>> cyclical elements will show some uptick. >> you have had an incredible -- >> the point is to unleash consumption. >> the hope is that we see this unleashed pent up demand left us even higher. >> it is inflation that will ultimately drive the shift. >> at the core of it, high yield will foster growth. >> this is bloomberg surveillance with tom, jonathan ferro and lisa abramowicz.

tom: good morning everyone. take it right to the 10 year yield. 1.30%. jonathan ferro, it is a surge in yield. jonathan: we had a massive move in the last 24 hours. i think the headline this morning early tells you about how -- how bad things have been. we had a 30 year issue from germany, just above 0%, and it has been about a year. tom: we welcome all of you on our simulcast on bloomberg radio, and television. good morning to you across these three hours. jon, i don't know, bitcoin well above $50,000. jonathan: i don't think he has changed his views. the professor is joining us shortly. outside of treasuries, it has been a buy everything rally.

you mentioned that bond auction, 110 billion. tom: lisa, is this bond surge, is it the kind of thing we saw in 2006, 2007? lisa: the interesting thing we have been talking about throughout the morning, there is this irony baked into the markets right now. what is safe and what is risky, given the fact that you have the safest of instruments, securities, losing value rapidly while the riskier debt and assets continue to fly high. tom: jon, i've got the vicks 21.18, dow futures are fractionally higher. i'm looking at brent crude. jonathan: i am struggling to get used to seeing it. the 10 year at 1.30. i know it has been a long time, and i get it.

some people might have said five or 10 years ago, it was unthinkable that we would be this low. tom: every second counts. let's get right to it. we welcome all of you again. any number of topics to spend a long conversation with the professor at nyu stern school. 's comments the last time he appeared with us, on bitcoin, those comments went worldwide. we get an update, $10,000 higher on bitcoin. let's start with the simple microeconomics, the supply and demand. why is bitcoin surging? >> it is surging because there is a massive amount of -- pump and dump schemes, there is issuance by the fed, not backed

by much. i think it is a bubble. fundamentally, bitcoin is not a currency, it is not a unit of account or a scalable means of payment. not even -- the profit margin can be wiped out -- these are not currencies. tom: nouriel, i want to get to the heart of it. the bank of international settlements. the transactional cost of bitcoin preclude its use. you look at tesla as a one-off and bitcoin will simply never be used in retail, because the

transaction costs are so much higher than normal currency. nouriel: the transaction costs are huge, but the technology doesn't allow more than five transactions per second. it is not a scalable means of payment, meaning it is never going to be used for goods and services. it will be used for speculation and buying other cryptocurrencies, but it is not something that will be used as scalable means of payment. jonathan: you mentioned the volume of transactions, what about smaller transactions -- a smaller number of transactions and larger size? if you could transact in large sums of money and move cash through bitcoin from one country to another in large numbers. not the volume of individual transactions, but let's say you could move $1 billion from point a to point b with bitcoin.

nouriel: even steve mnuchin said we could not have bitcoin becoming the next swiss bank account, being used by tax evaders. across borders, there is a movement of transactions -- you have a system that is illegal. [and discernible] --[indiscernible] no system or country is going to allow that. there has been a crackdown of the g20. they will be a crackdown against the total lack of -- jonathan: what do you make of the increased institutional buying we have been seeing more recently? nouriel: it is not a currency,

not even an asset. usually it gives you some income, even through interest or rent. gold doesn't have an income but it has a value. you look at bitcoin, it doesn't have any income, doesn't have any activity. it is pure speculative bubble on price appreciation. [indiscernible] you have an asset that is not an asset because it doesn't have any features of asset or currency. it is just a self-fulfilling bubble. it has hogged so much energy, you have a pure carbon tax in argentina. lisa: some people would argue,

