♪ lisa: i am lisa abramowicz. welcome to "money undercover," which provides valuable insight into alternative investment. we take you inside private debt, equity and real estate. let's get into burning issues, liquidity opening up in private markets after a start to 2020. getting ahead of u.s. elections, a flood of deals and plenty of cash in the coffers and million dollar hangover.

sconces willt of break records in sales. sonali basak, natalie wong and lisa lee. let's begin with sonali. there is a question of who will finance this company and -- as softbank takes control. goldman sachs trying to get a loan deal done but there is something unique. please explain. sonali: softbank said we work as the co-borrower here. softbank and we work had become intertwined since they got into this deal. softbank has been emerging as somebody that banks want to work with, despite the troubles that have happened, they are seeing portfolio companies, something -- they have a big portfolio company. something to look out for next year is doordash. also a portfolio company in the vision fund, working with j.p. morgan for a credit facility here. lisa: softbank is listed as the main borrower. they are putting their own money and name on the block here.

how much of a liability is this for softbank in a broad sense? case ofk in isolated this coming into their purview? are they going to bring other portfolios in? sonali: we work is a one-off given how far it has fallen from its peak. as both as you can get to a subsidiary of softbank. for now it is a runoff but if softbank will put that much of their own money in for somebody else, you need to keep an eye out on how close other companies get to them. lisa: that brings me to natalie because we have been seeing amazon saying it was going to come to new york, then forget about it, but not really. we are seeing amazon coming to the city and other tech companies. natalie: it is a big change from a few months ago when amazon said it was no longer coming to long island city. now they have announced a 335,000 square foot facility in hudson yards which shows they are committed to growing in new york.

even after everything that has happened. we had facebook and google continue to expand in the city. facebook signed a lease for 1.5 million square feet. lisa: can you put this in perspective? is this a tiny fraction of overall space in new york city or is it taking on a silicon valley ii feel? natalie: it is taking off. financial services industry takes the majority of the real estate. financial services industry takes around 30% of currently occupied space whereas the media and tech information take 24%. there is room for tech tenets to pick up, especially with the big leases coming into place. lisa: is there a particular city? long island and he was sort of was sort of the one with a lot of political pushback. natalie: a lot of them are

around hudson yards area, chelsea, midtown manhattan. these are places where they are starting to become more and more. in manhattan, some looking at brooklyn but i am not sure about queens. lisa: let's get to consolidation. lisa lee has been following that in the loan business. can you give us a lay of the land? lisa l: we have an asset manager with $100 billion in assets purchase credit advisors which is a direct lender and goldman sachs just merged two others to put aside companies. lisa: what is the advantage of these firms merging? lisa l: it is scale. especially in the direct lending platform. the money has come into direct lending, you want to be able to hold the loans you have found. that is definitely the thought process. goldman sachs in this space will take it to $3.3 billion and give

them greater diversity. lisa: do we expect this to be an ongoing trend of greater consolidation or are we reaching a stasis? lisa l: mergers beget other mergers. you could see more in the drug mining space. it could be one-off but especially in the place, experts see this as a ripe industry for consolidation. the problem is, among these, the majority of the fund makes pushing through and advocating difficult but there is room for more. lisa: thank you to you and all of our reporters. here is randy schwimmer, head of origination and capital markets. he is following the loan market and everything happening with this space. i want to talk about the collateralized loan obligations landscape and the view into 2020. it was a soft year in terms of issuance and performance. what do you see?

randy: we will have softer year. the indicated side with the buckets being full, and b threes being scarce, not wanting to go triple c. they are conserving cash over the last two months. going to 2020 it looks like based on the secondary price movements in leveraged loans there will be room for them to start investing again. not a lot, but you will see a firmer tone in the overall leverage market. lisa: this is not with respect to investors putting money into new clo's but existing ones collecting cash from the debt they are selling or letting run off. what about investor demand more generally? randy: as the market continues to firm on prices which affects the assets that the clo's are

