back to pimco, is pimco this good because of ben iversen?ld ask be -- ben this question. he is a leader of a great team .nd the collaboration effort allianz is not a single person, it is always a team who makes the success and that is exactly our companies structure. matt: we don't hear as much performance- goes -- pimco's performance overshadowed that business unit. are they on the same kind of level as far as their performance? >> sure. they are 20% and look small. we had 4 billion inflows, we have a profit level of some 120, 100 30 million which is a good profit level in comparison to the other european asset managers. i think we have a tough asset manager in the u.s. and a top european asset manager. can i ask you a question to wrap up? the euro is accelerating to the upside of this. we have seen a big move that has happened relatively quickly. isn you look at what happening in europe do you believe that the economic fundamentals are changing as quickly and sentiment is changing as quickly as currency suggests? macron is that stepping fo

pimco attracting so much money now?t has he done to buttress his image in the view of investors? john: i think his performance draws fees basically. he is beating 99% of his peers over the last five years. if you look at a chart of his performance, it has been the steady climb and operates and down rates. of setup this fund in a way that consistently performs and that is what you want from your bond fund. vonnie: it is funny that you should mention the chart. nus thisd it up and ja sort of the worst performer. front, totally eclipsing the others is the pimco income fund. what is he doing? was a strategy that still beating the rest of the market? john: it's interesting because he doesn't officially have a benchmark. it is not like he is tagged to have a certain weighting of different assets like most bond funds. essentially he's got a lot of money in mortgages and nonagency mortgages left over from the housing crisis. hose continue to contribute a lot to his funds. he is also done some currency bets. mexico's a very comp

they talked about the importance of pimco. >> i think pimco is severely a valuable member of the allianzhat we have acquired pimco many years ago and also staked to the recent years of more difficult development and now going to the next success but also we have to say it is a very volatile and difficult market. we have to enjoy it as the successes come. i would not make a forecast for the next five years as to how pimco is developing. it's a hard fight for customers money and only top performers get the inflows in that fight has to be done and one. every week. they are doing quite well organically but i wonder if you might get in on the purchase hereof the m&a and firemen for fund management. you did just make a purchase in the u.k., auto insurance, what about the fund management side? can you add to pimco's assets with some m&a? we are certainly looking because we have also a second successful asset manager, allianz global investments. we are looking for friending teams in expanding our product offering on the pimco side as well as the allianz global investors side. i don't think we ar

according to an allocation report by pimco, investors should pair u.s.gh-yield debt while shifting to lower risk assets such as treasuries and mortgage backed securities. ofy cut the stock portion the asset allocation portfolios to the lowest level since 2000. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt: thanks very much for that. one of-based euro -- the largest crude tank operators, reported loss per share for the second quarter that is narrower than the analyst estimates. joining us now, the ceo, paddy rodgers. paddy, thanks for joining us. think clarify something i a lot of people are wondering about. the lower price of oil. not necessarily a bad thing for your business, is it? absolutelythat is right. as high as we are concerned, a lower price of oil should stimulate demand. as a result of that, should encourage people to buy and consequently to ship oil. we have had a good time since the end of 2014 when the oil price came off, on mike our brethren in the offsho

and record inflows for pimco.t has become a performance engine area we will discuss to the cfo at 8:10 london time. i am getting some headlines here that i want to share with you. the world's largest pension fund, the global pension returned three,

and what steve liesman is talking about earlier is really pimco's view the new normal is the 2% rate 0% real rate is roughly what we're going so eto see look for the fed to revise down their forward fed funds rate projections over the next year i think that's why these rates probably in the u.s. will stay relatively range bound >> yeah. breaking the low 220 again here on the ten year. mark, thank you for joining us today. >> thank you >> mark kiesel of pimco. >> we're going to talk if big tech is too powerful facebook, amazon and google have cornered culture and undermining democracy. they'll tell us why after the doup24k. w is you always pay your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance. you're searching for something. whoooo. li

according to an allegation report by pimco, investors should pair u.s. stocks in high-yield debt. t. rowe price ago that view on prices as it cut the stock portion of its asset allocation portfolio to the lowest level since 2000. a former google engineer whose controversial memo has triggered a debate on gender differences and diversity efforts in technology has defended his music or speaking exclusively to bloomberg, he said company executives are searing him after the -- smearing him after the memo went viral. >> i shared a with me viral diversity programs, and with individual googlers, but no one high up ever came to me and said no, don't do this. you know there were many people who looked at it. it was only after it got viral that ever management started shaming me, and eventually firing me. the former google engineer speaking exclusively to bloomberg's emily chang. and a statement saying the job is to build great products for users that make a difference in their lives. group of our colleagues have lesss that make them biologically suited for that work is offensive it not ok.