nouriel, that the idea of so much money flooding the financial system that there is value in being able to put it somewhere, and not lose money. not being charged a negative yield is value in and of itself in this negative interest rate policy world we are living in. if it is a bubble, can it burst, given where we are without many other parts of financial markets also suffering big blows? nouriel: if it is a hedge against inflation, or the collapse of the dollar, you would see a spike in the price of gold and inflation expectations. eventually monetary policy might need that, but the price of other assets would increase. gold went up the last three years and has now corrected. why would bitcoin go from $5,000

to something like $50,000, 10 times higher, just because it is a hedge? other assets would be pricing in. there is no explanation in the rising bitcoin prices. it is not even a hedge against a risk. when you had the collapse in the u.s., bitcoin went down by 50% and other cryptocurrency went down by 60%. it is not a hedge against those risks. lisa: you say there is price manipulation. who is doing the manipulation? nouriel: there have been tons of articles showing these pump and dump schemes. they are pumping and dumping the price of it. no one has been verifying the accounts and it is not backed by

anything. it is all over the map. it should be investigated and it is being investigated. tom: nouriel, what should governments do? there has to be a point where the united kingdom, some fsa body steps in, the same as other nations as well. with your government experience with the clinton administration, how can governments be constructive with this surge in bitcoin? nouriel: just to enforce anti-money laundering rules. that is the first thing. [indiscernible] there are lots of things you can do.

there can be investigations of whether there is price manipulation. those things have to continue. this is a bubble and there is going to be a blowback like in 2018 when bitcoin collapsed from $20,000 down to $3000. the consequences and the losses are going to be much more severe. tom: nouriel, comment please, and we thank all of you out on twitter and your emails, watching professor roubini. nouriel, people are transfixed by this. explain to us not the thermodynamics, but the proof of work of electricity, and its artificiality.

how do you see the electrical consumption that makes this machine go? nouriel: bitcoin alone uses the energy of a country like argentina, because instead of having an interaction -- validating transactions, to make sure it is not double spent. now you have hundreds of miners -- [indiscernible] it doesn't make any sense. 70% of all the mining of crypto or bitcoin is being done by five or six firms based in russia, belarus and china, where the national security problem --

there is no rule of law to verify those transactions. people talk about decentralization. is not a decentralized system. -- it is not a decentralized system. it is centralization of wealth. it is a total lie. [indiscernible] it is centralized to a bunch of insiders. in states where there is no rule of law. jonathan: professor, the next time you come back, you can tell us what you really think about bitcoin. nouriel roubini, professor of economics at nyu stern school of business. tom: you get somebody on, in the

trade, and i think it would be scott minerd. i thinks -- i think scott minerd would be great, talking about bitcoin, much of it based around the hope of bitcoin being used every day in transactions. jonathan: we have to turn some economic data. what do we have come retail sales, ppi? -- what we have, retail sales, ppi? tom: the basic idea of retail sales is important, and the control group is critical. you wonder, can you piece together a three month moving average in a pandemic? jonathan: later, barclays chief economic -- equities pushing a little but higher. the story is in the bond market. 1.31 on a u.s. 10 year. a big move in the last 24 hours. good morning, alongside tom

keene and lisa abramowicz. i am jonathan ferro. your economic data, 15 minutes away in america. this is bloomberg. ♪ karina: with the "first word news, i am karina mitchell. utility operators struggling with that deep freeze in texas have a warning. rolling blackouts could key parts of the state in darkness for days. -- keep parts of the state in darkness for days. meanwhile, total u.s. oil production has plunged by the most ever, because of the unprecedented cold blast. traders and executive -- industry exec it gives say production was down by a third in america's biggest oil fields. president biden plans to recalibrate relations with saudi arabia, and will emphasize ties

with the king. it is the latest sign the administration is taking a different track from donald trump. the administration will downgrade relations with the crown prince, the country's defect a ruler. the u.s. has put a hold on some key weapons sales to the saudi's. another day, another record high for bitcoin. the world's largest cryptocurrency scaling another peak, rising almost 6% to break the $51,000 bubble. bitcoin has risen fivefold in the last year. activity in bitcoin futures suggested traders do not see an end to the crypto rally anytime soon. global news, 24 hours a day, on air and on bloomberg quicktake, powered by over 2700 journalists and analysts in more than 120 countries. i am karina mitchell. there is much more ahead. this is bloomberg. ♪

