for you -- and bad shape. mr. trump: it shows the number of people not in the workforce increased by 100 5000 people. that is where you see these phony numbers about 5% unemployed. people are not looking for work anymore because they cannot get a job. they take them off the rolls. these numbers are an absolute disaster. mark: hillary clinton campaigning in pittsburgh offered another take on the report which showed the nation's unemployment rate falling to 4.9%. ms. clinton: we got some good news this morning. our economy rated 161,000 jobs last month. is 73 straight months of and i believea that our economy is poised to

really take off and thrive. mark: election day is tuesday and the latest national polls suggested tightening rates. chris christie released a statement saying he had no role in authorizing lane reassignments on the george washington bridge that today resulted in the convictions of two of his former aides. the federal court jury in newark found both guilty on all counts. they were accused of intentionally creating the chaos dayse bridge over several in september of 2013. the move was meant to punish the democratic mayor of fort lee who refused to endorse republican kristi's reelection bid. it is a celebration the has been 108 years in the making, the city of chicago is honoring the world series champion cubs. it is a continuation of the party that begin with stay night when the cubs defeated the cleveland indians 8-7 in one of the most dramatic game sevens in

world series history marking the first title for the cubs since 1908. the celebration began outside wrigley field moving to grant park. the chicago river which is dyed green on st. patrick's day was turned a bright shade of blue to match the cubs' colors. news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet: we are 30 minutes from the close of trade. joe: i am joe weisenthal. oliver: i am oliver renick. the dollar moved on anxiety over the election. is, what dostion

mess? scarlet: we will wreak it down in just moments. while investors took comfort in the labor picture, anxiety has waned over stocks. even -- we will take a look at how current is are poised to react to as political risks rental markets, more managers are hedging their rest -- risks either candidate. the manager said the trump victory could keep the vix a 30. >> abigail doolittle is standing by. abigail: it has turned into another volatile day. from a standpoint of percentage change but from the fact that we been flipping from green to red into the close,

both the s&p 500 and the nasdaq turned slightly red. on the week is a very volatile week, we have the three major averages on case to finish lower on the week and more than 1% for the second weekly decline in a row, the worst decline since september 9. the fear gauge and affected. also the vix is going to the putting in a record nine days higher. so a tell on the idea and right now on pace for that record. the idea that on -- investors are on edge ahead of election. week, on, down on the case for its worst week since january as a bit of a signal around the economy and growth. look, the s&pa

500 put in another risk off for suggestion that we could see some risk off ahead signals. the index tested its 200 day above, and over the last 10 years or so out of the financial crisis, three times when the s&p 500 has gone be looked -- below the 200 day moving average. there could be some more weakness ahead for the s&p 500 and confirming it is a weekly chart of the vix. is6, we see that the vix trading over the last 10 years in this long-term trading range to the downside, the question is whether or not it will pop all the way to the top. there is some possibility that it could go toward the middle but there is a possibility it will go right to the top.

we take one last look and tile this into the jobs report which was a bit of a goldilocks report. higher on it for most of the day. nonfarm payrolls traded into a bigger arranged together over the last several years. it appears the s&p 500 is coming back down from the top of that range perhaps suggesting there could be some weakness ahead for the s&p 500 and the bit of risk off into the election. >> lots about stocks. >> let's get some more insight into the jobs numbers. our guest is a former economist at the board. the number that jumped out immediately was that 2.8% year-over-year wage growth, fastest pace of growth since the crisis.

is there more of this to come or will we see more signs of wage for a shirt, and quarters ahead? >> we think so. you're seeing a lot of signs of them neighbor -- of the market tightening. most measures are moving up. we are not looking for a rapid acceleration but it is moving in the right direction given the types of job growth numbers we are seeing and the move down. that should be continuing for the foreseeable future. >> we will look at these numbers today, we had a fed meeting oflier, a little bit language suggesting they are getting ready for september. is there anything they will take into account as a surprise? it is close to expectations. and close to what the job market has been delivering over the

last few months. not much of that. that will give maybe a little bit of more concerning the hawks, they are getting behind the curve. absent some big surprise over the next six weeks, they are pretty much on course for a hike in december, even if we get a disappointment. given how consistent not only what we saw this way from the .tatement but the rhetoric december seems locked in. scarlet: maybe the supplies will be on november 8 next tuesday. -- surprise will be on november 8 next tuesday. how will we know if the fed's thinking has shifted or changed? >> it would not be in the minutes. the thing they will be watching is the market reaction.

will they have a bad day after the markets and the weeks after the election so that will be the first thing. how the economy plays out not only on the election but how the president-elect end the incoming congress are working on fictional policy. for the fed, it is going to come down to a more record reaction. scarlet: how do fed economists view things that the job reports differently than an economist at j.p. morgan would, how do you take into account these inputs and how does it influence how you assess the economy? >> they have a little bit of a longer horizon. we are always focused on the most recent data point. that, i do not think we are seeing the world radically different and they are being transparent. i do not think they are saying it all that differently.