with pimco.sh jus is bloomberg. ♪ guy: guy johnson in londonderry tom keene of course over in new york. tom, let's have what is happening with brexit. the bank of england talking about the impact on the british economy. it is having an impact on investment. we have talked about it as being project fear, "you should not be doing this." this time, i am not seeing that reaction. >> you see a lot of holidays. a lot of people are headed to beaches. secondly, more importantly, different with the flow of where we are going on brexit, which is toward a transitional deal, thinking about the chancellor, talking about a transitional deal, and they kind of fit within the mainstream thinking. perhaps the brexiteers are not going to hit him this time. guy: are we starting to get any understanding of what theresa may will do with her speech? >> we are not sure if you have allowed the troops to stick out their positions. we have not heard much curtis johnson is in brexit movement. he has been the council on what

. >>> pimco has staged a comeback and is now the world's best selling active mutual fund manager. according to the "financial times" pimco attracted almost $50 billion to its funds in the six months ending in june. just a few years ago, investors pulled billions of dollars following the departure of big gross, known among investors as the bond king. >>> the vice chair of the federal reserve said political and economic uncertainty has contributed to slow global growth and that's part of the reason why interest rates are low both here and overseas. stanley fisher said the phenomenon is being driven by a number of factors including an aging population and weak levels of investment. >>> in washington, president trump's top economic adviser says the white house is committed to overhauling the tax code before the end of the year. director of the national economic council gary cohn said the number one topic at today's cabinet meeting was tax reform. he added the administration and republican congressional leaders are in agreement on that topic but later in the day republican senator orri

the owner of pimco. we get the headline numbers from them a fee -- a little while ago.attern to holding the asian markets. is not goingfic anywhere in a hurry. we have had some movement in the risk assets. as a result of the news around the second grand jury being appointed by the u.s. special counsel in the russian probe. treasury has gotten a boost from that. thepretty steady regarding jobs report that we will get a little later today. 109?t keep above spoke to an fx strategist earlier in tokyo. u.s. futures are pretty flat. we have the pound for you. looked pretty flat. interesting comments from the bank of england. in the u.k. ino these early hours about u.k. wage growth picking up in the coming years. the vote yesterday was 5-2. that is a quick look at where we are in the market. it is jobs day in the u.s. in the us, special counsel robert mueller is using a federal grand jury in washington to help collect information as he builds probes -- as as he he probes russia's meddling in the u.s. elections. has yet again lashed out at the russian investigation speaking at

geraldine sundstrom from pimco. plenty coming up.on deets on private growth, we speak to the manager of germany's largest renewable energy generator. this is bloomberg. ♪ francine: this is "bloomberg surveillance." e.on has underlined its full-year profit outlook. let's talk profit growth. germany's largest renewable energy generator says its substantial debt reduction will allow more spending in sustainable growth. e.on's share price is one of the best performers on the dax. we are pleased to be joined by the company's chief financial officer, marc spieker. thanks for joining us. how will you grow? you are looking at your growth strategy because you've managed to reduce debt. what are the priorities for your company? marc: good morning, francine. i would like to stress that all of our businesses have performed remarkably well in the second quarter. 25% in are up almost operating profit. that just underlines that all of our businesses are not only stronger, but have the prerequisites for future tangible growth. opportunities in all o

dieter: i would not make it forecast how pimco is developing.y top performers get inflows, and that five has to be done and wond -- fight has to be done and won and be beat. jonathan: it does not matter anymore, and a load of passive money, but what we're finding and ihen bill gross left, spoke to people close to him, they said look at dan iversen. it is going to be ok. that has transpired. but one man matters quite a lot. david: there is some irony perhaps. moving away from a superstar, bill gross, really a trade name. you put someone unheard-of and he will be fine, and now the is a superstar. jonathan: that is one hell of a call led by this guy right there. david: that is almost always true -- when you have a superstar, there is a team. the superstar gets the credit, but it is the team. what an: coming up next, company story this year and what a surge in the stock price. ceoill be speaking to the in her first interview program, mindy grossman. you are watching bloomberg. ♪ who knew that phones would start doing everything? entertaining us, get

