>> central banks are showing no sign that they want to take their foot off the gas. >> domestic activity is still really in the doldrums. >> wickets is the first quarter get back into dented territory -- quarter dip back into negative territory. >> it looks like an asset bubble is brewing. >> the post vaccine rebound is going to be incredibly bust and v-shaped. >> it may be v-shaped for some. it may not be v-shaped for others. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. be v-shaped for others. >> this is "bloomberg surveillance" with tom keene,

jonathan ferro, and lisa abramowicz. matt: this is "bloomberg surveillance" on bloomberg television and radio. i'm matt miller, alongside carol massar. tom keene, jonathan ferro, and lisa abramowicz are off this week. let's start off with brexit. it is truly almost done. carol: getting signed on the dotted line? the commons on the lords are voting on it today. here in berlin, we are in the seat of the euro presidency. , andhold it until thursday ursula von der leyen is a german who runs the commission in brussels. they are about to cement a deal with xi jinping so that europe will have a closer relationship with china. the question is, is that good or bad? in the u.s., you've got mitch mcconnell killing and burying donald trump's $2000 stimulus

checks, so that is not going to the nextybe until congress. there's a lot going on, but just not moving markets. outside of bitcoin, you really don't see a lot of movement this morning. the boardss bring up for everyone, just so you can see where we are on this wednesday. s&p 500 futures, we have been talking about it, this has pretty much been the trade throughout the morning, just up about 12 points. a little bit of support for crude. the 10-year note with a yield of 0.94%. spring up that coin. that is one of the -- let's bring up bitcoin. that is one of the outperformer's of 2020. we see some more momentum, off about 3.5%. we did see it go above $28,000 today to a record high. i think it is up almost 50% so far in the month of december alone. that is kind of whatever your has been, these and credible outliers, and then value maybe is starting to do better, and

then it backed off. some really strong outperformer's moving along a little bit. matt: the question is, is that rotation going to happen? a lot of people say it has already started. a lot of people aren't too sure. let's bring in a guest who has a lot of experience with this kind of thing, even though it has been a while since a value rotation. jim paulsen from leuthold weeden capital management, chief investment officer there. that's you are our age, jim. [laughter] you sit in the same demographic with me and carol. you were here the last time stocks were hip. carol: you've seen the cycle, is what you are saying. matt: so are we going to see it again? is it possible we rotate out of growth and into value now that some of the stocks i think of as growth stocks could now be value stocks? know, i have sort of

moved away from singing a lot about value or growth. i thought more about sectors. i think ever since the dotcom boom, we have really screwed up the value/growth trade-off. there's a lot of times i will own perceived value and parts of growth, and i think that is a better way to approach it. i think of all of the -- i think a lot of the value space is already starting to outperform and will continue to outperform, but i wouldn't necessarily just buy a value etf. i would still look at sectors. i think there are some sectors in there, the traditional value sectors we would like. i really like the global synchronized recovery play, which to me really it's a lot of industrials and materials sectors, traditionally more value place. i like the idea that we are going to have probably and 2021

the fastest world growth rate in a long time, particularly in the united states, the fastest growth here, i think it is going to be around 6%, so maybe since 1984. rates that is as interest , yields go up this year, which would favor financials in a big way with a traditional value play. carol: jim, let me jump in because steen you caps on -- because steen jakobsen, who we had on earlier, talked about the 10 year hitting 1.5%, 2%. how does that play out when it comes to fed policy, and what does that translate into for the financial markets and equity markets? do we see a pullback as a result, even though we are seeing strong growth in the economy? jim: i think one of the things that is really interesting, there are a lot of unique

aspects about where we are today, but one of them is this record-setting low yield environment and really inflation environment simultaneously. news we left off into this recovery, we are not lifting off from 3% or 4% yields and inflation. we are lifting from unprecedented levels, and i think they could go up a fairways before they really become problematic for the economy and for the stock market. to 1900.ck for example it took all of the months when bond yields had been below 3%, and looked at what is the impact on the stock market when i go up versus what they generally dead if they are about 3%. when they have been above 3% which is about 75% of the time since 1900, the stock market actually goes down on average when rates go up.

