clash between the treasury and the federal reserve. steve mnuchin calls for the return of emergency funds. powell pushes back. biden rips trump. the president-elect decries the administration's lack of cooperation on the transition. this as a georgia recount confirms biden's victory. biden says he'll name his treasury secretary soon. and restrictions ramp up. california imposes a late-night curfew amid the spread of coronavirus. the cdc says it doesn't travel -- the cdc says don't travel for thanksgiving. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. a good amount of time will be spent on what is happening in the u.s., this pretty public rift between treasury, the u.s. treasury and the federal reserve. the focus is also in europe on negotiations on brexit, ongoing after some parts of the negotiations are temporarily paused because a negotiator

tested positive. 10-year fore spanish bonds and portuguese bonds ever lower. yesterdayorld shifted in the united states of america. we are on the cusp of a constitutional crisis. i have no idea in america how friday is going to work. the president is clearly inserting himself on a constitutional basis into the state crisis in michigan, and into wisconsin. what i'm watching friday is simple. vice president pence travels to georgia. it will be fascinating to see if he makes public comments on this contested election. absolutely, tom, and we are also trying to find out what the next step is. let's get to first word news in new york city with ritika gupta. ritika: good morning. another legal setback in president trump's bid to overturn joe biden's election victory. last night a federal judge denied a request to halt

georgia's certification of its election results. that is supposed to take place today. according to a hand recount completed wednesday, biden won georgia by more than 12,000 votes. meanwhile, president trump is reaching out directly to michigan lawmakers to try to overturn the state's vote. bloomberg has learned the president will meet with republican leaders of the state legislature today. some trump allies have urged him to preserve legislatures in testing to he is the electoralive college the vote. using remdesivir to treat hospitalized coronavirus patients, the w.h.o. says there is no evidence that improves -- that improves survival or the need for ventilation. a warning for the european union. the leaders of france and

belgium are urging the block to step up reservations -- preparations for a no deal brexit at the end of the year, in case last-minute talks do not work with the u.k. and results in a trade and security agreement. if there is no deal, there will be disruption in higher costs .ecaus global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i'm ritika gupta. this is bloomberg. tom: thanks so much. let's look at equities, bonds, currencies, commodities. it is real simple, real quiet, and maybe that is what you see with the news flow and the -- inc battles between politics and where we are heading. it has been a massively divisive week. sustainsote the vix under 23. 22.96. dollar churning, i don't know

what else to say, francine. odd data screen this morning. francine: what is even more odd is that there is a difference that we don't see very often, between what european stocks are doing and u.s. futures. it is clear the top two american economic policymakers clashed, and that is worrying investors. mining, energyil stocks rally and. in europe, i want to show you gold, to give you a sense of what is happening. that i'm looking at these two yields, the spanish 10-year, a portuguese 10-year, because they are very close to 0%. i think that would be a game changer psychologically for a lot of investors. we will have plenty more on that and a great rotation. director anding christine lagarde are caused

bashar calling on governments to do more about the pandemic. here they are. infections wave of is slowing down the recovery. , and ouring momentum first message to leaders is, do not withdraw support for the economy prematurely. stay the course. >> decisive policy actions are needed. it will certainly affect the environment in which central banks operate. isncine: joining us now peter dixon, commerzbank global equities economist. i guess the concern is that the market has been largely ignoring what was happening over in the u.s. with a difficult transition. we see this public spat between the fed and the treasury. is this politically motivated? and what does that mean for how the markets will take it?

