title, breakeven possibilities. on the left-hand side you can see that this reductions -- the risk reductions. we felton bombing, that the losses was about $500 $200 billion for 9/11, and then you start getting into trillions of dollars. you can think what will most likely the type of attack would successful the fbi would be. we think a typical threat would be something like a boston bombing. we believe the reflection is 90%. the breakeven analysis shows 6.7 there needs to be boston marathon bombings needed every year to justify the cost of the fbi. every twoout one months. that is a pretty high attack frequency. if you are more concerned about a london bombing, then 30 32 of these attacks to occur -- then there need to be two of these attacks per year. mentioned, is terrorist attacks in the u.s. and australia cause very little loss of life and little damages. we could argue $3 million notnsion on the c.t. might be cost effective. that does not mean you should spend nothing. says that level of spending might not be

and that gives us a table of breakeven probabilities.d side we see different risk reductions. so the boston bombing, the losses sustained were about 500 million. 200 million. you start to get into trillions of dollars. so this is a table comeau what you think the most likely type of attack would be. so we think a typical threat be something like the boston bombing. as he said, the breakeven analysis, 6.5 or 6.7 every year. that is not one every two months. that is a pretty high attack frequency. more concerned about the london bombing, two of these type of attacks every three years. we would suspect we don't think the threat probability is that high. most in the us and australia , very little loss of life in damages. so we could argue then it might not be cost-effective. that doesn't mean you should spend nothing. just at that level might not be the most optimal. so they are likely to be worthwhile. so what we also says the detailed cost-benefit analysis, double expenses, that is probably about the level that is about right. it is the re

point -- where is their breakeven point?k there are a range of rake even points. economic ship -- break even points. economic -- a $600 per dayat decline and shale oil production. for the u.s. to get back to a flat level on shale production will need north of $60. guy: so that is the cap? that is effectively where we can run to, so give us the psychology of how the market will perceive this. we know where the cap is, and where the floor is, how do we position ourselves between those ranges? are we dealing with a wedge? do they come toward each other? >> i think that we are. as a matter of fact, i think the situation we have in the oil market now is unsustainable. we are trading in the near tearm because the market is oversupplied. i think that we have a high probability of seeing higher oil prices on a sustainable basis as we move into the fourth quarter of this year. -- be a cap?cap i tend to think that it won't. i think you could get through $60, that probably takes another year to year and a half. guy: in terms of this ar

cement so we do that breakeven analysis bibelots $5 million so good is the most likely each type the text? so we think chet typical threat to is like the boston bombing so that is about one every two months. the best mentioned most of those in u.s. and though still have a loss of life. so we could argue that $3 million probably not cost-effective. al level of spending and not be the most optimal. and then to get the law of diminishing returns? >> so this a this 3 percent you be spending but when we have a lot more concerned about. as an example the federal service if you would get the other security measures on the flight deck to every dollar you spend you get $10 in benefits. so it just is not cost-effective place the highest cost. and for it to pay for itself. with in the area where there is screening is for passengers as a risk so people can travel through for the screening checkpoint and to increase in future years of risk reduction is a very small change plus passengers are much more happier. that is something to lower cost than security ben finally a happens if u.s. sandoz joli

that gives us a table of breakeven probabilities. they are on the last -- left-hand side the losses from different types of attacks. the boston bombing in the losses sustained was about five and a mayan dollars. $95 million for the london bombings, 200 and two joints of dollars for -- attacks. you can think what you think the most likely type of attack would be and how effective the fbi would be. we think the typical thread would be something like the boston bombing. they believe the risk reduction is not -- and as john said break even analysis shows it needs to be 6.7 boston marathon bombings needed every year to justify the cost of the fbi so that is one every two months. that's a pretty high attack frequency. if you are more concerned about a london bombing than two of these attacks occur every year for the fbi to be cost-effective. the wood's expect the probability is not that high and as john mentioned most attacks in the u.s. and australia caused very little loss of life and very little damage. we could argue the 3 million-doll

particularly at these levels of breakeven's in tips. david: that was andrew johnson. it is no dead the beach for puerto rico. the island will fall on the $22 million payment due. what does default main for the island going forward? lisa: a closer look at exxon mobil and chevron earnings. the two largest american oil companies to verge. exxon beats, chevron disappoints. our guest joins us to break down the government's role in the future of a ton mr. diving. utonomous driving. david: julie hyman is ticking on company moving. julie: selling 52 million tores at 446 to raise money pay down debt and those shares are down 72%. they were down more steeply overnight after announcing the share sale but once the pricing great care to losses to some extent. we're seeing an advance in some of the miners today. gold and copper are both tired today. gold as we are seeing a little bit of a risk of scenario and the lower dollar, copper getting a lift from the lower dollars. and some assurance on the chinese friend. agreement.g after an just seems to beginning on that as well. general

