♪ >> as we started to reopen earlier this year, the bar for the data was high, and i think it was very difficult for the data to live up to that. >> most of our policy dues are already exhausted. >> the market is not ready for the market going up. >> we've had massive inflation in this area of zero interest rates. >> the message going forward will be very important, and right now the market doesn't care. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: inflation in america 90 minutes away. good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market up four on the s&p, advancing 0.1%. the data 90 minutes away. tom: we are going to talk gold in this first block of the show.

please stay with us on radio and tv. i've got to admit, this inflation is a different look on the screen. 5%-ish, that is a new level for america. jonathan: mohamed el-erian this morning, "deficient aggregate demand has given way to frustrating supply rigidities. they are not going away anytime soon." that is the conversation in the world of economics right now. tom: it is really important. he goes back to macroeconomics and the dynamics of demand and supply. everybody has an opinion on this. i'm technology to the rescue. we need to buy a new iphone. jonathan: or maybe two or three or four, or maybe five for christmas. i'm looking forward to how much you've got to spend a little later this year. on the policy front, we have to ask how much more of this can they tolerate before they have to turn around and say the message needs to change. lisa: and also, what can they do in terms of tightening policy that could actually affect why

prices are going up so quickly? i'm talking consumer prices. it is driven by supply chains. they are looking, a lot of analysts are looking at the broadening out of where the inflation is coming from. is it just from supply chain disruptions, or is this a broader demand issue that continues to persist? jonathan: let's set the stage for you this tuesday morning. s&p 500 doing absolutely nothing. we advanced by almost 0.1%. you did price action in the fx market -- muted price action in the fx market. yields higher by a basis point going into that inflation data, 1.377% on tens. lisa: the cpi data has been very hard to predict. increasingly, it means lower long-term yields for a number of reasons. we get that in about 90 minutes. the expectation is for an increase month over month of about 0.4%, slightly lower than

last month increase. nonetheless, the highest cpi we have seen in years. i'm watching this versus wage increases. this is potentially disinflationary if wages don't keep pace. we have seen wages go up, but not enough to overcompensate for some of those higher prices for the consumer items such as anything you buy in the grocery store, and of course rent. one a clock p.m., apple unveiling the apple 13, just for tom keene. there will also be a lot of chatter about the epic ruling and how much apple has to pay with respect to revenues as a result of some of the assets they have in their store. at 11:00 a.m., we get employment data. how much is the chinese economy slowing? this is really a big? . -- this is a really big

question mark for people. how much does this test xi jinping? jonathan: as always, looking forward to that data overnight on the chinese economy. on this inflation day in america, we consider gold. matt mclennan joins us now. let's go there, why we should consider gold in the environment we are in right now. matthew: i think you should look at gold as a potential hedge. when inflation gets a head of steam, sometimes interest rates rise with a leg to inflation. secondly, if you have inflation located in one currency in particular, currencies tend to go down. the other thing i would say is if you look at what happened in the 1970's, when inflation took off, risk assets were hurt pretty badly, and long duration bonds were hurt pretty badly. but you can't print gold. so gold preserved its value in real terms. in fact, it went up in real terms during period --

during that period. tom: you buy gold to own gold, i get that. you've got a much better return as well. now you've got it going, saying -- got going, -- got it going -- got bitcoin, enthusiasts saying it is it on her native to gold --is an alternative to gold. matthew: i would say that bitcoin is being valued fairly richly as an option. it has a market cap of nearly $1 trillion. so we see it out there existing, but gold has coexisted with treasuries. it can coexist with bitcoin. ovens and microwaves exist to get a. -- exist together. lisa: so it sounds like you're

not going in bitcoin. is that the correct takeaway here? matthew: it is very difficult to invest in something like bitcoin in a 40 act fund. it has a lower risk -- gold has a lower risk character. it has maintained a negative risk relation, and has traded at verse two risk sentiment. it trades a little more like a growth equity. it has much more volatility. it has less defined negative correlation with real interest rates and risk assets. so it doesn't yet trade is a hedge asset the way you see gold trade. it is too early to say whether bitcoin has achieved that digital gold status. lisa: why are we talking about gold? why are we talking about bitcoin? are you looking for more for a way to hedge, or more of a way to ride the rally that people see continuing for a long time?