is highlyuspect it politically motivated. we have entered a very difficult transition period. how this plays out, time will tell, but i think markets generally will start to look ahead. manynk there are too fundamental problems to worry about, whether they be corona related, whether they be fiscal related or european economics related, to bear on the markets for too long. attention will be very much elsewhere. peter, what will move -- what will the markets actually look at in the next three to four months? is it going to be a lot of haven buying? peter: i think in the short term, maybe, getting toward the they are looking to try

to secure their gains as long as they can ahead of year end. over the course of the next couple of weeks, we will upbably see flows draw significantly. looking ahead to four months, perhaps even before the end of the year, we will start to see a number of vaccines getting approved, especially here in the e.u.. there are suggestions we are on the verge of an approval here. under those circumstances, i think markets can look ahead for 2021 with more confidence, and i a three to four month horizon you will start to see a move towards cyclical stocks, which are likely to be pick up inat will general economic sentiment. tom: i look at where we are in the cacophony of this week. there is a massive divide between the bulls and the bears. which way does commerzbank go? peter: well, economists are in

the middle. i think in the short term, i am count,y in the bearish not very much. but i think fundamentally on a medium-term perspective, i am fairly bullish. the economy is set to recover next year, hopefully, despite all the concerns that we have about the degree of fiscal stimulus or not. i think the economy will still recover. pumpingbanks are still vast amounts of liquidity into the system. that this signs are is an environment in which you would probably want to continue buying equities, at least in the first half of 2021. and thereafter, we will have a pause to see how things develop. tom: with the ballet of institutions, and particularly what we heard from the imf

yesterday -- and, granted, they have a mandate to be cautious imfi get that -- as the said, is instability in our future, where we could jump conditions in interest rate markets? term: i think for the near , instability remains the name of the game. but i think in the longer-term, it is probably going to be an environment of relative stability, relative positive stability. what is going to drive interest rates higher? central bank actions, i would venture to suggest. but we are not going to see anything on that front for many years to come. they may even be going lower in some cases. conditions, there are those who think that we will get a bit of inflation, with this huge amount of central bank liquidity permission. i remain skeptical that it will show its face any time over the

next couple of years, given the damage to capacity and the demand we have seen over the course of the last few years, a huge amount of economic scarring. i think we have plenty of capacity to prevent inflation anytime soon. aancine: this is despite vaccine? if we have a vaccine, how quickly do we return back to not beso that there will a shock to spur inflation quite so quickly? peter: there is such a huge amount of spare capacity , that even if we get -- we are not going to run into capacity constraints. that is not a view shared by everybody, because there has been a lot of damage to the supply side of the economy. but the numbers i am running at the moment, is going to take 2, 3, possibly four years to get back to where it was prior to the onset of recession. that is sort of a general

feature. i don't think we are going to get to that position, vaccine or not. francine: peter, thank you so much. peter dixon of commerzbank stays with us. coming up next, we will also talk about the budget, the e.u., and a lot of things that have not been going to plan for european politicians. we will speak to wolfgang munchau, euro intelligence director. that is coming up shortly, and this is bloomberg. ♪

delay.pe there is no the german presidency is strongly committed to finalizing

negotiations as soon as possible. the european parliament is also very much engaged so that we can reach a solution, and so the target date of january 1 should be -- should continue to be our target date. of course we are going to fully use the 140 billion, but the rules are so that the grand part has to be committed by 2023. the grand part announced to -- amounts to 72 billion, and we are interested in making sure that we commit the amount in the first three years so that we do not lose the euro from the grand part. francine: that was the spanish withmy minister speaking maria tadeo. european leaders remain divided over stimulus after poland and e.u. package, the introducedlion plan at the end of july will not be put in place until 2021.

what is the elegant or not so elegant way for the e.u. to get around this problem? >> what they should be doing now that they should realize they are not bluffing. a verye very -- this is serious threat to their own finances, which it is. it was intended to be a serious threat, so this is not surprising. -- what theyhing need to do is to take the recovery fund out of this package. the reason we have this veto is because it is all in the package. it needs everybody's approval for that. but if you take it separate, but , withcovery fund in a box a condition of -- inside the