half hour of the european close, more insight on the european economy from a portfolio manager for pimcod. this is bloomberg. ♪ ♪ vonnie: not one but two beautiful shots. live from bloomberg world headquarters in new york and london, i am vonnie quinn. mark: live from london i am mark barton. seven minutes until the end of today's session. let's look at the biggest stories in the news. the u.s. real estate market took a breather last month with new home sales falling 9% to an 571,000.te of the lowest this year and it may reflect a lack of affordability with the median sales price increasing more than 6% in the 344 -- $314,000. considering a major hole that would focus on mass-market cars. italian-american company may spin off the upscale maserati and alfa romeo brands and its parts operation here they say he would make fiat chrysler more attractive or a possible combination with a competitor. investment banking executives at whetheramerica debating eu trading desk where there eu trading have should be after brexit. the equities --frankfurt or some are in the league and trading operations

david: many thanks to mihir worah, pimco's cio.next, even of nafta talks getting underway in washington. what is at stake? what are the chances that president trump will get his way or otherwise? what effect will it have on the trade deficit? this is bloomberg. ♪ got you outnumbered. the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. find your awesome with the xfinity stream app. included with xfinity tv. more to stream to every screen. david: we are looking at a live shot of the white house where president trump is not there, he's here in new york at trump tower. this is bloomberg markets, the trump economy. let's start with the headlines on bloomberg first word news with mark crumpton. mark: thank you, the fallout from the president's initial failure to identify hate groups by name continues. the president of the alliance or american manufacturing is the latest to abandon the president's advisory council. two others jumped ship

. >>> welcome back allianz since pimco has become a performance engine again as the asset management business logged inflows of 52 billion euros in the second quarter helping the german insurer post an operating profit it also saw the solvency rating rise to 219% all segments of the business are doing well according to the cfo. >> we are in good shape in all segments 2 billion net income out of 2.9 billion profits, 30 billion revenues all great numbers, solvency means that we can -- 1 billion we put aside for dividend pay, we can have another 2 billion of free cash, free surplus generated in the second quarter. the drivers, great influence at pimco, an active fund, a world record of inflows in a quarter >> staying with the sector, swiss re missed analysts forecasts. the world's second larger re insurer warned market conditions remained difficult property and casualty rates continued to slow down in july the cfo said there is no need to change the guidance forev the fl year >> we gave guidance estimate for the full year at the beginning of the year at 100% for pmc and re for the first

rich, thank you for checking in from pimco mike, thanks for being here today.hat does it here for "worldwide exchange. "squawk box" is next ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. what should i watch? show me sports. it's so fluffy! look at that fluffy unicorn! he's so fluffy i'm gonna die! your voice is awesome. the x1 voice remote. xfinity. the future of awesome. >>>s nuclear threat level is rising president trump plinlgedging fi and fury, north korea responding by threatening guam. also markets are responding to all of this. the dow snapping a 10 day wing stre winning streak a full rundown ahead and can i sdisney announcing a strategy shift in streaming. "squawk box" begins right now. >>> good morning welcome to "squawk box." i'm becky quick along with andrew ross sorkin joe is out

amey of pimco. we continue with kamal as well.you've set, nobody in these magazines like week.4 years old this two covers, they are really wonderful. these two young kids, you give them money every day. i think they could be my grandchildren and they are worth more money than god. must read on technology as well and if you know mr. scaramucci, you know these people. hna of china. michael campbell with an important article on the mystery of hna. much more than just on mr. scaramucci. ♪ ♪ francine: this is "bloomberg surveillance," with tom and francine from london and new york. let's get to the middle east and -- qatar -- grant presidency permanent residency to some foreigners. those eligible for the law include children of qatar women married to foreigners, those that have special talents needed by the state, and those with extended notable service to the country. for more, the editor for bloomberg markets joins us now from abu dhabi. i am quite intrigued by the list of things that you need to be to apply, but this goes back -- wh