but when you are below 3%, the higher rates actually lead to a better stock market by a wide margin. in fact, all of the months that we have had a ten-year yield below 3%, the stock market, when they went up, the stock market annualized almost 3% gains. i think the difference is if we take the bond yield from below 1% to 2%, it will actually boost confidence in the future. it might stoke animal spirits in the economy, moving us away from fears of negative yields in the united states and the like. so i think that will be a positive rather than a negative for a while. carol: thank you so much. jim paulsen, leuthold weeden histal cio, good to get thoughts and some optimism there when it comes to the outlook. direction, the other maybe a little pessimism is needed, let's bring in andrea's

clothes -- let's bring in andreas from bloomberg opinion. you have a piece that caught my deal thatthe eu/china we are expecting to see this afternoon. i think ursula von der leyen is going to jump on a call with xi jinping. they want to deepen their relationship, and you say that is a mistake. can you tell us why? andreas: i think it is a mistake because --y rest because they rushed into the steel that has been in talks for seven years. everyone agrees it was stuck for all of these years mainly because china wouldn't move an inch on the most important things, including giving a level playing field to european firms and not using forced labor in china and adopting international conventions. everything was stuck, and then suddenly xi jinping seems to

have realized that with joe biden, a much more skillful leader in the white house coming in on the u.s. side then this american leader which renew the trans atlantic alliance and that europe and america could start per did -- could start prison thing a united front against china in a number of areas, and xi jinping personally intervened and said we've got to make something happen. we have to have a deal. it could be a precursor to your trade agreement. we've got to give something. my fear is that he gave very little, and the europeans, just to have a deal, said great, let's do a deal with china, and as a result, undermined the incoming biden adminstration before the americans and europeans even had a chance to talk about how to have a combined strategy against china. carol: talk about timing. the bloomberg terminal, the eu and china given political nod to that marketing

open -- to that market opening investment pack, so it looks like full steam ahead. i do wonder about the timing. it is just a few weeks from an incoming biden adminstration, as you said. president xi understanding biden will be a much more skillful negotiator. he understands global politics. i wonder about the eu side of this. ,his has been traditionally historically the united states and the eu allies. i am wondering about the timing. andreas: from what i've heard from my sources, the breakthrough was definitely initiated by xi jinping. your question is why was the eu sosa presently receptive. that has unfortunately to do with chancellor angela merkel who has exactly until tomorrow to hold the rotating presidency in the council of the

european union, and you want to get a number of big deals done because she is out next year, and she wanted to have a legacy. we can talk about the internet you deal, but one was she wanted to have a success, and she probably on the counsel side, there was a nudge to the commission, can we accelerate this, and that is what they did. matt: i've got to say, i am pretty bummed out. i am glad you could join us on the phone. have ammed out that i hardback copy of "hannibal and me" for christmas. me"eas wrote "hannibal and about what military history can teach you about success and failure. bloomberg.re from thank you very much. on can check out his work

the eu/china deal that has just passed, this breaking deal on latestomberg, to get the from andreas. they will go in on a political agreement together, just weeks before joe biden comes into office and this administration changes. coming up, northwestern university professor of preventative medicine at a time when we need it most. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. senate majority leader mitch mcconnell is rebuffing both democrats and president trump on bigger relief checks. onhas blocked quick action $2000 stimulus checks. he warned that -- president trump warned that failing to act now resulted in a death wish for

republicans. coronavirus strain found in the u.k. has now been found in the u.s. a man in his 20's from colorado is the first american known to be infected with the mutated form of the virus. he has no recent travel history. electblican congressman from louisiana has died from coronavirus. luke letlow was elected in november. he was 41 years old. he was hospitalized with the disease on december 19. british prime minister boris johnson plans to rush his trade deal through parliament today, confident it will be easily approved. hard-liners in the conservative party plan to back the accord. the main opposition labor party will also vote in favor, even though it calls the agreement inadequate. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ when you switch to xfinity mobile,