holding, that will be a benefit. one thing clo formation depends on his triple a, that is been on the higher side this year. it is hard to see where this will go next year. overall deals are getting done. we at churchill have done middle-market clo's. there will be room for formation which is a positive thing. lisa: you said you think the first quarter will be active , in particular with sponsors bringing deals to market. why? randy: i thought we would coast into the end of the year, spending a nice holiday season. but the deal flow has never been higher, and i think in part talking sponsors, there is a little nervousness about next year in the second half relative to political risk and concerns. my sense is they are trying to get a jump on 2020. the pipeline we are seeing now is geared towards january and february closings. it means they want to make up in

time for what could be a slow second half or less certain. lisa: you are talking about financing for lbo's. randy: it is refinancing, new platforms, add-ons and we are seeing the full range of those deals. lisa: how are the structures of those deals? are they seeing things getting frothy? randy: we are pushing back on behalf of our investors because things are getting frothy. the hit rate is less than 10% of the deals we look at for that reason. we are trying to be picky. we are succeeding. the leverages and deals we have been doing have been consistent the last several years. we are on alert for deals that are getting levered more than they should be, particularly the cyclicals. lisa: one theme you and i have talked about is direct lenders have been taking over a greater proportion of the business once dominated by the leverage

lending area. syndicated loans are getting pushed aside. do you see that accelerating as a trend? randy: direct lenders are continuing to raise capital and doing larger deals as you commented brilliantly. the thing that, to watch out for as direct lenders get more capacity, the deal size is going to grow. that is going to cut more into the syndicated products. it will be interesting in the second half of next year to see where the volatility goes relative to political risk. if you see more volatility and uncertainty where the overall markets go, you will see the sponsors kind of going flight to safety which is companies that can get their deal done with a certainty of execution. lisa: randy schwimmer of churchill asset management. private equity is setting its sights retail equities.

we discussed that with a power player, elizabeth weindruch. this is "money undercover" on bloomberg. ♪

♪ lisa: i am lisa abramowicz. this is bloomberg money undercover. time for a power player, a look at the notable names in markets. we have been talking a lot about five equity firms. a growing number of investors are talking about democratizing the market. for more of a sense of what that means we are speaking with elizabeth weindruch. she is bearings manager -- managing director of alternative investment. so what does that mean? does it mean everybody with a retirement fund is going to have private equity exposure? elizabeth: that is a good question. it has been top of mind for investors for several years now.

the primary reason is because private equity markets consistently outperform the public market. if you look over 10 or 15 years , you have an asset class generating strong returns that has traditionally only been available to large institution investors. there are a number of voices saying we should provide access to these types of returns and asset classes in general to your general mom and pop investors. i would say that on the more retail side of things there is a push to make this asset class available but there is a lot of risk involved as well. lisa: a lot of people think the best returns are gone, and people looking to withdraw money for retail funds and the inability to do that with private equity, how much of a risk is that? you see it being an impediment? elizabeth: i see it as a risk. this is something that is

coming. it is not something that will take hold in the market in 2020 or in a couple of years subsequent to that. you have issues around pricing, like liquidity. at the same time with more businesses staying private for longer, as well as outperformance in private equity and i agree that returns are compressing, but over the long term you still have outperformance in comparison with the public markets. lisa: i want to shift to the dry powder. we have seen record amounts accumulate. i am wondering, does this mean companies, private equity companies don't know what to do with their money? elizabeth: i don't think it means that. i will say we have $1.2 million -- in dry powder that is in the trillion market today. trillion in dry powder that is in the market today. the capital will get thrown into

the market over time. private equity sponsors are raising capital and investing over five to six years. you have to think about coming into the market in a more measured pace. capital overhang is a function of what i say quicker fundraising timelines. it is taking less time to raise capital and large funds getting raised. i would not say there is a problem putting the dollars to work. the money is getting put to work more quickly. lisa: if the money is not put to work, are any firms not returning capital, or if they are not drawing on it, where does it go? elizabeth: it is an interesting question. we don't see issues in sponsors putting the money to work. they can request extensions and give extra time to put that money to work. there are times they can release commitment back to investors. we are seeing a healthy marketplace and i don't think there are issues getting dollars out the door. lisa: i would love your

perspective on something or other guest was talking about, the first quarter being really active. do you see that, that people will try to get ahead of the 2020 elections and get deals done early? elizabeth: i would say in our portfolio we are seeing a lot of deal activity and seeing a lot of interesting opportunities. i don't there is a rush to put capital out the door to mitigate future political risk. this is money getting put to work for a long time. if you invest in january versus investing in november, i don't know if it makes much of a difference. political risk is something that is getting talked about a lot lately. as we look at deal flow and transaction activity, the amount of risk is getting priced in. i don't see people rushing to put money out the door to avoid certain political pitfalls. lisa: is your sense a lot of private equity firms are expecting down cycle?

