can deleverage?: deleveraging is a term that oversimplifies. , think so many people use it we are talking about the u.s. total debt grows faster than incomes in the private sector. we have booming growth based on assumptions of a continuing exports can grow that huge speed forever. now what we want is mounting but many other places, financial stresses. where youur interview it would bes call, unprecedented in the says that global weakness has never dragged out. the economy has its own growth drivers. why is this different? this is not a cyclical change. it is a financial breakdown that will show up in a lot of emerging markets. time we haveirst had the global economy in the recession without major central banks having a lot of room to cut interest rates. obviously there is not much there. third, it used to be that the u.s. was relatively small, relatively large. now the e.m. sector is considerably larger. finally, i have a longer list but u.s. exports have been a larger share of gdp than they ever ha

maybe a little more deleverage but we are basically done.allows the normal growth printers to go through. the problem is asia. we have had growth supported by a real leveraging cycle over the last few years. particularly in china. they may have another last gasp but we are coming to the end of the leverage cycle. shift, a da real secret eyes global a common need -- economy. emerging asia is going into a deleverage cycle. >> what is this data of u.s. capitol ski spending. how do you see that? guest: the world has changed. what is really changed in the global economy or in development at over the course of the last 10 years is a shift in the way people do business. you have had a big increase in the people who are self-employed. self-employed people use it is different. scarlett: that is an accurate gauge of what is happening. >> not what is really going on in terms of capital spending. if i can use my brother as an example. we were skiing earlier this year. he is running his business from his ipad. running his business, sending of e-mails and

-- it is not really deleveraging.ctually bailing out the chairman. carson,xcuse me, explain to us what you can see what the markets are not saying? why is it you get to see this and others do not? why is it hidden from the markets? mr. block: well, the accounting is complex. the information is out there, but you have to go to numerous sources. basically, when you do that, what you find is as a shareholder of casino, you only own less than 50% of the cash flow that you see in the financial statements. what you know is 90% of the debt. betty: that was again, carson block, muddy waters director and founder. casino has responded saying the report has erroneous allegations the group will answer in detail. in her hour-long news conference following the fed's historic decision, janet yellen voiced her optimism about the economy and stressed her confidence inflation will move back toward 2%. stocks are rally -- rallied, but are getting back most of the gains today. joining us is bloomberg editor joe weisenthal, the cohost of

further bank deleveraging is probably unlikely.look at the american baking system, potentially some will increase in leverage is likely. the second caveat is look at my industry. we are seeing significant capital inflows from investors. you are seeing that transfer of activity. some call it shadow banking. the call it working based finance. -- they call it market based finance. amoco back in the commodity anna: akin the commodity space, ryan. how are they trying to tease? sell their trying to agricultural unit. we will be looking for more information on that. but a big part of this is cutting capex. spend $5ention was to billion. they're cutting that back by 1.2. they're good to shave off of capex. do you think investors are going to think that the court has gone far enough in terms of destined that glencore has gone far --ugh in terms of cutting? that glencore has gone far enough in terms of cutting? anna: it was fairly well flagged. bob: if you look at the prospect of dividend cuts, capex reduction and asset sales. that will be t

consumer was deleveraging and wage inflation was good. today, it is deleveraging.ble. i think it is unlikely. it is very interesting what we are seeing on this thanksgiving season. it looks to me as if it is coming out disappointing or in line with low expectations. the consumer is not spending. he's saving. 340than: iron ore output at million tons versus 340 previously. we are talking about $40 iron ore. they keep on pulling. tom: this goes back to clearing markets. what we've been waiting for eight years to clear markets. what are we waiting for? 0n balance sheet adjustment. balancece juice -- sheets are adjusting. you're talking about deleveraging. that is one of the reason why we are growing at low levels. it is going to continue. frankly, i think, glass half full, half empty. we havevironment where to do love her, growth is not going to be as high. - in which we have to delever. tom: this was a day of fabulous nced thoughts. a lot of fun. thank you so much. we will do this again. brendan greeley, we will do it again. an important interview with jack lew, the t