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♪ matt: welcome back to "bloomberg

surveillance." tom keene, jon ferro, and lisa abramowicz are out this week. there is a lot going on, certainly in politics. we see a brexit deal, and eu/china deal, no deal on $2000 just as checks, maybe, the rest of this year, the most important story is the virus. we did see another vaccine approved today in the u.k., the astrazeneca/oxford university vaccine, but it didn't seem to move markets much. carol: i always go to this number on the bloomberg, among our most read, the virus update. a ton of stories. we are right now i global cases of 82 million, deaths of 1.7 9 million, and in terms of the vaccine, more than 5.7 one million have been given globally.

the president-elect saying it could take years for americans to be vaccinated at the current rate. he is concerned about the distribution. this rollout and distribution is key for our economies come up to get back to work, for everything to get back to normal -- economies, people to get back to work, for everything to get back to normal. we have had off to mr. gross mates for 2020 -- we've heard optimistic gross mates -- we've heard optimistic gross rates for 2021. those numbers over in germany have been rising as well. we are taking out record after record. i think there's a lot that has to happen, and it is all key to this vaccine and really getting it out to people. matt: i'm ready. . carol: i am ready, too. matt: i have a gift certificate at brew dog already sitting by my front door prepared. i've got plane tickets for mauritius. i'm ready for this vaccine to

get rolled out, and i am hopeful that is going to start happening faster, it is going to start being distributed more quickly than it is now. i know there are some pickups in the u.s. because it is difficult to get that kind of cooling technology. who has super freezers just sitting around? even the great state of ohio is having trouble getting that vaccine out. but hopefully in the next few days and weeks, they will be able to do it little bit faster. carol: let's see what our next guest has to say about this, dr. mercedes carney fong -- dr. thon, northwestern inversely presser of preventative medicine. let's talk about what is going on here. joe biden is worried about the logistics. you are hearing about it, seeing it firsthand. there's pickups. are you concerned it is going to take a lot longer than everybody anticipated? dr. carnathon: certainly the

original projections of 20 million doses being in the arms of people by the end of 2020 was ambitious. it is fine to set ambitious and lofty goals. i think what we found out in the process was it was a little more complicated than we thought, so that is not unexpected to see that hiccup, but i am concerned about these projections that it would take 10 years at the current rate to vaccinate this many people. but of course, when you start some thing up, it tends to be a little slower. i feel very slow or the pace of this will start to pick up, but as it does pick up, it is going to become more logistically complex to determine who is eligible for vaccination. of the interesting things we have been talking about a lot here is the possibility that if you don't get the vaccine, maybe your name is going to go on a list. i think spain is doing that if you refuse it. if you do get the vaccine, maybe

you get to go on a plane or going a restaurant. are they talking about that in the u.s. as well? dr. carnethon: there have been a lot of discussions as to whether you can compel individuals in the u.s. to become vaccinated. there are always going to be exceptions, but my understanding is that employers can require vaccination as a term of employment. schools can do that, but they do have to allow for exceptions. i think where this will become an interesting debate, but not a theoretical one because it has such real implications, is what if employees in the workplace refused to vaccinate, and then they become sick at work? whose responsibility is it going to be to pay for that sickness if they allow those individuals, and what if their illness puts the clients or the patrons of that business at risk? i think the simple example of school systems, will school

teachers and administrators be required to vaccinate since, as you know right now, these vaccines are not approved for children, yet we know in the u.s., 2 million children have contracted covid-19. wonder that this speaks to supposedly months that we were working on logistics for the distribution of a vaccine. we knew it was coming. operation warp speed was full speed ahead, if you will. i do wonder if things aren't going as quickly as they are right now, and i understand you've got to wait 15 minutes or 30 minutes to know if there is no reaction from an individual, but we are at war against this virus. we need to see some kind of plan , program more coordinated from the federal government to get this thing out what's more quickly. my understanding is from the part of foucault companies -- from the pharmaceutical