matthew: we are primarily invested in businesses. cash flow generative businesses either in scarce assets or the have trenched oligarchic positions. we recognize, whether it is due to inflation, geopolitical risk, leverage and the system, that if you are on owner of is this, it helps to have evidential hedge in the portfolio. -- have a potential hedge in the portfolio. we see gold as the least worst because it is lower-cost relative to hedging options. tom: the goldmine in queensland, australia, back to 1907. there's a romance of broken hill property and the ownership of newmont and all of the others that you own as well. how is gold-mining doing right now from queensland around the world? matthew: we have seen a big transformation in the gold-mining business. what has happened over the last

20 years is we have seen the emergence of professional disciplined management teams, so we have seen the big gold-mining majors focus on their pier 1 assets that have scale production and could positioning on the cost curve. they are also starting to distribute the cash flow to shareholders. tom: how odd. that is so quaint. jonathan: some capital returns, matt? matthew: it is a good thing. jonathan: well agree. matt mclennan, thank you. an important conversation, tom, on inflation protection going into cpi. tom: we heard earlier from the bitcoin angle from tony roth at wilmington. they are starting to look at bitcoin is a gold alternative. do you buy it, jon? jonathan: no idea. you know what happens when you weigh in on bitcoin. ramos bears come after you. [laughter] tom: are you going to put

bitcoin in? jonathan: yields higher this morning by a basis point on tens to 1.3377%. equity futures set the stage going into this inflation print, up three points on the s&p 500. tom: have you moved in the last five months? jonathan: we've not done much. we need to settle some massive debates, though. i will be talking about job openings in america in about 20 minutes. they are sky high, record highs. what will it take to close the gap between demand and supply, and can we close the gap when we have very clear supply constraints right now, not just in america, but worldwide? tom: you are very microeconomic this morning. jonathan: just doing it for you, dk. that is -- you, tk. that is one of the stories we have to cover. i talked to ben about it at duane reade last night. he think it is important. jonathan: do we have to do the

dress again? tom: we should do the dress again. jonathan: not right now. we will do it later. chris grisanti is going to join us on the dress. is that what aoc is going to wear? congers woman alexandria ocasio-cortez saying to buy gold? i don't think so, tom. lisa: it is difficult to talk about these discussions. spending -- but it is the details. jonathan: nuance doesn't fit on the back of the dress, does it, tom? tom: was kim kardashian nuanced last night? did you see the black thing she was wearing? jonathan: you want to go after kim? tom: i'm not going after kim. i'm just saying she wasn't nuanced. jonathan: commodities, crude up. that's got to be the call of the

last 24 hours. triple digit crude in the world of bank of america forecasting. what does that mean for the political conversation down in washington? tom: are we ready for $80 crude? jonathan: we are getting closer. what are we, nine dollars away? tom: brent, six dollars away. jonathan: do you cut out inflation, all of the bad stuff? tom: you are right about $100. that would be a game changer. jonathan: equities pretty flat going into a cpi report in one hour and 19 minutes. you've been listening to that song the morning. tom: singing it in duane reade. what can i say? get with it. [laughter] lisa: does it surprise you? jonathan: we need to have a chat, ok? i don't want you getting in trouble. you go into those 24-hour places in the middle of the night? tom: i needed a six pack. [laughter] jonathan: from new york, this is bloomberg.

ritika: --leigh-ann: with the first word news, i'm leigh-ann gerrans. tropical storm nicholas came on shore in texas, bringing torrential rainfall to houston and parts of louisiana, still recovering from hurricane ida two weeks ago. nicholas was downgraded to a tropical storm after briefly being rated a hurricane. it could jump as much as a -- it could dump as much. . is 18 inches of rain house democrats -- dump as much as 18 inches of rain. a number of democrats say they cannot support president biden's spending bill until the so-called salt deduction cap is lifted. mostly affects those living in high tax states. here in the u.k., a panel has recommended giving coronavirus booster shots to people 50 and over, along with other vulnerable groups.