>> scarlet mentioned the election. it not really that controversial to say if there was a trump victory we might get some more market volatility because it upsets the current status quo but there is a potential for major change in economic policy ahead under his theoretical , less in favor of free trade and much more fiscally profligate with tax cuts in spending. what do you see the combined ramifications and the economic policy regime where trump would be able to get what he wants done assuming he could? >> the keyword is uncertainty. he feels know how about these trade issues, whether he would use executive action from day one. >> let's say there were regime change where a lot of the excepted. of economic policy for the last 30 or so years were to be shifted. let's just say even if it were

not trump, let's say that we had a change on some of this front. changes on trade policy are things that will affect the economy over a number of years. i think that comes with -- down to fiscal policy. he talked about large tax cuts. he has to work with congress on some of this so you have to keep that under consideration. uncertainty would prevail. >> let's combine today's numbers with the politics conversations. they had opposite reactions to the numbers as we have shown. is it possible that one of them is completely wrong or is there is upart of the data that for interpretation? >> it will not go there in terms

of weatherwise completely wrong. the data is always open to interpretation. most people have read this number pretty similar to the way we saw it. whether that is good or bad, you can take your own judgment. it was not a big surprise. it is consistent with 2% growth. >> let's say before the december report, we get into one of those huge ones. that kicked out expectations about several months ahead. could we repeat that were we get a big mess and then we are back at june 2017 for the next hike? >> possible. but if webig mess were 100,000 on payrolls for november i do not think that would be enough to get the fed of course. provided political concerns are off to the side.

>> thank you for coming on. scarlet: the s&p 500 has turned lower for the day, just a slight drop into the negative column. you can see it has been a fate since that 2 p.m. eastern time. we can show you how the move has progressed over the last nine days. we are looking at we were looking at it when he was eight days long, the longest losing streak since the 2008 financial crisis. we had a lift following the goldilocks jobs report. we are down 3% over that time. clinton lost in polls during the same time. coincidence or not? this is bloomberg. ♪

emily changlmer -- sits down with steve ballmer. theiscusses his move as owner of the los angeles coopers. >> it is interesting to hear you electionstic given the we are in right now. you typically vote republican. steve: i never said that. i'm a definite independent. i am not registered with either party. i care about issues deeply. i am willing to vote for anybody who shares my interest. emily: what do you think a hillary clinton presidency will mean for innovation, jobs, the economy? daye: at the end of the neither one of the plans have much to do with job creation, frankly. convincedtle less

that federal government action or local government action has anything to do with job creation. job creation comes out of productivity gains which comes out of innovation. emily: do you think this election has become too much about not the issues, not enough about what is important? steve: this election has become a lot about personality. i am sure that should be a part of things but on both sides that is -- that has been blown up. emily: we have seen people come out saying that there against donald trump, they are voting for hillary clinton. why not be more public about it? steve: i would advise most ceos to keep their political opinions to themselves. they are running their businesses under either administration. their shareholders may not agree with their views. companies should represent the views of their shareholders and whatever happens, probably 40%

will vote for either of the two candidates. i do not think that is a good thing to do. companies should stand up for their issues but i do not think they should take candidates or at least i would not want to -- a company in which i am an investor to do so. as a private citizen, i will vote my mind but the thing i am going to emphasizes the issues i care about and the fact. steve former head said he could never make the math work. emily asked him what he meant by that. >> it is too expensive. it a great company, it is a fine company. in my opinion, relative to earnings potential, it is genetically overpriced. that is my opinion. emily: do you think they are headed for disaster? worldview at some

