but outflows at pimco halved compared to 2014. speaking on "squawk box," the cfo was asked about the rivalry between pimco and allianz global investors. >> they are covering completely two different pillars of the asset management space, so it is a rivalry which is good because as cfo, i like competing entities to boost profit. on the other hand, one is much more an active asset equity management, the other more in fixed income. so it's really covering different customers, strategic allocations. >> do you feel though that given the way the underlying markets are at the moment it's a good strategy to have two competing operations? the same kind of money but looking at different products as well. do you think given the market volatility they can both have sustainable inflows once you get to the end of this outflow period over at pimco? >> well, yes, i think pimco has certainly the opportunity to strengthen also in the private fund area where allianz global investors is very much equity and multiassets. the two things are certainly t

vicki pimco advisor says emerging markets of the trade of the decade.ecb, council members tell us the central bank must be wary of introducing similar for some busy moving closer to mario draghi? we will year bundesbank president about the show. morning?watching this -- what are we watching this morning? let's get to the open now with caroline hyde. caroline: reverend yesterday, the last hour of trading the u.s. we saw those original raise. we saw the stocks close in the green. i catch of effort is been a --mendous -- tall to us time tumultuous time of trading. leading the charge is the likes miners getting a bit of a pickup today. happen with a bit of risk into the market. up postingthe numbers better than expected. let's move away and get into what is happening. interestingly, the bigger this disruption with oil down but stocks in europe opening higher. we're seeing the correlation down .8%. that is even if -- as we see, once again building in the united states. is there risk aversion when it comes to gold? the correlation is kind of breaking down. we

joinings pimco cio us. thank you. stick with us.ngage with a merger talk. that is coming up next. ♪ matt: this is bloomberg. on monday, bedroom bondage veteran bond investor will join us for a discussion. ford: here is the capacity honeywell. >> we have 25 to $30 billion of capacity. we have a lot of room. david: and hammond is a deals reporter for bloomberg news. tells about this deal. statement they put out, the latest twist in a strange week. they originally approached honeywell last year, about a deal about buying honeywell. honeywell trinitron more recently and said we will buy you. they came out and said that they had no way that this flies. so, honeywell has stepped back and said that his scorched earth. it is nullified we will be able to do it. honeywell continues to put pressure on. they offered $108 a share. they are basically making public with the reasons why they think this makes sense. david: this is not a hostile bid, nor is it friendly. they are trying to argue in the public that they should change their mind. >> it

jerome: at pimco, we get up really early.hneider in the short-term space at pimco. coming up, arguably the most important conversation for global wall street critic christopher wheeler of atlantic equities on the immense and new challenges that credits weeks of zÜrich has this morning with francine lacqua in europe, caroline hyde in london. this is "bloomberg surveillance." ♪ good morning, everyone. "bloomberg surveillance." it has become important for american banking as well, the troubles of credit suisse in zÜrich. it helps to have francine lacqua it is or it. francine, -- in zÜrich. francine, the story changed. credite: yes, because suisse came out with earnings worth than expected. what analysts are not pointing to is the fact that citigroup put out a note saying they may not hit their target. i asked tidjane thiam. tidjane: we are the reference in asia in terms of the integration. it is important to me to accelerate this. it is working. what we need to do? we need to fix it elsewhere. francine: so you can see that thiam

they are grappling with those outflows from pimco. that is starting to slow.e a look at alianza on the open. profit up some 6%. showing a loss for a fourth straight year. 12 million euro losses. their splashing the cash. they're trying to get content. they are going into the channel be in and france. splashing on acquisitions as well. -- onn eye on the vendee the vendee. carolyn group so important. gucci is about 35% of their revenue. two thirds of their profit. gucci turning around. we're seeing sales up a percent. -- sales up 8%. guy: we are four minutes away from the cash open in europe. it is the b-flat open. we have had quite a week when it comes to the story on the equity market. to 6000 but wet backed off a little bit. 59 46 is where we are trading on the future. next, the market open. ♪ guy: you are watching "on the move" and i am guy johnson. we are moments away from the start of european trading. down to the wire, david cameron's negotiations with fellow eu leaders are spilling into a second day. credit crackdown. oncould raise requirements federal l

these guys are advisors to pimco. thus the reason why it is worth mentioning.ou think about china, emerging markets, they say the market is exceptionally cheap. the msci is trading at 30%. declining by 30% over the last three years. whether that is useful or not, that fell to 10 in january. and the previous six occasions of a back up she went. by 188%. quite a few voices talking about the emerging markets. we will pick up that with our guest later on the program. a stop about the other moves in the last 24 hours, checking on asset prices. this is what is happening on oil, both of those maybe a little bit stronger this morning after some weakness in yesterday's session. we have that stockpile data out of the u.s.. they are volatile this morning. in terms of what is happening on the japanese currency, 112.46. that is where we are. in the battle of volatility outlook, it seems the yen is being the town. more volatility ahead, than they do for the u.k. pound. which is interesting. speaking of the pound? manus: all down to the brexit nasa nations over the next four