it urges that the vaccine begins this month. the british government is trying to increase the immunity of its population after a potential surge in cases this winter. china's evergrand has come up with a dire assessment of its financial house. the struggling property developer says it faces terminus liquidity strains and it has hired advisors for what could be one of the country's biggest debt restructurings. just how much investors will lose depends in part on whether chinese authorities and state-run banks take steps to limit that fallout. 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 leigh-ann gerrans. this is bloomberg. ♪

pres. biden: the eye of the nation's on california because the decision you are about to make isn't just going to have a

huge impact on california. it is going to reverberate around the nation, and quite frankly, not a joke, around the world. jonathan: the president of the united states. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your price action in hour and 12 minutes away from inflation data , not much price action today. yields higher by a basis point to 1.3394%. euro-dollar, $1.1807, totally unchanged. the bank of america fund managers survey calls it the bottom line, tanking macro optimism. everyone long stocks, short bonds. a fiscal frenzy to sustain the boom means portfolios have flipped to long barbells. tom: is this where i find an entry point from tripper leveraged all-cash -- from triple leveraged all-cash? jonathan: obviously right now,

we don't have a correction to buy. if enough people have that view, do you ever get that dip? that seems to be the mood right now. tom: i think this inflation data could be interesting, to say the least. we stay with us on radio and television. now in washington, emily wilkins joins us with bloomberg government. the president was talking about the reverberations of california and governor newsom. what is the reverberation of new york city at 61.2% marginal bracket, and los angeles just below 60% marginal bracket? how does this reverberate for a guy who wants his party not to be losers in 2022 and 2024? maria: --emily: right now, democrats are focused on this reconciliation package and getting that done. he taught -- if you talk to progressives, they see these packages how they are going to keep the house in 2022. remember, due to historical precedent, as well as redistricting and the fact at republicans have more control

over that process, democrats are not in a great lease for the midterms. they want to be able to go back to this constituents and say, look at what we have done, as being very integral to their reelection chances. that is as they are all lady the ash they are already dealing with some very tight deadlines -- they are already dealing with some very tight deadlines. tom: section 170a of the internal revenue code, give us a brief update on the salt bait -- salt debate. emily: there's a push from democrats to either raise the cap from its current $10,000 limit or just eliminate the cap altogether. this was new as of 2017.

we did not see details of it when house democrats rolled out there bigger tax plan. chairman richard neal says that is something they are still working on finessing the details of her yet here's the big thing. even though a lot of democrats do want something to change with the salt cap, every change they make is more money that they have to figure out a way to cover through other expenses. you raise that salt cap, the government loses revenue. so there is a big debate on how to make that work because it is becoming more and more clear, even to progressive democrats, that whatever they spend in this bill is going to have to be offset with new revenue into the government. tom: perhaps -- lisa: perhaps aoc's dress gets a lot of the attention. however, within some of the provisions, based on how much taxes's allies have been willing to raise, what is the size of the reconciliation bill we are looking at? emily: that is the 3.5 trillion

dollar question. we are hearing manchin say $1 trillion or $1.5 trillion. bernie sanders saying $3.5 trillion is already a compromise. their proposal would raise $3.9 trillion in revenue for the federal government. if they want to make sure every thing is offset, that means you can only spend $2.9 trillion. there is still a lot of negotiation that needs to get done. if we are already seeing that amount coming down, it could signal that the amount is going to be coming down even further. when i talked to senator joe manchin yesterday, he mentioned inflation concerns. he mentioned questions about what is going to happen with covid. i get the sense that he is certainly going to be watching the cpi numbers later today. that could further influence the debate as far as exactly how high the price tag needs to be. lisa: how big is the middle versus the ends of the democratic party right now? emily: there's definitely a lot of tension there. when you hear how the two sides