you, how does all the warnings about this credit cycle that we have heard from jeff gunlach, from pimcowhat does that mean for europe? strongave seen really gains there as spreads have tightened. i think spreads can continue to stay relatively low. we are even weight overseas in emerging markets. that said, are you really being compensated for the risk you are taking? it is at best a wash. i don't think it is worth putting a lot of chips on the table, so rates should stay relatively low and support that market. scarlet: ok. everyone stick with us. coming up, the auction block has a sale of $1.5 billion in bonds causing a stir in the market. we will go over all of it here in new york. this is bloomberg real yield. ♪ ♪ scarlet: i am scarlet fu. from new york, this is "bloomberg real yield." let's take you to the auction block. there were 62 billion dollars in treasury auctions this week. you had the sale of three-year, 10 year, and 30 year debt your debt. indirect bidders to the highest share on record. in the three-year, primary bidders at the lowest share in the past 14 years. on the co

that that is paying off as pimco received a record $62 billion in inflows in the second quarter.ss. weakness ofbout of the u.s. dollar is impacting multinational

the blow for lyon manager for pimco ways in ahead., this is bloomberg. ♪ e: this is bloomberg markets. julia: it is time for the bloomberg business flash. inle is planning on building iowa. state officials published a meeting agenda for the authority board. they say the board will consider an undisclosed amount of incentives for apple. putting says they're global antibiotics use in chicken. they're taking a tiered approach with changes in the u.s., canada, and japan. europe, australia, and russia will follow suit. mcdonald's goal is to have the policy implemented worldwide before 2027. venezuelan bonds are falling. to the wall street journal, the trump administration is considering additional sanctions on nicolas maduro for suppressing the country's democracy. the deepestosted losses since july. crippling recession have weighed on markets. that is your business flash update. i didn't know mcdonald's had antibiotics and their workers in the u.k. i just assume everything does. noted. julie: you learned something new today. central banke

north korea rhetoric that was the spark and you also have the background of howard marks and people at pimco in t. rowe price cautioning against being too bullish in this market. averages,the major there are big declines. a lot of them tend to be quite volatile. ,he biotech index semiconductors around 2%. is 1.5%.index the small cap outpacing the large-cap stocks. of the worst percentage performers individually in the s&p 500, retail is a big part of the selloff. macy's, kohl's, signature jewelers. continuing concern over the future of department stores. signet also taking a hit here. and stair recycle, that company a subpoena over the non-corruption acts of those shares are down 5% as a result of that subpoena. julia: and now the calls for caution are growing louder. the biggest money managers have a message for investors. littleays prices leave room for error. t rowe price cut allocation in stock to the lowest level since 2000. the firm joined the mornings including billionaire howard marks. >> when behavior is risky and prices are high, and the market has been doing well. it is time to be

we have heard pimco and t. rowe price talk about potentially a downturn coming, cautioning -- or counseling caution, i should say. we are looking at the vix futures, aggregate open interest, which has been rising. put call open interest as well has been rising. trump onesident twitter today, touting the u.s.'s nuclear arsenal, says "my first order as president was to renovate and modernize our nuclear arsenal. it is now far stronger and more powerful than ever before. hopefully, we will never have to use this power, but there will never be a time that we are not the most powerful nation in the world." u.s. secretary of state rex tillerson downplaying the threat of an imminent strike on north korea. if more insight into the escalating war of words is ofmas byrne, former director the analysis for sovereign risk group in asia-pacific, and movies investment services. great to have you on the show. good cop, bad cop, in terms of rex tillerson and donald trump. with what we have seen the last 48 hours, do you think w

i was looking back at a blog i wrote for pimco six months ago when we noted dow 20,000 probably didn'tmarket as it did to the stock market the bond market then, the ten-year treasury, was priced at 2.46%, and here it is about 20 basis points lower in other words, the bond market has been less than impressed by the outlook for the economy. it believes that there's been no permanent change in the trajectory on growth and, therefore, there should be no change in the view about where the federal reserve will ultimately wind up putting its federal funds rate its policy rate so the view in the bond market is to accept the idea of the new normal which is a subpar growth versus historical averages and the new neutral, the idea that policy will stay low for some time. >> michael, are you comfortable with the leadership change in this market as the f.a.n.g. stocks falter a bit and we see industrials and some other companies, good old meat and potato type of companies leading the way here >> yeah, investment i mean, i think the growth, the high-growth companies like the f.a.n.g. will perform long