e.u., there is the possibility, a legal possibility to look at this in some details and it is legally possible to do that. they other -- the other thing they need to do is take the rule of law, conditionality, to making sure that money only goes -- thatries that comp compromise with e.u. principles and take that out of the passage -- out of the package irrespective of the budget. and then they will not veto the budget. time --: is this the and i know there are millions of questions for countries that need the fund, some arguing that if it goes to esm it would be political suicide -- but is it time for europe and central europe to stand up to autocratic regimes that feel like they are holding them hostage? wolfgang: i think it is the time, because the recovery fund is delayed. -- -- we hearpine the spanish finance minister

being very optimistic about when she will get the money. she will not get it quickly. when thenot get it budget was supposed to be agreed to by now. that they know recovery fund is delayed. it probably will not kick in until the middle of next year. longer the e.u. is held hostage, the longer it will take. this will not be a paid free option either. wet will also take time, and shouldn't have started from here. we should have done this in july. but this is still faster than waiting for or bond to cave-in, which she may not do. tom: i want to look at the ft chart. it is an obscure chart but it shows the massive second derivative of the deaths in cases in europe versus other regions of the world.

it is friday and we don't want to do too much math. are politician in europe aware of the rates of change of the pandemic in europe? yes, they are. i think of all the leaders, merkel is probably the one who is most aware of the rate of hasge that the pandemic caused. rising fast, and this is not going to go away. we are not going to have christmas in europe. that is already clear. the lockdown will last. there is also the question about the lockdown that we have agreed, where the children go to school -- it is not clear that this is the right mix. i'm not saying it is the wrong mix because i have no idea. i find people are generally too certain about these things,

looking at data to see this country is doing better than another. i don't know. the numbers of the first wave are not the numbers of the second wave. early on, quite good but then it didn't. certainly the economic impact, you could say that this is going to be much worse. we talk about a v-shaped recovery -- this is not going to happen. of: is the federalism europe unraveling in this third week of november? the germans don't like the green effort in terms of fiscal support. his federalism drifting away this november? wolfgang: it might be. it might be. as always, we have the opportunity, we have the means to do this. we could do this if we wanted to, but we probably are not going to do it because we are probably going to offer softer

solutions and ultimately turn out not to do these solutions that we now see with the veto and all the fuss that people made about the recovery fund. the reality is that the action has already failed and the recovery fund probably will not -- the money will not be spent until the crisis is over. the deeper question about the future of federalism -- i agree, there is a lot, we have a lot of ambitions in europe, but the concrete realization -- at the moment, this is a test case. the ultimate veto is a test case for a federal solution, and we will see. if we meet the test or if we don't -- and my predation is we don't because i am not the greatest optimist when it comes to the eurozone. but if they do, i will be the first to say congratulations. but my experience is -- i have been looking at it a long time -- my experience has been that they will miss that opportunity.

tom: wolfgang munchau, and we are thrilled that he will be with us in the next half-hour as well. coming up, darren bernstein advising the president -- jared bernstein advising the president . what is the economic biden policy? what does it mean, and particularly what does it mean given the new gridlock of washington? futures are negative seven. stay with us. this is bloomberg. good morning. ♪

ritika: this is bloomberg surveillance. one of america's top chocolate the coco depending on market. hershey is taking an unusual step, directly sourcing a large amount of cocoa through the ice futures u.s. exchange. instead of buying beans in a physical market, it will save millions in the deal. but it will send delivery futures to a record premium over the next contract. turning to an american company to electrify struggling pickup trucks. the japanese automaker may buy a factory electric powertrain from hercules electric vehicles. it would be used to tighten pickup with u.s. sales down 24% this year. that is your latest bloomberg business flash. read on the screen, but ever so slightly, not a weight to the tape, but just a sluggish

tape. the yen, 103.85. over the last three hours, yen has breached 104 two a stronger position. yuan in the last two days. francine? francine: i like the fact that you mentioned yuan. if you look at the u.s. and europe, they are trying to figure out what the top officials feuding means to the markets. also whether there will be more stimulus for their battered economies. we are really looking at the u.s. and much more on conversation from world leaders, from the bloomberg new economy forum. ♪ - [announcer] imagine having fuller, thicker,