>> if i knew the answer to that question, we would be in a different situation. i would say that we are talking about the fact we are late in the current expansion, late cycle, seeing typical late cycle behavior coming with purchase price multiples, leverage multiples. i think everybody is preparing for some type of downturn but we are not sure when it will be. we have to think about where we are investing the money. we are seeing interesting opportunities in defensive industries as we are hearing the words recession resilience a lot more. lisa: elizabeth weindruch from barings. preparingl firms are for a downturn, we caught up with goldman's chair of investment banking. she told us the private equity firms are bracing for such an event. >> every one of our clients is

focused on being prepared for recession. there is a different level depending on their macro view. on the one hand we have clients who are just looking at their capital structures and saying, let me make sure all of my structures are ready in case there is a recession next year and my two plan has to be a four-year plan or three year plan. lisa: she also mentioned a recession checklist, which is -- doesn't mean it is a sure thing by any means. there is of course the concern they could suffer losses and have a reputational risk but there is also political risk as they amassed more and more capital. they don't want to be called out as being bad actors at the end of the cycle. coming up, one with the collector amassing 3900 bottles. we tell you what price tag is being put on them. this is "money undercover" on bloomberg. ♪

♪ lisa: i am lisa abramowicz. this is "bloomberg money undercover." family offices set up by the super rich to manage personal wealth and they are pouring more and more cash into direct lending. kelsey butler joins us now with more.

can you give us a sense of the acceleration we have seen with ultra wealthy families putting money in this space? kelsey: we have definitely seen a ton of family offices going into debt for the same reasons everyone else does. the ultra wealthy are just like us. currently there is 400 family offices that are active. that is up from 130 in 2015. it is picking up steadily. now family offices make up 10% of the investor base. lisa: is there a particular geographic region where it is picking up more? kelsey: it is going on globally. one family office which was a big example in our story, monaco-based -- which invests or planning to invest $15 million a year in private debt. we see people, former los

angeles dodgers owner frank mccourt jr., he put money into a direct lending and even bill and melinda gates put money into private credit. lisa: what do people think? kelsey: there have been surveys done by one of the biggest trade organizations that said about 50% of private credit managers believe that family offices were -- will continue to put more money to work in this space. lisa: instead of private equity do we have a sense what they are swapping out? kelsey: some of these are using it as a way to diversify their credit portfolios. others are using it as a way to extend entrepreneurial efforts they have already been doing. lisa: thank you for being with us. this is the uk's third richest

person and considered the most eligible bachelor. he is 28 and is suffering some backlash now. tom metcalfe joins us from london. how much is he worth? tom: worth about $12 billion. it makes him one of the more eligible young men in britain. he is having a rough time at the moment. he has got political leaders attacking him. he is seen as being the embodiment of everything is wrong with the british economy. he is 28 and has got $12 billion largely from inherited property. a lot of companies see this as what they are trying to stop in the economy. lisa: please elaborate about rent tier capitalism and how this man made his money. tom: it wasn't really him. it was six or seven centuries ago. one of his ancestors was given a lot of land in london.