amey.ne: pimco's mike this is for the picture of you watching us on tv .question by clicking under the video screen. this is bloomberg. ♪ francine: news is "bloomberg surveillance." i am francine lacqua in london, david gura is in new york. somen -- we'reg seeing some sun in london, but it is not as pretty as new york. taylor: quick approval to amazon's takeover of whole foods. the deal was approved in a 30 determining itr would not hurt competition in the grocery industry. lawmakers argue that the deals that could hurt consumers are being approved to easily. the company sales beat estimates, but the forecast it profits for the quarter may fall short of projections. they have been dealing with sluggish demand for printers and personal computers since it split from hewlett-packard enterprise. tradedo a deal to buy bonds from guggenheim partners. .1.5 billion they trail blackrock, vanguard, and state street. that is your bloomberg business flash. francine: thank you. two of the world's biggest hedge funds may escape the brunt of -- they both got the recent l

joining us is mike amey, managing director and portfolio manager at pimco. german story, the largest economy in europe growing by 6% of the second quarter, interesting all eyes on gdp around the world as we are trying to work out how far beyond that downturn we have come so far it doesn't leave germany? the europeans and germany in particular have taken time to get going. growth they are stuttering for a few years, seems to be on stuttering for a few years, seems to beona stuttering for a few years, seems to be on a pretty good trajectory and germany one of the stronger economies in europe, doing very well. i think it's good news, germany and the european union, the eurozone finally picking up on the upswing... why has it taken so long? the main reason, their period of maximum economic pain was later than it was for the brits and the us, ours was 2008—9, there is was 11—12, longerfor the ours was 2008—9, there is was 11—12, longer for the recovery to ours was 2008—9, there is was 11—12, longerfor the recovery to kick ours was 2008—9, there is was 11—12, long

c-span's "washington journal pimco live every day with news and policy issues that impact morning, afriday natural resources editor discusses the trump administration's review of more than two dozen national monument designations made by the obama administration. then, a utah state representative talks about federal land ownership, and secretary zinke use proposal to scale back the borders of a national monument in utah. also, the ranking member of the national resources committee on public land policy and national monument reservation. finally, the western energy alliance president discusses the oil and gas industry interest in federal land. be sure to watch "washington journal," live at 7:00 a.m. friday morning to read join the discussion. >> friday, the u.s. commission on civil rights examined the justice department enforcement of the voting rights act. members will also look at the impact of the supreme court decision striking down section five, which monitored changes to putting rights in areas with a history of voting discrimination. we will have live coverage starting at 10:00 a.m.

libby: at pimco we are probably more inclined to be skeptical of headlines. we thought back in january when trump laid out this ambitious legislative agenda that it was going to be difficult to see really. tax reform. just looking at -- to see really. fulsome tax reform. i think we would agree with assessment would be that the best you get is tax reform lite. we still don't think it will be big enough for meaningful enough to impact the economy in 2018. jonathan: is it a little premature to say they are not going to get that much achieved just seven to 8 months in? >> in the first three weeks after the election, small caps rallied about 20% and the number of fed hikes that were priced into the market shot up by several more hikes and for a few months, that kind of held in and for the last four months or so, it has been on priced and now -- unpriced and now small caps are just large caps and that is my -- trump trade is back to him it -- election lows. 2.25.-year is at in terms of how the markets are responding to all of this news and basically, when you look

many investors we are speaking to, including major players like goldman sachs and pimco are getting out of junk now or more to mortgage-backed securities. are you still in junk in a big way? the you have concerns about the market capping -- gapping at some point? nikc: i do believe we are at rich levels. we have some areas of a high-yield market but we have shortened maturities. there is not a lot of low hanging fruit. people have to reach for higher branches to get returns of yesteryear. fixed income is really no longer fixed and it will no longer provide income. people need to look for alternative ways to get their return. there is a fear of missing out as of this complacency. people are trying to meet the requirements or meet the returns a path for the previous years and replicate them for 2017-2018. i think that is a problem. people need to reset return expectation, realize they cannot just pile into risk assets. ultimately their fixed-income portfolio because were equity-like. vonnie: europe is having the same problem. they are even lower than here in the united states. the you loo