talk about each other, maybe not the lawmakers themselves, but the consultants come of organizers, the activists, you have seen progressives go ahead and attack moderates, and moderate groups attack progressives. but at the end of the day, this kind of a wide sense that they do need to pass something. they are all going to look very bad and have egg on their face going into the midterms if they don't pass anything at all. so there is sort of mutual agreement that something needs to be done, and right now everyone is playing hardball. lawmakers have said this is the time, if you want to dig in your heels and negotiate on something which really pushed to get something in, take a hard-line stance, now is the time you need to do that because now is the time that things are getting written. but after that, there is certainly going to be a big push for unity to come together and make sure they pass something. otherwise, republicans are going to have an even better chance of taking the house and potentially the senate in 2022. jonathan: just quickly, what do

you think this inflation data story looks like in washington when it comes out in just a couple of hours' time? emily: some people pay very close attention to these. i'm sure you will see a lot of press releases from republicans. they will use that data to criticize the current reconciliation plan. but for democrats, they don't see these things as inflation. they see them as things that simply need to get done, regardless of what the inflation data currently says. jonathan: emily wilkins, thank you. doug kass tuned in. "we are in a bull market complacency despite a wide range possible market and outcomes. the bull market believes that all ins well. forecasts are optimistic and precise. the s&p is up 1.5% from an alt -- is off 1.5% from an all-time high. tom: that's the drawdown joke we

have been talking about. jonathan: 1.5%. tom: the bottom line is there's no place else to go. huge part of doug's theory is bonds are where bonds are, so everybody is in. at some point, that ends. jonathan: doug is right to bring up this question, the wide range of outcomes that we could actually be exploring into next year. not exactly captured by a precise price target. lisa: a lot of it has to do with the marginal belief in stimulus. ultimately, doesn't it come down to that? you keep talking about a fund manager's survey, which is think is fascinating. one of the most interesting aspects is there's a disconnect between asset prices and fundamentals going forward. basically, the outlook for fundamentals is deteriorating, not for asset prices. still overweight stocks. jonathan: is that rare? lisa: i guess less rare. tom: no, what is rare is the yankees won.

it is rare. jonathan: inflation data, one hour in four minutes away in the united states of america. futures higher by just two points on the s&p. tom: the red sox lost two in a row. it is not rare. jonathan: how are you feeling? talk to me.

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♪ jonathan: a little bit snoozy this morning, isn't it? just a bit of a snooze going into cpi. futures doing nothing on the s&p 500. nothing on the nasdaq, nothing on the russell. what are we doing on your dow, tom? nothing. tom: nothing, like know it a five. jonathan: the dow is all with -- like negative five. jonathan: the dow is always doing nothing. yields higher by a basis point, 1.3394%. yields higher by about a basis point, curve steeper on 30's, 1.9 160% -- on 30's, 1.9160%. job openings in america pushing 11 million. it is a simple story.

i will translated into simple terms. demand is fantastic in america. that's the point mohamed el-erian was making in "the ft" this morning. either we settle those supply constraints, and the words of ethan harris at bank of america, and payrolls surge, or we don't and wages get hotter. they are the two scenarios we need to talk about. they are the two scenarios that could take policy at the pet one-way -- at the fed one way or another. tom: amazon, 38,000, $18 an hour. jonathan: does that get it done? do they need to go to $20? tom: dead on. jonathan: does that change the game for the federal reserve? we will haley conversation with matt hornbach ash we will have a conversation with matt hornbach -- we will have a conversation with matt hornbach in a moment. can they really delink the two?

jonathan: you are -- tom: you are on the edge of lisa here. it is way too much gloom for me. jonathan: i heard from the bears overnight. i just want to speak to them. job openings in america pushing 11 million. that's the cross asset price action. let's get you something the movers this morning. we do that is always with romaine bostick. romaine: good morning. let's take a look at some of the movers today. oracle reported earnings last night. this is a company that is really about transition here. it is still the second largest soft company in the world, but it has been losing a lot of ground to amazon, microsoft, a lot of these crowd can -- these cloud competitors. it was trying to transition customers to those cloud-based servers. they are now trying to do that, but unfortunately, growth coming in at about 3.8% in the latest quarter, little light compared to what the street was looking for. they are guiding to 3% to 5% for

