the policies -- very limited conversations from the policymakers there about what they are trying to achieve. andmanaging the economy, then you put on top of that the falling oil prices am a as we read this week may now be a sign a weaker growth rather than sign of future, stronger growth, which would be expected with such a decline of your you throw in the geophysical turmoil, and the sense of the central bank -- even though the bank of japan

and you see the are looking to do more stimulus -- that stimulus is less potent that it was was. following,ets are the central bankers will be there for us -- they might be there, but what they are bringing to the party is not as strong as it once was. stephanie: they will not be able to help you. investors that when we were in the mid-$30's, this was it. now we could be in the teens. where do you stand at this point? renee: well, it has got a little bit lower than i thought as well get i actually think $35 is a good medium-term point. the issue is with the crude oil. we have a huge supply. we have storage, we have inventory, we have new production. the perfect storm of supply toured ok, demand is chugging along, demand is still their, is not going down. but we think it is exacerbated by a lot of the training. a that we can have -- by

lot of the trading. matt: can i jump in and show you that you are right? what i have here is the chart of the three times bear oil etf's. everybody was going mega short in this etf. the white line here is the price of oil. the green line here is the amount of interest in the contrast. you can see that we peaked a couple of days ago here, and now have lost about $600 million of net asset value in the short. cory: is it levered long etf or levered short etf? matt: levered short. only half of the fund exists now, and the current market cap 300 $15 billion whereas it was closer to $450 billion -- is $315 billion

whereas it was closer to $450 billion previously. cory: the oil companies are doing m&a and other things, they are basing in these long-term, $50, $70 prices. stephanie: i don't know, are they, renée? renee: i think 70 definitely is. could we get to? $50? absolutely. i think $35, $40 session -- it could go down to $20 in the next few days, but by the in of the year after we get through some rationalization of supply, i think we did go back to $35-ish. stephanie: emerging markets have gotten rocked by the oil situation. when you look at emerging markets right now in terms of

the global economy and, you know, more signals that we should be in a very fearful environment, how do you see things? when i look at corporate bonds, high yield bonds, the leverage they have got is scary. simon: absolutely, and that pain gets greater every time the dollar ticks up. you have a situation where a lot of corporate's have borrow dollars and have extremely pained the values. you follow the traditional is an, the companies go down, so it is obviously a real concern. the real nexis is an energy-rich company who has borrowed in dollars and has a lot of debts, you are in big trouble. keep to add to that, we hearing this drumbeat about how china is not an important part of the u.s. economy. all the imports and china relative to the gdp. but when you look at other countries that are greatly affected -- mexico, japan, southeast asia -- the impact of a china slowdown is not just

kidding china. it does not just hit us from china because other countries are greatly impacted. stephanie: right. for you, emerging markets, how much are you focused there? when you look at emerging markets corporate, the sovereigns go first, the corporates go next. those corporates have more on their balance sheet than ever. they're getting significantly worse. renee: right. we do not focus a lot on emerging markets. we do on agricultural-rich, the commodity -- i mean obviously outside of oil. we think that we are getting to a state where -- and as an article out this morning -- maybe we can get into that, too. i mean, there is not enough ammo on lowering interest rates good . i actually started trading in 1995. it was dynamite. it was something unexpected.

when you look around the world and say, well, how can the central banks, how can people get a control on this? mean, if you have massive outflow from china and they try to just control it independently, it will be difficult. this needs to be coordinated. i am just starting to hear whispers about it. i think it is interesting, and that will help emerging markets as well. simon: bank of america oh, deutsche bank have been talking about in recent days, the shanghai reaching. the plaza accord, you try to support the yuan, i'm not think it will go down. stephanie: simon kennedy, thank you so much. cory: thank you very much, simon. thank you, renée. coming up, we will talk about credits we's. a -- about credits we's.

$520 billion insuisse. suisse.ut credit a $5.8 billion loss. that is next. ♪

vonnie: welcome back to "bloomberg ." another big recall involving toccata airbags. -- takata airbags. it is recalling another 200 million airbags because they can explode your so far, 22 million vehicles in the u.s. have been recalled because of the issues. mler iss-benz -- dai forecasting only a slight gain

after a record performance in a 2015. the company is seeing the slower growth in two of its biggest markets -- china and the u.s. and the company is falling of premarket trading after a forecast that was well below listedes, plus gopro negative sales after the holidays. seephanie: credit suis posting its biggest quarterly loss in seven years. a drop in trading deepened losses in the security unit. bloomberg zone francine lacqua spoke earlier with the new ceo tidjane thiam about whether this will continue to be the story in 2016 for francine joins us now in zürich. tidjane: they are the ones we controlled the lease. if you remember, there is a lot we are volatile. stephanie: francine, there were

a lot of concerns when tidjane joined. he has never run an investment bank. the story be told that he should not be? francine: well, i think that would be a fair point, especially if you look at the share price, stephanie. investors are pointing to if you look at individual divisions, there must worse than expected. this loss was a monumental. we have an important note from citigroup saying they do not believe that credit suisse can actually stick to their targets. the goals that tidjane thiam told us in october and then repeated to me today that he believes he can obtain. looking at futures, no question, he has been in the job for nine months. other saying if you look at the share price, it means that certain investors -- we had ubs on tuesday, shares were out a bit bigger. credit suisse is such a big loss, i would rather put my money elsewhere. that would probably be quite

fair. gameanie: tidjane thiam's plan has been let's li na to china, asia innovate way. lean into china, asia in a big way. that is exactly the question i put to him. he is bullish on china longer-term. he says twice 16 we will see more volatility, but he did also point out -- and he was trying to be as optimistic as he could -- he says we are going to take some pain. we will continue restructuring. we will get better. volatility is here to stay. but he says the market is confusing volatility with wronging underlyingly in the economy, and he does not see that correlation. it is ok, but the markets are not your we really have a disconnect between what we see with the economy if you look at the u.s. the lower oil prices good for consumer.

most of the gdp is consumption. from thater vary position. consumer feels good. it is obviously worth much more. stephanie, you are absolutely right, the problem is all with the investment bank. people say look at the slump, he should have cut more. other investors saying he could have cut into the fat instead of only cutting -- cutting into the muscle instead of the fat. people are uncertain about the details of his strategy, but i found a tidjane thiam this morning that was confident he will get the show on the road, things will get better, and he is asking for people to be a little more patient. stephanie: one more problem -- morale. remember, tidjane thiam stepped into that seat after many people stockisappointed with the performance, and brady dougan was the guy to lead the turnaround. the credit suisse team cannot be feeling too good. --omberg's francine lacqua

davos was going to be the only place she would be bundled up. we will have more with renee haugerud from galtere. also, the chairman of cbs, sumner redstone, resigns third will that mean for viacom? you will have -- you will be watching "bloomberg ." ♪

cory: big day in the will of media. viacom's chairman sumner redstone stepping down here it also the chairman of cbs. the world's largest media company. 92 years old is summerner, but e has been in poor health. les moonves will take over for him. bill cohan joins us. bill, this is interesting to watch from the sidelines. what you think is going on inside cbs? bill: cory, i do not think it

means anything. les moonves has been ceo for, whatever, 10, 12 years. he has done by all accounts a very good job, a great job. he was the designee of sherry redstone, sumner's daughter, to be the chairman. they have that agreement in december. this is putting forward what they agreed to. everyone he knows that sumner is not a good health. he knows it, we all know what, so this is a natural thing. it is a real sort of moment to pause and reflect because sumner redstone has been such a big part of the american media landscape over the last 30 years, but this is obviously an inevitable part of life. i think it is a very good choice that was made by cbs. cory: to that point, when we look back and look at what sumner did him a putting together what is viacom, water sort of his hallmarks?

what are the things he did best? bill: do not forget he also arranged to buy viacom. by an viacomin in what amounted to a also takeover of a media company -- something that is not happen anymore. he then bought cbs, merged the two together, splits the two apart. he put les at the head of cbs. he has created vast wealth for himself, a lot as well for shareholders, so it is a real moment in time to reflect about what he has done. i do not know that it is going to change things very much. i mean, he said he will live forever. assuming that is not happen, the control of these companies passes to a trust, a seven-member board trustee or not think they will do anything rash soon. the rashest thing you will see

is what we saw yesterday, which is hardly rash, making les moonves chairman of cbs is hardly rash. interesting to see is if the chair of viacom will get that role, and i will bet he will not. meanwhile, revenues down, if you look at the bloomberg down for the year, down 10% last year,down even more last the business is struggling. viacom is definitely struggling, cbs is doing fine. are there any people out there who believe that -- cory: bill cohan, our intervening editor, always great to have you on "bloomberg ." ♪

stephanie: welcome back to bloomberg . tom keene is here fresh from

bloomberg radio. it is almost time for the morning rest -- must read but let's get to the first word news. andie: hillary clinton bernie sanders trying to his sellers their credentials as progressive in a town hall meeting in new hampshire, six days before the primary. sanders says clinton is closer to a moderate. clinton defended herself, saying she was a progressive who likes to get things done. polls show sanders leading in new hampshire. will proposema reducing the cadillac tax on health insurance plans. lawyers and unions have complained the tax won't be imposed until 2020. florida has the count that declared a health emergency in for counties over the zika virus. nine cases have been reported. the declaration allows the mosquito spray to be used more in those counties.