jonathan: good morning. talking about $18 crude. jp morgan flirting with the idea, at least flirting with the idea of seeing triple digit crude again. tom: by the time we get you to the real ye -- real yield on

friday, you might have -- jonathan: to be clear, you said a couple things about this, so far this year. i remember when you said, are we going to say $3900 soon? i'm happy to concede. and then we got there. you mentioned a 10 year. it has happened really quickly. 1.30, just like that. lisa: entry point? a triple leveraged cash fund? tom: i'm thinking $80 on oil. let's do this. thank you so much for the comments that we have seen on the roubini interview. michael mcglone joins us from bloomberg intelligence. a great savvy derivatives option guy is going nouriel is nuts.

discuss that divide between people pro bitcoin and someone is educated and articulate as professor roubini saying you are nuts. michael: i think it is a difference between someone like jon, someone who was a traitor and academic -- trader and academic. it is already priced in from an economist standpoint. he is missing a key thing about bitcoin, and that is it is not a currency. it is a global reserve asset, a digital asset in a world that is going digital. you can see the flows. it is accelerating. the strategists say something has to change. flows are coming from gold and bonds and now the stock market. how are you going to stop that? the point is bitcoin is -- people say it is too volatile and i say yes it is, it is not a reserve asset yet. give it four years and i see

volatility for bitcoin dropping below that of gold. the key difference is bitcoin's supply is fixed, unlike gold. lisa: what would you say to nouriel roubini's point that there isn't some intrinsic value to bitcoin? such as for example with gold, you can actually make stuff with it. other assets, you can actually get income from it. is a property, you can rent it out. michael: he is missing a key point of history. i understand he is turkish and i recall in the history of alexander the great and the can keys to doors and the nazis, the first thing they would sees is a country's gold. you can't seize bitcoin. i look at the british museum, things like the hordes. you had gold, nothing but gold. now you have bitcoin. it has already been adopted on a gold scale.

you don't use it for transacting. it is a collectible. you hold onto it, but the number one tradable digital currency is digital dollar, and that is what is happening in the ecosystem. tether trades double the volume of bitcoin. lisa: one thing you are so good at is having lots of conversations with people in the market, who are interested in getting into different asset classes. can you give us a sense of the scale of interest in bitcoin, among the institutional investors who speak with? michael: i get it from everywhere, economic teams of major banks. we hear it every day from different entities and institutions, but the key thing you have to look forward to in markets is always something to look forward to. in bitcoin, there will be a u.s. ets. -- u.s. etf. until we have this u.s. wealth

money going into bitcoin, the price is more likely to go up. jonathan: we touched on something important. we are looking at it because our clients are looking at it and if they are looking at it, we should buy it for them. are you hearing more and more pms start to think about this as an asset to diversify into? i'm talking about 5% or 10% of the portfolio, just a little bit. michael: exactly. reputation risk is now tilted against the naysayers. in five years, bitcoin continues doing what it is doing, capturing the world is a global reserve asset that started organically. the people saying nay are going to be at risk that they didn't get their clients in. tom: i talked to professor roubini about the transaction costs of affecting bitcoin and the banking system, versus mastercard or everything else my houses -- my house uses.

windows the transaction cost come down? michael: there are second layer solutions for bitcoin. tom: you've got to understand, i thought tether was a dating service. i'm dumb. explain to me how the transaction cost for bitcoin comes down to be competitive. michael: most people buying bitcoin are not planning on selling. that is the way i look at bitcoin. it might get expensive and it might take a few hours to get out of it, but it is much easier than gold. you can do it on your phone. millennials like that. this is a transition to the future. tom: i can buy it and sell it on my phone. michael: that is very easy right now. all of these second layer solutions. one is lightning. mastercard is allowing it. it is on paypal. it is going to venmo. tom: what do you think, jon?