look at the five year breakeven, we have seen an increase. here is the increase we have been seeing. this is another gauge of inflation expectations on the part of market participants. even though we are not seeing any kind of probability being priced into the market, there will be a rate increase this week and there is an increasing that inflation will start to move higher. it will be interesting to hear what the fed has to say. lisa: especially because inflation has been for so many years. now it's check on the news this afternoon. mark crumpton has the news. mark: returning to united states after history to saudi arabia. earlier today, the president and heads of state of france and italy and the united kingdom and germany discussed topics which reportedly included the fight against isil, syria'civil war, and uroplasty stress -- refugee crisis. john kasich is falling off two public events in indiana after his agreement to stand aside force -- from senator 10 crews. he announced a deal to give ted cruz a clear path for indiana's may 3 primar

thee is oil, just below breakeven mark.ow it is time for the bloomberg business flash, some of the biggest business stories. laboratory corp. of america holding talks about a possible deal. corp. is looking to solidify its position as the biggest diagnostic company in the u.s. with the market value of $12.1 billion. former harvard university president larry summers wants the school to consider curbing annual payouts for its world record endowment. the former u.s. treasury secretary says it will further reflect the likelihood of lower investment returns, which have been in decline since 1999 and are projected to be around zero in the long run it harvard has the world's largest endowment dispersed. he'll campbell, and admired silicon valley coach and mentor, has died -- bill campbell. he nurtured a range of luminaries, including apple cofounder steve jobs and google cofounder larry page. campbell was a marketing executive at apple in the 1980's and was appointed to the apple board in 1997. he died of cancer at the age of 75.

breakeven the difference between a 10 year government bond and 10 year inflation bond.s been creeping up since february as the oil price rebounds and as sterling weekends. -- weakens. the bottom chart is as interesting, because this is the mortgage that tells us how many months there are until the next hike in u.k. interest rates. back at the beginning of the year we were at eight months, and now we are at 45 months. we're off the highs of a few months ago, but still almost four years, if morgan stanley is to be believed. let's have a look at the banking industry on the news out of italy that has created this multibillion euro fund to help weaken bank said raise capital. this is what's happening. standard chartered rising; you can see the splattering of italian lenders. have a look at how they have fared. this is the year to date chart; the was performers are on this index, predominantly italian and greek this is a great chart. it shows us all the big luxury goods players in 2015. burberry shares are up by 5%; the others, little changed. lvmh is the country a want to fo

the breakeven. this is what a lot of on to market activists look at. at the top, you have u.s.ive you -- break evens. followed by the german break evens. and the japanese. caught their inflation linked to issues. inflationion, the linked bonds delivered a negative return of 1.5%. the u.s. delivered a return of 4.4%. no sign of inflation in japan. what is that telling you? taking this wide. this was over one year. if i take this over five years, you can begin to see how tortured a soul inflation really is. mohammed: there has been a reversal in terms of inflation expectations reflected in the prices. the long-term trend is deflationary focus. there are structures in all of -- creatingies deflationary forces and that is why the trend has been downwards. if you roll the clock back aches weeks, there was a prevailing mood of negativity and that is why -- a temporary bounce back. do you need oil to stay above $40 a barrel? commodities need to stay at high levels. or $70ds to go to $60 for it to have an inflationary impact. manus: what are the chances of that? mohammed: quite high. i

the market is waking up to the idea that possibly deflation and had been overpriced, breakeven ratesation are lower now than they were in december. they have begun to rise. the market is beginning to think , maybe this is a way of protecting gains we've made on conventional bond portfolios. i think it's something to watch. becomingtself was concerned about how market expectations on deflation became decoupled from what they were signaling in terms of their intention. anna: we will see what signaling we get about the rest of this year. how does that play into strategy? technology in the u.s. is something you've been thinking about. bill: we have been with technology for a while. clearly, it has been a fairly glum quarter, year. the big thing on the technology side, enterprise spending is quite solid. that's the important thing. it's a strong cash flow story. it is still forecast to be something over 6%. in a world of no nominal growth. you've also got a strong cash flow story. we are looking at things like virtual reality. that's the next big exciting thing to come through. the story