the family has been able to hold onto it ever since. $12 billion, the value of property, how much they make and the common criticism is where is the value? that is somewhat like jeremy corbyn, either of the opposition party, been attacking him on. saying is this fair by virtue of who your dad is or your great, great, great dad, you are one of the country's richest people? lisa: it is no coincidence we are talking about this amid the u.k. elections cycle. i am wondering how billionaires have been portrayed by candidates. tom: from all sides they have been in the crosshairs. you had the duke of westborough, you had jim ratcliffe, britain's richest person, attacked. there is a chatter about a wealth tax. that is a similar atmosphere here, increasing dismay about

the rise of billionaires. you had the shadow chancellor -- -- john mcdonnell sin, -- mcdonald son no one deserves to be a billionaire. very similar rhetoric this side of the atlantic as across the pond. lisa: thank you for being with us. it is time for this week's big number. next year a whopping 3900 bottle of scotch collection will hit the auction block including rarities that may sell for $2 million apiece. it includes an unprecedented number of bottles from storied names like maccoll and, bow more maccollin, blamour, and others. you can tell i am not a huge scotch drinker but this segment where we talk about the different auctions is important

to highlight how ultra wealthy individuals are spending their money, giving a sense of the field in the markets now. that does it for us. you can watch each tuesday 1:00 new york, 2:00 in hong kong. from new york, this is bloomberg. ♪

lisa: i am lisa abramowicz. in for jonathan ferro. bloomberg "real yield" starts right now. ♪ lisa: markets assessing the contours of a partial phase one trade deal. a swirl of conflicting headlines and tweets continuing to whip-saw risk assets. keeping invesors on edge looking for more detail before the closing bell. we start with the big issue, markets debating what 2020 has in store for the u.s. 10 year. >> it should eventually be a good year for bonds. >> we think yields go higher. >> bond yields moving sideways. >> we need them to be cheaper. >> still attractive, but not

breaking out. >> we are going to test 1%. >> a lot of things have to go incredibly wrong to get down to 1%. i think we are going lower. >> 1.2% on the 10 year, we have to be looking at a global recession. >> i don't see a resolution on the trade front. i think that continues to weigh on the u.s. economy. >> not a resolution but some progress. >> the fed will have to come back and ease again. >> the fed is going nowhere. >> there has been a tremendous shift easier across the central bank landscape in 2019. how can that happen in 2020? it probably couldn't. lisa: everyone ganging up on bob michele. we have more perspective. joining me around the table is marilyn watson of blackrock, matt hornbach of morgan stanley and subadra rajappa of societe generale. marilyn, i would love to start with you. do you think that now that we have some contours of a trade deal, that we will seek 10 year treasury yields bleed higher into next year?

marilyn: we have to see what the details are on the phase one trade deal, how much they will roll back next year, the impact for the rest of this year. it would reduce some of the headwinds if we see more stabilization. but i think going into next year where you had some of the -- we think the fed will probably be on hold until next year. that is the message we are sending out clearly this week, in terms of the data, the u.s. election coming up next year, we think the u.s. economy is moderating but will continue to grow. it is hard for us to see the 10 year break out of the range it is in currently. lisa: to that point, we see treasury yields lower on the day, even though we did get some kind of removal of the december 15 tariffs. why aren't yields lower? matt: at 1.95, what the market was pricing in a phase one deal that included a lift of the tariffs from september 1.

we got half of that. at 1.70, you are probably pricing in no rollback of anything, so we split the difference, rallied into the middle of that range. subadra: i think we have been trading in line with the cny. we track the 10 year treasury yields versus the inverted cny. that correlation has been very strong. this is i would say this is trading very much in line with the trade sentiment, as marilyn pointed out, there are no details or specifics in the announcements and the headlines we have had the last couple of days. lisa: that has not stopped people before, certainly. the lack of specifics does not necessarily mean anything. if we get a greater sense of a deal, do you expect 10 year yields to climb substantially above where we are currently? if you look at positioning, for example, you can see people were expecting this rally, expecting

yields to come in. now they are pretty neutral heading into next year. marilyn: i think that's right. going into next year, it is hard to see the yield breakout from here. it could go up to 2%. it has rallied today. going into next year, unless you get some significant new news, either more than the market is expecting, than the headlines suggest, it is hard to see a catalyst for yields breaking out too much in either direction. lisa: subadra, do you think that bob michele's call of 1% on 10 year treasury yields is not your call? subadra: it is actually more in line with our calls. lisa: really? subadra: we have 1.20 by the end of the year. we are calling for a meaningful slowdown in growth next year. we think the u.s. economy could potentially go into recession. under the circumstances, the fed could deliver three or four cuts. 1.20 is very much in line with bob michele's call.