stephanie: here we are, hearing from -- the question is, it is physically like he is going to stay the course. he's actually turning to speak right now, let's take you there. >> to maintain bank rate at -- when bank rate first reached this level, all of seven years ago, the global economy has called, financial markets had plummeted, private domestic demand was collapsing. yesterday's decision was taken amid sluggish global growth. andulent financial markets the ongoing resilience of the u.k. financial system and its private domestic demand. those distinctions explained the difference between the outlook then for a recession and now for a continued solid expansion.

global growth has slowed again over the past you months as emerging economies decelerate arthur and the u.s. economy grew less than expected. global growth is expected to remain around 1% below its past averages this year despite the boost to real incomes in advanced economies from lower oil prices and a fiscal policy in the euro area and the u.s. main trading partners are expected to remain well below past averages, reflecting the balance of the growth and it advanced economies and a eventual modest flow recovery. time, the npc has identified downside risk to the global economy from deteriorating in emerging -- prospects in emerging markets. the challenges of global rebalancing in china, the impact -- theply declining reversal of capital flows and the market tightening of

financial -- as these risks have become to materialize, global financial conditions have deteriorated including widespread falls in advanced economy equities, prizes and corporate bond spreads and increases in market volatility. all of these developments pose downside risks to growth in the united kingdom via trade, financial and confidence channels. the outlook for trade is challenging with net exports expected to drag on u.k. growth over the forecast period. there are three domestic offsets to the tightening of financial -- global financial conditions. fallen 3.5 percent since november, the largest decline between inflation reports since the crisis. fallent yield curve has since november and third, the u.k. financial system is resilient. it is important to recall the

major u.k. banks are well-capitalized and take into account the results of the bank of england's 2015 stress test, a test which focused on a much more severe shock to chinese and emerging-market growth, sharply higher spikes in financial volatility and steeper falls in risky ask it -- asset prices. this means the banks are much less likely to amplify such stress and are likely to be much more able to continue lending to the real economy, even if global conditions -- deteriorate further. of the u.k.ce financial system is matched by the resilience of u.k. private, domestic demand. despite the slight slowing in the pace of u.k. growth last year, and the prospects for referendum this year on uk's membership of the european union, indicators of household and business confidence remains robust. lean years, real

income picked up sharply last year, supported by record high employment and lower food and energy prices. they're expected to grow solidly going forward. business investment growth has been well above its precrisis average with firms investing to meet rising demand while benefiting from favorable credit conditions. but the understandable exception of the oil and gas sector, such strong growth is expected to continue given high returns on capital and limited air capacity. overall, given global weakness, somewhat more modest wage growth and accelerating fiscal consolidation, the overall pace of growth in the u.k. is expected to dip low past averages before returning to around 2.5% thereafter as a tighter labor market, rising -- and rising productivity supports consumption as well as spurring business investment.

this modest profile for demand compared with the last report is matched by a lower but still solid dr.. -- solid marker. stephanie: let's go to simon to break this down. mark carney continuing to be dovish. about this year being a point of focus on whether rates would rise in the u.k. and him that vote on the npc, the rates are not going up anytime soon. cory: he's talking about somewhat modest rage -- wage growth. tom: i heard the word resilient three times but what was unique was the larry summers phrase which got my attention. incredible fors him to talk about the confidence channel. is that new language from a u.k. banker? he puts great stock in

animal spirit and the need to pick up confidence and what he is looking for is confidence among companies could push up wages, among consumers to spend that money that they get and to push inflation past the target that it has been missing so long -- for so long. the market likes the word resilience. it has been moving up consistently since the presser began. simon kennedy, thank you. my morning must read is all about glencore. the south african company has come out saying glencore cannot honor its deal because of the price of colby you low, check out this quote it has something they often get us to pay exorbitant amount for their

coal. i felt like they were holding a gun for my head, he said, but we were able to procure call at a at less than the price they were asking and the power plant did not shut down. months ago we thought they were on the brink of disaster, they jumped the shark, but i feel like we have not spoken about them in a wild. probably going to disappoint you on this, i don't really focus on individual equities, i'm more of a base commodity currency landscape, so to dig down deep and see what's happening in glencore politically, i probably don't have a lot of opinions on that. but as we have seen, they have a very leveraged that in the -- leveraged bet. long term company with

roots well back into building up commodities in commodity trading. i will not venture to say what is underneath the curtain so to speak, but i think they have some rough waters ahead. stephanie: if glencore went down , what kind of impact would it have on the overall market? tom: that's an important question and i don't have the comparison to long-term capital, but glencore is tangentially like normal group over being a trading group, it is not just about a commodity analysis, there is a lot more moving parts going on than just a pure commodity. cory: the thought was glencore will be protected from downturns in the market. we've heard that before. [laughter] stephanie: if you look at trading, glencore is on pace for the word straight weekly gain in

the longest weekly winning streak since may of 2015. they got hit very hard and they have seen quite a comeback. you: in terms of tom, when look at this company, it is one felt was auld have big selloff of commodities last year that they worst is over, but as we talked about earlier, tom: -- tom:this gets to my morning -- tom: this gets to my morning must-read. let's bring up the quote and this barely touches on the quality of this research. the structural shift toward a lower price environment in oil will have profound and long-lasting consequences on the production --che ized production. with prices trading below the $30 mark, our expected 10% cut

in 2016 global is starting to look modest -- global is starting to look modest -- cap modest.rning to look people need to recalibrate the industry and that leads to much bigger cuts. cory: when you look at perfection, it has not taken that much of a hit. production is not down that much because you have such efficiency and the expense much money drilling for oil. they want the revenue that will come out of oil, even at $30. i'm still of the opinion that they will make it through. time i wasn the last on, we feel beholden a lot of the sector, oil is the caricature. they are the front page. the commodity sector with the leading indicator of the global economy.

we think that could be facing a little bit and it is hitting equity but the commodity equities got hit first, so we think even some of the commodity thaties could be basing they were the leading indicator, now we move into the next dominoes to fall, the equities across the board and we have seen some high-quality banks that have been masked by this. everyone has been selling caterpillar and glencore. tom: can i interrupt and say that matt miller comes up with the most depressing charts known to mankind. this is the chart of 18 months ago isn't it? matt: i heard them talking about the s con coal issue in south africa. i've been coming up with some very depressing charts although i will point out that the one we showed earlier, it showed --

tom: you don't know what you are doing, it is hillary that saves you? you are a font of knowledge. matt: this is the triple , oil etf and you can see that the market cap has dropped. stephanie: which is a great way to lose a lot of money. matt: you made a ton of money on this over the last couple of months, but everybody got out. weeks, thist two triple sure oil etf is down or a 3%. 43%. down inphanie: when you sit down front of your terminal, what are you doing? mentioned, i am not a day trader so i try to stay aware. as buffett says, when everyone

is manic, you have to look at the downside. when everything is extreme on the downside, you have to look at the upside. i don't think we are in a disaster scenario. i don't think we are going into a recession and i think oil to the front page because everybody is overleveraged to it. no one thought we would get to the levels and if we stay here -- tom: i want to go to a financial one on one that cory text on. -- touched upon. we waitingraged, are for a quintuple leveraged fund? this is out of control. cory: the leveraged etf's have been away for -- then a way for investors -- tom: i am in the double leverage cash fund.

i wanted to pull up a correlation chart. see how well correlated oil is right now to the s&p but corymost half, said it was the most it's ever been. see howrs ago, you can correlated we were back in 2012. stephanie: we have to take a quick break. they are demanding you return to radio. renee is staying with us and because cory is here and don't throws,the man of three steph curry, nba m.v.p.. golden state warriors took on the washington wizards, he started the game and scored 51 points in under 36 minutes. cory: he had 11 free throws.

stephanie: i remind you, i made my first basket and he missed his. we stick with four-week eyes on drug concerns. we get the coffee buzz when we return. ♪

stephanie: you are watching bloomberg . i am here in our new green room. don't miss ken jacobs in just a moment. vonnie: welcome back, here is the latest business flash. the company has been hit hard by the big drop in oil prices.