janet loves a breakeven.r the sentiment. ,1 out of the 17 fed governors risk out of info -- risk of infection forecast is the highest number since the fed started posting data in 2012. i was quite shocked by that. we are off the highs. look at that. i know we are taking off again. what does that tell you you can why are they so worried? -- what does that tell you? why are they so worried? nandini: the first quarter of this year upon us oil prices fell further did a lot of that energy component of the cpi has been -- had to fog again. it brought down the five-year five-year. so correlated with the oil price when the five-year five-year is for five years time is starting five years. a lot of that is relying on the oil price and immediate current factors. not getting into the longer-term forecast. manus: where next for the dollar yen? everybody's paranoia. let's save it for the rest of the day. we simply don't want to admit exists. capitulates my entire career. it is a store gathering of the fed chairs. janet ye

if we had this conversation two years ago, breakeven was maybe $74 a barrel.loser to $50 a barrel. i think it is not unreasonable barrel in two0 a years. i think that is a medium-term cap. the second factor, one major consumer of oil, which is the auto industry, is going through major change whereby hybrid and electric+++ very productive. whereas for five years ago, electric cars did not work properly. anna: all of the same time while the saudis prepare for this environment. bob parker from credit suisse, thank you. guy johnson humming back. deutsche bank reporting net profits for the third quarter, after endless predicted a loss of almost half a billion euros. let us get more with elisa martinuzzi, joins us now from milan. explained was, how have they managed the prophet, when many analysts had expected a big loss? eliza: bear in mind that the estimates have ranged quite widely. we had asked ms. ranging from a slight profit to a big loss. and i think that reflects the fact that the company is undergoing deep restructuring in a very difficult environment. whic

inflation applications have not picked up as much as would be implied if you are only looking at spot breakevenly so is the market looking at growth and inflation as opposed to purely what the fed might do? michael: that is right. downive-year are still year to date. yourine: michael, what is take on the devaluation of the yuan? are we over that debate? we understand the pboc would hold off for now, or does that still worry you? michael: we do think it will hold off for now. if the fed signals tightening, the yuan moves too much, slowing the chinese economy, and that gives the fed concern about growth abroad. tie-in from the chinese economy into the u.s., is slowing the fed's hand here. michael: what will the fed signal? we will find out tomorrow? stay with us on bloomberg. i will join scarlet fu and joe p.m.nthal for that at 1:00 new york time, 6:00 p.m. in london. "his is "bloomberg surveillance on bloomberg television. ♪ atncine: we are looking bonds, currencies, macroeconomics. i am francine lacqua in london. michael mckee is in new york. let's get to the bloomberg first word flash. vonnie:

break evens, even in janet yellen's testimony, she was kind of dismissing the message from these breakevenid it is impacting that is impacted by liquidity and the oil price. they started to highlight low market-based inflation expectations as a reason for concern. that is not helpful in terms of clear communication. since the risk appetite can back to the market, oil prices went up. surprise, market-based inflation expectations are coming back as well. what is the expectation of the things? they do not tell us anything about where inflation rates are going the next five or 10 years. vonnie: thanks, harm. we wanted to know. francine: harm bandholz from unicredit. "bloomberg " is up next on bloomberg tv. coming up on monday, we have a great lineup. carl weinberg, chief economist at high frequency economics, will join us. tom keene will be back. he was on holiday. thank you so much. we had a great couple of shows. for the rest of our viewers, tune into "bloomberg " or bloomberg radio. ♪ jon: the japanese yen -- "bloombergome to ." jeff one or joins us. the stock moving on that rep

this shows what your breakeven is.selling price versus how many phones you expect to sell, so right around hair, 3 million units -- right around here, 3 million units. you have to sell that many more phones. that i believe people like the phone a lot. i still need to continue to focus on that market segment. it might have a crossover effect. it may help the higher in the phone as well. phone as well. carrier andm the moving down the price scale, was anything fundamentally you need to fix? >> we have to upgrade operating systems, which we are planning to do. other than that, no major problems. we need to get the product out tier of thehe right customer base. >> longer-term, your goal is to drive profitability with software. have you had any conversations about selling your hardware business to find that your software business? >> as long as i can make money with the hardware business, we have a lot of know-how, so as long as i can make money, i don't intend to sell the hardware business. yousoftware business, as pointed

the shows what your breakeven is.e average selling price -- it is the average selling price versus how many phones you expect to sell. around here is the 3 million unit. if you go down the average selling price, you have to sell that many more phones. >> yes. i think -- i really still that people like the phone a lot. i need to continue to focus on that market segment. it also might have a crossover effect. as i start moving to the midrange phone, it might help the high end phone also. there are a couple of things we could play with and work with. it is all very reasonable. alix: aside from the carrier, and moving down the price scale, is there anything fundamentally iv thate with the pr you need to fix? >> we have to upgrade the operating system, which we plan to do. other than that, they're not really major problems. it is just we need to get the product out to more of the ier of the product base. alix: are you concerned about margin erosion? >> you always have to worry about that. this is a competitive business, an

