say these daysto given how gloomy the e.m. is, but i think we will be better able to handle it. joe: in an edm conversations someone will point out that e.m. is not a monolith. today we got the news that brazil is being downgraded, the political situation continues to deteriorate. what do you make of brazil right now, and what are some countries that look particularly attractive, well-positioned for this rally? >> the brazil situation is highly idiosyncratic. i don't want to say it's on related, but it is certainly -- unrelated. this is better described as a depression. the political anchor is completely nonexistent. most importantly, the fiscal adjustment is also completely inverted. the only game in town is now counterproductive. the more they hike interest rates, the worse the economy. it did not come to us as a surprise that the numbers got downgraded. the timing was a bit of a surprise, but i think that half of credit worthiness was expected. scarlet: argentina scratch currency controls, and apparently the people can trad

we have seen a number of headwinds to e.m. currencies.is led to the russian ruble and the brazilian real. general dollar strength and euro weaknesses taken its toll. turkish lira has done badly. lirave seen the turkish fell and rally. the brazilian real has been hit by domestic problems. has been having a strong run. beginning to fade in december. is this one of the things we are also concerned about the fed's first rate hike that now that we got it on the way the market is going to be less concerned and as a result of which the dollar is not going to be the challenge it was for the e.m. in 2015? back, theooking dollar had a much bigger impact on the timing of fed liftoff than perhaps any of us realized. i think the strength of the dollar throughout 2015 has already tightened policy for the fed, which is one of the reasons why i think we saw the delay to last week rather than earlier in the year. even as early as june, a lot of economists were expecting the fed to raise rates. the strong dollar has been a big determinant for the fed. in 2

i think e.m. corporate debt is largely largely an asian issue. this is tactical. i think e.m. is going to struggle. i think the currencies are oversold. >> in seema's report, we're talking about dollar denominated debt and how prevalent it is. a lot of this is related to what we're talking about with the potential contagion here with high yield and the commodity bust. if you think that the commodity structure is lower, structurally, it's a really hard trade. we know that petrobas has close to 30 million in debt coming up. i expect it is a mean reversion back to about 36, but then you want to be out. >> that level is getting above 33. >> it seems like that's going to be ground zero next year if we have any problems globally. >> tim mentioned the er.m. we made a run last week or so. against that level, i think the risk/rewards have been long. probably sets up really well. as does in my opinion, the chance for gold to rally, especially if we see the dollar get whacked as this trade potentially unwinds. >> quick programming note here. tune in to cnbc. 2:00 eastern time. full live

now the e.m. sector is considerably larger. finally, i have a longer list but u.s.ts have been a larger share of gdp than they ever have. sales. are not just lost this gets into the flows of funds and determine profits. guest: if you look at the most ecent data, our stronger dollar makes exports cheaper. we're not relying that much guest:. guest:besides current growth, we are looking at the flows of funds that determine aggregate profits. something that is given too much attention in economics and we have been doing for a long time. what we see is that profits are well to go the distance. you have to create wealth which is investment. you run a trade deficit. we are giving away wealth. what did it do last quarter? what are the magnitudes? where they taking profits? joe: your argument in the last earnings season, there was a profits recession things to energy. you just start have this weird thing happening where the business sector is not making as much money as it was. that is a fallacy to separate it does ultimately bleed into the real economy. guest: you can't sep

ramin: if you're talking about the e.m. story, that is key. driven by the price of oil.orrelation is very high. many asset classes will be affected by this. on thecan agree direction of oil. people are taking bets on it going up or down. can't forecast it. we did not forecast the fall. we saw a difficult variable to forecast. because it is politically driven. jonathan: let us use the curve. is our bestthat case scenario. 60 dollars all the way out for 2022. if that holds true, where is the the biggestin: trouble is the u.s. high-yield market. liquidity, we are seeing too much binging on credit by single big companies. we think this could be the end of the u.s. credit cycle. once the fed starts to hike, that could be another trigger for an increase in the default rate. the problem is able have what you was credit particularly mutual funds. we start to see a big outflow, that is when they have to sell the liquid assets and that will be equity. that will not be high-yield because there is no secondary market. risk event after risk event for the next two or three weeks. do t

the whole e.m. wobble that we had is over. i think the fed referenced it.e feel that is being contained or we see those pressures of dating. abating.res jonathan: richard jones of bloomberg, thank you very much. that is it from me in 2015. i will see you in the new year. guy johnson will return on monday. he's got a sore throat. if you want to talk markets, you know where i am. 56 minutes into the session, the ftse 100 pretty much dead flat on the session. the dax hitting session lows again. in the commodity market, brent crude at $37 a barrel. $34.94. best of luck for the rest of your day and have a fantastic christmas and happy new year. ♪ francine: the u.k. prime minister sees halfway to our form deal. european meters -- european leaders meet to discuss terrorism. the chinese bank book tells a tale of worsening conditions while other data suggest recovery. the force to be reckoned with is the franchise looks to make $2.4 billion for the studio. so, welcome to "the pulse" live in london. i'm francine lacqua.