point in time, the market will ask companies to make profits commensurate with their market cap. amazon does not either. they have great potential, is a great company. when will the market demand that? can't say. when will it demanded of salesforce? can't say. emily: is -- are they getting a pass from wall street? i think so. it cannot tell me over the long run earnings and market cap are divorced, that runs fundamental to my basic view in capitalism and the way it works. scarlet: you can watch that interview this sunday. at noon eastern, 9 a.m. pacific. time now for the bloomberg is this flash when we look at some of the biggest tories in the news now. like lewis is proposed to the merger between tesla motors and solar city. a lackpany -- group face

of independent oversight and described the deal is a high risk noncore acquisition. in contrast to a recommendation earlier from institutional shareholder services which said shareholders of both should vote in favor of the proposed deal. see -- the ceo of cbs said he is optimistic a deal could work if structured correctly. the broadcaster is in the early stages of exploring a deal after reporting better-than-expected quarterly sales and profits. both are controlled by senator redstone and his daughter who said they want them to recombine. saudi arabia did not increase oil production. ae secretary-general denied report that the saudi's plan to raise output if other countries did not agree to cut saying that talks held were constructive. oil extended its losses earlier

after the original report from reuters. that is your business flash update. you know who this baseball player is? between about his retirements read momentarily -- momentary alarm. we will show you why next. this is bloomberg. ♪

scarlet: if you were at work today you might have missed the chicago cubs and the players enjoying their victory lap today. there were tens of thousands of fans as they celebrated their first world series victory in 100 day years. this was 108 years in the making. when you talk about the world series, it was a classic series that went seven full games, game seven was incredible. two franchises that had gone decades without winning, the championship, the rain delayed my and extra innings and the

payoff ends in record numbers of viewers. here's the early estimate of how many people watched the game. 40 million people watched game seven and this is incredible given that it went well past midnight on the west coast -- east coast. 14 giants and royals in my nowhere close to the levels we got in game seven. last year when the royals played the mets it did not get past game five. this was a pretty blockbuster ratings number four fox. they also got some political acts in there. donald trump and hillary clinton ponied up a lot of money for ads and hillary clinton's campaign donated -- i should say spent money for one minute add. >> the nfl ratings are down this year. maybe there is some sort of regime change going. scarlet: this was a classic matchup. about baseball

and also about a tweet and about the danger of relying on twitter unfiltered for news. this was a tweet that went out at 1 a.m., in japan. translation by being -- says the governorught resign. -- resigned. it had to be clarified, it is about a baseball player who used inplay in the mlb and now the japanese league. he held a press conference regarding his retirement. nothing to do with the bank of japan but it shows how quickly you could see something and react to that.

>> maybe they just found his retirement to be a big move. significance.d >> this will be looking at something not baseball related that it is important because this is what is happening with fed funds expectations for a hike which is what we are looking at in the blue, the purple is the vix and we know the volatility has been shooting up in the s&p 500. the rate hike expectations have been moving up. -- white line here is the , also movingverage quite a bit since that new e-mail situation arose last friday. if you aren here is of the belief that this could derail expectations. update: let's get you an

. the s&p 500 had given up its gains and down point one of 1%. extending its losses for the ninth straight day. this is bloomberg. ♪

scarlscarl we are moments away from the closing bell.

"what'd you miss". this would be the longest streak on record with two more trading ays to go before election day. joe: and welcome to twitters and follow it live from 4:00 to 5:00 p.m. eastern time. scarlscarl we begin with our market minutes and start with the streak with the s&p 500. it looks like it gave up gains from earlier. ninth straight day of losses and eight days, it was the longest streak since 2008. the financial crisis at nine days and longest stretch of daily losses since december of 1980. that is remarkable. 36-year record there when it comes to the longest stretch of declines. in terms of industry groups today, you're not seeing a whole lot of decisive downward action

because you still have five groups in the green. the big loser here was consumer staples followed by energy shares. >> it has been the nature of many of these losses which they haven't been that dramatic and doesn't feel like we are teatering the market. >> slow grind down. scarlscarl we should mention, the magnitude of the loss is not extreme. it's about 3% which could have happened within two days or three days and speaks to people that they are reluctant to do anything. >> off the high from august 15, t gets closer to 5% down to 4. 7% and begin events that could shake up the volatility even more. >> i'm going to check out stocks a little bit deeper. you mentioned it's been mixed

today. there are a few that stood out in particular. health care doing pretty well and we also had some pretty good strength in the real estate space. now i'm going to go back to that from a minute ago, where you had dividend-specific sectors and sold off quite a bit where trump has done well. if you are the belief he could derail the fed by winning, you think they might pair back some of those losses and reverse the trend. consumer discretionary led the way, one of the biggest losers on the day. down 20 basis points. here are election sectors. groups were losing and biotech, good volume as well, 40% above the average and we can't not talk about the vix.