lisa: so you agree, and the people are ganging up and saying no way subadra: i think the recession call is a tough one, but they are more skewed to the downside, there is uncertainty around the trade negotiations, elections next year, you are seeing people -- seeing the ecb continue to purchase assets. as well as the demand for treasuries from overseas accounts is quite overwhelming. even though there has not been nearly as much yield pickup currency adjusted basis. under the circumstances, i don't see yields rising meaningfully from here. if there is any weakness in the data, you will see a rally in bonds. matt: the thing we are focused on next year is the confidence at the c suite level in corporate america. we don't have reason to believe that you'll see a continued

deterioration in ceo confidence. in order to get the economy to slow to a point where the fed would qualify it as a material change in their outlook, you are going to have to see ceos get pretty pessimistic on the outlook in order to start laying people off. eventually, if that were to happen, the fed would react to that, but we don't have reason to believe ceo confidence will fall that hard in an election year because of the uncertainty. you don't want to lay off 20% of your workforce prior to the election, because if the outcome is a positive outcome you will have to hire all those people back at higher wages. subadra: ceo confidence is at decade lows. to me, that is more of a concern. business sentiment is low, ceo confidence is at decade lows. that to me is troubling. matt: i will reply to that. when you look at diffusion indices, that's correct. the diffusion indices are at decade lows. but when you look at measures of the level of ceo confidence, they are above levels that existed prior to the election of

donald trump. when you look at the level of ceo confidence, it still looks perfectly fine. lisa: your call on treasury yields? matt: we are at 1.75. marilyn: when you look at the liquidity in the system, that it is increasing again into next year as well, i think the fed is doing a lot going into year-end, helping with the repos. when you look at that, that will continue to contain the dollar, support growth. it is hard to see a reason why i think the u.s. would deteriorate significantly from here. we think it will remain on trend. lisa: what is your 10 year treasury call? maryland: we are between 1.8 and 2. lisa: you mentioned repo, that is the magic word. the fed announced new repo terms, taking place this month and next. a strategist weighed in on this, saying the fed expects take up

to be this large and they want to make sure they provide that level, or they just wanted to make sure everyone knew they were not going to undersize it. i would not expect this to be fully subscribed, but it should be fully comforting to participants that it is available. the interesting thing is that we have seen all of the recent repo operations oversubscribed. does this indicate to you there is some concern among market participants? matt: i wouldn't call it stress or concern. i think people were stressed out a couple months back when, in the wake of what happened in september, they thought we need to get our act together for year-end. i think that caused a lot of stress. i don't necessarily think there's going to be a lot of stress over year-end, in part because the fed is sending a significant signal here. you also have to remember the treasury's cash balance is expected to go up, so the fed will have to provide some extra liquidity to account for that. lisa: do you think the repo man cometh is more of a bogeyman, will there be any serious disruption?

marilyn: there are signs of stress in the market, but the fed is doing as much as it can, and it is demonstrating that it is willing to step up and help the situation. it is not that there is no risk, but it is a diminishing. lisa: credit suisse this week was talking about qe 2. subadra, do you think the federal reserve will be forced to buy coupon treasuries in the face of stress that could materialize by the end of the year? subadra: it is possible but unlikely. they still have a lot more room on the rate cutting side of the equation. we are well above the zero lower bound, so the fed has more room to cut rates before they start doing qe. the thing that is happening right now, there is sort of stealth qe going on, buying bills, potentially could buy front end coupons. that is where the uncertainty

comes from. there is some easing of monetary policy, even though the fed is suggesting they'll be on hold for the rest of next year. lisa: matt, you look like you are itching. matt: not at all. lisa: please go ahead. matt: i think the idea that the fed can certainly buy coupon securities is one to think about because powell suggested they were considering that. but it is not something that we expect them to do until may when they convert their $60 billion a month of t-bill purchases into purchases that are more meant to sustain the level of reserves in the system, as opposed to building them up, which is what they are doing today. in may, we expect them to convert that $60 billion a month into $15 billion a month and buy coupons across the curve, which is what they are doing with their agency pay downs. lisa: i did say qe 2, but i did mean qe 4. it's hard to keep track. coming up, the auction block. no end to the december lull. friday marking a third straight