you saw the little goldman and pimco as well. jonathan: we have steve here for robin, and-- a round a guide to moderate it all come with the director of black rock investment is to do joint is now. great to have you with us. the price action of the last 4, 5, 6 weeks, what do you make of these take intraday swings? word tol is the easiest use. it is impossible from an investment point to pick off a particular moment. youhave to stay with what believe in. you should believe we're in a very slow economic outcome. one where central banks remain are supportive and profits coming under pressure. when you go to that point you can try to see the goldman thread running through all of this. that is that is a low return world. you get deep value for buying at the right moment. the s&p index with first of generate about now it is down 8-10%. the take out the five worst days you are up 8%. making the points about the being careful but entry points. jonathan: if you look at prices at the moment, the prices are almost no hikes for the rest of

pimco does nothing that it will happen this year. credit should outperform. for all is everything happening in high-energy. thatdn't we be flipping around saying that oil is just exposed to the dreadful investing that has happened over the past eight years, and that is all that has happened here? credit markets are going to get tighter for the weakest companies. that is the reason we have been underweight on the energy sector, underweight on these higher lever companies. but the fact is there are many great companies to invest in that are tied into the consumer that is growing 2% or 3%. beis a beautiful market to an active manager like him, because we can pick the winners like the consumer housing health care sectors that are doing well, and avoid the losers and outfit for a client through active management. high-yieldso is ho corporate management finally at the right price? >> that is exactly right. we took a pause and took a step back when those yields were low. now that we see the wider spread in these attractive yields, we are now playing selected offense

pimco is saying that maybe it isn't good. maybe it doesn't help push people to take more risk. what it does is make the least risky assets even more risky. they are the negative consequences according to pimco. i wonder what your thoughts are on that. does it make things a whole lot riskier? arnab: i suppose it may have some of that effect. perhaps another concerning channel is the effect on banks' business models more generally. i think the underlying pressure for risk aversion is not coming from negative rates. it predates the riksbank move. the underlying common thread in all this, i still think, he's about the deflationary impulse coming into the rest of the world, or the fear of a deflationary impulse from a chinese and emerging-market exchange rate realignment. we are not quite there yet, but the fear is still stocking the market. that has spread through the energy market and through the rest of commodities and emerging markets. that is causing some concern about impairment of credit portfolios in various banks that are exposed to energy or emerging markets. jon: are we a

pimco is skeptical of the virtue of negative rates.ozone gdp.iew due out this morning. ♪ a blessing coming up, a little bit later, commerzbank with a strong quarter delivered by germany's second-biggest bank. the consumer units doing the business here. let's find out all the details that we need to know. let's talk about that consumer unit and the relationship we have seen today versus the weight that the market perceived the stock yesterday. this huge drop-down we have seen in the value. >> we're all trying to figure out why this is popping so much. it could come down to the tier one ratio. 2118 levels. in the third quarter it was 10.8%. deutsche bank is at 11.5%. those are the most recent ratios that we have all stop the concerns about those convertible bonds or if you have ratios that drop down, five and 8%. areg the things investors looking at are the ratios and how well capitalized it seems to have been done. slight increase for 2015 and i also think that 2016 will be challenging. there are a lot of loans in eastern europe. david

second of all -- the goldman sachs and pimco think that that is wrong.hey think we are underestimating the fed. lisa: and the u.s. economy, perhaps more importantly. the signs will be so overwhelming that the u.s. economy is doing pretty well and is on track that the fed really won't have another option but to raise rates. it comes back to a chicken and a question. can the economy continued being a powerhouse while the rest of weakens? regions -- betty: things are turning a little softer now. lisa: and you have the question of let's say oil does rebound. maybe we are at a bottom for oil prices. then you have less selling pressure from some of the big sovereign wealth funds that companin oil-producing es. the dynamics of the treasury market now at a time of an expanding universe of negative yields from europe to japan is incredibly complicated and it is a dynamic of its office of security that very few analysts can understand or get right. betty: it is hard to read where the minds of -- my set of investors are. are they buying it because they are worried

so, we will get pimco's take. it's a company that runs the world's biggest bond fund. and actively managed bond fund, i should say. we need to talk about those bonds, but let's start talking about what is happening with the banks. very nice to see you this morning. you would've thought looking at how the year started that it would've been the mining stocks, the oil stocks that would've been the most being up -- beaten up. stocks, horrible start to 2016. is that an overreaction? >> yes and no. i think it depends when you look at the globe. in europe, they are operating under a difficult environment. not only banks have been under pressure to raise capital but they also have a negative interest rate to deal with. the news we had so far this year is that negative interest rates are going even more negative. and they might they there for even longer. in terms of profitability and net interest margin, it is bad news. the light at the end of the tunnel is still not there. when you look across the atlantic in the u.s., we have more holds there. the move might be overdone. ban