the pimco is the biggest one. it is the largest actively managed fund bar none.all active and have over one billion and yield 1.3%. fund, will goo more international to get that 1.3% yield. its duration is half a year. and you have the blackrock product that will go less international, but a little further out in duration. it will take more rate risk. and in the guggenheim product says will have the lowest duration, but we will take more risk and have a little more high-yield in their. -- in there. again, all the duration is within a range of that half a year, give or take a couple of months. so, these products are liquid and have no gates. likemoney market investors they can get in and out whenever they want. their $40 billion in assets. julie: over the past couple of days, as we have seen buying in the treasury market with rates coming down, and these are seeing is a relatively place to be, with a be taking in money from a lower stock environment perhaps? >> that has typically been when they have done well. they have just gone opposite with money market funds f

pimco and t.gers are sounding the alarm on markets and fears rhetoric between the u.s. and north korea has resulted in a more risk off sentiment feel. these are the reasons why our guests have said they are more cautious. >> i am nervous about three much everything. there comes a point in where the cycles return on capital is less important than the return of capital. it's keeping your money and not losing anything. >> i think anyone who is fully invested now is taking on great risk. we raised cash reserves. it's been a great ride in the stock market. we have a layer of gold g,dx is the etf that captures the gold miners and you take precautions, you change because we don't know how this plays. the dysfunctional, chaotic washington gives us no comfort. >> there is little room, little valuation buffer should some of the risks out there materialize and impact growth going forward. alix: you have some investors starting to buy that protection. ofs is the ratio of the vix the vix so the measure of vix

a bit of a disappointment let's try and make sense of all these numbers with portfolio manager at pimco does it trade on brexit and what the boe is doing >> it does trade on data to some degree i think the key driver of where it goes is brexit. if you look at where sterling has been trading, europe has been strong. running around 1.30. dipped below the last 24 hours or so. so the -- you know, the big influence on sterling is still brexit but i think brexit is part of the story in the data as well. you mentioned the construction data was weaker there. if you look at the pmis, the weakness in the construction data has been in the commercial sector i think some of that is brexit related. so i think the brexit uncertainty is feeding into the data having an effect on sterling and keeping it on the weaker side. >> just want to show you once again to our viewers, sterling/dollar inching off the day's lows but increasing somewhat after the better than expected industrial production data now changing hands at 1.2978 what would it take for sterling/dollar to go back to the 1.32 levels that we saw

pimco joins the course of asset managers say it is time to dial it down.nd the man google with his views on women and diversity. his opinion in an exclusive bloomberg interview. >> the point of my memo was to improve google and google culture and they just punished me and shamed me for doing it. francine: this is bloomberg: surveillance. i'm francine lakhdar in london. joined by the- chief investment officer. we will speak exclusively for the provincial ceo. we will be joined in the studio in 35 minutes. just after those earnings come on. in the meantime, a lot going on in markets. tensions surrounding the korean and insula. korean peninsula. a little selloff in asia, in little cellophane european stocks. down from 0.2%. i am looking at the dollar strengthening the day before the u.s. inflation data. that is what we will be focusing on. oil advancing and looking at the 110.s, again, the fix and deck skinning a touch. let's get to a first word news. nejra: south korea and japan have warned north korea it faces a strong response if it carries through with th

like pimco us saying, maybe next year. they are thinking it will happen. it is when. they think the breakevens up onto far. this is doing the loosening work effectively. that is for inflation, the longer time. some people feel that the weaker dollar increases import prices and make felt and six months down the road to higher inflation. they looking at short-term factors. that weaker dollar, those listening financial conditions is a push poll. there is a safe haven shortage of demographic changes. they were wanted to put the money on some kind of reliable instrument. that means that they won't stay low. the counterargument is that vanguard and blackrock are offering to that? >> they see that. they see the best part of this global need -- blackrock analysts and strategists said that he thinks that will slowly start to dissipate that voracious demand for yield. we are seeing economies in europe do better, rates are going up. better,es are so much relative to everyone else. they were love. that is what has -- they were low. that is what has kept us chugging along. >> june

got -- and pimco. got your bases covered. ♪ emma: this is bloomberg daybreak.ay, facebook joins emilyandberg chang for an exclusive interview. this is bloomberg. i am david westin. in has been 10 years since the official beginning of the great recession. since then, investors have chased yields lower as central banks globally pumped trillions of dollars into economies around the world. mark gilbert joins us from london now. he has written a piece on this. occam to the program. take us through this. you are taking us through forms of credit. you say it is apples to pairs, but explain it to us. mark: 10 years ago, bnp paribas closed three foreign credit exposed to u.s. subprime. points in a0 basis day. european central banks offered unlimited liquidity to the .arkets, 95 billion euros 10 years on, if you look at euro high-yield credit spreads, the gap between what european high-yield companies paid to borrow from the government, and the bond market, the u.s. treasury spreads -- it is dipping below the first time in a decade. last time that happened, that had very