the whole system has deleverage. we have all this debt where we started with the culprits. households have too much debts,'s banks and security firms with too much leverage. that all looks much better than than it did. the other job, when i wrote this book that was still part of the work ahead but we just now didn't do it and it mostly cured it self was the tsunami of foreclosures. when the housing bubble burst and all these mortgages can be repaid and there were so money households underwater, it was very clear that a lot of people could lose their houses. to me it's a crying shame the government didn't do more to prevent that, but it didn't and that is mostly over by now. the bubble burst in 2008 - 2009. by the time we get to 2015, most of that is over. not all of it but most of it. it's too late to fix that problem. >> you're watching tv on c-span2 thank you to alan blinder. >> thank you. >> c-span takes you on the road to the white house and into the classroom. this year our student cam documentary contest asked students to tell us what issues they want to hear from the

i think the important thing to look at is the deleveraging. it's not really deleveraging.t's actually bailing out the chairman. explain to us what you can see that the markets are not seeing. how can you susan other people don't? >> the accounting is really complex. the information is all out there but you have to go to numerous sources. when you do that, what you find is that, as a shareholder of casino, you only own less than 50% of the cash flow that you see in the financial statements. what you oh 90% of the debt. alix: that was the muddy waters directive can the stock is getting hammered, off by 11%. a new financial landscape is upon us. scarlet: one of the sectors seeing the most cash inflows over the past month's financials. they have surged in anticipation of the federal reserve interest rate increase. is the head of u.s. equity strategies at j.p. morgan bank. thank you for joining us. you say a change in market leadership is warranted now that we have begun this tightening cycle? what part of this is already priced in? >> that's an interesting question. it's not j

headwinds included tighter underwriting standards and limited access to credit for some borrowers, deleveraging by many households to reduce debt burdens, contractionary fiscal policy, weak growth abroad, coupled with a significant depreciation of the dollar, slow toer productivity in labor force -- slower productivity in labor force growth, and elevated uncertainty about the economic outlook. although the restraint imposed by many of these factors has declined noticeably over the past few years, some of these affects have remained significant. as these affects abate, the neutral federal funds rate should gradually move higher over time. this view is implicitly reflected in participants' projections of appropriate monetary policy. the median projection for the federal funds rate rises gradually to nearly 1.5% in late 2016 and 2.5% in late 2017. the factors restraining economic growth continued to fade over time, the median rate 3.25 percent by the end of 2018 close to its longer run normal level. compared with the projections made in september, a number of participants lowered somewhat their pa

we are seeing this long-term, ,any year trend of lower wages deleveraging of debt, and the -- going to the very top of the income ladder and the folks at the very top don't spend as much consumer wise as folks in the middle class. there may be more resources available for investment and other types of uses of that cash , but how do you see this long-term trend of income inequality, how is likely to impact the ability of the fed to be as effective as it may have been in past years using these tools when those things were in balance? chair yellen: that is a great question and you introduced a lot different elements into it. clearly the trends in income and having disposable income for households are one of the most important factors determining consumer spending. the fact that wages have been pretty stagnant for a number of years. compensation has been growing in the 2.5% range. that is something we have had to take account of in forecasting what the strength of the overall u.s. economy has been and it's integral to our forecast. i guess i would say that job growth has been pretty solid

because this age of deleveraging , what the fed worries about is the extinguishing of money.and turned it into eight. imagine going into a bank to repay a loan in the bank says thanks very much for repaying your thousand dollars loan, but we are not going to replace your loan with another, we're just going to hold it. it is no longer available to .pend on goods and services that can affect goods and prices. so what it has tried to do is pumped up prices through moving up financial asset prices first and then hopefully prices of goods and services. but it has not happened. for the to be probing numbing celebration rate of unemployment. non-acceleration rate of unemployment. the jobless rate that would catalyze inflation -- that is 5.2%. for four years it was 5.2%, 5.5%, 5.7%, 5.4%. now they had voted three times this year. now it is for .8% in terms of -- now it is 4.8 in terms of what it thinks the bottom is. have saiden and crew they want to see inflation pickup. it probably is in the zone of or fives.ours there probably is a pickup in wages. we will see in next friday's job