the upcoming quarter. those shares down about 2% in the premarket. keep in i. a big grade over at susquehanna, saying the days of eat and raise orders are behind them as a rightsizing now starts to take ice for some of these chip equipment makers. keep an eye on smile direct club. shares rallied 16% yesterday, but the volume was through the roog, the second-biggest all you day for the company -- through the roof, the second-biggest volume day for this company since they had their ipo in 2019. those shares up about 10% in the premarket. that drip, drip coming out of china with regards to the regulatory rhetoric. some language out of china thing new laws could be written with regards to minors and the internet. this seems to be an extension of language they have already used before. those shares down 2% in the

premarket. also keep an eye on las vegas sands and the rest of the casino stocks. interesting commentary out of macau saying the government there once to have more direct supervision over consumer operators -- over casino operators and wants to encourage more local ownership or so a lot of the u.s. based companies that operate in macau lower in the premarket. las vegas sands down about 5%. tom: thank you so much. picking up the pieces off the apple soiree this afternoon on open the close. -- on "the close." right now, matt hornbach has to synthesize global research at morgan stanley, head of global microstrategy, also -- of global macro strategy, also senior head of herding cats. it is greek to me and everybody else as well. you go to the heart of it. watch the fed. what is this distinction between

tapering and tightening? matthew: thanks for having me on, and what i said way from jgb asset swaps into fed tapering. i think the issue for the fed is that when they are tapering their asset purchases, they are technically not tightening monetary policy. they are simply easing monetary policy by less and less with each subsequent paper -- each subsequent taper. the issue for the markets, in order for the fed to hike rates, they need to taper their asset purchases. so the first step towards rate hikes i asset purchase tapering. it doesn't guarantee that the fed will reach the end goal of actually tightening policy and hiking interest rates, but it is a necessary first step. i think the fed is going to have trouble decoupling tapering from

rate hikes because ultimately, it is that necessary first step. so that i think is the communications challenge facing the fed today. jonathan: they clearly want to aggressively delink any kind of taper decision from guidance on rates. are you confident that the data will be there to allow them to do that? matthew: we are confident that the data will be there to allow the fed to march down this path, starting with the meeting next week, where we expect the official advance notice of tapering to come out of chair powell's press conference. that i think could be quite interesting, the questions that he will get us of course from mr. -- he will get asked from mr. mckee, i'm sure a very pointed question around that tapering process. that is going to be important for the market place because right now the consensus is pretty firm around this idea that tapering will look like it did get. it is not entirely clear to me

that we should be so confident that it will play out in exactly the same way. there is certainly a possibility that the data could be strong enough, particularly on the labor market side of the wage and, where we actually get a faster taper than what we had back in 2014. lisa: how important is the cpi print for your call when it comes to treasuries? matthew: i'm really glad you asked that question because i do think that this number is important. in particular, the rental components of the cpi basket we think will continue to show strength, and used code of prices -- used car prices will most certainly come down get this to be offset, but an part in extent by the continued rise in equivalent rent. what is more important for our call, we think, is how all of

this inflation data in some of inflation expectations from here , and a data set we got yesterday from the new york fed showing that inflation expectations have reached a new high in their survey. that to us is the real key for the tapering process, how quickly it evolves. that is what we think fomc participants are particularly focused on today. jonathan: i took note on that as well. i thing many of us did you let's get to the call, high yields, stronger dollar. can you walk me through the stronger dollar? matthew: the story in the united states can't occur to the extent cups most investors would like to see yields rise without europe participating. but in these early stages of this process that we think is going to play out, we see a decoupling between u.s. interest rates and those in europe. we see u.s. interest rates rising relative to interest rates.