companies, they have distributed millions of doses, net we have not seen that showing up in the backs and numbers -- shown up in the vaccination numbers. dr. carnethon: they talked about how to get them out to the united states, but they didn't do any work on setting up the infrastructure to be able to deliver those vaccines. so it is sort of like getting almost to the finish line and stopping to wait and take credit without actually seeing it through. there are a lot of details around getting the vaccine into the arms of individuals, and right now we are in the easy phase because we are just vaccinating health care providers and individuals in long-term care facilities. we know there where those people are. we can verify who they are and what they do. what is going to happen when it is time to vaccinate in a variety of tiers of other essential workers?

i work as a professor in a university. well i be essential? i don't teach face-to-face, so where would i be on the priority list? all of these are really complicated things that somebody has to sit down and think through. carol: the virus is just one of those subjects we could go on and on. mercedes carnethon is the vice chair of preventive medicine at northwestern's feinberg school of medicine. this is one of those things that we were worried about. that when we ultimately got the vaccine, we had to think about manufacturing and all of the supplies to do it, but then it was the case of getting it out. here's a vaccine that needs to be refrigerated, at least the pfizer one, at extremely cold temperatures, and it is tricky. matt: that and the fact that here in berlin, we have been having these protests every few weeks with a number of who-factors -- anti-vaxxers think that bill gates and george

soros are conspiring to take over the world with 5g. in the u.s., i imagine you will have an even greater number of those reluctant to take the shot. carol: coming up, no more as chief economist -- coming up, nomura's ♪ you can go your own way it's time you make the rules. so join the 2 million people who have switched to xfinity mobile. you can choose from the latest phones or bring your own device and choose the amount of data that's right for you to save even more. and you'll get nationwide 5g at no extra cost. all on the most reliable network. so choose a data option that's right for you. get nationwide 5g included and save up to $300 a year on the network rated #1 in customer satisfaction. it's your wireless. your rules. only with xfinity mobile. more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousands of hair strands

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carol: you're watching bloomberg surveillance on this wednesday, december 29. year many of us will be very happy to wrap up great carol massar along with matthew miller. we are setting up for a higher open. 3733 the last print on the s&p 500 futures, up one third of 1%. 10-year note .93. get some numbers on new york supplies -- u.s. supplies. stockpile expected to come down. that is providing a to support for new york prude at $48.25 a barrel.

-- new york crude. matt: people are saying they cannot wait for this year to end, but i do not think a lot will change right away. you do not even get a new president until later in the month. he will face a lot of the same problems donald trump faces and he may have to do with gridlock. the vaccine rollout is not going quickly or efficiently right now. bars and restaurants will still be closed in berlin. it is difficult. carol: all i can say is we will not be going backwards, we will be going forward. i can start to think about the improvements we will see later this year. you're right. just because we change a page in the calendar does not mean it will be different. january and february will be difficult month. we will see improvements in terms of the vaccine getting out and i hope we will start to see businesses opening up. it is dramatic in new york how many businesses have been shut

down. love, there has been so much activity at all times of the day. it is quiet. there are so many storefronts and office buildings that are boarded up. looking for changes in 2021. matt: absolutely. not as many bankruptcies as we may have seen. the question is is that yet to come? lewis alexander joins us to talk about the economy now. towhat to know -- we want know what you expect in 2021. there was a time in march and april and may when i was thinking will get hit with an absolute waterfall of bankruptcies. that did not happen thanks to stimulus. not everyone has fared well during the crisis, but we have not seen an absolute catastrophe yet. are we going to see that in q1