shell is betting an acquisition will help maintain dividends and increase gas oil production. lions gate entertainment is funny to restart stars after buying a stake in the pay-tv network company according to -- john malone has controlled stars voting shares and is interested in merging with lions gate. that is your bloomberg business flash. -- : you follow this commodity quite a bit, why is coffee important? [laughter] renee: demand is growing around the world. it is basically one of our morning staples, but it's also a commodity that has taken a lot of the spotlight in the

commodity sector over the past few years. we had the drought a couple of years ago and have been in deficit for two years and we rallied up over two dollars and now we have been rationing that price significantly down towards one dollar. we got down to about $1.15 and with demand growing, supply has been constricted because of this drought, but in fact, the whole el niño weather situation has missed a lot of the a replica areas and a replica has had a lot more supply than we initially thought. cory: so the negative thought -- effect of el niño did not hit those areas were coffee is growing. and some of the irrevocable and columbia, so we are getting the nescafe for lunch, the robusta, the variety is in much more short supply

then the replica -- a replica. -- aravica. renee: i have a math on el niño. stephanie: we can pull that map up. renee: it affects everything, coffee, cocoa, corn, beans. we are in a strong el niño right now. there is snow in my home city in california. renee: the el niño is typically theacterized by more wet in midwest, grain prices actually come down. matt: i have a map here of all of the places where corn is major and the prices. $138 per mentor time but if i zoom in on just the u.s., we will see a price per bushel of about three

dollars 50 three cents and you can see here and the yellow areas, when you get to the red areas, it is even cheaper. washington, it gets more expensive, about $4.66. stephanie: copy, what is the trade? what do you like? renee: i'm still on a little bit of coffee but it is a trade, i am not looking for a new high because supply is not as compromised. the coverage is there. because of the currency move and going up to $4.25, everybody who has coffee in their coverage sold it out. going tosupply is not be as compromised, a lot of forward selling, so there could be -- i think we are basing, it is a trade, but if the brazilian

real -- ray i -- we could have a pretty significant bounce. stephanie: we have to leave it there. we are short corn. renee is staying with us, you are watching bloomberg .

stephanie: you are watching bloomberg . how are banks being affected in your opinion by this route in in oil? renee: everyone has been building up the banks, and that interest rate for rise and banks will be better. high-quality banks have a lot of exposure on their books to the oil sector in lending and investment banking and trading and we inc. that if the equity markets rollover, high-quality banks could be one of the first

to get hit and its mast with a lot of the other -- cory: that has been the question in the conference calls. i don't go into any specifics on individuals, but we think high-quality banks that have not mentioned it, a little bit came out in the fourth quarter but we think the first quarter, if we don't have a recovery and the energy sector and we don't think we will, significantly, it's going to hit the banks. thank you so much for joining us. ken jacobs when we come back. ♪

stephanie: it has been a terrible start for the year for financial stocks. we speak to ken jacobs. the business of women's

congresses, them and is him is being granted and sold like never before. theyer has got game or sure hope so, that is what investors are banking on. ♪ stephanie: welcome to the second hour of bloomberg . david westin is out. johnson. still cory stephanie: cori is pretty special but our next guest is pretty special, ken jacobs. we have a lot to cover but we give you some first word news. vonnie: secretary of state john kerry says the syrian peace talks will resume. sox resist -- were suspended for three weeks after syrian forces

made major progress in a major offensive back by russian airstrikes. russia was called on to honor the resolution to halt airstrikes. germany took in more than one million refugees last year. the german government says more than 91,000 asylum seekers arrived in january, less than the numbers that came in december but officials blame that on harsh winter weather. proposed tougher rules for asylum-seekers. the city of cologne is trying to avoid a repeat of the mass sexual assaults on women that occurred new year's eve. it is doubling the number of police being deployed for the carnival festival which begins today. theesses described attackers as north african and middle eastern men. look at futures,

they have turned it since the bank of england decision came down. they become slightly more dovish, the one hawkish member they had voted with the rest of the group to lead and -- leave interest rates unchanged. take a look at oil over the last couple of days, we've seen a raines in oil. yesterday we saw almost a 10% gain. today, basically unchanged but 32 dollars -- $32.10 a barrel. we want to touch on the dollar, one of the main reasons for the move yesterday and oil is the dollar. this is a great chart and you can do this yourself with the hs function. you put in a couple of securities and click the correlation box over here, i showed this earlier to tom keene and you can see how correlated oil has been to the s&p. able to grabo be

it and compare it to other historical -- moments in time. this is the reason you saw the big jump in commodities, especially oil. the dollar just came down. biggesty's move, the change in the dollar index in seven years. that pushes prices are -- gold right now trading at -- cory: market volatility has been very exciting this year to save the list -- the least. triple digit moves in the dow almost every other day. financials in particular are getting pummeled. ken jacobs joins us now, the ceo of lazard. do you guys do a lot of advisory work whether it's on the m&a side or managing money? i wonder how your customers are

looking at the corporate side and the money managing. i don't think anyone is freaking out yet, but periods of volatility tend to result in pauses in m&a activity. business, about half our business and the asset management business, on the advisory side, we spent a lifetime advising on acquisitions and client endboards generally impeccably volatility because it affects sentiment. m&a tends to be procyclical and generally speaking, boards and decision-makers like to see stable conditions, a verbal macroeconomic outlooks and when you get these periods of volatility, people tend to step back. stephanie: when you think about what companies need right now,

it's financing, especially when you look at where the stock prices are. what does that mean for you even if you have the best bankers out there when you don't have the balance sheet of a jpmorgan? ken: we have been doing this for years. we have never had a balance sheet. the decision about the advisor you choose oftentimes can be made separately from where you get the money from. in the end, the advice business competes on a -- intellectual capital and the decisions made in boardrooms and by ceo's are really about the quality of the advice and that they are taking from their advisors as well as their boards and his intellectual capital model which has been the core of what lazard has had for so many decades is what gives us that advantage. stephanie:. not having a balance sheet also protects you our last guest talks about how oil could hit banks in terms of the balance sheet, inventories.

when you look at the bank of america and jpmorgan out there, what do you think outlook is for them? near there nowhere kind of leverage and potential lawsuits against that leverage that we saw, that was a time where you had a crashing of onuations, starting really the financial sector which every to one was levered 25 when will -- and was actually a hundred to one. stephanie: we may have had the same parasitic 2007 because we did not see were the debt was sitting. -- it is muchcial better regulated than it was and what is taking place right now is not directly in the financial sector where is the was taking place in 2007 was directly in the financial sector. cory: you mention emerging markets and when you see a

duality in the world for the u.s. economy is a lots longer than what we see in europe and emerging markets, what are you seeing? ken: we manage a significant amount of money in asset management business globally and we have a real expertise in the emerging markets over decades. it is difficult to generalize the emerging markets today, because in the past you could say bricks and describe the emerging markets but there is a big difference between people that are net importers of commodities and oil and their prospects for the last couple of years and those that are exporters. the importers are going to benefit from low commodity prices, they suffered during this time. second, we have seen enormous swings in currencies, valuations, commodity prices.

the swing -- it swings too far so i'm not calling a bottom in the market, but we've already seen in norm and the question is when the pendulum starts to slow down or stop, is it where we are now, is it 15%? my guess is more, what probably less than we've already come. stephanie: is a big swing means this is in there -- mean this is an area you want to focus on in 2016? we are searching to see inflows. what does it mean for you? to be a yearing where we take stock of what's happening. the fundamental change in markets this year has been risk premium being reintroduced into the markets, primarily because what -- because of what the fed has done. they took the risk premium out

of the market in addition to lowering rates. we have seen the last couple of months, this reintroduction of this risk premium and with that, you are getting a recalibration of risk in the markets and violations. the real test is going to be whether the underlying trends that have been evident in the united states and in europe around a stable improving macroeconomic environment stays intact. if they do, that will be a good sign. companies importing oil and countries exporting oil. that is your differential. ken: if there is a recovery in the early part, it is going to favor those that are net importers and if we see some stabilization in some of the commodity prices over time, it should extend to others. stephanie: you are talking about taking stock or pause. does owning an asset management franchise still make sense?

it definitely was a dragon the fourth quarter. ken: we have done this for decades and there has been ups and downs. does not take any risk, there is a big difference. we can go home at night, we don't lend any money, we take no trading risks. we take no losses on our own, it's a very conservative approach to business. we are in the advice business. we are in what i hope to be the great advice is, we have to be better than everybody else that can throw around capital. long-term trends are aging populations, savings rate increasing to some extent in developed and developing economies over time, and this business historically has been a great long-term business, it has

its ups and downs because markets go up and down but the trend toward expert advice and great management of assets is something that is here to stay. weathere: how will you in the short-term, is it going to be a rough ride? ken: the beauty of our business it's a stable business on both the advisory side and the asset management side. we have seen ups and downs before, we have a ton of advice with our bankruptcy practice. i think the m&a market is here to stay, maybe not as the same -- at the same levels, but it helps. we may see some buffeting and on the asset management side, we have been focused on the institutional part of the market for a long time. that tends to be a more stable

and strategic allocator of capital and that has kept the volatility much less for us than for others. stephanie: we will take a quick break. ken jacobs, ceo of lazard, staying with us. i have to share something with you that happened last night in london. picasso's young lover brought in a measly 18.9 million pounds. here is why it mattered. less, lower than just two years ago and that's not the only one. fell.e is the lesson this is not good news. if you look at the high-end art market, it is a proxy for where you are seeing things. this is not necessarily a good thing. we have more with lazard ceo ken

jacobs and why he said the role of shareholder activism is here to stay. ♪

vonnie: bank of england is leaving its trademark interest rate at a record low .5%. they were unanimous. they also/growth and inflation forecast. another oil company is making cuts because of the plunging oil prices. dividend was cut by two thirds and x managers were lowered. -- reported arded fourth-quarter loss.