of pimco firms -- one man there, the officer saysent "emerging markets is quite possibly the trade ofe." among other things he is looking for evaluations. i made a chart of the price to have seenatio and we it has declined -- right now is 11 point three on a trailing basis. in particular, brightman is p/eing at the schiller ratio, and i could not cyclically look at that, so i e ratio moree p/ generally. some managers are more bullish on emerging markets. if you look at that index over the last five years, you will see it has been a rough ride over the -- it has been a rough ride. or over the last year where it has been down. by size ine funds the united states over the past year that follow emerging markets have not done well. take a look again at the bloomberg. this is highlighted in the gadfly column today that looks struggling of emerging markets. down pretty sharply over the past year, tracking fairly decline inh that 26% emerging markets, and if i can bring backup that other screen i ratio, if you look at the last year, it looks pretty good right now, but finally i want to mentio

we caught up with pimco.y said 40% probability that if we vote for brexit this will have an impact and the bank of england will have to push hikes way into the long route, something in 2015. saker: it is interesting. because, of course, sterling being weak means we have to import inflation. but they will be worried about economic growth in the u.k. and they might not raise interest rates. it is quite complicated. i think most people are assuming this will go to the wire, but it will be ok. i am not sure it will be either. onus on credit swaps government bonds, we have not seen this is 2013. it is nowhere near that panic level. but the market is worried. is markingmarket itself, saying the position of the u.k. government will change if we have a brexit. there is a referendum, and if we have a brexit, the position of u.k. government debt and of sterling will change and will weaken. and it will be more risky than it was before. manus: we like to deal in fact the bloomberg. you will stay with me. the rest ofe for

that was pimco's jerome schneider.x: still ahead, credit suisse posting it biggest quarterly loss in years. ♪ alix: from bloomberg world headquarters in new york, a come back to bloomberg markets. i am alix steel. scarlet: let's start with first word news. mark crumpton has that from the news desk. mark: a brazilian health workers union has called off a strike because it could affect the battle against the fast-spreading zika virus. it includes workers that go door to door in rio de janeiro, trying to eradicate because. the union had threatened to strike. in sierra leone, dozens of people linked to the most recent cases of ebola are still missing according to the world health organization, who says 18 of the contacts are at high risk of having the double -- the disease. the west african outbreak has a thousand than people since late 2014, nearly 4000 sierra leone. the senior u.s. commander in afghanistan is taking issue with president obama's proposal to cut the american troop level two 5500. army general john campbell

have yields and europe dropped to low and what does it mean for pimco's strategy?rew: given the inflation levels, the outlook for inflation, what the ecb is doing, i would not conclude that yields have fallen to low. as far as the periphery is concerned, i think it is a relatively safe position in terms of the yield one can get there versus core country bonds. that is a long-standing position we have been running. we stick to that position. i would view the widening we have seen in recent days and weeks marvin opportunity than a reason to hit the panic button. guy: andrew, portugal 20 basis over germany, spain 143. you would be comfortable buying at those levels and adding to the positions? andrew: to start a portfolio from scratch, yes, i would be buying into some of those positions. guy: what would it take for you to sell them? when you look at what is coming down the road, and to fran's support -- point about wolf game, what triggers are you looking for? andrew: the most important theyer is the price if were to get to an extremely tight level, that would be one

david: a chief investment officer who oversees $300 billion at pimco, i know pimco was forecasting $50 oil or $60 per oil this year. is that still the forecast? >> hi, david. we are more in the $50 camp. the market is oversupplied by about 2 million barrels, and the first quarter, we could see lower prices, but ultimately, we are going to work off this imbalance, and we do see higher prices ahead. david: how are you playing that right now if you're looking at $50 per barrel right now? securities. the market is pricing in only 1.2% inflation over the next 10 years. we think we will get towards 2% core inflation by the end of the year, so there is significant value in tips right now paid we are also focusing our investments in the credit market. credit is offer equity returns today in corporate bonds pay it 6%, 7% even 4%, 5%, in investment grade, high-yield bonds. we are also tilted more towards the consumer and more towards tanks as opposed to energy, focusing on the 70% of the economy that is doing quite well. david: how much of it is based on fundamentals as opposed to technicals? >>

with us now is tony crescenzi with pimco.ony, there is so much to work with in the markets these days. how do you prioritize whether it's oil, whether it's global headlines, whether it's fed speak, that's going to move the market on a given day? >> it's all of the above. and it actually began a long time ago, in 2014, when markets started to think about the possibility of the federal reserve in 2015 would raise interest rates. it caused the dollar to rally that, of course, had an impact on oil, as you just mentioned, oil, and had an impact on china, forcing it or compelling them to devalue their currency last august. and that also set in motion all the instability created by those things, actions by central banks, that steve just spoke to, about bill dudley, regarding negative interest rates. the implementation of negative interest rates. so they're all historic, they're related, and they intertwine. and all at the same time. so right now, we've got to let markets adjust to these things, the normalization of interest rates is

so where is pimco buying on the u.s. treasury curve at the moment? there still value in of course, yields pretty low, 1.7% on the ten year. >> the intermediate portion of the curve is what provides bond investors the best so-called carry. it's a little too technical, but i could easily describe it in one way. think of a five-year treasury security and how in a year, because it ages, it becomes a four year. it rolls down the curve. the yield on a four year is less than that of a five year. that means the yield will be falling throughout the next year. now, looking out the curve, moving from a 30 year to a 29 year, as that ages, the pick up in price movement would be less than it would be in a five year. plus, the interests rates one must take moving into a 30 year, it's much higher. one would own about a quarter r of what one would own in the five year. to sum it up, the intermediate part of the curve is what looks most attractive from a technical perspective because it carries well. >> okay. tony, thanks so much for joining us this morning. much appr