day of zero high-grade issuance. that is coming up next. this is bloomberg "real yield." ♪

lisa: this is bloomberg "real yield." to the auction block, we begin in europe where the primary market is slowing ahead of the new year. but bankers are lining up deals for early 2020, including a big leveraged buyout from nestle's ice cream business. activity from u.s. grade dwindling this week, just under $4 billion of new debt has been sold thus far including offerings from canadian imperial bank and apollo management. in high yield, junk bond issuers rushed in early this week as

yields dropped to a fresh two-year low. cox media led the pack. on track to price $8.4 billion by the end of the week. speaking of credit markets, peter tchir of academy securities says it may be harder to find value in the junk space going forward. >> one thing i look at in the high-yield space, for every dollar that comes into the high-yield, it is going disproportionately into bb. they don't want to own ccc and bbb. there are some companies that have benefited too much. it is time to be a credit picker. lighten up on what is risky. the value is not there the way it was a year ago. lisa: still with us is marilyn watson, matt hornbach, subadra rajappa. do you agree it is time to lighten up on high-yield debt? marilyn: going into next year when we have a moderate growth environment, i think it's really important to focus on the underlying fundamentals.

i think we will see increasing dispersion between the performance of individual corporate bonds. this year has been very interesting. we have seen a higher number of upgrades than downgrades. a number of corporate focusing on deleveraging a little bit. in this environment, given the supply and demand dynamics, we still have a huge amount of demand compared to supply, so there is a huge focus on income, carry, but really understanding the underlying fundamentals will be incredibly important. lisa: so you are punting. marilyn: we will be very selective. matt: our global head of credit strategy is of the similar view, we continue to like being up in quality in credit, particularly investment-grade. we are expecting another range bound year for investment-grade credit spreads. because we expect a range bound year for treasury yields. ultimately when you are looking for high-grade corporate credit,

you'll have to look even harder next year. that is what we are recommending investors do. lisa: i don't mean to be flip about that, marilyn, because a lot of people are saying that, and even this year, you saw credit dispersion that was dramatic. is there a way to scope the amount of credit dispersion we have seen? marilyn: when you look at the performance of durations, corporate bonds, that has had a huge impact. we are not going to see that next year as well. we need to price in how much duration risk will be. we have a strong preference for being towards the front end of the curve. now when you look at the liquidity, that is incredibly important in the market as a whole but also underlying issuers. look at the management, look at the financials. you have to understand the risk return dynamics. lisa: subadra, that brings us to your space and the concept of duration. duration has grown to some of

the highest levels on record in the investment-grade and high-yield space, with spreads shrinking to the lowest in more than two years. do you think this is going to be a risk or tailwind next year? can credit spreads rally, can you see a rally in treasury yields? subadra: it is possible. i think it has more to do with the demand dynamic for corporate bonds. typically if you see a meaningful slowdown or if the u.s. economy goes into recession, you tend to see credit spreads widen. this time around with the amount of demand you are seeing from overseas accounts, especially looking at the balance of payments and demand from japan, what you tend to see is a lot of demand for corporate bonds and any higher-yielding assets. about 13 trillion to 15 trillion in negative yielding assets. what you are seeing is this constant demand. my concern is that people will become complacent to the risks in the underlining economy going into a recession, credit spreads being too tight. i think credit spreads will not be a good indicator of a

recession, or a meaningful slow down, because of the demand dynamics. matt: i guess what i would say here is if we did have a rally in the treasury market next year, i would suppose it would be on the back of an aggressive fed easing cycle. the more the fed eases policy, the lower those currency hedging costs are going to become. if you are an investor in japan and you have spent the past couple of years not hedging your foreign bond portfolio, you will probably raise your currency hedges, and you'll be able to pick up more carry when you do that. the need to own corporate credit as the fed takes rates to zero diminishes. i would actually expect to see treasury yields go down and credit spreads widening in that particular scenario. lisa: sounds like it is not very good for credit. barclays calling for lower returns in the high-yield space, writing, we expect triple c spreads to be relatively unchanged in 2020 with higher default losses and price declines remaining elevated for