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washington for our international audience, this election seems to be case after case but there are some interesting goings ons between the president of the united states and michigan state lurs and election officials. this all happening in the last 24 hours. we'll have much more on it throughout the morning. wolfgang, i want to take brexit and go off an ian bremmer yt which is every nation for itself. is every european union on brexit now or is it britain and six other voices on fishing rights, agricultural rights, the nitty-gritty of brexit. >> it is interesting. angela merkel never -- she kind of held it together by not evoking national interest. macron, the fishing industry. the question many germans are asking themselves were we right

to withhold on the interest and having a trading with the u.k. en macron is threatening about the fishing. the unity held up so far. the germans kept it together quite well. but as we approach the end game and we are approaching it at some point, nobody wants to make predictions when it is going to happen. the case of covid-19 and negotiating on hold for now. there may not be a deal next eek. also emergency provisions going on and being prepared for what happens if there is a delay. they are going to keep negotiating. they are not going to let a deadline get in the way. the unity to have e.u. will at one time come under some strain unless there is a deal at the

moment. they know exactly what the deal is. tom: you know, i'm going to steal a line from politico e.u. here. in cod we trust. i get the fishing thing and that is that fishing is a heritage issue for other nations as well. how many other cods are out there? > at the moment, not many. the u.k. and the e.u. have a difference on state a for example. that is a matter between the u.k. because they don't want to bind themselves. i think the u.k. will not cave in on this but it will accept the principle that it needs to have to have a robust policy

and it cannot completely disline from the e.u. the trid relationship are suffer as a consequence. hat is a tradeoff that might -- my hunch at the moment is to say there will be a -- it won't come to this. problems enough. i don't -- i do not at the moment anticipate a big row between france and germany unless of course british play this really hard. i'm not agreing to anything. i want a deal that is trade only and nothing else. the germans may at one point say we want that too. but it hasn't happened yet. merkel has been quite wise not to fall for any -- she has been

really -- kept her subdued. the longer that drags on, the greater the chance for serious francine: the election in the u.s., we don't fully understand what the legal challenges could be because also there is obstruction for this transition at the moment. this is the united states of america we're talking about. does it change diplomacy? does it change the way that we do politics or do you assume that come january 21, we just go back to something a bit more normal? >> there will be a different tone assuming that biden becomes president on time. there will be a difference of one. the possibility of the change. i think the reality of a new administration, especially what

the current president is likely to do between now and then will an for example, on all the countries, the transatlantic relationship, the pipeline project. steel tariffs. none of these things will go away. biden will sign up to the paris accord. a symbolic gesture but probably will not deliver any of the goals in the paris accord. there may be some movement on the iran nuclear deal possibly but it is not clear at all because it is complicated. it is not going to be clear. the u.s.-china rivalry probably s not going to change.

ey would like to -- do not want to be a part of a confrontation but cannot lienate the u.s. thank you so much. let's get straight to the bloomberg first word news in new york city. >> the trump campaign lost another one last night. a federal judge refused the block georgia from certifying its election results. a hand recount showed that biden won in georgia by more than 12,000 votes. early today a judge in eas threw out a suit in a pivotal filed a suit in michigan.

treasury secretary mnuchin called on fed chairman jerome powell to return money for several fed lending programs that rely on treasury backing . minutes later the fed put out its on message. they told bloomberg companies don't need more loans. they need grant money, which must come from congress. and congress is getting closer to a guiel on a $1.5 trillion spending bill that would avert a government shutdown next month. nancy pelosi and mitch mcconnell met to hash out the details. they are separate from another coronavirus relief bill. democrats and republicans are far apart in those negotiations. joe biden said he has picked a treasury secretary and promised an announcement next week or the week after. he said his choice will be accepted by all elements of the

democratic party from the progressive to the more moderate. mong the names being entioned, ferguson and yellen. this is bloomberg. tom? tom: thank you. it has been an extraordinary week for this ever changing pandemic. our next hour, a guest will join us from johns hop kin kins. not so much on cases and deaths but the dynamics of this virus into december and 2021. futures negative 4. this is bloomberg. ♪