that is your bloomberg business flash. stephanie: i'm back with ken jacobs, chairman and ceo of lazard. on your earnings call, you talked about the role of shareholder activism driving m&a. you said it is here to stay. is that a good thing? causing ceos to get more done? ken: activism is here to stay, less because of the activist, more because of the increased level of shareholder engagement. the real evolution of activism tippingfrom precrisis exercises that an activist with take a position in the stock and a company would either by that company or go private with a sponsor. post crisis, it began a debate around governance and capital allocation which fundamentally, haveeal success activists

had is engaging shareholders and the shareholder is activist. they are very engaged, they are and focused on performance capital allocation, that is the big change. stephanie: why should they have to be? shouldn't ceos of fortune 500 companies to get paid millions of dollars, as to their boards, why shouldn't they just get the job done? ken: i think they are, but the question really is, in the past, , at times,s have given up its responsibility to others in terms of governance. in terms ofrs decision-making, they would do with themselves and it was either by a company or sell the company, now i think increasingly what has happened and i think there are questions about whether this is good or bad but what has happened is shareholders are much more the impact of a

company's future. stephanie: should there be more segulation over holding period or what these activists can do? if you look at bill ackman in valiant, some people say he destroyed the company. ken: i think the discussion around activism shareholder toagement really should turn a discussion about short versus long-term. what really is driving a company? short-term performance and long-term performance and what's going to influence that? fundsthe role of index which increasingly are viewed as the longest term shareholders of a company in addition to board and management? that debate should be aired. stephanie: what the you think it should be? -- what do you think it should be?

ken: i think it has to find a balance. it was on short-term and i think it will shift back a little bit. you seems that you see some responsible actions taken by index funds and i think that is a good thing. stephanie: i think we have a chart to show how big activist investing has become. matt: we have a chart to show that it is beating other strategies. macro trading strategies in white, global equity hedge funds in yellow and activist investing in blue. even though on this program we show these hedge fund strategies have outperformed just buying a basket of the s&p over the last five years, activist investing has outperformed other strategies over the last 10 years. stephanie: you were involved in six of the 10 biggest m&a deals. how much of this is being pushed activism?or passive

ken: there is influence, but in the end, these deals are so important to a company's future that the management teams, the boards, they really have to carefully consider. the kind of decision they are making. there is going to be a fair to howof attention paid a deal will be received in the market. the impact it is going to have on shareholder base, but in the end it has to make sense and one of the things that has happened which i think is a good thing about this cycle is that the pressure from engaged shareholders on board and management teams ensured that most of the deals that get done make sense, that they are kind -- kind of down the center of the fairway. they may not always be priced perfectly, but they generally make your teaching since. stephanie: we have to take a quick break. ken jacobs staying with us. clinton talked tough on

banking in last night's democratic town hall in new hampshire, responding to accusations that she was in the pockets of big banks like oldman -- goldman sachs. >> name anything they have influenced me on. i'm out here every day saying i was shut them down and going after them and i'm going to jail them if they should be jailed and break them up. they are not giving me much money now, i can tell you that much. stephanie: maybe because bankers are getting paid less. we will talk about banker pay when we come back. ♪

stephanie: you are watching bloomberg . jobs and pay are being cut across the banking industry. wells fargo announced job cuts in their investment banking unit. take a look at what out numerous -- atd to say in dominoes

what algebra ceo had to say in davos. -- the industry needs less people and as a result, human capital will be priced down. heads of i.t. and a bank is paid twice as much as the head of i.t. in a british tell of -- stephanie: golden goose cooked, paydays are over. ken: this has been a long process at the end of the crisis. the is really going on is complete restructuring of the financial services industry. the first inning was the crisis, the second was the series of adjustments. now people having a make real that's on what their models are going to be. in the end, shareholders will demand at -- a return on equity. that return on equity is in excess of whatever your cost to

capital is, whatever the return requirements are. it is just going to be increasingly difficult. stephanie: it is a human capital business so when you hear from the ceo saying they are not paying, how do you keep people off the streets? ken: you are not, it will be difficult and it's already happening. cory: i would argue that some of the changes happened before the crisis. some of the equity trading massively declined, that's a big change. ken: the big difference now is that to take a risk, you have to have capital against it. in sos the big difference consequently, to earn your return on the capital is very difficult in these businesses and you can't subsidize the intellectual capital business with the trading and balance sheet businesses, it is the opposite. is their top trading

telik at big banks were they can't control their destiny like they used to? ken: it's going to continue to happen, just a move of intellectual capital away from plot arms that cannot do pay people because they have to earn their cost to capital. stephanie: wouldn't young people want to go to private equity? ken: they are voting with their feet. out of college campuses, it is attractive to come to wall street. you find a lot of competition for talent. that's a healthy thing for the economy. stephanie: ken jacobs, chairman and ceo of lazard, thank you. we are back with ipo's. ♪

stephanie: you are watching "bloomberg ." with me. in a few minutes, barbara burns

will be joining me, as well as shilique lakhdar. a big day. tons to cover. by now, matt miller will give us a check on the markets. matt: thank you very much. take a look right now -- futures trading across the board -- down across the board. we were looking at gains. no rate change was expected. we got no rates change. it was a unanimous vote. previously, a caucus vote. breaking news -- initial jobless claims higher than anticipated of the000 is the number week. we were looking for 278,000. a little bit higher. jobless claims have been creeping up over the last few weeks and months. worse than expected because the number is higher than expected. we also got nonfarm

productivity, worse than expected. a drop of 3%. ofwere looking for a drop 2%. slightly higher and initial jobless claims and slightly more of a drop in nonfarm productivity. let me take a look at some of the individual stocks moving in the markets right now. and earnings miss from credits weeks has been the headline of the morning as far as earnings are concerned. those shares are down 12% right now. interestingly, there are more calls than puts. about down again today, 2.5% in sympathy. cbs and viacom. it is not clear what will happen to the chairmanship in viacom. will findiliar say we

out today what happens in viacom. we also have earnings from conoco phillips today -- actually, you can see shares trading down right now even though oil is trading up. ell, on the other hand, trading up, after a drop in those shares yesterday. finally, go pro earnings, a real disappointment. it is down 14% and phillip morris down 3.1%. fors go to vonnie quinn first word news. officials suspect a bomb caused the explosion on the somali airliner. american officials tell the new york times a bomb maybe the work of a militant islam group. the senior u.s. commander in afghanistan is taking issue with president obama's proposal to cut american troop levels to

5500. army general john campbell says there would be too few soldiers left. campbell thinks the afghans will not able to independent sustain security forces until 20 24. in greece, workers are holding a one-day strike against alexis pension reform plan. the proposal calls for higher taxes to plug a deficit. protesters say that will cripple small businesses. global news, powered by more than 2400 journalists around the world, i am vonnie quinn, and that is your bloomberg first word news. matt: the world needs $57 billion in infrastructure by 2020, but investors are finding it hard to find opportunities.

we discussed this this morning with jim very, join us in the studio. we hear a lot about this in the u.s., but globally and the structure needs are almost as bad, if not worse, and difficult to fund. rry: in developed market, it has been under investment in infrastructure that we need to fix. matt: what do you do -- you handle it billion dollars of assets. ry: the key is there is zero correlation. we are looking for fast rivers of flow, investable opportunities to go play. we take areas like if a structured debt, renewable power, the mexico, and latin america region. is oneenewable energy

that i can understand because the government likes it. the public likes it, and as far as new energy generation, most has been for me global sources. reallyry: and it is happy because it is cheap. that is the big miss. matt: not because it is better for the environment. mr. barry: it is about being cheap. they netted states is sitting on the -- the united states is sitting on the cheapest gas in the world, and the cheapest renewable energy in the world, and it will probably increase. what i would say in the u.s., 70% of new generation last year was a noble power. matt: 25% of the addressable power is in renewable energy. the rest is, what, spread out? mr. barry: you will have other transport,0%, another 25%, 30%, and the balance will be water, waste. matt: to be clear, the

addressable market does not include laguardia. mr. barry: it does now include laguardia because there is a partnership game plan. in the united states, where energy is 50% in the market, it is 90% in the united states. -- parts that we think about loads, courthouses, education facilities, hospitals -- that has not opened up as an opportunity for the direct private equity investor in the united states. matt: i am going to ask to share it date secret -- -- to share a state secret -- what is the best witho get in despised -- despite getting into your fund? mr. barry: i would be looking

for the unlisted opportunity to get to play in the market. matt: jim, thank you for joining us. of inventory at blackrock. mr. jacobsts ago, talked about volatility. tends to be aa pro-cyclical opportunity, and generally speaking, ceos, boards, decision-makers, generally like to see stable conditions, favorable macroeconomic outlook, and when you get volatility, people spend too cap back -- step back and pause. cory: barbara burns joins us along with sheila called her. i wonder, are you seeing a slowdown in deal completions?