canada, the canadian oilsands have the highest breakeven cost in the world.ady much across the board. that dynamic does exist a little bit. the companies overall are digging in for the long haul on the job cuts side of things. in the canadian economy, we have our job numbers you out this friday. 10,000 expected to be added overall. 36 million roughly. a notoriously swinging number that goes across the trend. many less full-time jobs being added to the payroll picture. many added to part-time work. in terms of where they are getting jobs. here in the u.s., you lose your job in the oil field, i hear things like they're going to construction work or is over drivers. are they getting jobs after an oil or adding to unemployment? >> there are cases of it. we have had a number of reports enoughf people are young they can go back to school or may be based that he to be an engineer in the oilsands but with kidsave people and loaded down with that and much more difficult to turn their picture around. stimulus the biggest piece of the picture for how we diversify. nothi

we're not seeing much movement in the 10 year today, but we have been watching the breakeven.ng an uptick closer to that 2% target and closer to the cpi as well. that core number is forecast to come in at 2.3% year over year. at the same time, we see a higher level of shorts in the treasury market. we are seeing the highest number of shorts in treasuries going back into november 3. a reflection of the idea when we may see rate and inflation expectation. scarlet: we will talk a little bit more about rate and expectations. alix: breaking news on tesla. the tesla company is rate calling model x vehicles because of some issues with the third row seats in terms of a seatbelt issue. the company began delivering and you cann number still use your model x. a little bit of a delayed reaction, but it ticks lower. it has paired some of its games and has -- paired some of its gains and was up as much as .2%. now currently of as much as 2%. alix: the recliner in the third row seat accidentally slips. let take it to bloomberg first word news with mark crumpton at the news desk. mark: corrup

. >> let's talk about the data, the german breakeven rate in the u.s. 10 year bond. noticeably in the last few days. as that an aberration or an indication of things to come? yields remainall, extremely low. certainly, we see the tenure selloff quite a bit. that is significant. that is roughly where we are right now. we see -- we have seen yields selloff quite a bit. that is not a trend shift. we still see a tremendous amount of demand for a 10 year yield and treasuries in general. >> we have maybe a minute or so. we talked about elections earlier. they are keeping people on our toes. you say we shouldn't overlook the impact of u.s. election cycles. what, specifically? bricklin: what we are seeing right now is that there are a number of different outcomes possible on the republican ticket. colluding and kasich to try to take the next couple of races, that is a significant development, trying to force the brokered convention. what it does for markets is just raise uncertainty. it is uncertain what trump presidency looks like. it is uncertain what any republican presid

fundamental work and we do scenario analysis, so we really kind of looked long and hard about the minimum breakevene to really refuse in the shale field -- reviews capex in the shale field. i am not saying every company, i am talking on average. marketsnumber three, are wondering about shares of coca-cola falling in the pre-markets. hosting premarket estimates mostly at expectations, but they were looking for faster turnaround from the ceo. earlier, we were speaking with an analyst that says this is about the consumer and the north american portion was quite healthy, but how do you see the american consumer? consumerthink the everywhere in the world is week. that is a challenge. i think the fundamental problem we face is not just deflation, which everyone is worried about, but when you have a group scarcity, people are belying on consumer staples because they are supposed to have reliable growth, and when that disappoints, it sets the stage for the rest of the market. i think that is the read across from the weak results we are getting, even from the consumer sector. the consumer that has redirecte

will justnally, it about breakeven and there are a lot of investments in india and it might be nice toe details about the progress may be and when we expect a break, but then the rest of the international segment, mostly germany, the u.k., japan, we would like to see more evidence that some of the things that are working in the u.s. work there as well. david: when you talk about margins coming think about cost. the cost of shipping went up in , prettyed states 42% dramatic. what can they do to try to manage the costs of shipping? little: you have to be a bit careful because shipping revenue was nearly up 40%. you have got to remember that this is the service that they do, so they are charging the third party, the people who sell to them, and amount of revenue to ship things for them and then it is a cost as well for them. fulfilled by the amazon program, shipping costs will continue to go up. what we really want to see is the net shipping costs shrink a little bit from the 5.56% and we hope that they are getting efficiency back. carol: they could always start their own transportation c