blackrockto pimco and , it does look like it probably will take the onus off the shoulders of the bankof cuts. .5 percent, not quite an all-time low, but pretty low, and there were many thoughts that further cuts would be on the way and negative rates were not off the table. they were a tool. the marchike for meeting, investors and traders cut,ining up for a rate lower than expected. it does show the effect of fiscal spending in canada. the government, it appears, was setting up canadians for sticker the deficitectation for the canadian dollar, that is the deficit from not having as toy revenues as they used have, that they used to count on from the oil patch. more than the $11 billion in spending that was part of the platform campaign and they were the only party in that campaign promising to spend. aboutly, that comes to $30 billion in terms of deficits, starting on april 1 of this year. ae budget should come down month from now. this was to prepare people for that. they doubled their amount of red merchants the cash. they have to make sure that they have extra money for natural disa

tom: gordon brown replaced bill gross at pimco?oline: i'm not sure he's managing too much money, but he's certainly an advisor. tom: i'm glad you brought that up, thank you so much. the silliness continues in new hampshire w. all due respect with coverage on that, through friday and into the weekend as well. on "bloomberg surveillance" next, jane foley, without question my story of the week is a stronger japanese yen on this jobs day from new york and london, "bloomberg surveillance." ♪ tom: one thing showing the same shot every morning, you get to see what the sun does. it's february. there is more daylight. a gorgeous view of hong kong with a little bit of daylight in their early friday evening. we welcome all of you from asia to "bloomberg surveillance." jobs day in america. lots of global news. right now, let's catch up on if the first word" news. >> good morning. the stage was left crowded, but the tone was more intense in the latest presidential debate. in new hampshire last night, bernie sanders sparred one-on-one with hilla

is advising and managing several funds for pimco.f you look at the index, we are not seeing any strength there that they are joining folks like blackrock and goldman sachs. raising their outlook to overweight. is thing they are looking at value rates. they say it is possibly the trade of the decade. they're looking at the schiller p/e ratio which looks at the quickly adjusted pe. i could not duplicate that so i took regular pe and we see the tradingon at 11 times earnings and is at a relatively low level. index, ifng markets you look at it, we have seen a significant pullback, a drop of about 26%. been a tough time for those who invest in emerging markets. ,f you take the top five funds take a look at the bloomberg and you see a percentage adjusted. they have tracked that emerging markets index, a drop of about 26%. there's some debate about whether it is time to get into emerging markets. have been waiting until the dollar started to get some of it gains but now that it has, they are changing their recommendation. smithnamed john pa

we have mohamed el-erian, the former pimco chief executive joining us thanks to our very own betty liu who is going off somewhere. it's a secret, but i will tell you during the commercial break. ♪ mark: welcome back to bloomberg markets live from london and new york. this is the european close and london. it's: here in new york, time for the bloomberg business flash, a look at some of the biggest business stories and the news right now. first-time claims for unemployment benefits at more than expected last week. the four-week average has exceeded 280,000 for the third week in a row, indicating hiring has risen a bit of historically low levels. the january jobs report comes out tomorrow. there is a new threat to corporate profits -- worker productivity dropped by the most in almost two years. that leads to an increase in labor costs. productivity has languished as the end of the last recession. part of that is companies being reluctant to invest in new technology. airline traffic up last year by the most since 2010. let toce in oil prices cheaper airfares and led to a ..5% increase dema

company of pimco, bill gross was there. no longer is. they had 8 billion in outflows. year before, they had 131 billion in outflows. that looks like it has stanched a little bit. mark: good job. hans nichols in berlin. up next, is britain shopping again and is a brexit bad for the city? our next guest says britain is better off outside the eu. for retail sales data january. that is coming up on bloomberg television. stay with us. ♪ mark: welcome back to "the pulse " live from bloomberg's european headquarters in london. just getting some breaking news. , excluding sales autos, excluding fuel, up 2.3% on the month. that beat estimates of 0.7%. that is up from the previous month decline, which has been revised lower to 1.3 percent. if you include fuel, a gain of two point 3%. looking like u.k. retail sales is looking pretty strong in the last month. according to our report, boosted by demand for clothing and computers. 2.3% jump and the volume of sales was almost three times the pace of growth forecast by economists. growth was helped by post-christmas price-cutting. the

a couple of funds for pimco, talking about them as the treat of the decade.you look at the index youour bloomberg of course, can see it has been rising that index but not every emerging market is created equal. marketse the emerging performing well that are making up for those performing poorly? >> you look at costs -- across the spectrum. deviations know question about it. -- no question about it. the ratio of the emerging market index to the u.s. index so you of how these developing companies are performing on relative terms and that term higher fire police ago -- five weeks ago and it is something citigroup points to perhaps as the shape of things to come. vonnie: would you call this smart money? black rock andut some of the other investors looking at it, you could argue it is smart money. they aret, citigroup, talking about with the dollar means in this equation, that strategists focus on the market rush, and has been considering the shares to be attractive or a while. it is that you have been struck with a stronger dollar. city sees it they are not so co