ms. burns: you see deal completions occur across all markets. these are transactions in the pipeline, but i would agree, i listened to can as he was speaking earlier -- you are seeing a pause. pauseot sure it will be a that refreshes. it is people think about what actually is happening because when you put a transaction together, you will have to be looking at what your global business will look like. no one knows. january has been a surprising volatility, surprising valuation. you have a lot of hedge funds -- hedge funds that suffered great losses by being too early in the energy trade last year. so, the long only's have a different view and equities than do the hedge funds. how that reflects on m&a is a perspective of sitting back. i actually believe once this settles -- major corporate's

will look at transactions in a very different way -- an opportunity, particularly in the textbased space, to pick up transactions. stephanie: you came from different worlds -- gobbles and -- davos and sundance. what are your takeaways? dav was very much focused on the industrialos technical --ow tech is taking away people's jobs. then you go to fantasyland, sundance. cory: where no one skis. ms. byrne: i do. there is a concern about where is the growth, the uncertainty. the biggest issue i see -- we talked about mna -- goes to liquidity in the capital

markets. where is the capacity for transactions that are funded by debt/ i am not concerned by liquidity --ause there are over 200 $2.4 trillion of cash on the balance sheets of major corporate's. so, they stand by. these are self-correcting measures in the market. stephanie: with no ipo's, more investors are sitting on more and more cash. where's the action he -- action happening in sundance? ms. byrne: go skiing. the action right now is not happening. that is why everybody is sitting back. you are sitting back. people are putting money into cash. you look at where and waiting. there will be a catalyst moment. you spoke earlier about the correlation of energy prices, oil prices in particular to where the equity markets are. sheelah: stephanie mentioned the lack of ipo's, and i am curious -- i mean, there is some murmuring going on, that the

tech bubble, such as it is, has already been ruptured, and we have not noticed, and the fact there was a steep drop-off in ipo's is one indicator. what are you thinking -- stephanie: for where some of the ipo's are trading -- hello, go pro. ms. byrne: is it a bubble burst -- i think it is a correction. -- if yound demand look over the last five years, the number of unicorns is substantial. you could not take all of those companies public in a year, even in the best year we had four ipo's. cory: interesting. i have not thought of that. you are seeing the revaluation happening in real time. stephanie: look at untouchable tech -- fidelity having to write down snapchat, the crown jewel, snapchat. ms. byrne: normally, a company

funded by venture capital, it is not totally transparent. cory: and the terms are funky. are customized, which is a good way to put it. fidelity, t. rowe price, started putting money into the ipo, and you are sitting there with his entity and they have two mark because they are a mutual fund. cory: mark to a nonexistent market. ms. byrne: exactly. marking the same entity to a different price. cory: based on an imaginary valuation, numbers we cannot see. ms. byrne: based on an algorithm. cory: creating the potential for future gains. sheelah: what does it mean when you have players like fidelity and t. rowe price getting into that investment space, which is

outside of what they are known for. stephanie: it makes you think of 2007. sheelah: what does that remind you of. from an historical perspective. stephanie: looking for a "bloomberg businessweek" cover. come on. ms. byrne: the point for me is the transparency back to the venture capital committee, who put most of the capital -- community, who put most of the capital at risk. i'm not too worried about fidelity. stephanie: we'll take a break. are stayingsheelah: with us. when we come back, building of women has become a big business. we are asking the question do helpf these rent -- events women do anything but feel good -- we will dive into how feminism has been branded and sold like never before. ♪

matt: welcome back. in the next hour, we will hear from oil tycoon boom pickens on whether he thinks crude has hit a bottom, and if so, how high it will go from here. ♪ vonnie: and welcome back to "bloomberg ." fell tof credit squeeze the lowest -- credit squeeze fell to its lowest since 1991. suisse will speed up plans to cut 4000 jobs and save

half of $1 billion a year. proaction camera maker go cannot seem to pull out of its nose dive. they issued a forecast below estimates and posted disappointing sales over the holidays. that is your bloomberg business flash. stephanie: guess what we're going to talk about -- women. women's empowerment has become a multibillion dollar industry and in past years there is an explosion. that is partly why barbara and i know each other so well, but is it a reflection of women making huge strides in corporate america, or signs they are frustrated and have a long way to go. it is the subject of a cover story, and the woman who penned it is still in the house. sheelah kolhatkar. barbara byrne is still here. -- it is how we know each other. sheelah: i was just interested that somebody figured out that the number of ceos, all these

different metrics have not told up as much as we like, and there is frustration and hand wringing, and some people have figured out there is a way to turn that into a business. it is not an easy business. many have folded. when you do it well, you can make a tremendous amount of money, and i wanted to see what impact it is having, and perhaps both of you can talk about your experiences. stephanie: what did you learn -- i mean, who is making money? somera and i have met at beautiful hotels and luxurious locations. some --ms.ne and had byrne: and had some massages. cory: swanky. stephanie: anne-marie slaughter makes the point, as long as is women's issues are only be discussed by women, it is pointless.

we have been at so many women's conferences at banks where we sit there, do a fireside chat with the ceo, he gives the welcome remarks, and walks out the side door. what is the real impact your question mark i'm sure you have diversity initiatives -- impact here? i'm sure you have diversity initiatives at barclays. ms. byrne: everyone has diversity initiatives. straightforward way is the best way. i celebrate the fact that someone in the media is making money. that is where conferences have gone. i think it is really interesting that we would focus on a women's -- woman's conference and not a golf conference, or things men have done regularly for years. when you come back to where the rubber meets the road, it is not about how much impact is it -- not just having women ceos, but what is the impact on women working full-time -- childcare -- i

think you are beginning to see it. you are beginning to see one investment banks now have childcare for men -- parental leave for men equal to what had given to women, you are setting to see that impact. you have to have the discussion. mike spencehave -- has been 20% to 30% -- my experience has been 20% to 30% women in leadership. stephanie: my spirit to someone on a stage. fortune, the woman who speak about women that stay and produce that, as opposed to beat on the conference tour, speaking and leaving, to a bunch of disgruntled, the solution hopefuls, looking for a change. it is about engagement. most of the discussion, and it conference, is

occurring not in the room, but outside -- what could we do differently? ieelah: there are women interviewed for the speech you said it was revelatory to go to the conferences to meet another senior woman whose husband was alone with the kids. they were alone at the top and not know anyone had this arrangement. it does provide this bonding, sharing war stories. stephanie: but actually doing business ms. byrne: as well. i had to tell you --as well. ms. byrne: i hate to tell you, i have also done a lot of transactions. becomet people where you a friend, and you can refer people in or you are a trusted advisor. it is not just about self actualization. i care a lot about diversity in the workplace. when you have diversity, you get better decisions. you just do. cory: -- stephanie: there have been men's conferences forever -- we just did not call them that. greatrne: and isn't it

women are making money at doing this? stephanie: there you go. cory: sheelah kolhatkar, barbara byrne, thank you. stephanie: we're not letting barbara go anywhere. cory: you must stay. talk" it is the cover of "bloomberg businessweek." andost talk about twitter super bowl 15 -- we will also talk about twitter and super bowl 50. also ralph lauren -- shares down. revenue will only be up 1%. the stock down 10%. we are keeping an eye on that one. stephanie: ralph lauren out of fashion, at least today it is. act with more. ♪

stephanie: we are talking twitter -- it was made for real-time conversations in

real-time events, but it looks like super bowl ad dollars are not going there. still with us, barbara byrne and sheelah kolhatkar. you are my twitter twit. twit. she called me a it is interesting. twitter has aligned itself with live television -- and when we look at what is happening, particularly with super bowl 50 in its backyard, san francisco, it will be interesting to see the role it plays in its big advertising event. when you look at the world as media marketing, and the company that seems -- it seems the stock is struggling, the business not grow in terms of users -- what do you see their? ms. byrne: personally, i use twitter, and i use it as a way to follow news and things i care about -- it is curated. what you care about is the quality of the audience -- not just the size. you careeresting --

about momentum, momentum up, momentum down -- the issue will be how well does dorothy do in commercializing that content? i have been doing technology for a long time -- i have been around over 35 years. it always strikes me when we look at the size is relative to how you can commercialize it. i think twitter has its challenges, but it has a different market than, say, facebook. sheelah: i use it, too, of course, like many people in the media, but it has a fundamental problem -- the thing you like about it -- it is unfiltered, it is not caught up with ads and junk. stephanie: we will leave it there. sheelah kolhatkar -- do not miss her "bloomberg businessweek" piece. barbara will be back. ♪

stephanie: you are watching "bloomberg ." we are 30 minutes from the opening bell in new york city. i am stephanie ruhle. david westin is out.

cory johnson just left. he is headed to radio. matt: it is a team effort. stephanie: i like to say it is a family. matt miller is here. speaking of family -- a dear friend of mine, barbara byrne is still with us. we now have breaking news for you. we will go to our partner drew armstrong. we are talking about martin shkreli drug pricing. a member, this is the day where he is entering the congressional committee. matt: testifying in front of congress. stephanie: testifying in front of congress. there?ill rza be killah?ce stephanie: drew armstrong. pulledhe committee has tons of documents from terry

pharmaceuticals, the company he used to run. valium hear from the intern ceo -- in terms ceo. we do not know exactly what time martin shkreli will testify, but they have saved him as best for last, and we will hear from him later this morning. matt: not really best for last if he will take the fifth. i heard hillary clinton yesterday stumping in new hampshire and, -- and valium, whichout had taken a drug her constituent was using and priced it at $1400 a month. what you think we will hear from them? drew: we will hear from howard schiller, who is back running the company.