>> i think it is clear that during this period of great deleveraging that we supposedly have had, theuite precipitously. for example, japan has a debt to gdp of about 604%. today the 650%. japan is probably the poster boy world, and wee can see our future if we continue on the trajectory. china, i think, is another good example. gdp ofey had a debt to about 320%, and today they are somewhere around 450%. debt is a very interesting thing. it creates rate instability. it is almost like a seesaw in that everything looks pretty stable on the downward side of the seesaw, until someone puts a couple ounces at the right time on the other side, and things sling violently in the other direction. issense is really the fed reactive, not necessarily a cause of some of the issues. the politicians are really to blame in that they build up a high debt level and leave it to the federal reserve to eventually monetize that debt. is they don't i think they will have a fair level of default, but historically if you go back 5000 years on the currency that is not anchored by gold or another currency, histo

we're seeing this long term many year trend of lower wages, deleveraging of debt and the fact that most of all the economic gains are only going to the very top of the income ladder and the folks at the very top don't spend as much consumerwise as folks in the middle class there may be more resources available for investment and other types of uses of that cash. but how do you see this long term trend of income inequality? to s that going to impact be as effective as it may have been in the past when those things were in balance a lot more than we're seeing right now? >> that's a great question. and you introduced a lot of different elements into it. in income trends and having our disposable income for house holds are one of the most important factors determining consumer spending. and the fact that wages have been pretty stagnant for a number of years i guess compensation's been growing in the 2 osh 2-1/2% range. at is something we've had to take account of in forecasting what the strength of the overall economy has been and it's integral to our forecast. t i guess i would say that jo

we're seeing this long-term many year trend of lower wages, deleveraging of debt and the fact that most of all of the economic gains are only going to the very top of the income ladder. and the folks at the very top don't spend as much consumer wise as folks in the middle class. there may be more resources in terms of other uses of that cash. but how do you see this long-term trend of income equality. how is that going to impact the fed to be as effective as it may have been in past years using these tools when those things were in balance a lot more than what we're seeing right now? >> that's a great question. and you introduced a lot of different elements into it. clearly the trends in income and -- having our disposal income for households are one of the most important factors determining consumer spending. and the fact that wages have been pretty stagnant for a number of years, i guess -- compensation has been growing in the 2 or 2.5% range. that, you know -- that is something we have had to take account of in forecasting what the strength of the overall u.s. economy has been and it

deleveraging has not completed. an ongoing drag. betty: where has he been right about this?g of things going bad before the 2008 financial crisis, and his dad famously called the 1929 great depression. so there is a lineage of forecasting in his family. betty: how morbid, right? of calling recessions. joe: it is an interesting thing -- the thing is, most years the stock market and the economy grow, so you can't really be a hero by calling for something to grow because most years that is consensus and that is what everyone thinks. i guess it is sort of inevitable that you become known for out of consensus. betty: well, we will see. he has been calling it for sometime, although he is being joined by more and more people this year. joe: a few more. betty: still rare. joe weisenthal, cohost of "what'd you miss." wu onn also catch david the show today. it begins at the top of the hour as we hit the close. time for the biggest business stories in news right now. this is the year wall street discovered cord cutting. media stocks are heading for the first annual decline in seven yea

pamela: it really does, and od ofcans are in a peri deleveraging and canadians are in a reverse mode. confidence has a lot of people with low rates to go and borrow. mortgages are feeling housing -- some people call it a bubble. not everyone. yes, on the other side, in the oil patch, you have to member that western canadians like test seen this drop in its oil price, as it relates to world oil prices. it is also an expensive place to be taking oil out of the ground. the oilsands, offshore drilling, all of these are types of recovery that are expensive, no matter how careful you are with costs. at the end of the day it is expensive oil to take out of the ground. scarlet: pamela, did you hear anything on inflation? marks thereestion because headline inflation has been below the 2% that so many people are keeping an ion -- keeping an eye on. pamela: i'm sorry, if you look at? .carlet: core inflation prices pamela: yes. no, no, right, the difficulty of balancing there is why we see him keep things where they are. i think canada is in a fairly recalibrating of its entire economy, and we ha

in his opinion the economies which have done the most deleveraging are the ones that are going to be looking at the biggest pick up in growth next year. take a listen. >> the focus for growth is going to be on the u.s. and europe. that's important because markets emphasize u.s. data very strongly. if you look at what data markets care about it's u.s. number 1, 2, 3, 4, and 5. that's the dominant issue so this creates a more upbeat perspective from the markets that tend to view the world through the prism of the united states and countries like germany but the second thing and i think this is a longer term issues that investors need to look at, what are we seeing is perhaps a degree of a narrowing of the gap between emerging markets and developed economies growth as a trend. so as you know for a number of year emerging markets have strongly out performed by several percent and that's been one of the traits since '97 and '98 in the asian crisis. now we're getting more beleveraging from asia and that gap between emerging market and developed economy growth is starting to narrow back in