scott mather at pimco says they should by corporate that.y should do something like v where they invest in assets and get people incentive to invest rather than taking money out of the system by repeating the drive down of interest rates. progress says it does nothing to stimulate the -- gross says it does nothing to stimulate the economy. interestere are some in corporate bonds with the banking sector. saying theey are signals are the prices are falling far enough in mip good -- and the pangs won't default on these desperate jeff gundlach said on waiting for the moment that the back -- that the next big opportunity out there is corporate debt and the sectorsre among he cited as being the most beaten-down especially banks. david: thanks in the u.s. for banks globally? fallen ain europe for lot in deutsche bank said they are buying back some of their debt to bishop people. u.s. banks are way down. thosean was one of the leading in the market we will see how long that lasts. jamie dimon said i am buying a bunch of j.p. morgan stock which is a

do you think, as pimco seems to have implied, that we are looking at big losses going through the end of the year, miscalculated where the fed will go? >> we do. take some set hikes out of the market, or at least the perception thereof in her testimony. but at 170 or so in the 10-year note, it is coming closer to a greater fools game, where the margin of safety is really nonexistent. it is hard to time when interest rate will rise -- interest rate rise will come. but yields are too skinny, from a total return standpoint. it is just not an attractive ways to be. betty: they are not attractive. it seems like the jobs market is doing well. credityou think investors are so pessimistic? what are they seeing that the economists are not? >> there is a lot of nervousness and skittishness after a long time of fairly solid returns. a strong obviously concern. the correlation between energy, the dollar am a china, it has all become swept up in one highly correlated trade. it is easy to write a narrative with fairly dire consequences. but it is not when we subscribe to exist. the market is pricin

i am claudine wong in for pimco. >>> and i am dave cook , let's check the weather and traffic, stevethe forecast. >> it is warm, very warm, record highs, santa cruz the record is 82 back in 1916, 80 degrees today and gilroy the record is 81 and i went 80, down to monterey and sacramento we will take you to southern california but 77 in sandra fell and san jose will be 4 shy and napa will be 1 off the record. san francisco 76 will tie, sso 75 and 80 will tie record set one year ago. one year ago we had record highs in here we go again. oh 50s, upper 60s and huckleberry 63 degrees, offshore air. palo alto says 49 and denville 62, black hills 65, warm air aloft it will not take long to warm up. mainly in offshore trees and slight, nothing too strong but a few locations out of the west, except for a few high clouds it is warm and upper 70s to near 80. way above normal. we do have changes later in the week and it will not be hot all week. more coming up

. >> what if josh pimco is right in this note. that the fed, that is growth is going to be better than people think and if the fed is going to raise interest rates more often than people think and that's going to change the dynamic of how you should be invested in this market. >> well, the market disagrees substantially. we started the year. there was a 5% chance that that would be on hold. that is now being priced at 60% and it's not to say that can't change but you typically don't see such a radical shift so quickly and have the market be completely wrong. and it's bear market rallies and everyone scratches their head and all of a sudden they rise again and churning. and it doesn't mean to churn your portfolio. the role of bonds is the portfolio stabilizer and i would point to the performance of the 3 to 7 year. the 7 to 10 year. and year to date while stocks have been out of control. you have that stability coming from the fixed income portion of your portfolio. there's a lot of big trades unwinding. that's the story of this ye

>> yeah. >> pimco for several years. i know him from that capacity., i won't get into -- trying to reverse engineer his motives, but i thought it was a surprising proposal. >> i'll reverse engineer his motives. this seems look a very kind of -- if you have futures, your sights set on some kind of political position, this is a very popular thing to do right now, don't you think? >> okay. plausible analysis. >> and also it was his first speech as i understand it as president of the minneapolis bank. that was designed to make a big splash. >> are those speeches routinely cleared by the which ichair? >> no. >> really? >> his speeches -- he can give any kind of speech he wants to. >> what do you think they're saying to him today? >> i think they're shaking their head but haven't said a word to it. >> i want to agree with bob. i had three e-mails, more than three, three e-mails saying this was a trial balloon from chairman yellen. i had no firsthand knowledge, but i would be shocked if this is -- i think he's out on his own. >> you think they're shaking the

because that was not enough fun, he went to pimco to start and equity fund there. pimco, as you know is one of those places where you were and how people get together well to make money. after that, you and for governor of california against jerry brown. jerry brown one, case you were wondering. 60-40. but he be quite a name for himself as a republican candidate who actually cared about people who make less than $3 million a year. he is the new president of the minneapolis fed, the minneapolis fed have a long tradition of thinking about financial stability and banking. you'll meet later, gary stern, who is the president of the minneapolis fed for more than two decades. and in 2004, with ron feldman, wrote a book called "too big to fail." which looks pretty good at the time and looks even better from hindsight. i write is say that it was published by the brookings press. and also, i would like to welcome bruce mcclory, a former president of the minneapolis fed, and a former president of brookings. the gentleman will speak for a bit and then be joined by gary stern a