there are way the federal reserve has been approaching the -- dealing with the dollar i think has been in a positive direction. our interest rates are as low as they have been in modern history and i think that is a positive thing. you'll soon hear any choice for treasury. i made that decision. we made that decision. you'll hear that either just before or just after thanksgiving, number one. you'll find it is someone who i think will be accepted by all elements of the democratic party, from progressive to the moderate coalitions. francine: joe biden there praising the federal reserve and announcing that he will choose a secretary of treasury that has been chosen for administration. joining us to talk about the risk and the transition and anything in between is emily wilkins.

i have to say it is pretty extraordinary what we're living through at the moment. when you look at the treasury vs. fed rift, how political is this? is it a sign of things to come over the next six to seven weeks? >> i think a lot of people were surprised to see treasury secretary mnuchin asking the $455 reserve to return billion of funds to sort of be going this direction of pulling back from funding at the same time the federal reserve has said we need more stimulus funding for covid. i think it is interesting to see a dividing line like that in the federal government come into view so clearly. francine: what is the one thing that you would -- how can joe biden basically change the narrative? if he appoints a treasury secretary, is the limelight going to shift more to the

president-elect and not the transition? >> i think what everyone is looking for in most part for biden's cap net is who he picks. whether they need a moderate-leaning individual or a progressive-leaning individual. his message has been unity, unity, unity. not wodge republicans but within the democratic party. at this point he said everyone is going to love his pick. we're assuming he is not going to be going with progressive senator elizabeth warren. see what the ll vice president says about his boss talking to michigan, election officials, maybin viting them to the white house. maybe trying to get the michigan legislature to do something to change electoral

process. how will this play this friday in emily wilkins' capitol hill? >> i think the white house meeting that you mentioned is definitely something a lot of people have their eyes on. a lot of lay-ups have been asked about to get their response to. for the president to be inviting state legislatures, trying to influence kind of the outcome of an election is really surprising but it is not clear this is going to work out. it sounds like it is not going to happen. that the michigan legislature going to pick up the mantle of deciding the electoral voter. tom: what is the goal of the vice president in visiting georgia today with these two key senate contests as he supports perdue and loeffler? >> i think the key is basically to turn out as many georgiaans as possible to polls on january

5. these two races are critical for who controls the senate. remember biden won the state of georgia. they are going to go into a 50-50 tied senate that means that democrats have the upper hand in the chamber. this is do-or-die at this point n georgia. francine: when you look at all of the legal challenges for the transition, are we going to see lawyers? is the biden camp looking at ways of how they get the president to move? >> i think the biden camp has been talking about going forward with the transition at this point without too much focus on the lawsuits. i've been watching, following one of the democratic legal lawyers who are involved in the election cases on twitter and every day he keep posting these tweets showing that trump has won one legal case and they have won an increasing number

of legal cases. i think yesterday was 29. to a certain extent the biden campaign may not have an active strategy dealing with trump's cases in court. they are letting the courts do their thing. tom: i think this is really important in that i totally take your point that the president-elect is just letting time go on here and let the process work out. did that change yesterday with these announcements and actions by the president? >> i think a lot of people are still looking at trunch to do something inclusively. yesterday we did see that press conference with rudy giuliani where he got up there and defended trump still had a path way to victory and there was a way to make this work. it seems like a big part of trump's camp is still determined that he wins the election even though yesterday we saw georgia be called for

biden after the recount. tom: thank you so much. emily wilkins here on a really interesting friday after the giuliani press conference yesterday and some of the announcements and tweets by the president. the economics over the state of the american economy. in our next hour, a chief u.s. economist at morgan stanley. we can talk for three hours. we'll try to do it in a good 12 minutes. 'm looking at yen 10382. futures negative 3. good morning. ♪

tom: bloomberg "surveillance." good morning, everyone. francine lacqua and tom keene. it is a good way to thend hour. there are people that make a lot of money and they do and then there is people that do not. lliam gates of microsoft and he has been absolutely extraordinary on this planet on working with bacteria and viruses.