and q2 of next year? i do not think his microphone is working. you may have hit your mute button. let's try and figure that out for a second. remember joe stiglitz at the beginning of this year was warning we could see this cascade of bankruptcies. it made a lot of sense to me. fortunately government help in the germany and the u.s. to stop that from happening. i'm not saying everybody remains solvent, but you've not seen a wave of bankruptcies that we were fearing in the beginning of q3. carol: certainly when it came to publicly held companies having difficulties, whether it was the hospitality industry or you name it. carnival cruise lines were able to tap the debt market many times. there were copies that's saul of

assets. there were these -- there were ways for them to tap multiple places. the smaller businesses struggle more, but cheap money thanks to the fed and government policies should make it possible for a lot of companies to survive. we will see what happens in 2021, whether is any overhang. matt: let's get over to lewis now. these fiscal policies and central banks were trying to provide a bridge from the beginning of the lockdown to the end of the vaccination for the herd immunization. are we going to make it that far or are we going to see a ton of bankruptcies in 2021? lewis: the first part of the year will be tough. we are having big business disruptions right now because of the resurgence. i think the first part of the year will be very tough. the amount of physical support

that has been provided is significant in that has been a significant offset. the other thing that is remarkable is the degree to which people want to get back to normal. you saw that in the second half of last year. i think that means once we get a significant amount of the vaccine rollout the prospects of the second half of the year look better. than is more confidence what the second half of the year will look like. i think the first part of the euro be tough but you are looking in a much better -- the first part of the year will be tough but you're looking a much better second half. says: a global survey people around the world want governments to spend more to -- they economy survive talk about households cutting out spending on entertainment, anticipating food, higher living costs and lower incomes. i worry about what that might mean when it comes to what kind

of growth we ultimately get, what kind of economic situation we get globally and in the united states. lewis: one of the things that is unique about this shop is it is different for different groups. is different for different groups. if you work in the sectors that have been affected this is a tough environment and those people are dealing with weighting of fiscal support. we are going to deal with the drag on that part of the economy. there is a significant part of the economy that is doing well. rate over the last year has been remarkably high. that represents pent-up demand that once covid-19 is no longer the threat it is now you will see normalization of consumption which will be a big boost to growth in the second half of the year. very much a mixed story. i feel like we will be

data-dependent. lewis alexander, thank you so much. have a great new year. we want to get to one of the most read stories on the bloomberg. news finance reporter wrote it and it has to do with wall street bonuses. headlinesee bonus in a it will be one of the most let -- the most read headlines. lynette, this will be a good year for wall street and yet that does not necessarily translate to higher bonuses. what is up with that? lynette: that is right. the key part is wall street has done better than main street, but a lot of these banks have big main street divisions that also need to be propped up during this difficult period. while the traders got a huge windfall, these are big businesses that have to spread the load and share the wealth when times are good. in previous years when the consumer divisions were doing better than trading, that is

what happened, and the consumer divisions were propping up the traders and now what goes around comes around. matt: what is going to happen in terms of poaching, in terms of movement? deskif there is a trading that made $500 million, $2 billion in profits for the banks and they are not properly rewarded. will they be drawn somewhere else? >> that is a real risk for the superstars. the ones who can command that type of competitive salary negotiation and get up from their desk and walked any competitor will definitely be rewarded for their performance. for a lot of other people across wall street, it has been a difficult time. it is not a great time to look for a new job in any industry and obviously wall street trading desks have been cut

consistently over the last two years. -- over the last few years. this competitive advances only applied to the best and most top performers. most who will be rewarded to seeand who is going no bonus or even reductions? >> what we have seen and heard from early indications is goldman sachs and jp morgan will be among the most generous. the bonus bullet those banks will go up about 20% -- the bonus pool at those banks will go up about 20%. on the others there is citigroup and bank of america. bank of america is probably going to have a flat bonus for an city will have a flat pull for equities and up to 10% for their fixed income traders. it is looking like the fixed income trader will probably come out at her, but it will vary a lot across the street and even within firms.