it is 20% higher on average in the month of november in election years and getting close to 2 range. >> let's look at government bonds, because the real story today, one of the stories today was that jobs report which was pretty good this morning, particularly on the wage front. two-year yield, popping higher on the report, but eventually sliding. so people are buying bonds today as we got this market selloff. let's look at 10-year yield, kind of similar story there. initial jump briefly with yields going positive on the day after the 8:30 report which was characterized by unemployment going down to 4.9% and wages growing 2.8% year over year. and real quickly, commodities, check out oil because it has been pretty rough. this is a one-month chart of

texas intermediate crude. people were getting excited about opec coming together. this is pretty ugly. and down 9%. below $45 a barrel for wecks texas intermediate. not a pretty scene in oil as people are scared of opec not getting it able to get it together. scarlscarl u.s. dollar got a brief lift from the jobs report, but it was short lived. the market priced in and this jobs report paves the way. concern about the election dictates where the currency market and the dollar in rticular goes in the short-term. we are just there right now. the other interesting trend is the swiss bank becoming a safe haven. it was stronger against all the major currencies. you can see stronger versus the

dollar and the euro as well. those are today's market minutes. >> i want to bring in matt and talk about the jobs report this morning. seemed pretty good and people talking about the wages number. you brought with you some charts. the first chart is one of your favorite ways of assessing the labor market. aggregate weekly payrolls change and let us know what you are seeing. >> a big debate is whether job growth is slowing down because the labor market is approaching full employment and we are just running out to hire. if that's the case, you should see wages start to rise and pick up the slack. and this line which shows you employment times hours worked times hourly earnings. this is your aggregate paycheck . d year-over-year and we have two different

signals. the white line actually slowed to the slowest since february of 2014. >> nice work. >> that's the production, nonsupervisory series in the jobs report. that's 80% of employment. and this used to be the old headline measure and about 10 years ago they introduced this new one which adds the other 20% of employment back. that's the blue line. we have these two data sets from the same report telling us different things about what's actually going on with wages. >> the debate continues until next month. >> that's right. >> i have a good chart that you brought, employment within a certain demographics. you are looking at the plunge in the 40-50-year-old nonemployment rate. there was a great story coming out this weekend how important 40-somethings are to the economy. you see high productivity when

those people are involved in the workforce. >> this is the most positive thing because this is -- you can see the red line that it projects that and compare it to previous cycles. before this massive plunge we have seen over the last two months, this was very high and d a lot of 40-year-olds to 54-year-olds who lost their jobs and there is not a lot of hope like can they restrain and go back to work. we are seeing them come back now and getting down to levels that are consistent with previous expansions which is good news. >> between this and the wages, you start to get a picture of a labor market that is starting to pull in, getting tight and pulling people back in. scarlscarl you wonder what kind of jobs they are getting whether the quality jobs with high wages or the jobs that used to go to teenagers working at a fast food

restaurants. jobs in service-producing industries and looking how it is compared to other kinds of jobs. this blue line which is jobs in low-wage service-providing industries. >> you can see in this chart, a major driver has been the low-paying jobs and we have heard a lot about that. relative to previous cycles, it has been much faster and that is trying to come down. the red line is the high-paying scientists. wyers, that is staying steady like the blue line and the green line which are the lower-paying jobs are decelerating. this is why an hourly average earnings growth is picking up because the composition is being tilted towards higher-paying

jobs. >> how does wage growth feed into inflation? what's the consensus thinking on that? does it lead inflation, coincide, does it not move. does the fed look at that number and feel confident it will get broad based inflation? >> they look at the lines and like to see them moving up together, but there i know consensus and there are two ways. you get higher inflation and allows businesses to raise wages or workers to demand higher wages because there is higher inflation. wage growth goes up, and so workers have more money to buy goods and therefore the prices of goods rise. so that probably runs in both directions. there is no clear consensus on which is the driver. >> thanks for breaking it down. scarlscarl let's recap, it is

the longest losing streak going back to 1980. you can see there this is today's price action and faded into the close. since the streak started, if you want to come inside the bloomberg, real estate and health care were the biggest bragging groups. health care shares down by better of 4%. every industry group declined but utilities held up well. actually, utility is sensitive. >> it's interesting. a lot of losses across the board. m going to look at technical stuff. simple math which is the relative strength index how quickly thinks rally. the bottom panel here which is looking at the number of mpanies below 30, which is