jonathan: i want to get a final word on crude. what is going on? michael: short-term spike usually makes long-term peaks. it reminds me of 2019, when we had that attack on saudi oil assets. this is not a permanent reduction in supply. it is going to come right back. jonathan: thank you, mike, good to see you. not exactly endorsing that $80 crude call. tom: did not get a lot of love. jon, where are you on bitcoin? i thought tether was a dating service, what can i say? jonathan: some real data on the economy side. retail, ppi, just to tie this into what is happening in the commodity market. the crisis pushing higher at the factory gate. ppi data just a couple minutes away.

tom: we are pushing away from the deflation spiral of last week. jonathan: of last week? lisa: he is throwing shade at me. jonathan: ok, this is about lisa. lisa: do we see it in the numbers yet? tom: you see a churning of price. jonathan: we know it is going to happen here. it is pretty obvious. look at where we were, 12 months previously and think about that on a rolling basis. it is in it -- it is inevitable when cpi starts to push higher. tom: i hate to say it, but i'm going to go back to the real yield, very constructive at -.94. that is a big change from 10 days ago. jonathan: i'm not sure what is going on. never mind that other show. tom: lisa is getting her own show to compete with you and real yield.

she will call it the deflation spiral. jonathan: coming up next, i might not be here, but you will get some retail data and some ppi did as well. after that, you will hear from the barclays chief u.s. economist. this is bloomberg. ♪

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jonathan: economic data just round the corner in america. from new york city alongside tom keene and lisa abramowicz, i'm jonathan arrow live on bloomberg tv and radio. equity futures coming in half a point. a nice late of economic data dropping. here is mike mckee. michael: ppi, everybody is keeping an eye on inflation. heard you talking about it in the last segment. 1.3%, that is a significant jump from the .3% in the prior month. without food and energy it is up 1.2%. we also want to check out the ex-food, energy, and trade, 1.2%. big jump even if you take out

gasoline prices that have jump significantly. we seem to have some pressures at the lower end of the economic scale. we will continue to watch that. let's take a look at retail sales. retail sales up 5.3%. this was expected but not that much. the forecast was for 1.1%. you had a number of things happening for the month. seasonals, we had a terrible year last year and the seasonal suggested there may be overcompensation. the other thing is you have the $600 checks. people spending money. taking a look at where the money was spent. i want to look at gasoline stations, gasoline stations up 4%. that is a price change. we know gasoline prices went up. electronics and appliance stores up 14.7%. the narrative in december was

people stopped buying stuffer home offices. looks like we went out and bought some stuff. building material up 4.6%. food and beverage stores up 2.4%. solid gains across the board. non-store retailers up 11%. tom: we will go longer. this is important. jonathan, i want to go to you on the data. we have markets moving on what michael is talking about. jonathan: 1.33 on the u.s. 10 year. yields were coming in, now they are high on the session by about a basis point. stronger u.s. dollar, just sort -- just short of 91 on p x y. if you want to put all this together and go to the equity market, we coming off the back of this. down seven points on the s&p 500 , off .2%. the move that gets your attention, yields higher. in the fx market, strength comes through. on a day the dollar is stronger,

we had some weight, 1994 on the dxy. tom: you take the three month moving average? how is a pro like you result -- massage this retail in america? michael: you have to take the average and discount the fact of pandemic influence. clothing and retail stores of 5% in december -- in january from december, but on a three-month average they are down 14.2% -- they are down .8%, 14.2% was last year when we had the big drop. food services and drinking up 6.9%. tom: did you expect that? michael: yes. we know your social life. no, we do not expect that. that is why john stuck around. tom: he went to the ferro school