that we think will put a boost to the u.s. dollar vis-a-vis the euro, so we remain bearish on euro-dollar. our current target is one dollar 14 since. we were targeting $1.17. we think it can go further. jonathan: thank you sir. i cousin for my mom's side, tom. matt's mom, my auntie. seriously. i've been very open about that over the years. lisa: well, i can see. jonathan: we grew up together. i would come to vacation in america, and that would come to the u.k. when we were younger. at hornbeck -- matt hornbach over at morgan stanley. he used to bully me, where are treasuries? what are treasuries? lisa: for those on radio, they are wearing the exact same

outfit and they have the same glasses. jonathan: well, we planned this today. good to catch up. talk soon. morgan stanley had of global microstrategy. this affects market looking for a stronger dollar and higher yield. tom: i'm speechless, jon. i had no idea. jonathan: i thought you knew. tom: i'm looking at the family disclaimers, and at the bottom it says i'm related to jon ferro. i didn't read the small print. jonathan: i don't own morgan stanley shares either, for that reason area. tom: all of the research, all the back-and-forth we've got down to the gloomiest of the gloom, guess what? everybody's got a narrative. that's what makes us go on radio and tv. you know what? nobody has a clue. jonathan: no one has a clue. i think you have really hit the nail on the head for me. the range of outcomes is incredible he wide. i totally agree.

this is one of the most fascinating points of the global economy, going back to the euro zone debt crisis 10 years ago. the range of outcomes seven currently wide going into next year, except we seem to have policy makers get what they want. policymakers have been able to get what they want. will this federal reserve be able to get the employment outcomes it once, or bullet be overwhelmed by some of the data we get at 8:30 eastern time, cpi in america? tom: auckland again in lockdown in new zealand. what else do you need to? jonathan: the strategy is just so different here area. we haven't done premier league, have we? later in the week, tom. futures unchanged on the s&p. this is bloomberg. ♪ leigh-ann: with the first word

news, i'm leigh-ann gerrans. president joe biden is urging california to send a message to the nation by keeping gavin newsom as its governor. polls show he should indeed survive the vote. the president appeared with newsom and repeatedly linked the leading republican candidate larry elder to former president donald trump. russian president vladimir putin has gone into self-isolation, exposed to several people in his entourage infected with the coronavirus. his spokesman says he is healthy and says he tested negative for the virus get more people are back at their desks in london's financial district than at any time in the last 18 months, according to data compiled by google. more than half of the employees in the city of london were in their offices on thursday and emptied out in march of last year with government lockdowns.

china will consider new rules for minors. beijing will reportedly set up a nationwide platform to deal with online rumors. the maker of turbotax and quick books software into it has agreed -- software intuit has agreed to buy mailchimp. it will increase the services it offers to customers online. 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 leigh-ann gerrans. this is bloomberg. ♪

>> markets in a deficit. you've already exhausted the pandemic inventory glut, so you

are slowly getting to a point, you get any kind of disruption as you go into the autumn, dip it into is for oil prices to explode to the upside, particularly if you don't get a round. -- don't get iran. jonathan: jeff currie of goldman sachs, bullish on crude. here's the price action for you. alongside tom keene and lisa abramowicz, i'm jonathan ferro. crude up by 0.5% to $70.80. into the bond market, yields higher by about a basis point to 1.3394%. 42 minutes away, with equity futures totally unchanged on the s&p come on the nasdaq, down 0.1 on the russell as well. tom: on the equity markets, david wilson, compare and contrast not the s&p, but the one that matters, the dow, and the one that people really care about, the nasdaq 100. dave: absolutely. when you make that comparison,

as oppenheimer did over the weekend, you find out the nasdaq 100 is at its highest level relative to the dow since march 2000, and we all remember what happened then in the height of the dotcom years. tom: is it the same now? dave: you can argue that question. certainly technology companies dominate the nasdaq 100. they are represented in the dow as well. let's not forget, apple and microsoft are there. tom: this chart, on radio, it is something to see. dave: gross is beating quality. that is what this ratio suggests . we've seen it move up 16% in the last four months. this is where we got to the point where we are back at the height of thedotcom years. ash the height of the -- the height of the dotcom years. tom: we've got to keep it short today because we are in china,

where there is a restructuring as well. right now, let's assess capital structure. into karen ---- enda curran joins us. what is the social outrage, the political outrage in china over ever grandpa -- over evergrande's collapse? enda: we have seen people protesting against what kind of payments they might get. there's a social side. there's the economic aspect to it. and what does this mean for china's real economy? it does seem like events are starting to move fast. they brought in some heavy hitter restructuring experts, which does suggest it is on track for a pretty major restructuring of evergrande, but the details we don't yet you know -- we don't yet know.