oversold, which is a good thing and the red are those that are over bought. this is the trend we have seen since the market started to sell off. now you have the percentage of companies in the s&p 500 that are oversold. 15%. on the flip side, there's very small amount of companies that are actually overbought. if you are a technical person and find value, this would indicate to you things have moved too far too fast. overall in the big picture, we're not down a ton. scarlscarl what happens, before you have a presidential election, stocks tend to rise and we're not seeing that. >> when it doesn't rice, it party willhallenging win. ♪

"what'd you miss." election not just in the stock market but in the foreign exchange market. longest losing streak since march. for more on that, i bring the head of global. i want to start off with a simple chart in my terminal that is showing average three-month volatility. it's a small move but nonetheless and see in the past couple weeks, this is dollar versus yen and euro, all kinds of stuff. what is behind this? >> the election uncertainty is the big story. it's a big story but i wouldn't go too far. if when you look the volatility,

you see one year-volatility not tracking up that substantially. people look at the policy and in terms of election uncertainty that is driving. but doesn't see it extending that far into the future. and same story you see in the vix. >> if terms of how that translates, if you are a trader, do you expect this to come back down? >> it will come off somewhat once we get rid of some of the election uncertainty. there is a broader story and went from the brexit vote to a trump victory and the market would say we are underpricing political risk and something strategic there and that might be something people would want

to own. a flash crash that is stiring as well. that's another reason. >> going into a lot of people are likening this election to the brexit vote. and we saw in the aftermath. then many of those moves erased. it feels different this time in the sense that we have brexit, everyone is kind of hedging for that possibility and feels very different. it felt like we were sleep walking. and everyone is aware of that risk is out there. >> they walked into the crash. if you remember what happened on e day, of course -- up until the final few minutes we saw a surge in risk assets until it became clear. > sterling went from 143 up to 150, down to 130.

but the markets learn from events and taking a cautious line on this. if you contrast the polls. scarlscarl brexit taught us how to use the swiss franc. as everyone came back into risky assets, it held up as well. it is a perfect hedge for the u.s. election. it would climb if trump wins but wouldn't crash if clinton wins as well. are you seeing that? >> you are seeing that kind of hedging. if clinton wins, it does go up. what you are seeing is the market is generally testing the swiss national bank's resolve to hold that 108 line. they seem to be giving way a little bit and if you have a trump win and you've got all the european uncertainties, then the swiss are going to look great.

>> if you have the brexit-trump as you mentioned, our imaginations start to open up and where else could we have political turmoil. might want to reconceptalize what they consider a safe haven. you mentioned switzerland, where else is a political safe haven that they want to park some capital? >> it's japan, i guess. odgenous really whom society and intracountry politics. and you have the united states, which is problematic. >> what about kiwi. there was an interesting story about billionaires moving to the end of the world to escape geo

political risk, is that the kind of currency that people might bid into? >> i read that story and it rings true. there is a sense that there is some flight or movement. you have a small country and relative small demand for that currency generates a big movement. that's the caveat. you don't want to trade -- >> you can get protection at the end of the earth, you just have to pay up for it. scarlscarl what about currency like the australian dollar? we have seen how the commodity boom and bust has stabilized somewhat. is there a reason to find safe haven in the aussie? you are looking at aussie yen. this time around, people are looking at the chinese credit side and saying the economy

seems like it is going to do. and people are pricing out rate cuts in australia as well. the combination ended up with a very firm aussie dollar. the risk is actually challenged. >> i want an update on something you mentioned in late september about strengthening of the japanese yen. dollar weakness we have seen in the past week. what do you want to see from the japanese economy and the signals from the japan side of the equation? what is going to happen that will strengthen their currency until the end of the year? >> it's really more if you see the yen strengthen and see it go below 100, it will strengthen a lot more, because you will see

that hedging activity taking place by japanese investors as they hedge the foreign portfolio and becomes a self-fulfilling story. right now, the japanese economy is doing ok and just going along at a slow base. it's not accelerating or decelerating. >> global head at deutsche bank. scarlscarl berkshire hathaway reporting earnings. analysts s lower what had anticipated. the net profit was $7.2 billion and should mention that berkshire hath away ends the quarter at $84.4 billion. this is bloomberg. ♪