matt: thanks much for joining us. one of the most read stories, this is our bread and butter, this is what people want to hear about. talking about the bonus for for 2020. carol: she digs into her story. part of that is due to the wall street banks, they are rewarding shareholders and doing buybacks. that is going on. there is also a little bit of a sensitivity. we have seen this after the financial crisis about not throwing big parties and not doing certain things. in a year where we have seen a lot of inequities, we've seen division between wall street and main street, the last thing some of the big banks want out there is all of the headlines about the bait bonuses. you have to remember we have done these stories before. big bonuses trickles into the economy in terms of big purchases, especially for the high end retailers. well even if you've done

at jp morgan, jamie dimon does not want you to go back to your and ben greenwich showing everybody your new for ari when your neighbor owns a restaurant at the guy next door that has a chain of gyms and they've gotten hit so hard this year. they want to keep it low-key. even those people who have outperformed are probably going to get a promise in addition to a bonus that was not as rich as they expected. they will be rewarded more and more in the coming years. that is a good thing. carol: what is fascinating is this is a big year for wall street. as you pointed out, one thing the wall street firms do not want to happen is some of the big traders, the big money winners to go to another firm. i am sure those who have been outperforming, i am assuming that we get a decent bonus. they will be taken care of,

don't you think? matt: they will be doing ok. ,hough not be a problem especially for fixed income traders. ,oming up, barry ritholtz bloomberg opinion columnist. he will probably want to weigh in on this. is he getting big bonuses? we will ask him. this is bloomberg. mitch mcconnell has made it unlikely there will be a quick action on any increase in direct stimulus payments. mitch mcconnell says the senate will consider boosting payments to $2000. that will only take place in conjunction with other demands from president trump such as re-examining threshold protection for tech companies. only.s. is vaccinating 200,000 people a day against the coronavirus. while operation warp speed has this to be did millions of doses , some states have been slow to

get them into people's arms. according to a bloomberg news analysis, the u.s. will not hit the trump administration's call of 20 million vaccinations a year end. reportedly is deciding whether to designate cuba as a state sponsor of terrorism according to the new york times. a thank you tobe cuban-americans in florida who turned out to president trump in the election and make it tougher for the bided administration to improve relations with cuba. in germany the daily death toll has surpassed 1000 for the first time since the pandemic started. there are more than 1100 deaths in the 24 hours through this morning. germany joins the european union partners in starting vaccinations on sunday. the u.s. supreme court is being asked once again to overturn election results. the trump campaign once judges -- wants judges to review wisconsin's decision to overturn

ballots. it wants it before wednesday when congress meets to cap the electoral college results. challenges have already been rejected. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> the equity market seems to be focused on everything but the fact that fundamentals in the economy appeared to be losing

momentum. depending on the duration of the second round research it and the subsequent policy measures in place we could see the first quarter back into negative territory. yet you see little if any concern priced in via the equity markets. lindsay piegza talking about the strength of the underlying economy. coming up on the open, wells fargo asset management senior portfolio manager. we will get her take on what is going on for 2021. i will change before the program into my blue suit. i do it is a tribute to jonathan ferro, my best bald friend. he always wears a blue suit. i would get rid of this. he would be disgusted by this brown jacket. carol: a very matt miller jacket. you are right. jonathan ferro has a distinct look. i'm glad to know you've a best

bald friend. i assume you for best non-bald friend. you break it down into categories. maybe i'm your best blonde girl friend. and then best for net friend. i do not want to get you into trouble -- best brunette friend. i do not want to get into trouble matt:. more broadly i think very highly of you. carol: what you have coming up? anything interesting? matt: margie patel. i miss tom when we talk to margie patel because i love to watch his interviews with her. i will do my best impression of tom keene. "the open" is a fast-paced program and i hope the market provides us with fast-paced action in new york. europe has been pretty slow. carol: i would not hold your breath. let's see what barry ritholtz has to say.