he is getting paid about $40,000 a month. we -- $400,000 a month. he will have to defend the company in the internal documents that are brought up about how to minimize the press thect and mediate impact of price increases -- media impact of the price increases and how to downplay them. i think they will put hard about whyto valeant they did this, did it hurt patients, and why they did this. it is about name and shame. stephanie: there you go. why is valeant the only one there -- you're not hearing from elegant, amgen. member, 10 months ago, bill ackman was backing the company, saying this is the model that we like. 20 of the 30 south side analysts love this model and the company. drew: it is a good question because tons of drugmakers do similar things, some as aggressively as valeant, and

others a routine increase every single year. pfizer is not up there. merck is not up there. bristol-myers -- roche -- none of them are here. urnig have become the face of the crisis. congress is going to drive the public conversation and build the case for action or for valeant to reverse what they have been doing. matt: all of the other drugmakers have real r&d departments. valeant does not. stephanie: ok, but 10 months ago, it was the valiant business model, the breakup, the rollout that the streetlights. if bill ackman had not put the company on a pedestal, would we know who they are? drew: i think we would. they were doing this before bill ackman entered the picture as a big cheerleader. his position and public face came after the company had gotten into trouble.

folks have been looking at the company for a long time. of times the conversation -- if you read the internal documents -- they talk about it like an arbitrage investment, especially over at for cheap andit sell it for hundreds of thousands of dollars a year. people talk about them as investment companies rather than pharmaceutical companies. the internal conversations, which are, to be fair, highly selective across a number of documents, come across as rather damning for both companies. stephanie: drew, you will be in the room following this. we'll be back with you at 9:30 a.m. i would say consensus is martin will be pleading the fifth. let's check in with a little bit of first word news. vonnie: we begin with the race to the white house -- hillary

clinton and bernie sanders appeared separately at a town hall meeting in new hampshire, six days before the primary. sanders said clinton is more of a moderate than a progressive. clinton said she is a progressive who likes to get things done. polls show sanders leading in new hampshire. meanwhile, another republican presidential hopeful is joining donald trump in accusing ted cruz of cheating to win the iowa caucuses. claims the cruise campaign stoked speculation he would drop out. both are competing for evangelical voters. if you are looking for super bowl tickets, you might be encouraged prices are coming down quickly. it will still take big bucks to see the game. according to stub hub, the price of the average ticket sold is down to $4936. the cheapest ticket available is about $2800. day,l those 24 hours a

powered by our 2400 journalists and 150 news bureaus. matt, you could afford a few. matt: i paid much less to see the grateful dead at that stadium, and it was worth a lot more. markets were worth a lot more earlier this morning. we were looking at gains in futures, which have now turned firmly down. at least the timing of the turnaround makes it look like just that one vote that turned it over at the bank of england was enough to turn the markets down. barbara is here. i want to ask you, we did not expect a rate change. we got no rate change. it is the bank of england, not the fed or the ecb -- and it is is 9-0.e, and now it is the loss of one talk enough to turn around futures in the u.s.? you are in a market

where anything that is unexpected will cause -- look at the volatility -- whether it is oil, and interest rate move -- you are in a situation where people do not know where growth will come from this year and there is a genuine fear of recession. now, there is a different -- difference between fundamentalists -- if you were talking to hedge funds in the equities base, they would tell you they are sitting back, they are concerned. they are gunshot. they have dry powder. they sustain losses last year. if you look at the long only, they are looking at the consumer market and consumer sentiment is strong. in that sense, that drives the and 70% of all financial fees are paid in the u.s. market. so, in terms of where markets are -- when you look at liquidity, the bigger concern i have is banks are in the best condition they have ever been in terms of safe and secure, but when you look at the high-yield market, the high-yield market is down about 50% to -- 15% to

20%, and it is energy-related. they suffered a downturn. the risk is no longer in banks. it relies in mutual funds. that is where the debt has gone because under voelker, the banks cannot make a market in that security. the buyer is in the mutual fund. it is a concentration of risk. stephanie: one of the issues in yield is high yield is concentrated in energy affected by oil prices, and that takes us to our next guest. morgan stanley is out with a new forecast that the bank sees crew dropping to $29 a barrel by the fourth quarter of 2016, but oil tycoon, the one and only boone inkens, thanks oil is headed the other direction to he joins us from dallas, texas. good morning. mr. pickens: good morning. stephanie: what do you know that morgan stanley does not? sure --ens: i am not so if we go into a recession, morgan stanley could very well be right. but, absent a recession, you

will be $50, $60 a barrel by the end of the year because you shut down rigs all over the world. you are down now, in the united states, for oil-drilling rigs -- 1609 toe come down from under 500 rigs. you will see the decline of production fast, but watch out for a recession. stephanie: "watch out for a recession." if a recession hits, what does that mean for you and your position? mr. pickens: right now i do not have a position. i am just sitting here, waiting for the opportunity to come back into this oil market. matt: i wonder -- stephanie: hold on -- back that up for us. you are sitting predominantly in cash right now? mr. pickens: yes. matt: and i wonder where you

would go if you come back in -- what sign do you need to get back in, and how would you go about it? thepickens: i believe $26.19 was a low. i do nothing we will go back there unless there is a recession, ok? do not get in a rush here. you are going to have plenty of opportunity. the market will be volatile. it will not go straight up. we know that. there will be good entry points. matt: when you look at the supply and demand -- and i have on my bloomberg right now, a chart of the u.s. crude supply, it continues to climb -- it does not level out until the last year, let's say. is there any -- mr. pickens: way justice -- matt, just a second. you say that it continues to rise. supply is not rising. inventories are. we keep adding.

, i'm sure,reenter until we start to draw on inventories. that is a key point. well, no, supply has leveled out -- in the last year we have not seen an increase, butly, in doe crude supply, inventory worries the market. how much do we need to see the chart fall -- it is a five-year chart. 11, 12, 13, 14, and leveled out last year. how much of a drought will we see --how many wells will close up? mr. pickens: well, you're not going to close wells up. you're going to keep drilling, is what is going to happen, and you still have 3000 wells that have been drilled, taste, and are waiting to be fracked. those back in at a slow

pace, and that has kept the production of in america. we are still declining. we are down. high, 9.7%.l-time is that what you're chart shows? i cannot see it. day for theillion a nine states, and i think you are down to about 9.2 million now. boone, it is barbara byrne. i have a question. in the last 20 years we've seen oil prices decline by 35%, up to 75%, but on those occasions we have seen opec and saudi arabia in particular decreased production. what is different this time? move, how long does it take, since the u.s. production has gone up so much, for us to stabilize, and in particular, given that you've talked about them shutting down and not drilling wells, we will have a lot of bankruptcies, and

in a typical restructuring, people will run down those wells, so the production may not go down as fast. what type of impact to you see from that? well, i -- yes -- what will happen to you is the rate shuts down. you are not -- the rig shuts down. you are not adding production, and you will decline because the wells we have drilled areshale wells-- they are shale and they have declined fast. they did not decline as fast as i thought they would. the decline will happen. what happened to us is the saudi's made us a swing producer. they had been the swing producer for years. they would balance the market. they would cut production, and stabilize supplies. that is exactly where we are today, that we do not have any mechanism in america to say ok, shut down production, and it

will just come from the declined production. barbarat they do -- made a good point. in the past, and i have another chart here showing opec output -- in the past, when crude prices fell, opec cut their output drastically. go ahead and show the chart. now that we have seen the recent drop in crude prices over the last year, opec has almost increase its output, and is expected to continue doing that. the last few days we have heard talks about possible talks between russia and opec suppliers. do you think that they will actually come together and cut production in a substantial way? mr. pickens: ok, historically, russia never cuts, and this time the saudis told the market they would not cut. at the time they said that, it was 10.2 million -- their production. production went up from 10.2 million to 10.6 million. i think they are back at 10.2

million now. what do you show their? matt: we show 10.2 as well. mr. pickens: yeah. i have to believe -- who is this costing -- it is costing the american producer. the american producer does not have allies. no one will stop in and say it is too bad for the american producer. they think the american producer makes too much anyone. who is being helped is the american consumer, and there are a lot more consumers than there are producers, so the united states is at the mercy of declining production. go over to opec, and what you have? well, you have one country that has consistently balance the market, which was saudi arabia, and they say they are not cutting. then you have russia, which is 10 million barrels a day, and they never cuts. now -- never cut here in russia now is talking -- never cut. they area is saying

getting tired of this. the quick conclusion is i would suspect that at some point -- look what it is costing the saudis. it is costing $500 million a day. their cash reserves were over $800 billion. they are now down to close to $600 billion. i think everybody is getting tired of it. i think at some point, maybe june, you will see, if there has in been a recovery, that june they will cut. that is when their next meeting is. has not been there a recovery, whether it is between now and june -- will we see, among american producers, &a?least, forced m mr. pickens:? &a -- will forced m they have acquisition targets? mr. pickens: you are already

there. they are acquisition targets now. some of them are hanging on. the big companies -- exxon, for instance -- they have a great opportunity to acquire if they want to acquire. do they do that? stephanie: who should the acquisition target be? if you were exxon, with all the money they have, who would you look to buy? mr. pickens: probably one would be pioneer. it would be interesting to me. anadarko. maybe even apache. i do not like apache's portfolio, but they still are a strong company with a lot of reserves. there are a number of them out there that would the attractive if you want to go for them. earlier, reneee, haugerud told us that she think banks will get hit harder. you know banks well. do you think this is the case?