lisa: this comes at the same time that economic growth seems to be slowing in china. we will get data early tomorrow in china on that point. there's a question of the tolerance of xi jinping to continuing this effort to try to deleverage the economy with this kind of backdrop. what are we expecting in terms of measures to support evergrande or put more acquitted plea -- more liquidity more broadly into the economy? enda: this goes to the whole thesis about more financial discipline, pushing back against what we saw last decade. so the question does become how much of a loss will be authorities allow investors to hold, how steep will their own intervention b. nonetheless, there is going to be a fallout. the markets have already turned very negative on it. they are expecting the worst.

there is money tentative on this evergrande story on how it spills over to the real economy, and how it spills over to people on the ground as well, as tom mentioned. jonathan: it is protest. how bad were those protests around this story in the last couple of days? enda: you know, china, it is not unusual to have sporadic protests in china from time to time, but it is not exactly with the authorities want to see either. social stability goes to the core of what the communist party is all about invasion, so that is why we are getting a sense now of a degree of urgency. when you had the announcement this morning of the appointment of the new restructuring advisors, including an advisor on the lehman bankrupt, there's a sense the authorities are moving on this. and of course, they don't want to see scenes of protesters in the street. they want to make sure this gets

resolved. we have some big payments due in march of next year. tom: i don't want to catch you unawares on this, but i think there is a significant distinction between the old world and across the atlantic to the new world on bankruptcy. what is the character and nature of the word cropsey in china? it is a new phenomenon -- of the word bankruptcy in china? it is a new phenomenon, isn't it? enda: don't forget, onshore creditors will be treated very differently to offshore creditors. offshore creditors don't have any recourse on assets in china, but that is well known by the foreign investor community. that is why i think there will be so much interest to see what kind of a shakeout does come from evergrande. what will happen to onshore debt, foreign currency debt? clearly it will define the whole direction of this financial distance story china has been

preaching for years now. how much payment will it inflict on the company or the real economy? jonathan: thank you, as always, for staying up late and bringing us that news. bloomberg's chief asia correspondent. the question we are always out, how the dominoes fall. one domino is almost transparent right now because we don't know what it looks like. who owns the debt? damian sassower of bloomberg intelligence was making this point. it is a bit of a black box. trying to work out how the dominoes fall, you need to know where the dominoes are, don't you? who owns the debt? tom: i think this is a huge black box. i will go back to the waldo for story of bob room -- the waldorf-astoria ballroom. i was polite. i think matt would put a role in mime ash matt winkler put -- matt winkler put a role in my mouth so i which. jonathan: he had to be quiet

pretty quickly, didn't he. he got more than a slap on the wrist. tom: i'm not extending it to evergrande. but nevertheless, these are serious things. the nuances of journalism here, it is a big deal that berg says in a reporting restructuring versus other terminology -- that bloomberg says in our reporting restructuring versus other terminology. jonathan: this is the bearish scenario many people painted for many years, and yet this market, i find it really compelling. interesting, rather, that we have seen very little spillover from em to dm on the back of this conversation. lisa: or frontally within the emerging market compex from china. this seems to be an isolated event. there's still faith that the chinese officials will come into some degree. there is a fear of if they don't or won't come in enough, then you will start to see ripples. jonathan: we are negative a little more than 0.1% on the s&p.

bond yields higher by a basis point to 1.3394%, counting you down to inflation is a -- inflation in america. full coverage on bloomberg radio and tv. this is "bloomberg surveillance ." ♪

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>> i think the fed has already started to change their signaling. >> most of our policy tools are already exhausted. >> most of the market is not ready for coming up. > we had massive amount is ventilation -- we've had massive amounts of inflation. >> going forward, what tapering means be very important. right now, the market doesn't care. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television,