nobody is close. ere he is on the pandemic. >> in case over the u.s., the only thing they have done well is they funded more r & d. not just for u.s.-based companies but for companies around the world including a lot of these european constructs. that was a good thing. that was a favor to the world. the rest is the u.s. is at the back of the pack. the diagnostic work we did. the messaging. even today the messaging is reaching a new level of incoherence. >> you look at the numbers, i just looked again on the bloomberg virus tracker. you look at the deaths for every million people. america is close to 750 deaths. china the other great participant in this conference is around three deaths for every million people one number may be a bit overcounted the other undercounteded but one

country has done better than the other. why is the u.s. doing so bad compared with other people? >> i don't think comparing china and the u.s. is that helpful because the china -- china has a more aauthoritarian control over behavior than the u.s. does. but if you compare the u.s. to south korea, australia, the contrast is every bit as dramatic as it is with china. so we didn't catch epidemic at that early stage where the numbers are small before they get big. we are facing as the model predicted that the fall will be very tough. some people didn't think the fall would be tough but if they had looked at the numbers and saw in places like brazil how winter affected infection rates

they saw that and so they -- the bad news is the next six months in the northern hemisphere will be very tough. the good news is both the accines and the theraputics, in particular, the anti-bodies will come and bring that number way down. >> we must rely on masks and all of these things and testing. >> that's right. the behavior -- the using the tests for people and if they contact ive, you trace and make sure those people are not infecting other people. the u.s. still has a long way to go on that. you have finally more agreement that restaurants, bars, a number of things will have to forego during this next five-month period. >> are you surprised by how

badly america has done on that? >> it is mind blowing. we have so many p.c.r. machines per capita than any other country. the c.d.c. and has practiced how to communicate appropriately to the public. they made some mistakes early on and then they were completely muzzled. nobody knows the name of the people underneath redfield who would have been the key communicators. we have this so-called path course. it is disappointing. we don't get to go back and change that but we still have a chance to wear masks. in fact, at healthdata.org they show a line if you have good mask wearing you save now over 100,000 deaths in the u.s. over the next six months. francine: that was bill gates

speaking to john nichols. i have to say it is absolutely incredible how the different approach is between new york and london. in london everything is closed apart from school. that was very clearly what the prime minister wanted, to keep the schools open, close shops. even essential ones for a lot of time and you certainly close restaurant and bars. in new york it is a different triverpb thought that the mayor is going through. tom: no question about that. the pandemic move here is extraordinary. if someone like bill gates talking about it, what he has done is -- some people pick a disease and they do it. gates, granted he has a lot of money but gates has really taken on solveable problem s that arejust waiting for money. they are not like insolveable problems. you just find the money and fix the problem and the worm or the parasite goes away. that's what he is trying to

accomplish. francine: with big infrastructure. european stocks gaining. u.s. futures trimming some of their losses. there is concern about what is going on in the u.s. between the u.s. treasury and the fed. a lot of marks are taking it in tride. om: in march, maybe it was april, we had a conversation on a pandemic with mount sinai. we do so again with 250,000 deaths. david rich, running and leading mount sinai. this is coming up. good morning. ♪ u. good mo rning. ♪ businesses today are looking to tomorrow.

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said 1876 was the lowest point in american history. gore of the doll said 1876 with the lowest point in american history. it may be top. nebraska says we are a nation of laws, not tweets. markets churned this morning. 26 days until the next fed meeting. and the white house coronavirus task force -- they had a briefing yesterday. the first since april. that was some 200,000 deaths ago. bloomberg surveillance. i am tom keene in new york, francine lacqua in a really different london in the continent of europe. francine, paint a picture of what london is like in pandemic. new york has shifted this week. francine: i know there was a big shift in new york because you closed the schools. we have been in locked down for two weeks. we expect