all that in combination creates a system that is sensitive, more than sensitive to the number of deleverage basically of the system on an ongoing business. basically, the system itself is at risk in terms of delivering -- de-levering. they are position for 2% growth in the united states. they are not necessarily positioned for a negative effect in terms of emerging markets, brazil, argentina, what may happen in puerto rico. these are shocks that potentially lie ahead and could affect the real economy. >> bill gross, thank you so much. we appreciate your time. and michael, that was the harshest criticism from bill gross. >> we will bring in brandon. whatross is not buying janet yellen said. did she make an effective case? brandon: did she make an effective case that is one and done, yes. how often can you say the word gradual? i think we can say gradual, everybody go home. she said, this is modest. even after this, this is accommodative. as far as looking at data, we're back to data driven. the real question for me that came out of the press conference was the way that they are looking at in

you're getting upper-middle-class in the lower class, do your numbers show they have deleverage? really have to look at everything in an aggregated way. the american consumer experiences different across income groups. i look at debt to income ratios. by incomeice it group, those are all falling. we are not creating the right kind of jobs for middle america. that remains a problem. our fiscal house is good in terms of u.s. consumers. we had this tepid creation cycles during the financial crisis. we are not overleveraged going into this. expect to see the big punch in the gut we get to the u.s. households. >> a lot of people are on vacation. a lot of people say this isn't a great time to be raising rates. >> this is the bake unknown we are venturing into. if i were to take some gross liberties, i don't know what we are doing. no one policy makers is conducted. it feels like this is an interest rate economy. two fantastic employment reports. equities are saying go ahead. they don't want to pass up their opportunity. >> what is the biggest green light, what is the biggest red light?

i do think there will be a long-term commitment to investment banking but also committed to a deleveragingn. the need to build up capital in the next few years although they have done well in the stress test, their starting point on capital is not the strongest in the industry. so i don't think it will be a message in part here at barclays from the current strategy. it will be more acceleration. >> thank you very much for joining us this morning. a pleasure as always. global head of financial research at pimco. >> let's talk about banks across the bond. cuts across the board and on each of the banks trading desk reports say that london is expected to bear the brunt of its more than new york. morgan stanley with a 42% drop in fixed income and commodity trading revenue in the third quarter. checking in on those listed shares we're up going in the opposite direction out performing up by 1.5%. also we have auto makers, right? >> we do. they're reporting their november u.s. sales today. sales forecasted to top pace of 18 million for the third straight month which would be the third time that's

we talk about how china's growth is really being affected by many of these issues, the deleveraging, so intense on the way up to that peak that we made in 2008. accumulation, trying to get as many leases on everything from rare earth, raw commodities like copper. they had so much copper they were using it as collateral putting it in warehouses to make loans. you know how that turned out. the other side of the ledger, what we received wasn't good news, but what commodities made given the future, well, you can decide how much offsetting there is, but ultimately businesses are going to have lower input costs. now, when it comes to oil and gas, many say, well, listen, whether it feeds into steel or agriculture, whatever it is, well, it didn't do much good for the global economy with lower gas prices, but we don't know that. these are unusual times. many families in this country have expenses that help move faster than the anticipated -- it looks like, hey, we have all this money going. this is a good thing. maybe outside of business proper, but alof those products and all those companies

headwinds included tighter underwriting standards and limited access to credit for some borrowers, deleveragingby many households to reduce debt burdens, contractionary fiscal policy, weak growth abroad coupled with a significant appreciation of the dollar, slower productivity and labor force growth, and elevated uncertainty about the economic outlook. although the restraint imposed by many of these factors has declined noticeably over the past few years, some of these effects have remained significant. as these effects abate, the neutral federal funds rate should gradually move higher over time. this view is implicitly reflected in participants' projections of appropriate monetary policy. the median projection for the federal funds rate rises gradually to nearly 1-1/2% in late 2016 and 2-1/2% in late 2017. as the factors restraining economic growth continue to fade over time, the median rate rises to 3-1/4% by the end of 2018, close to its longer-run normal level. compared with the projections made in september, a number of participants lowered somewhat their paths for the federal funds rate,