>> we are back. alan thanks for sticking with us. keep on politics that's all anyone cares about right now. it's possible that you could have a risk-off event on a trump victory. but let's look further down the line and the possibility that we could have economic policy regime change, much more fiscally liberal, a government much less inclined to pursue trade. what is the economy and what do financial macts do if we get this shift in consensus.

front-loading growth into the new administration. , i think that the markets understatementing the latter. qu n't think it is reaganes emp and corporate taxes could be cut where there is a new corporate tax structure not just for the united states. >> what would do in raising the dollar? >> the back end of the curve will sell off. i think it will sell off regardless. potentially quite substantially and what the front end does and what the market expects in terms of the federal reserve. if you have a combination of this fiscal policy and credible

central bank you will have a yield curve that flattens out. it's the perfect environment for the dollar. it's when i started my career in the early 1980's where the dollar was on a tear and it was about fiscal expansion. >> i have a burning question about the mexico peso. and let's get some scope. and this has been politically focused and this is the move down about 10% relative to the u.s. dollar. people are attributing this to the trump situation. take this chart back five years, this curve has been going down since 2013. are we in a situation here where the value of the peso has been pushed down because of politics or stay clear of this three-year momentum of losses? >> the trading we have seen,

it's shocking how the trade accounts have not responded at all to the weakness you see in the currency. that puts a break in terms of weakness. we haven't seen the trade accounts turn around. when you look at fundamental values, you look at a variety of ifferent measures. t.p.p. and you have external accounts and throw that in and there is could be expensive. i generally would say this is a currency that looks fundamental weak. >> thank you very much for your perspective. >> what happens to g.o.p. leaders if donald trump loses? ♪ seeing is believing, and that's why

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you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. >> time now for first word news. hillary clinton has a three-poirnt lead in donald trump in a new national poll. the former secretary of state the mr. trump 47% to 44% in abc news "washington post" tracking survey. voters trust her to handle health care. trump has the edge on immigration issues. president obama has pardoned 72 more federal prisoners. many had been jailed on drug and weapons charges. the president has now commuted the sentences of 944 people, more than any other u.s.

president. in new jersey, a jury has found two former allies of governor christie guilty of plotting traffic jams. jurors convicted the two on all counts and accused of intentionally creating the chaos at the george washington bridge in september of 2013 to punish a mayor who wouldn't endorse christie's re-election bid. >> when people do things in government when they are supposed to be serving the public and they take actions that undermine the public's confidence in our ability to do our work is so far over the line and illegal, we have to seek them out and see they are punished. >> sentencing is scheduled for february. both defendants say they plan to appeal. the paris agreement on climate change became international law today coming into force faster than anticipated and ends a year of successes of efforts to

reduce carbon dioxide. under the deal, 200 countries agreed to move economies away from fossil fuels and limit warming. global news 24 hours a day powered by more than 2,600 journalists and analysts in over 120 countries. scarlscarl let's get a -- scarlet: pre-election jitters sending stocks down once again. this is the ninth straight day of losses. that is the longest losing streak. during the period, however, it's not like stocks cratered. yes, every industry group declined but we aren't looking at momentous losses.

at the same time, we saw treasuries rally and vix climbed and the dollar weakened even with the jobs report that keeps the track. >> there is some consistency, down, down, down. we are grateful for the consistency. >> impact of wage growth on prices might be muted. >> this is another data point in a trend of moving towards full employment. i think the three-month, six-month averages are in the 1 70's. very consistent. so i think this is steady ogress towards removing full employment. >> strong gain in ages, 2.8% annual rate. are you convinced that the phillips curve is back to generate inflation? >> so historically when you have

this type of wage growth, it would find its way into prices. one of the trends, the secular trend is technology enabled disruption. it's harder for businesses to pass on cost increases. businesses have less pricing power. i would be interested to see if it finds its way into prices. it would be more muted than we are accustomed to. >> the market is looking at these numbers and saying the feth is going to raise in september. is there any reason to think that's not going to happen? >> i usually don't speculate on -- >> i want you to. >> i think we are at the point where we should be to remove some amount of accommodation. i think this is in the context of a very gradual shallow path