his podcast very popular and you should check it out, masters in business. masters in business anchored bloomberg radio. ripples wealth management founder -- barry ritholtz management founder. he has a many titles we are done, we do not have time to talk to him. i'm just kidding. what is of interest to you as we get ready to wind up 2020. not much will change at the beginning of 2021. as an investor, where is your head? barry: i was listening to the clips before you intrude -- you introduced me and i am still amazed that somehow the stock market and economy are closely related. i thought that old myth was put to rest a long time ago. your local economy is not reflected -- the restaurants that are closing, the small businesses are not reflected in the big market.

carol: why hasn't that played catch up? barry: the big indexes are market cap weighted, that is why it is apple and amazon and microsoft. the local dry cleaner that goes out of business, my favorite italian place, they are not reflected in the actual indices. even if you look at what we look at as day-to-day experiential parts of the economy, the gas stations and hotels and retail , they are travel single-digit fractions of the index, whereas technology is 20% or 30%, depending on which index you are looking at. it is a rounding error. you can take the 50 worst performing sectors and eliminate

them from the s&p 500 it would only knock 6% off of the index. it shows you your day-to-day experience is so different than the actual index. i am glad you hearkened back to the financial crisis. carol sent me a story on the fundserg about hedge trouncing the quant and i meet at least thought of barry ritholtz and josh brown -- people picking stocks are actually doing better than these mathematical models. what you think -- it seems like the tech has caught up and overcome by now but they still cannot do it. barry: i'm not going to make any friends with this answer, but even blind squirrels find a nut occasionally. all the data continues to come out and continues to say over long periods of time stock

pickers do pretty well in selecting stocks, but they are terrible at figuring out when to hold and went to sell stocks. that is where the advantages of index show up. it is not so much the cost, although that is a giant factor, and it is not so much their stockpicking prowess, it is everything else going forward. the beauty of indexes is they self regulate. companies that do poorly fallout. companies that do well get put in. personally i think they were late to the party with tesla. they should've done that much earlier. that said, it is very challenging. you know the people who are outstanding portfolio managers and stop pickers -- and stop pickers,- and stock they become household names because they are outliers. carol: we've been in such a low

rate environment for such a long time at the same time we've seen the explosion in index assets. we have guests that have talked about the 10 year moving up a little bit, maybe 1.5% to 2%. if rates go back to more normal levels were start to tick higher, how does that -- or does to tick higher, how active management become something that is important where the algorithms do not track? barry: you are raising three fascinating points. the first is go back to the implosion of the 2008 financial crisis. in those cases -- active management not distinguish itself. the fact that we came through a crash and recovery year, the third time is a charm, they finally did better this time. index two, the fears that

pulls asidee world the fact that most of the world is managed actively. indexes dominate etf's but they do not dominate bonds or how most equity is managed. the fascinating thing is as more and more people index because it is cheap and it is low cost and it is easy, it creates the space for good active managers to thrive. the more people index, the greater the inefficiencies start to be overlooked by the indexers , so that creates alpha opportunities. up, 10 seconds. barry: the third thing is is a problem over time. you can do one -- you can do well one year, three year, five years. carol: we never have enough time. thank you so much. check them out on bloomberg radio. masters of business. check out his palms on bloomberg.

coming up next, dan ives with wedbush securities on bloomberg television as we go to break. a half hour away from the open. futures suggesting some gains on this wednesday. i am carol massar for matt miller and this is bloomberg. ♪

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matt: good morning. for viewers worldwide, i matt miller in for my good friend jonathan ferro. the countdown to the open starts now. we begin with the big issue. another stalemate unfolding over increased fiscal eight. -- fiscal aid. mitch mcconnell blocking and burying attempts to increase payments despite pressure from his president. trump tweeting "unless republicans have a death wish, and it is also the right thing to do, they must approve the $2000 payments asap. $600 is not enough." chuck schumer also pointing the finger at mitch mcconnell. senator schumer: the vast majority of republicans and democrats support $2000 checks. an overwhelming bipartisan majority in the