some of the e.m.'s are going to look interesting. random ask those are the two i like.han: david bloom, always good to have you with us. up next, all about manufacturing pmi. french manufacturing crossing my screen. german unemployment data coming up after this very short break. stay with us. we will wrap up the trading day ahead. that is next. ♪ jonathan: good morning. welcome back to "on the move." a lot coming up ahead after china delivered its worst pmi data in three years. the next hour, we'll hear from the eurozone. a half hour later we get the data from the u.k. we get u.s. manufacturing pmi. at this time of mourning, i am joined by the bloomberg team. richard jones, manus cranny. gentleman, great to have you with us. awaiting german unemployment data. they did ok. geopolitical tension is rising. i'm seeing it on my screen. you wrap this all up, richard jones. we are going to talk about it until it happens. to beenough for the ecb concerned for over delivering on thursday? richard: is unemployment numbers going to be ok? they seem pretty determined to do somethin

ramin: a lot of e.m. is breathing a sigh of relief.ot of them have said that they wanted to cut because it would take away the uncertainty. i think that is definitely going to be a breather for them. but overall, we think the dis-inflationary trend we see globally emerging from china is going to be a problem for some of the small, open economies. you mentioned taiwan. that is one of the places where we see the impact of china's slowing exports. but we also see them having to potentially protects their growth by devaluing their currencies. so, i think that will be a concern in 2016. francine: they do so much for all your thoughts. -- thank you so much for your thoughts. bank of japan kept its main monetary stamens target unchanged but adjusted the program to include longer maturity bonds and real estate investment trust. against thetronger dollar. a private survey of china's economy shows disturbing deterioration across the board in the fourth quarter. the china-based book shows national sales revenue, volumes, output, prices, hiring an

. >> and you mentioned the relief, 33 to 36 on the e.m. trade this now. >> dan? >> let me see. i forgot what this is. >> s&p. >> i'm out. >> seller -- >> spy. >> a senior moment. guy, could you remember yours. >> new mont. and you are done. >> i'm melissa lee. we'll see you >>> my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm trying to make you some money. my job is not just to entertain but teach educate. tweet me @jim cramer. so that's all there is? we have this monumental move, the first time the federal reserve raises it's rates in nine years and the

rose to nearly $10 trillion in the second quarter which they say could trigger panic when it comes to e.m. borrowers. >>> the ecb governing council intended to disrupt markets with its policy decision last week. according to a righters decision last week they felt that mario draghi raised the expectations too high coming into the meeting. the six-month extension to the qe program were therefore the best the ecb president could find consensus for. julia raised that point when she spoke to the ecb vice president last friday. however, he denied the governing council raised the expectations too much going into the meeting. >> one can never tell beforehand. it's very difficult to calibrate and fine tune that. what i can tell you is that what we decided yesterday was exactly what the board proposed to the governing council. so there was no change in what we proposed to the council. so we did what we intended to do. now we have to recognize that the markets got it wrong in forming their expectations, they did, indeed, add higher expectations that were there and that's why they reacted like they

guns, fed sticks to their it will be difficult for e.m. corporate.orporate credit, high-yield specifically. i would say the higher quality of the high-yield market. in a few weeks when mutual fund managers and traders sit down at their desks, thinking about where to make money this year, that will be top of mind for everyone. we are perhaps starting to see a bottom forming in oil. oil is a significant part of the high-yield market, by various indices 15% to 20%. however, outside of oil, and commodity-related names, you still have defaults of only about 1.5%, and you are getting paid in something like 7% almost. yesterday was a huge day for the markets, and it is somewhat tighter today. even if you expect some downside, because of the income you are earning now it is able to absorb a lot more pain, especially in an environment where the fed is raising rates. by the way, this is the most spread we have ever seen a sector offer going into a rate hiking cycle. keri: what about all the people who say that the high-yield blowup will start? carl icahn tweet

e.m.as always been the opposite and now there is such a dichotomy between the two, and it makes for those of us in the business of investing in emerging markets that much more rewarded for being disciplined. betty: those who are disciplined will become the winners. miami is kathryn mooney via. bloomberg -- and bloomberg is caught tia. -- caught tia. on venezuela, tell us the significance. ia: we have to see how much majority they get because if it is less than 66%, people are not that bullish and a lot of it has to do with the symbolism behind this, and exactly how far they can go in terms of weakening the president. any majority can call for a recall referendum but the stronger they have in congress, the more they can do. they can appoint new supreme court officials, change the constitution, and go after stronger problems. betty: as someone who follows closely not just events in venezuela, but china and other emerging markets, they have been roiled by the stronger dollar. when you look at

the blue line is e.m. stock. there was a big spread here.as narrowed and come down to nothing as it seems investors have not been as interested in the dubai stock. no production has taken the charm out of that straight. let me come back to russia for a second. they are quite dependent on oil as well. what does this mean for them? >> it was thought earlier that this would get vladimir putin's back against the wall, but no w they have this great question because the price of oil has come down and the ruble has come down at the same time. it does not have the same impact on their budget. it is about 42% of their budget. this year and will contract about 5%. it is not the crisis expected about eight months ago. now russia is just putting sanctions on turkey. this could continue to spiral. stephanie: thank you for joining us. daniel yergin. before we go to commercial, matt, take me into the terminal because we want to look at where it is. matt: up 75% right now. that the the premium purchase was announced. it was a 78% premium. we are at $90.45 a