it is round two for fed chair janet yellen on the hill so with me as richard clarida from pimco.et's talk about the commodities space. oil is still hovering at $28 per barrel. as a goes lower, will it have as much as an -- of an impact of the other markets as we have seen? it is a wildcard because oil prices should be a net positive for the global economy. we have not seen that's about what would have the anxiety. the benefits have not yet been realized. --hink oil fighting a bottom there is a bottom. stan fisher said zero is the bottom. betty: you cannot go negative and oil. >> that's right, but when we find a bottom in oil and i think we will be pretty close, i think that will. be a positive we are starting to get supply cutbacks. the benefits of oil should begin to be felt and we have not seen them yet. the positive story is yet to play out. betty: is oil that really that transitory with inflation? >> arithmetically, yes. at 30 prices stop degrees, the direct inflationary effect should out and that's saidjanet yellen yesterday. more broadly, when you have the dislocation in oi

. >> when we come back, pimco global strategic adviser rich clarida on why he's warning investors toe saying rate hikes are off the table this year. markets not pricing any in. you're going to want to hear what he says about that when "worldwide exchange" comes right back. you can't predict the market. but through good times and bad... ...at t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence. karl, don't you have fryeah, so? ng over? it stinks in here. you've got to wash this whole room are you kidding? wash it? let's wash it with febreze. for all the things you can't wash, use... ...febreze fabric refresher whoa hey mrs. webber inhales hey, it smells nice in here and try pluggable febreze... ...to continuously eliminate odors for... ...up to 45 days of freshness pluggable febreze and fabric refresher... ...[inhale + exhale mnemonic]... ...two more ways to breathe happy >>> welcome back to "worldwide exchange." let's show you the setup right now. it's not looking pretty. the dow jones futures

pimco saying in a new note today the exodus from emerging markets is a wonderful opportunity. possibly the trade of the decade. we made it our call of the day. is this the right call? >> i think emerging markets and the head winds that they were facing judge with the potential for four rate increases which most of us agree is not on the table any longer, especially what bullard last night and again today with what he was saying, the fed, mr. bullard -- >> john is this the right call? rewind what i said. >> let me put it this way. >> john, is this the right call. >> you have two of the biggest emerging markets. the bricks, right? brazil and russia. those two you take them out of it and it is the right call. you leave them in it's the wrong call because they will drag down result of the rest of the emerging markets, i believe. >> pete. >> i think it's just too early of a call would be my point, scott. i don't understand why this isn't going to persist for a little bit longer. i think -- do i think after three years they have been crushed? absolutely. does it mean it's by the dec

manus: you believe pimco. stephen: i would entirely agree with that view.nt credit is our focus. which is a long story, which i will not bore you with. but perhaps we can have a quick chat about politics. i love your picture. an orange picture, i like that. other risks out there are that the actuality of rejectionists, and we had holes -- and you can believe them as much as you like -- we are now down to actual voters. the first open primary, i will was a caucus, and the donald and bernie sanders both delivered. in this situation, where the two candidates who won with actual voters, they are both variations of a sort of agenda. manus: they are polemic. stephen: what would a donald trump presidency look like? he wears the crown, would he be constrained by the system? i am not sure he would be. i think he would be much more sort of juan peron populist, what we see in argentina today. anna: if you look at the rise in the rejectionists, what do you do with that information? other than worry? stephen: i think you worry a great deal. these are the risks i am afra

is very important mple tom: virginia, you have time at pimco.would happen if these banks went away? what are they waiting for? >> well, i think there's an element of politics which we just talked about. there's an element of resilience in terms of banking also. if you look at asset managers, there's an opportunity if they can add value and provide in this low-rate environment sustainable performance and absolute. but the financial landscape is clearly changing not only in the u.k., but i think all over the world. francine: all right, guys. thank you so much. we will have plenty minor talk about. today iranians go to the poll. coming up in the next hour you will hear live from teheran. this has huge implications also for the price of oil and saudi and russia, friendship or not. ♪ tom: good morning, everyone. looking at the german two-year. it my grates, we do three digits on friday here. it's got a little bit of weight to it. dow futures. atul lele with us. we try to recover over the weekend with our failed retirement plans. one of them, atul is

that will be one of our themes coming up from pimco.ok for him in the second :00 .- in the 7:00 hour in support of his wonderful new book. stay with us. bloomberg surveillance. ♪ tom: good morning, everyone. away from global finance and the challenges of european banking, i believe there is a vote in new hampshire today. megan murphy joins us, our washington, d.c., news bureau chief. what is the distinctive feature this morning as candidates lineup final votes? megan: the snow and the weather and whether they will be able to get there. new hampshire is a different state in terms of how people turn out to vote and how they turn out in the primary. this is a different state than what we were looking at a week ago. be -- is it to going to be rubio? donald trump? i think people think donald trump is going to take the space, and that will be a defining factor in this election. tom: who has 24 hour momentum that will change votes? is it governor christie, governor kasich? megan: i think casey has a lot of momentum. it is jeb bush as well. --