than we have ever experienced of the i think we are at the point that we should be removing some amount of accommodation, but again, i think the path after that, it will be very gall and we can afford to be patient. >> when look at the markets, are you saying the market reaction to a rate increase that it is enough priced in that you won't get a temper tantrum? >> that is hard to judge. i watch the market probabilities. if we were to move to the market to have significant expectation of that. i don't think that should drive our actions. we need to be driven by the underlying economy and economic conditions and that's the bases is on which we should remove some amount of accommodation. >> the dock plot put together at the last meeting suggested ta the consensus from the fed is fed. o increases in the

where is your dot? >> my submission was part of those averages. i don't comment on number of increases or timing specifically, but i think the dot plot, the s.e.p. was consistent with what i think is appropriate, which is a very adual patient path of rate increases and that's what people listening to this should take from what the fed is saying and what i'm saying is that i think future rates will be very gradual. >> that was federal reserve bank . turning to politics, "what'd you miss," donald trump is narrowing hillary clinton's national lead. thanks in part to growing support from republican voters. but clinton is still favored to win and republicans are still concerned about what happens if

they lose their third straight presidential election, what is the future of the party, because that hasn't happened since the 1940's. here is bloomberg politics who join us. if trump loses, it feels like there is going to be a huge brawl for the future of the party between his side of the party, which is more pop you list and nationalist and the more sort of free market, arguably more global side of the party perhaps represented by a paul ryan type. who is going to win? >> i think it's going to be painful for the party. they are facing a moment of reckoning unlike that we have seen in 2012 and 2008. he extended this wing is flexing its muscle and revealed it has larger numbers than anyone thought which is why people

wrote him off in the beginning. and now we see a situation where republican voters are getting behind him. he is around 80% to 90% depending on the poll of republican voters and doing better than paul ryan when voters are asked to see they would like to see lead the party. there is going to be a moment of reckoning, the establishment versus the pop you list, the grassroots versus the donors. it's going to be a lot, i think. let's talk about the nuts and bolts what to look at. brexit, one of the first places reported seemed it was going to stay and then went the other way. what should we be watching. and oon will we be getting

key battleground area where the shoe has dropped here? >> two states on the east coast where polls close earlier at 7:00, north carolina and florida. if he loses one, either one of them, he's pretty much toes and call this thing earlier. the polls right now in nevada, the early vote, which tends to be pretty high as a share of the electorate. and looking good for hillary clinton, if you take that off the map for trump, he needs to win a state like colorado, like virginia or wisconsin or pennsylvania. d the latest polls we have show hillary clinton holding in both states. the polls are showing a little bit better odds for hillary clinton but there are a few days left and has to turn out her

base and minorities, millenials and unmarried women. scarlet: how do these early votes count? are they tallied up and the actual votes on election day are added to those early votes or early votes tacked on at the very end because that's how we view the results on tuesday? >> the early votes are calculated at the end of every day. depending on the state -- it goes state by state, so there are methods for each one but usually we get day-by-day results. >> tune at 7:00 p.m. on tuesday, our washington bureau chiefs will be hosting special election coverage. don't miss that. this is bloomberg. ♪

>> "what'd you miss." the vix climbed for nine days and snap posted its eight day of losses. look at my chart. this is interesting. this is basically looking at the vix versus -- and this is what we are looking at. far right of the screen and see that popping to a level that it hasn't been since august of last year. it means while the market has gone down. we have seen a bump in the vix. there is a bit of discrepancy. joining for us to talk about volatility ahead of the election. adam, i want to start off with this chart which is looking at the realized versus volatility.

spike in vix is going to have to come back down to normal levels or regardless of who is going to get elected, there will be a volatility event and add on higher vol. >> i think what is going on is similar what happened during the brexit. since last friday and what happened with the f.b.i., the probability of hillary winning has gone down and everybody has to put on their caps this week. my bet is that hillary wins and vix goes back down to where it was. scarlet: how does this set up the last trading day before election day. will there be last-minute scrambling. snap rising in the morning and then fading into the close. >> i'm going to play long into this event, i think.