of charm. michael: we had the big shutdowns in january. a lot of food in bringing establishment shut down, but we saw a rebound instead. the question that will come out of this is how much of this is $600 checks? how much is the extra money people got that was spent? we will have to watch another month. tom: we will go to michael gapen , but one more question. does this change fed policy which shows a sustained gdp statistic which upsets their plan? michael: the fed will look past this as well because of the question of how much is influenced by stimulus and how much will be lasting. tom: the chart say it all. on radio all you need to know is up to 1.33 on the 10 year. michael gapen joins from barclays. does this kind of data solidify

a barclays call for buoyant economic growth? michael: it certainly does help. we are looking for growth to be solid this year and what this tells you is when fiscal stimulus arrives to household balance sheets it does get turned around fairly quickly and materializes in economic activity. this is largely attributable to the aid package packed at the end of last year. we suspect will be getting around a $1.5 trillion aid package by the middle to the end of march. this means we should see a rapid acceleration in demand and household spending as we move into the second quarter, which could be continued if vaccinations continue apace and mobility recovers over time. it does confirm our expectations about growth for this year, at least initially.

there is 11 more months to go. lisa: can you connect retail sales and a one month pop after passing a stimulus plan to longer term growth? how neat is that line? michael: i would not say it is entirely neat. there are a list of things that have to happen, including vaccinations and getting on top of the pandemic and perhaps turning to an economic recovery package later this year. it does show you that when households have resources to spend they ultimately will. this does address the question of excess savings on household balance sheets and what is going to happen to savings if we can gradually normalize activity. there is one school of thought that says it is wealth, the wealth effect is diminished. our view is we think a lot of it is pent up for deferred consumption likely to come back

and support activity. jonathan: to give you an update on the price action, the move did not hold. 1.31 on 10 year. dollar index just off the highs of the session. we are talking about retail sales. maybe we should pay more attention to ppi. i'm trying to understand, you have this commodity boom, the supply chain issues, how do you take the read on ppi after cpi? how consistent is that read? jonathan: -- michael: we should note this is not just a u.s. phenomenon. you mentioned china. across the globe the ppi data set input prices are moving higher. we think on net this affects the emerging-market central position much more because they are much more export oriented and have a heavier focus on goods

production. in the u.s. and europe and most of the developed world, we are still a services -- a service oriented economy. how does this pass through the cpi? further buoyancy in good prices. services take the weight off of that and we think good prices in shelter and services later this year. there will be a pass-through. i did i think it will affect the fed you on how policy should be set, but it is moving the needle on central banks like in brazil and south africa, thinking about maybe we need to delay further cuts or move to tighter policy stands. it is a global phenomenon. we do not think it affects the developed market world as much as the emerging-market. jonathan: is it more than just base effect? michael: i think it is where we

apply constraints. it is lack of availability of labor, it is lack of input, lack of containers. we are not moving as much cargo via air. i think the cost of getting goods where they are needed globally has risen. i think it is more than base effect. presumably, or if we expect it will diminish, if the composition of activity chips back in the direction of services, but in the meantime i think you'll be with us for the first half of this year. jonathan: increasingly complex to get a read on this. thank you michael gapen of barclays. it is not just u.s. story, it is a global story. look out for what is happening in china as well. tom: i agree with that. i just did a fancy moving average study while you are going on on the control group for retail sales. it is visible as all get out on the moving averages that you would have a lift in inflation given the massive gyrations. jonathan: michael mckee

mentioned the checks set out. there'll be more in the near future. lisa: what is interesting is this is a huge beat from expectations. the market did not hold the move. what matters to this market? we are getting this inflationary push, but as is this all priced in? jonathan: lisa, where you satisfied? we had a move of 11 basis points yesterday. lisa: i'm not saying it is not -- i am saying is not correlated to the actual data. people are pricing it in. at what point will the data be a driving factor? tom: in one week we have gone 19 basis points on the 10 year yield. i know this because i am at terminal central. jonathan: it is not enough. not enough for lisa. lisa: i am pointing out that the beats are no longer the drivers. you are pointing out how noisy and messy how hard it has been to get a read on the economy. jonathan: wait until we get a