headwinds included tighter underwriting standards and limited access to credit for some borrowers, deleveraging by many households to reduce debt burdens, contraction area fiscal policies, weak growth abroad coupled with a significant depreciation of the dollar, slower productivity in labor force growth, and elevated uncertainty about the economic outlook. although the restraint imposed by many of these factors has declined noticeably over the past few years, some of these effects have remained significant. as these effects abate, the neutral federal funds rate should gradually move higher over time. this view is implicitly reflected in participants' projections of appropriate monetary 83qñpolicy. the median proceed skreks for the federal funds rate rises grally to nearly 1.5% this late 2016 and 2.5% this late 2017. as the factors rehe straining economic growth continue to fade over time, the median rate rises to 3.25% by the end of 2018, close to its longer run normal level. compared with the projections made in september, a number of participants lowered somewhat their paths for the federal f

cooperations, largely have been going through deleveraging process, so the 0% interest rate has beenstring, going forward, however, two of the most significant drivers of economic activity over the last year have been automobiles on housing. if we start to increase interest rates and we start to ease the pace of improvement in those two sectors, that could be dangerous for the economy, particularly when we only have, as you mentioned, that we foresee for the year ahead, gdp in the range of 2-2.5%. it's particularly problematic, maybe for the housing sector, the inflation pressure we've been seeing comes from housing. owners equivalent rent, based on renter rates has been the primary driver of the core rate moving higher, and if we start to increase interest rates in that environment, it makes housing less affordable, pushing buyers into the rental market, causing things to go higher, creating a sticky situation for the federal reserve as they try to increase interest rates at this time with economic demand really soft and negatively impacted by the strong dollar as well. >> do you th

>> there is a related story to overcapacity adjustment and the deleveraging.ing is that they are trying to separate the issues by minimizing the risk of default but at the same time pushing the oil capacity adjustment. as they do that? the keyword is the consolidation. reform, it as silly is not about shutting down the company, it is about emerging and consolidation around the sle sectors. yvonne: a lot of headline news is about the end. they have listened the peg on the dollar. the new currency index, are we going to see further depreciation or is the government really trying to match the expectations of the yen? >> is a positive move. they move from a bilateral to a different exchange. china does not say that they are moving toward -- they made it very clear that the trade rates are the more important reference rate going forward. statement, they said that compared to a 2014, it will appreciate by 3%. by the and of november, so i think that the message is that in the near term the yen will continue to appreciate. the fed is getting stronger, so yes there'll

we had consumer deleveraging, banks afraid to lend.tlook can look very different. one last point, the game changer for next year is wage inflation. we are crossing through neutral unemployment, and that means we will see wage pressure. that has impact for consumer spending, business investment, they were forced participation -- labor force participation, and productivity. tom: the money question is, is that 2% certitude that you studied at brown, i studied, vonnie quinn studied, will that nudge down that inflation bogey that they are trying to get to? bob: we suddenly had this magic 2% number out there, as if it is a magic number. i am not sure if it should be 2%, 1%, 10%. i do not think there is a reason we had to get to 2%. it has taken on way to bank much importance. we want to make sure that we do not have persistent decline in prices and any deflation expectations because that affects people's spending behavior. we have not seen that be the case. real consumer spending has picked up, a benefit of lower energy prices in particular.

deleveraging by many households of debt burdens contractionary fiscal policy at all levels of government, regrowth of broad coupled with significant appreciation of the dollar, lower productivity and labor force growth and elevated -- economic outlook. as we restrain from these headwinds further i anticipate the neutral federal funds rate will gradually move higher over time. indeed in september most fomc participants projected that in the long run the nominal federal funds rate would be near 3.5% and this is sexual federal funds rate would rise to that level fairly slowly. because the value of the neutral federal funds rate is not directly measurable it must be estimated based on our imperfect understanding of the economy and the available data. i would stress the considerable uncertainty of estimates at the current levels and even more to it's like we path going forward. that said we will learn more from reserving economic development summit. not bad. it is thereby important to emphasize the actual path of monetary policy will depend on how i'm -- incoming data affects the evolution of

since the financial crisis, consumers have deleveraged, they've been building up balances.nd the banks have had a deposit glut. they would like consumers to start spending, borrowing more and not just piling up assets at the bank. so they're not competing for those deposits in the same way they're competing for the lucrative corporate clients. so they'll take a few quarters to pass those through to customers. >> these are sticky deposits, the institutional deposits you referenced, is it necessary for jpmorgan to give more? is it a competitive area? >> i think probably the fear was that another bank could make that move. and because yield has been so hard to come by, why not go through the process to move that money to get a little bit more yield. the "journal" story talked about the fact that actually jpmorgan is the first u.s. bank to do this, but the canadian banks have been raising their operating deposit rates, cds, rbc to win over some business from big u.s. clients that could have been a source of pressure there. we'll see how this pans out and what the actual rate is