recorded pimco have earnings. noble, $1.9 billion loss in the same period.ocencio is at the wall with the chart. ramy: this is the great wall of bloomberg, i suppose. this is g #btv 8765. this is the drumbeat of debt. glencoreentral to both and noble. noble as a percentage of wage and debt is 84%. just for the first half of this year, the latest numbers show it has added debt on the order of nearly $1 billion. not going away investors wanted to be. looking at glencore, net is that 36%.- at they chopped their debt by $1.6 billion. in december of 2014 the share price of noble has tanked by 96%. but since the end of 2015 for glencore, it has shot up by two under 50%. that is debt. i want to look at default risk. k function.r the green line is share price pence inthe 339 london. in comparison, the default for noble at 12.4%. this is a distress category. the share price over the past year or so has actually been $.35, downw at about from $2.50 in spring earlier this year. you can see what is happening in terms of debt and default, both going in opposite ways, eve

tony from pimco was on bloomberg television earlier, he said furthermore, there would be any kind ofhe one mario draghi is signaling in june in italy. he said nothing big, probably not a big impact. >> there is reason to signal that marine policy will be changed, that is the most important thing that the markets can take away from this. traders are still worked up over this. they may see this in regards to some other bias. what about the fundamentals? address the surging euro's impact on the economy? news fromsome germany. investors felt that the idea is that this surging euro is making business people nervous about exports and therefore the economy. look at a chart with me, this is #btv 2041. here is the expectations index. this is what is so important. this is supposed to be around 15, it fell to 10 in august. this is the german stock market index. it factored out the big move in by taking ally relative to the s&p 500, bottom line, you can see how this trend stock market was, look how expectations were, look what has happened since the euro has surged. another thing is dieselgate.

let's start with pimco. they want to pull back -- pair back u.s. stocks and that. -- debt.still have a tilt to risk assets better paring that back a bit. another large manager in the we, is morero aggressive in terms of lowering their stance. and in some of their equities portfolio, they have this smallest -- the smallest equity position since 2000. this week, we have heard from big money managers, including blackrock and double line. many concerns are around extreme valuations and pockets of the market, and an overall feeling that a lot of markets are expensive at the moment. if you are prepared to pay up for those valuations, some at this point aren't. the important thing to notice here in a week that has been characterized by an uptick in geopolitical concerns, is that it is not a case of large managers running for the hills and slashing massively their equity position. it is a small dialing back of risk, given outstretched valuations are in many markets. betty: adam haigh on the markets, and the sentiment there. let's get back on wall street. investment bankers expectin

. >> ladies anladies and gentlemen mike's what pimco ceo the potomac institute for policy studies, and is my privilege to welcome you all here today to a seminar on combating biological terrorism. i'm proud to report that for now almost exactly 20 years the potomac institute has been involved in the study of this issue. unfortunately, the issue of bioterrorism has only grown worse over time. it's more threatening. it is probably more eminent, and certainly the tools we have for dealing with it are, as inadequate today as they were 20 years ago. almost, also like 20 years ago, more and more the political people in the world are distracted by so many other threats from nuclear north korea, tehran, the ships run into each other in the pacific to political division in this country another, economic disruption around the world that the threats posed by tear are seen more and more as lone wolf driving cars through open spaces in europe and in the united states and other places. and many seem to forget that the potential of even a lone wolf getting his hands on something very frightening in t

. >> we had some high profile managers it was pimco saying their cash balances are above average of coursecentage of year assets in gold anything change in your model? >> not really. with a we saw the end of june we saw their median cash positions had come town from the lowest level since '08 when we started asking where is your cash positions. they're just getting dragged into a market up over 10%. especially when there's a whole movement from active management. these guys are being pressured to put money to work as opposed to sit back and i don't think it's because of that i was in boss on the last week visiting with some of the institutions there and i kept telling them it's fascinating. the market is up but you're so glum you're wealthier and you're still not feeling good about it. which is odd. >> why are we up this morning? >> clearly nothing bad happened over the weekend i mean, leaving out charlottesville. i'm talking about the korean peninsula looked calm and there is, you're hearing the news about back channel communications and diplomacy trying to rachet down what seemed to be m