our banks going to see a downturn because of oil prices? mr. pickens: you know, i have had meetings with banks recently. i think this is different this time. i think they do not like deal -- the oil price going down. i think they have done a better job to prepare for it. i do not see the banks in trouble. we will see. i mean, if this continues, you know, it is going to put more pressure on the banks. , ithanie: all right, boone could not be better talking here. we have to take a break. when we come back, barbara, i want to give you a minute to think about it -- if there is a concern banks will get hit by oil, we want to know what you think about it. pickens, thank you for joining us from dallas, texas. matt: coming up, we will talk to henry mcveigh --an interview you do not want to miss.

there he is sitting in the hp green room. stay with us. ♪

vonnie: welcome back to "bloomberg ." i am vonnie quinn with your business flash. jobless claims have exceeded tutored 80,000 for the third straight week that the generate jobs report is out tomorrow. lions gate entertainment is planning to restart discussion to require -- acquire starz according to people familiar with the matter. billionaire john malone, who controls starz voting shares is said to be interested in merging with lions gate and lower the

entire company's taxes. an indicator that the arts market is losing steam after several years of growth. a portrait of pablo picasso's "young lover" went for $25 million activities in london, 20% less than what it sold for four years ago. stephanie: thank you. we are taking a quick look down in defeat. martin merit of the pharma care association is speaking. this is the martin shkreli testimony. he is testifying before congress. it is all about spiking drug prices by these copies. we will take that life when we come back. a lot to cover -- hot issues for investors and presidential candidates. we will take a quick break. you are watching "bloomberg ." ♪

matt: more than half of the s&p companies have reported earnings, and overall the quarter has seen a 5% decline in earnings compared to last year. let's look at some of the latest copies to report. royal dutch shell, which is obviously, traded in london mainly, has had a drop, but that makes other major oils look good. stephanie: 20 look at shell, connick -- when we look at shell, conical phillips, we see them up. are they moving one to one? ms. byrne: in some ways. when you look at shell the easiest way to see how they are being priced out is the credit market. they are single-a credit, but their recent debt crisis out at triple b credit, which is a much lower grade. people assess more risk to the covenant. matt: that takes us back to -- stephanie: that takes us back to

boone's point. banks are underwriting this. what does it mean? it is different, because most of the banks -- when you look at 75% of energy companies are investment grade, it is not overly meaningful to versus triple be. there is not a lot of credit risk there. the bigger credit risk is in high-yield. that debt is not held by the bank. it is held in mutual funds. ,o, in that particular area when you look at that area, -- stephanie: it is a problem. we will be back with more. you are watching "go." ♪

matt: welcome back tomatt: "bloomberg ." i am matt miller. futures traded down after the bank of england decision came

out, and we will see the cash trade open down as well. herelet's take a live look , after we check out the new york stock exchange, down in washington, d.c., at capitol hill, shelley? -- shall we? there we go. fortin -- former ceo martin skelly will take the stand where he will testify, or more likely take the fifth amendment in front of congress on drug prices. we'll keep you updated. stephanie: i will take you overseas. we have been talking about the chinese slowdown and the slumping oil prices, both of which contributed to the volatility here in u.s. markets. mcveigh,guest is henry head of global macro and global allocations at kkr. when you are not sitting next to us, you are touring the globe, getting a sense of the global economy. let's start with china. what are investors missing? mr. mcvey: people are focused on

real gdp. since 2011, gdp has gone from 9% if you run businesses over there, you deal with china in nominal terms, and nominal terms -- this includes inflation -- it has gone down 70%. it has gone from 14% to about 6%. nominal gdp is down 70%. if you are doing business with china, which most people in the world are, let us not forget china is about a third of global growth, it is a major slowdown. that is one thing people are missing. the second thing i would say is a lot of people are focused on china in terms of having to lower their currency to improve trade. that is not what the data would suggest. china is taking market share and trade by moving into the high end. we'll come back to this because you have been reporting a lot on mna cap -- and the day, but the reason the economy is at risk is

because they have too much data and low inflation. most economies, when you have very low inflation and too much debt, you lower your currency to adjust to that. , andhave had a fixed peg that is creating volatility. it is an influx of nominal gdp been much lower than real, and adjusting the currency to deal with that, now with the trade, but that is when the tensions are. matt: these guys were talking to ofry fink in davos a couple years -- weeks ago, and they said it would be horrible if -- if china let the currency float. do you think that would be horrible? mr. mcvey: overtime, the currency will appreciate, and the question is the methodology. for a tradable basket makes sense. -- the move to a tradable basket makes sense. then you start to move toward a market-based force. the question a new government in

china has to deal with is they have -- they want to move toward market-based forces, but they keep intervening, raising risk premiums, and keeping foreign capital way. if you look at the last couple of quarters, what has happened with stock market intervention, uncertainty around the currency -- that is what is play now. you have the tension between wanting to be a market-force, market-based economy, and then wanted to intercept or you cannot have it both ways. stephanie: where should investors be playing in china or at all? mr. mcvey: we have 16 businesses in china and we're focused on the high-end services. i would think about china in three buckets. one is fixed investment, exports made in china -- typical thing. that business is going away and that is overweight. the second is traditional consumption -- everything from that isshes, combs, maturing more than people think.

the third bucket would be higher value-added services. what do you want for your family when income goes up? you want them to be educated, have health care, and avoid issues china is facing. i was there in december, and the smog factor in beijing was off the charts -- unbelievable. i have been going there for quite some time, but what we saw in december was at levels i had nothing. how do you invest -- how does one invest -- you are not going to play in the stock market, which is essentially a roulette wheel, right? mr. mcvey: i would not go that far. a lot of your viewers will access public equity and we do a lot through private equity -- we own a lot of growth companies. typically we will have 15 to 20 businesses in china. we have people on the ground. they are all chinese. that is what they do. that is how they operate. for the average investor, china is a difficult market. stephanie and i talked about

this last time. look, emerging markets overall to the public market is greater for the individual investor, and i think results would prove that out. we're still -- even though valuations have come down. stephanie: it has been tough for the institutional investor. mr. mcvey: it has been tough overall. invest in cycles typically last 80 months. about 65 months into this bear market. i would stay patient. stephanie: let's turn to oil -- with oil hovering in the $30 range -- matt: speaking of the bear market. stephanie: yes, speaking of a bear market -- what you see oil going? mr. mcvey: my wife is from houston. i spent last week in houston. i think oil will remain at a low level for quite some time. what is changing and what we see changing is a lot of the big conglomerates are having to pay down debt. you guys are reporting on this. their ratings are at risk. they're having to sell things off.

that is creating opportunity in the world that we deal in it i think for the average investor or are some -- deal in. i think for the average investors, you can buy real cash flows. generally, i am in the camp to the whole commodities complex is going to take more time to bounce back than folks think. matt: it takes you a wild to do deals, right? you must think now is at least close to a floor, and if we want to do deals, it will take a while to do due diligence, figure out targets, and take them out? are you doing that? mr. mcvey: most public equities seem to be discounting $50 to $60 oil, so, too me, it seems that credit is more depressed than the equity. that would be point number one. is, in ourr two business, you have to buy the company. you will partner with oil copies at the well-level, so you have a

switch where you can turn it on or turn it off. in the energy world -- i know you had your prior guest on -- it is changing. people talk about takeovers of big energy companies. we are in that business, but we do a lot of other things. what i would say is just as you saw technology get more complicated, or debt get more complicated, the energy world has gotten much more complicated, and there are wasted a to access investments in the oil fields that may be did not exist five or 10 years ago. stephanie: not just equities related to the energy sector -- we continue to see equity prices -- we continue to see the stock market move one to one with oil prices. why is that? it makes no sense. summit the argument that with outside oil, you will see other -- some make the argument that without title, you will see others benefit. we do not. mr. mcvey: until that stabilizes, right now, if you allocator, you will

go out and say my best risk-adjusted reward is in leopard loans, maybe outside -- levered loans, maybe outside of energy. why would i buy an equity that is twice as volatile, when i know i could put the money away in a bank? we are in a world right now where inflation is extraordinarily low -- extraordinarily low. the bank of japan just went to negative interest rates. i think draghi told you in davos the ecb will do more. the fed is facing real inflation. if real rates are zero, nominal rates are 1% or 2%, and you can earned 6%, 7%, a percent -- and yet to pay attention, 6%, 7%, 8%, risk-adjusted, that is a great return. matt: the bank of england came out, left the rate as expected, but now it is a unanimous vote. they used to have at least one hawk.