doing what he is done, whether hit us running for governor or working for pimco.e of the minneapolis fed. he has big shoes to fill. he had a speech yesterday that stops global banking. he will join us later today. ♪ tom: gorgeous day in new york city. everyone is focused on volatility. we are doing that this hour with dean curnutt from macro risk advisors. right now to london with our bloomberg business flash with caroline hyde. caroline: since the outlook is negative, a similar rating was released on monday. the company last three quarters of its value last year, anglo american. david einhorn cutback holdings in apple just in time. he reduced the stakes in the fourth quarter just before apple started to slide. apple is down 8% this year. the market is becoming saturated. goldman sachs says it is a deal that will not revive crude prices. goldman forecasts that the agreement between saudi and russia will have little impact on the oil market. last week, goldman said rice could drop below $20 a barrel. guy: thank you, caroline. javier blas, rationalize this market fo

coming up, with pimco, richard clarida. from new york, "bloomberg surveillance." ♪ tom: it is 6:49.orex report. yen weaker, but it has been all over the place in the last number of days. euro-sterling and cable -- those are the two major pairs, and they signify a weaker sterling. the ratios are flipped, so it is a little confusing. francine? francine: in the last couple of minutes, apple has been commenting on privacy issues on the company website. they are suggesting the company and congress will discuss privacy implications, apple saying they will participate if congress is involved in privacy issues. this alights to what we heard with the debate that has going on in the last several days, the fbi asking apple to get access to the iphone for the shooters of san bernardino, apple saying, no, because this will have global implications. fbi, wector of the understand, wrote to apple saying that this is a matter of national security. we have never seen a case like this before. tom: that is the key phrase to me, that "we have never seen this before." we will have more on that through th

pimco is currently down on trading.it actually placed andurth quarter increase, noticeably, the dividend was not good enough, even though the cfo told us it is a great dividend yield. the markets want to see more. tom: they want to see more. i would go to franklin templeton for some of the same challenges that are out there. it has been ok. i'm looking at the 10-year track record off the bloomberg. meh. it is sort of that kind of performance. what else do we have? caroline: i will get less meh with you. role.are on a , however muchows new york is, and the rest of the world is buying in. of theiroup, about 2/3 products, and we see the new ceo making critical acclaim. what the8%, double market had anticipated. tom: it is amazing that they have turned that around. it has been a troubled brand. for those of you a lot, all you have to do is look at the traffic outside any given store's window. in all seriousness, you see people stopped, and they are frozen in front of the gucci store on fifth avenue. vonnie: caroline, u.k. f

research affiliates is an advisor at pimco.it is a wonderful opportunity for long-term investors. that is bloomberg business flash. francine? francine: think you so much, caroline. what we are watching for the next test for the coming days. dennis lockhart speaks at the banks conference. at 12:00 p.m. new york time, 5:00 p.m. here in london, vice president john williams will speak at new york university. tomorrow, a group of 25 ministers convene in shanghai to discuss growth in the face of global headwinds. bloomberg will the reporting live. great interviews lined up, including the spanish finance minister. -- -- the election that could bolster president rouhani's. the -- effective negative rates. the 40 year japanese yield is below percent. richard lacaille from state street, what would you do in this type of environment? rick: negativee. rates do not seem to be doing the trick it if you think about the timing and japan, it was unfortunate timing it sentiments realized this could be damaging. in terms of bank health, finding w

credit strategist with pimco. coming up, is bigger always better when it comes to hotels?and what it with to compete for the -- airbnb. barclays considering selling the egyptian unit that has been around since 1864. is this a sign of larger issues? howard edward heiman has been voted wall street's top economist for the past 35 years. what does he think of the new close relationship with oil cap ho? alix: welcome back to bloomberg markets. i am alex eyal. a look at some of the biggest business stories in the news right now. i am alix stele. el. citigroup has maintained operations in the two countries for more than a century. michael corbett has been scaling back global footprints to cut costs and boost profits. restructuring the remaining manufacturing operations and first quarter charges totaling $437 million. the company will shut 220 jobs in texas and oregon. shares have lunch more than 90% in the past year. the u.s. government wants to make it easier for you to buy boxes other than your cable provider. this is a two-nine vote. companies like tivo and apple could eventua

pimco said there's a 40% chance that they will get a no vote.ng for a 20% decline in sterling. as we work through this process what do investors fear, martin? what becomes the issue at stake? well, there will certainly be a lot of currency turmoil in the short run. probably asset price turmoil in the short run. the really interesting question is the long run effect. we have to assume that a lot of businesses, quite a bit of business activity will move from london into europe. very complicated way. but i think the really big issue is that if we vote no, what happens next is complete uncertainty. nobody knows what the new relationship will be. so investors will have to cope with high levels of uncertainty. that will make prices more volatile and probably the risk premium will rise so it will lower value. >> a treat to talk to you. martin wolf there, chief economics commentator at the financial times in london. >>> when we come backs, a live exclusive with the chairman and ceo of mgm resorts, jim murren. ♪ ♪ ♪ for your retirement, you want to celeb