trust me, i just don't find a logic in how more qe or lower interest rates is going to make the deleveraging in the super cycle end better, but that's always a discussion that we leave out, and i think it's something to consider. >> rick is right. i don't think you can. i think you have to have a strong stomach or long-term time horizon, and i think what's going to shift in the moderatety space is global economic growth. demand. i don't necessarily see that on the horize orn right now either. let me see if we can see all three as we are for the moment. just raise of hands is the proportion of shopping that you did this year more on-line or in stores for you guys? is it more on-line? if so, raise a hand. steve. >> in stores? >> i was wondering if the hand was going up there. are there packages that you are still waiting to see if they get delivered tonight? >> i made the mistake last year. i'm definitely a last minute guy when it comes to shopping. this year i did it all on-line, and i did it a month ago. i didn't want to run that risk. i am -- i am going to say i'm 95% on-line shopper, and y

. >> mortgage credit is starting to ex paneled, that deleveraging that occurred after 2008 is now beyondand now you're going to start to see credit expansion, that bodes well again for the consumer. >> liz. >> i think walmart needs to do exactly what they're doing, it just might be a little bit late. they need to shift as much of their business as they can on to online channels and need to use those big boxes as distribution centers. that is an advantage they have if they can capitalize on it. >> thank you both. up next we will look at which retailers are thriving amid the unusually warm weather on the east coast. >>> plus drones are one of the hottest holiday gifts this season but if you don't register yours with the government it could end up costing you a pretty penny. we will get you those details coming up on the "closing bell." >>> a white christmas will be a dream for most of the u.s. retailers are suffering through an unseasonably warm winter. there are warm weather winners. traffic to restaurants, outlet centers and home centers all up more than 1% since december of last year. j

after the financial crisis it was leverage that got the banks in trouble, consumers are focused on deleveraging we be rebranding these if they are not dangerous? >> we are not afraid of the word leverage but i think it's really important for investors as the mantra goes to know what they own and why they own it. it can be a great tool to manage risk and enhance returns in a properly constructed portfolio, be a great way to meet a very wide variety of investment objectives. >> when carl icahn -- this goes back to the high yield market but it's a keg of dynamite that sooner or later will blow up. on the high yield piece of this you've got concerns? can you guarantee the people in these instruments will be able to get all their money back in case there is any kind of panic? >> the liquidity of a leveraged etfs is. same as any etfs in that asset classes. there are no enhanced liquidity issues with leveraged etfs and they are an important tool. you may have seen that over the past few weeks that the 1 x inversed junk bonds -- ticker sjb has had inflows, people are looking to use these tools to manag

down the funding cost to negative real levels, so that should allow a heavily leveraged europe to deleverageore efficiently. that is one of the things on the horizon. have a transmits into extending credit into the system, i think most of the european central bankers are frustrated. stephanie: a lot of americans frustrated, what does quantitative easing to hear, it has been great to investors but not the economy. janet yellen around the timing of raising rates. it theellen: to deliver start of policy normalization for too long, we would likely end up having to tighten policy relative abruptly to keep the economy from significantly overshooting both of our goals. such an abrupt tightening would disrupt financial markets and perhaps inadvertently push the economy into recession. david: we have heard from more than one person, including the head of credit squeeze, people are concerned about the possible quick rise in interest rates into 2016, how big a risk is that? bob: not a realistic risk, the fed understands that the normalization process is getting off the leak -- zero lower bound. yellen,

deleveraging by many households to reduce debt burdens, contractionary fiscal policy at all levels of government, weak growth abroad coupled with a significant appreciation of the dollar, slower productivity in labor force growth, and elevated uncertainty about the economic outlook. as the restraint from these headwinds further abeatates i anticipate the neutral federal funds rate will move gradually higher over time. in september most participants rejected that in the long run the nominal federal funds rate would be near 3.5% and that the actual federal funds rate would rise to that level fairly slowly. because the value of the neutral federal funds rate is not directly measurable, it must be estimated based on our imperfect understanding of the economy and the available data. i would stress the considerable uncertainty attends our estimates of its current level and even more to its likely path going forward. that said, we will learn more from observing economic developments in the period ahead. it is thereby important to emphasize that the actual path of monetary policy will depend