pimco, goldman, and others are snatching up home loans made before the housing crisis which offer potentiallysachs asset management. talking about this move from junk to mortgages. mike: you have seen huge global demand for u.s. assets. we talked about treasuries before. the secondary asset investors are buying is corporate credit. they are used to it. you are seeing spreads tighten dramatically. our view is you are not getting compensated for the risk in credit whatsoever. you have had a significant move up in leverage. they are taking on much more risk. you look at the investment grade market, and you are at the tightest level if you look at spread as a unit of leverage. similar things going on in high-yield. we think there is an attractive carry, but it is fine things people are not buying. securitized markets are a little more complex. we think the non-agency mortgage market is an attractive place for returns, and instead of being exposed to that demand from overseas, you are exposed to the u.s. housing market, which is in healthy shape. andr things like clo's asset-backed securities like

up, a lineup of guests including goldman sachs, pimco, and barclays. this is bloomberg. ♪ ♪ >> this is "bloomberg daybreak." i am emma chandra with your business flash. according to people familiar romeohe matter, entertainment of the could go public as early as next month. over charter communications, according to people familiar with the matter, altice is planning to partner with investing groups for help. in china, the economy showed further signs of slowing down. rose slowertlook than expected from last year. retail sales missed estimates. rose muchn japan, gdp faster than expected in the second quarter, raising at an annual rate of 4%. alix: thank you so much. for more on china and japan, we the bloomberg -- we are talking about not a boj.er pboc, but a tighter you have japan leading asia. in some respects. >> we are seeing the best figure out of japan. consumption is holding up. it looks like they are gaining traction. inflation is not going anywhere. that is despite the strongest labor market in decades. i think it bodes well for abenomics. he s

coming up next week some important guest will be here, jeff three of goldman sachs, libby cantrell of pimcorom new york and london, this is bloomberg. ♪ ♪ this is bloomberg. i'm david westin. address isoves, both softening inflation data yesterday. >> we were telling a story that inflation was gradually going to return to target, and on this measure you can see the gradual return to target. it seemed to be going according to plan until we got to this year and this year this number has fallen way off, at least on the scale that you have here. this number has fallen quite a ways off. upinflation has been coming short, relative to our 2% target. that actually matters. you think 1.5 is not a big deal, it actually matters that investors believe the fed can achieve its goals. david: still with us are and shepardson and krishna memani here in the studio in new york. i want to talk about you are concerned about the fed moving fast in the markets but that it might have negative effects. did the soft and laois and data give you -- soft inflation data give you some solace? ian: in the short-term, yes.

and you control of pimco. this is bloomberg. ♪ david: this is bloomberg.'m david westin alongside caroline hyde. the president may have left the city but washington continues to be in the news over the weekend. of six hard at work on their plans for tax reform to be taken up after the break. joining us now is chief washington correspondent kevin cirilli. let's start with north korea. it's quite something to have a unanimous vote out of the un security council. this is a win for the president isn't it? >> it is a win for president trump. haleyhe weekend nikki announcing there was a unanimous vote with the un security council including both russia announcing new crippling sanctions totaling more than $1 billion against the north korean dictator. thehould also note relationship economically between north korea and china. both russia and china did not label the intercontinental holistic -- ballistic missile test -- despite secretary of state rex tillerson several days pressing aggressively against russia and china for their lack of ability to work with the uni

joining us is pimco's global strategic adviser, also tom lee, who is fund strath global adviser's founder, managing partner and head of research and welcome to both of you so, you heard what joe said at the top about all of these incredibly bad headlines coming out of washington, coming out of new york, or wherever the president is, and yet the futures continue to climb. why is that? what do you think? >> i think part of it is the goldilocks story, which is the economy's chugging along it's not exciting but it's consistent inflation's below target so people aren't too afraid about a hawkish fed, and of course as you know, and we learned from cnbc, earnings have been strong, and so essentially i agree i'm a little bit more than a little surprised, as one ofmy friends said, you know, the markets aren't worried about korea and neither is south korea. the korean markets at an all-time high, too just the world that we're in >> and tom, do you think that this continues if you look at these goldilocks sort of situations, how far do you see that kind of carrying out? >> i mean, i think there's a