downgraded bonds in this ratings bucket." you also had ubs coming out talking about how the ccc space and the weakness we have seen in leverage loans a leading indicator of what we may see next year. marilyn, do you agree? marilyn: next year, talking about dispersion, duration, i think it is really going to be critical what we see from the u.s.-china trade talks. also the huge uncertainty coming from the u.s. election. we have yet to see the policies of the democratic candidates, yet to see in terms of the fiscal space in the u.s., what will be possible. there are huge amount of unknowns that we have yet to price into the markets for next year. lisa: matt, ccc's, polling nice, or staying away? matt: we are staying away. definitely the focus of our strategy group is up in quality. that has been our focus this

year and that will continue to be our focus in 2020. lisa: everyone is sticking with me. coming up, the final spread, the week ahead featuring more fed speak and another round of global rate decisions. that is coming up next. this is bloomberg "real yield." ♪

lisa: this is bloomberg "real yield." time for the final spread. coming up over the next week, on sunday, china reporting retail sales and industrial production numbers. tuesday, the fed's robert kaplan and eric rosengren speaking in new york. wednesday, ecb president christine lagarde speaking in frankfurt. thursday, rate decisions from the bank of england and bank of japan. marilyn watson, matt hornbach, and subadra rajappa are still with us. subadra, which rate decision will be the most important to keep an eye on?

subadra: with all of the brexit developments, i would pay attention to what is coming from the bank of england. we have seen a collapsing on breakevens in the u.k. we will see what we get from them. i think there is more room for policy accommodation coming out of the u.k. matt: i completely agree with subadra. i think that is a place to focus on. i would say it gets more interesting the deeper into 2020 we get. next week may not be much of an event. lisa: marilyn, will anything be much an event coming up? marilyn: we think that brexit will remain on hold the next week. next year will be important because we will also learn who will be nominated to replace mark carney as the head of the bank of england as well. next year not only will you have someone else heading the bank of england, but as we go into brexit negotiations, the u.k. potentially leaving the eu, looking at the underlying data, events next year will be crucial.

but next week from the bank of england i think it will be more of a steady as she goes conversation. lisa: 2019 was a year of easing. the biggest wave of global easing collectively of all the central banks in the direct aftermath of the financial crisis. there is a question, is that not to be repeated? are we going to see something, if not to the same magnitude, the same direction? matt: that is not in our forecast, i can tell you that. after 30 years of seeing central banks in these a bunch and not seeing inflation, you can never discount the possibility you get another wave of central bank easing. but it is not in our forecast at this point. subadra: it is in our forecast. we think the ecb stays the course, the fed could cut rates, if there is a meaningful slowdown in the u.s. economy. for the most part, as long as inflation remains muted, the bias will be toward easing. that is what i feel will drive the bond markets.

lisa: i love that you have a contrarian take. time for the rapidfire round. the first question, matt was cheating. will the fed cut rates next year? marilyn: no. matt: no. subadra: yes. lisa: are ccc rated bonds a buying opportunity or catching a falling knife? marilyn: be selective. lisa: all right. matt: catching a falling knife. subadra: i'm in agreement with matt. lisa: do you prefer emerging markets or developed market corporate debt? marilyn: treasuries but also emerging markets. matt: emerging markets. subadra: emerging markets. lisa: the reason i said you were cheating, matt, is you were reading the questions first. which is smart. marilyn watson, matt hornbach, subadra rajappa. matt is never coming back. from new york, that does it for

us. "real yield" will be back next friday at 1:00 new york time, 6:00 in london with all the developments on the rate front heading into an exciting 2020. this is bloomberg television. ♪

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♪ taylor: i'm taylor riggs in for emily chang and this is the "best of bloomberg technology" where we bring you all of our best interviews from the week. up next, silicon valley is listening to your most intimate moments. we discuss the smart speaker craze and how vulnerable users are. facebook and google drop out of