1.50 on the u.s. 10 year. then she will be with us. lisa: with you on what? jonathan: then we get the nice direction on the assets you think we should have. maybe wider, nasdaq lower. lisa: that was the immediate move. the knee-jerk move was nasdaq lower more than the others because that is the more rate sensitive stock, which you will be talking -- which we will be talking about with gina martin adams. jonathan: dan suzuki comes up the next hour. tom: dan suzuki is great. a data check. the 30 year bond, 2.07%. it is negative to in fargo. jonathan: 1995 on the dollar index. we are back to session highs. tom: i like your data check. negative two degrees in fargo. jonathan: temperatures in fargo is the new data check. from new york city, a good

morning to you all. i'm jonathan ferro. heard on bloomberg radio, seen on bloomberg tv, this is "bloomberg surveillance." karina: with the first word news, i'm karina mitchell. the deep-freeze could keep parts of texas in the dark for days. power suppliers from texas to north dakota implement rolling power outs for the second day in the row. the operator of the texas electric grid says it could be days before power plants are up and running. on tuesday night outages spread to arkansas, louisiana, and mississippi. meanwhile the u.s. and japan have reportedly agreed to extend their agreement on trip funding. the deal will keep japan cost of keeping u.s. forces -- former president trump had demanded a four fold increase in financial support. reportedly there is no love lost between donald trump and mitch

mcconnell. the former president blasted mcconnell in a statement, calling him a dour political hack responsible for republicans losing the senate. mr. trump said the party can never be respected again as long as it has leaders like mcconnell after the senate acquitted trump in the impeachment trial. mcconnell said the 40 fifth president was responsible for the riots at the capital. it was another blockbuster quarter for shopify. canada's most valuable country -- valuable company beat forecasts on sales and earnings and it expects revenue to grow rapidly. a measure of product sales flowing through bop five -- three shopify was up from a year -- through shopify was up from a year earlier. 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 karina mitchell. this is bloomberg. ♪

>> it will all come down to leverage. i would discourage people from

taking on that marginal bit of risk on leverage. time is your friend. leverage is your enemy. leverage is uncontrollable. tom: ken moelis on where we are in investment banking. lisa abramowicz and tom keene off a bang up retail report with yields higher, 1.32 on the 10 year. i rarely do this but i have to go to neil dutta who is a congenital optimist lincoln's birthday was pounding the table, saying watch what we do with our visa and mastercard. it was up and away and dutta nailed the strong retail report. lisa: he said it was going to be more than five times as much is expected, and bang on, it was more than five times as expected. a key question is how do you extrapolate this out? is this a one-time bang or is this going to be something with longer legs in the market that

has not been fully priced in yet? tom: our chief strategist for extrapolation a bloomberg intelligence, gina martin adams joins us. i want to go from where we are now to june 30, which means we have an earnings season august 1 and the first week of august, the second week of august. are we pricing in how american companies will do for the second week of august? gina: it does not appear we are just yet. i say that because we did appear to price much more than indicated fourth-quarter earnings. we are seeing that in price reactions, but we were completely unprepared for the degree of positive guidance and upward revision momentum that has emerged out of fourth-quarter earnings season. as companies are continuing to guide us towards much more positive positions emerging in 2021 than any analyst had anticipated, it is having strong positive price effects. in our work we can find a case

to see earnings grow much greater the consensus was expecting in 2021 just based upon what we have seen throughout fourth-quarter earnings. i would suggest we have started price for 2021 and have a long way to go to anticipate -- tom: if that takes away the bloom call on stocks, does it -- the gloom call on stocks, does it lead you to a range word can you actually see high single digits blended advances? gina: you can continue to see advances in our mind as long as rates do not get out of control and islam is upward momentum continues. those are the two things that are absolutely driving stock prices -- and as long as upward momentum continues. those are the two things that are driving stock prices.