you said you don't think the fed should raise rates as aggressively as it might, and it will we had pimcoe out saying the bond market is not correctly anticipating the rate rises. and jan hatzius is usually with us on these shows, he's in sydney but he thought that the ten-year could reach 3% this year and that people should be careful from here. what is your view? >> i certainly think the market is discounting the number of rate hikes we'll see. the fed is very much abandoning their stance and focusing on expectations, consistently incorrect, but the expectations of further growth down the line that will drive the short end of the curve up, but the disappointing fundamentals are likely to keep long end of the curve under control, resulting a much flatter, much more difficult rate environment going forward. right now we are talking about 130 basis points. we see that declining to about 08 basis points by the end of 2016 down to about 40 basis points in 2017. >> if they raise rates, it will be a mistake. people will be increasingly concerned about growths, and yields from down the curve wi

we can try a resting pimco mary ellen. i think it a peaceful techniques, whenever feasible.i think your analogy put out the i.r.a. in germany are inappropriate. no more than we should have killed the boston bombers. we arrested him. they are within u.s. territory. we have the appropriate legal instruments to do with them but these individuals who operate in lawless areas in which the government are either unwilling or unable to turn him over to us or to allow us to work with them, we have to be able to defend ourselves, and to the extent that the fbi was able to do this in yemen early on, i applaud the effort. i think that's -- whatever we can, but i think we are not able to do that in every place around the world. to our places around the world with the fbi is not able to operate to bring these individuals to justice. and to also protect ourselves from the danger that they're posting. the rules i think are still there. i'm a strong believer in the relevant, a strict believer in the -- the rules of the charter of their but an armed attack is not the same thing in 1945 as a w

pimco was embroiled with infighting. adam: i don't think fighting is the point.peak up with minority opinions. instead of firing the person, he replies and says, i am sorry to let you down. committee to investigate the situation. stephanie: alexis, you are a cofounder of a company. when the markets are horrific, how difficult is it for a founder to get real, get honest, moves?e big alexis: we have an advantage as a privately held company. for the public ones, i can't imagine. it is easy to talk about being a nonconformist leader, but when you have to go into that earnings call every quarter, how do you reconcile the two. at the end of the day, you are still working for the shareholders. atm: when you are looking the nonconformist when the market is very poor, they are standing for values and principles they believe in. that is the time you have to be clearer than ever. stephanie: when you listen to all this, these beautiful management principle ideas, in your world, do they matter? adam, i would be interested to hear your views and apply these concepts. in the em

pimco saying revenue is down hard. you see the numbers out in japan and europe.ig carmakers getting spanked. you say mario draghi will do whatever it takes -- investors went long, but they went long boom. the remember bill gross, the short of a lifetime? matt: april 21 when he put out that note. the short of a lifetime. tom: that is where the yield moved up. matt: that means the price moved down. now, the price has come up and the yield has moved back down. we are right back where we started from one year ago. david: this is risk off again. tom: where we are now versus where he made that statement. jonathan: an investor wants to be compensated for inflation. if you are going to accept the yield at 14 basis points for longer dated maturities, you are saying there will be no growth and inflation. the ecb stimulus is not going to work. that is the market saying good luck generating inflation. tom: there is curve flattening this morning in the u.s. it is a group effort. stephanie: isn't the impact beyond just this? we are at a four-year low in terms of issuance. ever

none of this is in the textbooks are in the mailroom at pimco a million years ago. what is your portfolio, your unconstrained strategy to adapt in this on, -- odd, low yield environment? bill: the me say this. if central banks are true to their word and are gradual and one direction or another depending on how the economy goes, and we know there are shocks, taper tantrums, and etc. are german sinkholes, , say they are true to their word and interest rates move gradually. what you want to do is not accept the .7% from a two-year but sell volatility around it. pretend the two-year in the next month or two can go higher than .9% or lower than .5%. when you do that, you camesa they take a .7% two-year and turn into a 3% two-year. does that come without risk? no, it doesn't. it allows an investor to earn more on what is a guaranteed security with a little volatility by essence, selling it. stephanie: that was our own tom keene and michael mckee on bloomberg radio with janus capital bill gross. for me, the takeaway was bill dealing how long-term real wages are suffering.

goldman and not just pimco. bullish on emerging markets after three years of underperformance. what do you think? michael: how often have we heard the trade of the decade before. it is a return to the mean analysis. it is saying it is under -- underperformed so much it is going to return. there are a lot of bombs, not least of which what we were just talking about. we have maybe a disinflation isironment and china careening out of control. that will weigh heavily on emerging markets. john: this morning, we had another euro zone inflation revised lower to 0.3% from the month of january from zero point 4%. the ecb will meet in a couple of weeks time. the expectation is they will deepere positive rate into territory. getting rid of high denomination. you get rid of negative interest-rate policy, it has more bang because you may store its costs a little higher. i wonder how much your members are talking about that. michael: i think that is ridiculous honestly. we are either in a low inflation or perhaps a disinflati