now people are telling us maybe the bank of england will cut next rather than increase. what do you expect? mr. mcvey: the message i would leave you is the risk of deflation is far more substantial than inflation. the break events are collapsing. stephanie, to your question about stocks, stocks do not like inflation below 1% of the 14erage p/e is about 13 to times when inflation is below 1%, and when it is between 1% and 3%, it is about 16 to 17 times. when the market divest, will the inflation rate go to less than 1%? in the u.s., we're using 1% to 2% inflation this year. hopefully we are right, but that is close to the 1% threshold. when i talked to friends in the threat -- hedge fund community, they pick stocks. that is what they do. take a step back and think about what the macro environment is

telling you -- it is tell you a couple of things. china is slowing. a are exporting deflation. those are concerns the market has to price in. on the offset, i was in there are good things going on in the u.s.. the savings rate is high. household formation is doing ok. really, it is the intersection of those two. we were living in a world where china had a policy where they were going to stimulate growth and the u.s. had your back because the fed had your back in the capital markets. both of those are now called into question right now, and that is creating the volatility we are expecting. it does not mean you cannot make money. we are finding plenty to do, but to disregard those forces changing structurally is a mistake. stephanie: here is my fear -- you say credit compared to equity looks cheap, and it is higher on the capital structure, but it looks cheap and we are in a bull market, when we are in a better scenario facing no default. that might be changing. these companies -- actually, we have breaking news. i am so sorry. nobody wants me to talk

high-yield. we have to take you to d.c. where former touring pharmaceutical marched rally has taken the stand. theartin shkreli has taken stand. >> what do you say to the single, pregnant woman, who might have aids, no income, she needs the drug to surprised -- to survive. her?do you say to i invoke my fifth and respect we decline to answer the question. >> you were quoted as saying if you raise prices and you do not raise prices -- put take the cash and put it back into research, it is despicable. extrae all of our cash, profit, and spending on research for these patients. did you say that? mr. shkreli: on the advice of

counsel, i invoke my fifth againstprivilege self-determination and respect we decline to answer your question. mr. jacobs: do you think you think you're done anything wrong? mr. shkreli: on the advice of counsel, i invoke my fifth amendment privilege against self commendation and respect we decline to answer your question. >> i would like to yield time to gaudi.sman that one did not incriminate you. i want to make sure you understand that you are welcome to answer question and not all of your questions are subject to incrimination. you understand that, don't you? mr. shkreli: i intend to follow the advice of my counsel, not yours. >> i just want to make sure you are getting the right counsel.

is disclosedertion to the fifth amendment. lead tot which you will other evidence. mr. shkreli: i intend to use the advice of my counsel, not yours. >> do you also understand you can waive your for the moment right? you gave an interview to a television station in new york, where if i understood you correctly, you could not come wait to educate the members of congress on drug pricing, and the soupy a great opportunity to do it, so do you understand you can waive your fifth amendment right? mr. shkreli: on the advice of counsel, i invoke my fifth amendment privilege against self commendation and respect we -- respectfully decline to answer your question. >> he has been willing to answer one question. i do not think he is under

indictment for the subject matter of this hearing. so, the fifth amendment does not apply to answers that are not reasonably calculate it to expose you to incrimination, and even if i did apply, he is welcome to waive it. i listened to his interview. todid not have to be prodded talk during that interview, and he does not have to be prodded whole lot, or show us his life on that little web camera that he has, so this is a great opportunity, if you want to educate members of congress on drug pricing, or what you call the fictitious case against you, or we can even talk about the purchase of the -- is it wu-tang clan -- is that the name of the album, name of the group? mr. shkreli: on the advice of counsel, i invoke my fifth amendment privilege against self contaminate -- incrimination and respectfully decline to answer your question.

mr. gowdy: i am stunned a conversation about an album he purchased could subject him to --mination area incrimination. >> the gentleman is correct. it is not the intention to ask him questions about that topic. mr. gowdy: so if i understand him correctly, we are not going to answer --ask him questions that will be in the subject matter of his pending committal charges, and if we were to get close to one or in the gray area, he is welcome to assert his fifth amendment privilege , and some would argue he has a legal obligation to answer , but certainly he has the right to do so, as he did in the television interview, and as he does quite frequently on social media. >> may i be recognized for a moment?

>> no. under the house rules, he is not been sworn in. >> you are not recognized, and you will be seated. it's: -- senator chafee it's: the genera just gentleman is correct. we now recognize mr. cummings for any questions. mr. cummings: two are very much. let me say for the record that i -- thank you very much. let me say for the record that i support your decision to make hkreli asserted his fifth amendment right. normally, we have accepted the assertions that a client will take the fifth. made a case, mr. shkreli number of public comments

himself raising legitimate questions about his intentions. honestly, i did not know whether he was even going to show up today, so it is nice to see you. now that he has invoked his constitutional rights, of course i will respect his decision. you inreli, since i have front of me, after having trying to get -- after trying to get you in front of this committee for so long, let me say this -- i want to ask you -- no, i want to plead with you, to use any remaining influence you have over your former company to press them to lower the price of these drugs. you can look away, if you would like, but i wish you could see the faces of people, no matter ms. retzlaff says --

somebody is paying for the drugs. the taxpayers end up paying for some of them. those are our constituents. people's lives are at stake because of the price increases accessose and the problems that have been created. you are in a unique position. you really are, sir. rightly or wrongly, you have been viewed as the so-called bad boy of pharma. you have a spotlight. you have a platform. you could use that attention to wrongsean, to right your , and to become one of the most effective patient advocates in the country, and one that could make a big difference in so many people's lives. i know you are smiling, but i am very serious, sir.

the way i see it, you could go down in history as the poster boy for greedy drug company executives, or you could change the system -- yeah, you. knowledge about drug companies and the system we have today, and i truly believe -- i truly believe -- are you listening? mr. shkreli: yes. mr. cummings: thank you. i truly believe you can become a force of enormous good. of course, you can ignore this, if you would like. all i ask is that you reflect on it. beg not ask, mr. shkreli, i that you reflect on it. there are so many people that could use your help. may god bless you. thank you.

>> the gentleman yields back. mr. shkreli, it is your intention to invoke your fifth amendment right. >> given that the witness has intended he does not -- and instead answering questions, i ask the committee excuse the witness from the table. without objection, so ordered. we will pause for a moment as mr. shkreli is escorted out. turig ceoheard former refusing to answer all questions, giggling a little bit as well. stephanie: no surprise. matt: he looked like he was thoroughly enjoying himself. andrew armstrong standing by. -- we have drew armstrong standing by. stephanie: we do not have drew. matt: we will take a little bit of our own money right now, take a commercial break, and come back with more from henry -- y.nry mcve

stay with us. ♪

matt: welcome back to "bloomberg ." stephanie. stephanie: here i am. with the quick snapshot of markets. matt: markets turned around to it we had futures up, and then fell. the castrated, very little change. the s&p in the negative, the dow jones in the -- the s&p very market, very cash

little change. the s&p in the negative, the dow jones in the positive. stephanie: credit suisse, all they have done is cut jobs in the investment bank, and they cannot make money. are you getting concerned about european banks? matt: henry mcvey with us. thank you for sticking through mr. shkreli. mr. mcvey: i will try to answer questions. what drug he is doing is driving the interest rate down and banks, making it hard to make money. inflation rates have collapsed. a lot of the european banks have more levered books than the u.s. banks. stephanie: why? mr. mcvey: they have big derivatives books and i think they have had big global footprints. they are pulling that back, try to get the cost to capital up. one you look at how the market looks at their fixed income credit ratings, they are getting more nervous. matt: they were not forced to do love her and they were not easily allowed to -- d lever and

they were not easily allowed to. mr. mcvey: they were, and some of the european banks have that. they need to continue to de leveer. the bigger picture, when you look at wall street, their 90%,r inventories are down so the ability to hold inventories has gone down because of regulations and the ability to make profits off that trait has gone down. for us, who need to access those markets and do deals, it is extorting a really difficult. a lot of times people focus on equities. i'm telling you right now the fixed income markets remain dislocated. stephanie: why do they still have big derivatives books? traditionally, that was big business they had and they do a lot with corporate around the world. when people get nervous, if you look at the price action, they are telling you slowdown is coming and that drug he has more

on his hands in terms of fighting inflations. -- inflation. matt: the fed, we think, watches equity markets closely. does the regulator of note watch fixed income markets, and do you think they understand? mr. mcvey: they do. you went from 2007, wall street being levered 30 to one, and now they are level -- will lead the -- leopard 10 to one. stephanie: thank you so much for john s. that does it for "bloomberg ."tomorrow is jobs day. bill gross, bill mcnab. ♪

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

betty: from bloomberg world headquarters in new york, good morning. i am betty liu. here is what we are watching this hour. stocks have been fluctuating. the bank of england cutting its inflation forecast once again to what it means for the future, and for fed rate hikes in 2016. controversial pharmaceutical ceo in front ofli congress moments ago. that is a live shot of the congressional committee. on thatred questions price hike. era.he end of an calls it quick that cbs has questions about his mental health continue.