also, the fact that estimate revisions continue to move higher is certainly a positive for price. if you see one of those two things change, then you could see stock prices move into some sort of range consolidation, maybe even deteriorate somewhat. none of those things are changing. even ppi less than 1%. 10 years ago out of the 2009 session we had just 7% before it became problematic. we are still in the very early stages of recovery, gathering momentum, and that momentum is reflected in the upward price of the equity market. lisa: what counts as out of control for interest rates? gina: it is significantly higher than where we are today. if you think about the yield curve, the yield curve spread is double where it is today. by the time we start reaching equity markets out of the 2009 recession, by the time we start reaching a major turning point

in the optimism that emerged in 2009. you look at long-term interest rates, more than double levels of where we are today. out of control is substantially higher than we are today. the earnings recovery is higher rates are positive. you have to get to a point where inflation is significantly faster, where hiring conditions are driving much higher wage costs for companies before you deplete the earnings momentum. lisa: a lot of people would agree with you that they do not see paths down to a bear market in the near-term. there is a question whether there are pockets of from. charles cantor came on our program and said he is having the best opportunity in his career when it comes to shorting certain specific companies. do you think that is true based on what you are seeing, the

global rack of enthusiasm for a rally? gina: i think you always have pockets of opportunity for shorts and the equity market. what we do will be practiced as strategist capturing the bigger trends, where you want to be, sector position, where you want to be factor positioned. without a doubt we developed a bubble in defensive high-quality stocks in the course of 2020. that has been deflating over the last six months and will deflate into 2021. there are absolutely concentrated and specific stocks. a lot of retail speculation exhibited over the course of last six weeks. there are always pockets. the bigger question is will those pockets overwhelm the bigger trends. i would say the bulk of the evidence suggests that is not likely to be the case.

tom: gina martin adams with us. a little bit away from q1 come onto the q2 with mysteries we see. on the data front, we see equities soggy. i agree with jonathan, i'm not used to a 1.31 on a 10 year this is truly, it is not new territory but it is odd. lisa: it is odd when you look at high-yield bonds that are yielding 3.89%. that spread getting narrower and narrower. we are not the all-time tights between high-yield and debt borrowing costs, but this is a new paradigm. companies can borrow cheap. how quick does it take for that to reverse? tom: the other thing is oil. paul sanke was brilliant on oil and the raging debate, as mike mcglone said, is it a one-off of

texas cold amarillo, or is there a permanence where we begin to think about $80 oil? lisa: the concept of shortages in production, some of the hits but shale producers keep getting in the idea we have gone to peak oil in the majors are reducing some of their production. i wonder about the discipline of their carrying out those plans if oil prices go high enough for them to turn a big profit, to they increase production? tom: there's a lot of gung ho about the power grid. that was a good conversation with jim wright of the texas railroad commission we did yesterday. on gold, $1779 an ounce. what do i do with gold? lisa: people are trying to figure out is a hedge, is it correlated equities, is it bitcoin? tom: mike mcglone says it is going to bitcoin. it is negative one in fargo, we

are any constructive trend. lisa: it getting hot. a different kind of cold. hard to breathe and that kind of weather. tom: fargo, north dakota, stay warm as you can. former treasury secretary rick perry coming up on "balance of power." ♪

♪ jonathan: from new york city for

our audience worldwide, good morning, good morning. the countdown to the open starts right now. 30 minutes until the opening bell. your 10 year yield having a look at life above 1.30. the big issue. will rising yields spoil the risk rally? >> it comes down to the pace of the move. >> bond yields will continue rising. >> is that going to put out the risk asset recovery? >> that puts all the more pressure on that earnings growth. >> as long as earnings are moving more quickly than yields are rising, then stocks will be ok. >> the foundational issue to the risk rally. >> a lot more treachery volatility. >> a significant rise in interest rates. >> becomes somewhat problematic. >> the fit will be late to pull the punch bowl. >> the