one reason about is the growth of credit in and that it may be a real problem and they need to deleveraget growing out of the economy. we have got a chart we look at and you pull china out and it is on a trend line. we are deftly looking at high degrees of leverage. inerage can sometimes and 2008. those are the three stories that matter to markets. next up we will look at premarket trading. stay with us. ♪ vonnie: welcome back there four caramels are being added. u.s. regulators say -- mazda-side airbag six and subaru, legacy, and outback, all the makers say that could affect more than 450,000 vehicles. nine deaths are blamed on the exploding airbags. $65 million today saying they are guilty of price-fixing. of china passes anti-monopoly crackdown. many companies have already been hit or united airlines has a new policy on kids flying solo. a fee is being added for those 15 and younger. has the same fee, covering a similar age range. i will head right over. to focus on one stock in the premarket today, and that is valeant. the stock is down 6% this morning. it's ceo is on medical leave he

but at some point, it's important when he goes to iowa to set expectations so he doesn't deleverage himselfhampshi new hampshire if the republican party performs historically. >> dot those i's and cross those t's. >> can i say one thing for one second? >> i know for a fact that ted cruz is specially organiuper su iowa. they know they have an incredibly sophisticated data operation. when you go to a caucus, the republican caucus is a little less onerous, but you still have to go. you have to put your ballot in the box. we have no way of knowing. i don't think trump has nearly the organization on the ground in iowa. he would have to make that kind of commitment. he hasn't made the commitment that cruz has. and cruz has every evangelical supporter. he's got the radio people, the preachers, he's got the evangelical vote nailed down in iowa. trump is not going to get anywhere near that in that state. >> do you agree with that, steve? >> well, again, i think whether trump turns out a trump voter that we haven't seen before, we're just not going to know until we know, but in terms of dotting the i

headwinds included tighter underwriting standards and limited access to credit for some borrowers, deleveragingseholds to reduce debt burdens, contractionary fiscal policy, weak growth abroad coupled with a significant depreciation of td appreciation of the dollar, and elevated uncertainty about the economic outlook. although the restraint imposed by many of these factors has declined noticeably over the past few years, some of these effects have remained significant. as these effects abate, the neutral federal funds rate should gradually move higher over time. this view is implicitly reflected in participants' projections of appropriate monetary policy. the median projection for the federal funds rate rises gradually to nearly 1.5% in late 2016 and 2.5% in late 2017. as the factors restraining economic growth continue to fade over time, the median rate rises to 3.25% by the end of 2018 close to its longer run normal level. compared with the projections made in september, a number of participants lowered somewhat their paths for the federal funds rate. although changes to the heedime path are f

. >> the depth, the cause of the recession, the bust in credit and therefore the deleveraging cycle andll the deflationary pressures keep nominal growth. we're still in that world. >> could the government be doing more things to encourage growth which is part of your question? yeah, they could. but that would make some difference. not the difference between 2 and 4%. maybe 2 and 2.5%. >> really? a wish list of progrowth supply side policies would not get this above 2.5. >> i don't think so. >> get rid of a bunch of regulations. >> go for a drink but it's different. >> coming up, we got a key finding of -- thank you for being here. key finding of a cnbc exclusive oil survey. we'll learn what top analysts traders and energy funds are expecting late they are week and what the cartel's decision is going to mean for prices. plus an internet sensation tries to make magic again. you have to see this video. have you seen this yet? you don't watch korean videos. it's okay but we'll show you that. first as we head to a break, we'll show you this date in history. ♪ >> i hope he's -- >> what does 2

headwinds included tighter underwriting standards and limited access to credit for some borrowers, deleveraging by many households to reduce debt burdens, contractionary fiscal policy, weak growth abroad, coupled with a significant depreciation of the dollar, slow toer productivity in labor force -- slower productivity in labor force growth, and elevated uncertainty about the economic outlook. although the restraint imposed by many of these factors has declined noticeably over the past few years, some of these affects have remained significant. as these affects abate, the neutral federal funds rate should gradually move higher over time. this view is implicitly reflected in participants' projections of appropriate monetary policy. the median projection for the federal funds rate rises gradually to nearly 1.5% in late 2016 and 2.5% in late 2017. the factors restraining economic growth continued to fade over time, the median rate 3.25 percent by the end of 2018 close to its longer run normal level. compared with the projections made in september, a number of participants lowered somewhat their pa