i think the odds are still that hillary is going to win and there is fear mongering going on over here. so what i started to do i started to scale into a long bet and i'll continue to do that on monday and tuesday and then basically what we'll do is do on brexit, we'll watch the results state by state and start to go badly, then aisle put on a hedge to protect myself. >> one of the things that has been striking this year, the fact that there have been a series of event risks for brexit, then this and italian referendum. people thought this was going to be a summer of volatility and never got that elevated outside acute moments like the immediate post brexit environment. what do you think explains this zreps and si the way people are

talking about money and the economy and the way people are treating the market. >> i took two years and we are to a from a low vix era high vix era. in my mind, everything's about the bonds and interest rates. and to me, bonds are inlet's call it the ninth and 10th inning here and once interest rates start to go up, you'll start to see higher volatility. the markets are basically on a sugar high from very, very low interest rates from a very long time. like you said, the volatility has been dreadfully low. i think after the brexit, we were in a three percentage range from, i think it's 80 straight days or something like that, which is the longest streak of tight ranges going back to 1993

or 1994. if you are a trader like myself, it has been relatively painful. ut i think we are transings -- transitioning. world to a low vol igh vol world. lately, we have seen a tick up in rates since the end of the summer, is that part of the end of this great low vol? >> that's my opinion. i do believe that. i think these short vol -- the popularity of short vol trades, everybody wore ships now at the teat and it's my opinion that that's going to change once we get into a period where the

s&p's allowed to move more than 1% a day. i started trading in 1991 and from 1995 to 2000, i mean the ranges were dramatically higher. 25.vix was on average 20 to i think we are going to see that again pretty shortly. regardless who wins the election, if trump wins, then that could happen immediately. if hillary wins, maybe it takes a little more time. then ven the stimulus and interest rates will go up, we'll probable see that. carlet: do you think vix is an action class and people see it and treat it as one? >> i don't really know. i think the people who have been conditioned to short vol on every single rally in the vix

will one day get burnt and burnt very, very badly. after what happened to the brexit, i don't think anybody could have imagine that the market rallied back. we saw it in august and during the brexit and one of these times it's not going to end well. and i think that's where the volatility g emp nie starts to come out. >> people didn't think the brexit vote was going to go the way it did. they were caught offsides. if trump were to win, i think that would be the same thing and people say that. could the combination of these two events start opening people's ideas about all kinds of things and cause people to fundamentally question a lot of the stabilizing forces at play here? >> absolutely. if trump wins, i think

everything falls into question. what happens to janet yellen. what happens with trade around the world. he risk parameters should go up. >> would that validate -- >> i'm not rooting for donald trump to win. i would rather have limb lose. i do think i have been watching politics my whole entire life. i was a history major and i was actually a republican when i was younger and loved ronald reagan but this is the first time in my lifetime that i think this is a candidate who is a danger to the republic. and somebody that i would really be scared to be president and be scared for my children. i would rather have him not be

president. >> the fate of the republic not worth a few vol points is what you are saying? >> i would sacrifice that. >> we will talk to you more. stay with us. we are going to talk about art sellers bailing on their investments after an emerging global burst. ♪

scarlet: we are back with adam. you are well known collector of contemporary art. how much of your investment in art is rooted in your search?

>> when i first started collecting art in 1997, zero percent was rooted. it was something i was passionate about and got into and became a very avid collector. i had about 1,200 pieces of art. scarlet: how about now? any yield from the art work now? >> i don't look at it that way. >> there are a lot of people who do look at art as an investment. you look at that and zero coupeon bonds and gold. what drives art? what drives the price of art? >> the way to look at it and answer where i think things are going. since the japanese market crashed in 1991 or late 1980's, basically art has been in a bull

market. and we had a slight correction during 2007, 2008, but for the most part it has gone up in a straight line. right now, we have a ton of galeries and art fairs every two weeks and there is too many people out there dealing art. you finally start to see the correction in art where the younger start has start to go down and it's the high end stuff that is holding up. but, if you are looking at art as an investment, this wouldn't be the time to be buying art. the tide has to come in and you get to see whose leveraged and who is not. like any other bull market, there is a period of time where people reassess and the popularity of collecting contemporary art kind of fades.

scarlet: are you in the market for any piece or artist? >> i'm in the process of giving away some large institutional type of pieces. one point, i wanted to have my own museum and it's just something that i really didn't get around to. instead of the art sitting in storage for the next 25 years, it would be better to get shown. for example, there is a piece that was put on in los angeles which has hadn't been seen since 2005. >> adam, thank you very much. fascinating conversation. appreciate it. >> coming up, what you need to know to gear up for next week. ♪

scarlet: election special on uesday night 7:00 p.m. eastern

mark: i'm mark john: and i'm john. "with all due respect when you say this election is enough. mark: on our menu tonight, some juicy f.b.i. updates. buffet of other news. john: a free range cut of the sights and sounds of this busy day on the campaign trail. >> what's