rachel golder with us from goldman sachs and mark kissel out at pimco.et me begin with you on the appetite for paper. real yield is not only about the strategy and economics, but the demand for paper. is it a frenzy yet? if yields are going to go up, and mr. kissel is going to tell us yields are going to go up, it's like everyone going out the theater door. what is the appetite for paper right now? mark: the demand for high-quality income producing assets is huge in the world, and simply put, it is overwhelmed by the supply. even though you have had a trillion dollars of investment grade corporate bond issuance here today, it has been met with significant demand and credit spreads have tightened throughout this year. what you will see going forward is more range bound spreads. i don't think you will see tighter spreads going forward, but most investors have underestimated how strong these technicals are. the demand for income in the world. central banks at the margin will gradually normalize and that can cause technicals to change at the margin, but righ

let's bring in tony cracenzi from pimco thanks for joining us.t we were just discussing, the fed minutes yesterday seem set for a december hike but pointing to that lack of inflation. >> right there were two arguments or discussions within the minutes one was over inflation clearly the moderate hawks within the fed are winning out pimco was discussing this notion with ben bernanke yesterday, he's one of our advisers he seemed to think that the moderate hawks, those who think this is a relationship between economic growth, the unemployment rate and inflation. though there's no inflation now, the advocates of the phillip curve, they are winning. it looks like the fed is on target to raise interest rates, highly likely will in december it still thinks it will raise rates three times, pimco thinks two to three is a fair bet for next year. >>> what does that meecan for te dollar what is priced in? the december hike but only one or two next year >> one intriguing thing that's happened in the past weeks is the market decided a hike in december is likely

jim keenan of blackrock, rachel golder of goldman sachs, and mark kiesel at pimco.you to give us some wisdom here. there was a great article on the frenzy in your world of loans. describe how institutions buy loans. rachel: loans are seen as a higher-quality high-yield opportunity set, within fixed income and a safer way of getting yield. there has been a massive issuance in the last few years, but most of it has been refinancing oriented, a lot of it absorbed by clo's, which are doing very well. rachel: collateralized loan obligation, it -- tom: jonathan ferro would not have done that, what is clo? rachel: collateralized loan obligations. the bank loans have a floating rate. tom: we have jim keenan. explain floating-rate versus fixed-rate, and why you need to flow now as you go into 2018? jim: it is around the duration risk. fixed income has a variability of rate risk associated with it. bank runs give you credit risk -- senior secured credit risk that are tied to the front end relative to what you would get in fixed income. i do think it is important -- the bank l

and things to pimco's luke.ny branches, the boj is warning local. -- local banks. that's coming up next. this is bloomberg. ♪ raimi: this is daybreak asia. e in hongnd i'm yvonn kong. loaded local lenders maybe hurting the country's financial says him. gareth allen joins us live from tokyo this morning. tell us the message the boj is trying to send here. what is the systemic risk they see? message the is any japanese banks want to do something about your profitability. and the financial system reports the bank of japan has data and six monthly reports that they do , analysis of japanese banks comparing it to european banks. and they found they have too many branches. it is efficiency and low profitability. bank of japan has pointed that out. it is all lost on the banks. they cut the workforce and in japan, you have to do it by attrition. so we can improve the efficiencies by investing. and they are generating positions. yvonne: sure, but what i don't understand is that isn't the boj the one inflicting some of th

mike from pimco. up, we are live in riyadh.will speak to the ceo of one of the biggest chemical companies. this is bloomberg. ♪ francine: this is "bloomberg surveillance." let's check in on your markets. mark barton has all the action. mark: gucci continues to glitter for kering, third-quarter sales growth up, underlying the revitalization. revenue increasing 28% on a comparable basis. shares are up 80% this year, record high today. luxury demand rebounds in china. creative revivals at several kering brands bear fruit. the 10-year on the u.s., jeffrey gundlach watching closely. he says it is pivotal. rising above 2.4%. jerome powell could spark a five-basis point move, a drop in the 10-year yield. john taylor could cause a 10-basis point lead. the yield curve from two to 10-year may flatten by 20 basis points with a taylor nomination according to wells fargo. traders are on edge. the dollar could gain as much as 3%. taylor is the green option there, and powell is the red option. on the next fed chair, these are the odds accordi

managing director at pimco.joined by deutsche bank chief executive to talk about the lender's future. this is bloomberg. ♪ retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. watching are "bloomberg surveillance." here's sebastian salek. of united president states donald trump is thinking of giving janet yellen another term as fed chair. he thinks she is terrific and is doing very well. according to three people familiar with the matter, trump is not predicted to appoint gary cohn. barclays ceo says he will not panic after one bad quarter, base at three. he trails most wall street route rivals but street perform better than deutsche bank.

i want to bring in the global strategic advisor for pimco. the likelihood of this passing without a phase-in? >> it's hard to tell. i think it would be a terrible idea. we've seen examples in the past, if you tell them they are going to get a big tax cut in five years, they hold off. it's terrible for the economy in general. could a clever person design a program that would work? a phase-in is not a good idea. vonnie: he said he's not for it. it seems like there will be some sticking points on 401k. even the president said we don't have the details yet. what is this going to look like? he said the democrats say it not or the middle class. richard: we haven't seen the details are in i think it's a classic example, until everything is agreed upon, nothing is agreed upon. there will be a lot of deals cut. there's a reason why we haven't done it in 30 years. it's hard to do. as a result, we don't know where this is going to end up. i am cautiously optimistic that we will get a tax bill through. i think it's in republican interest to pass it. it's

. >> let's bring in mohamed el-erian, former co of pimco good to see you again, as always >> thank you, scott. almost unabated. this is a stock that's up 60% year to date. >> and it's a great decision it is a special stock, but the irony is you could be having that discussion on so many names on the market as a whole do you stay the course despite valuations despite all these disconnects? the answer is yes. the make rho drivers are really strong you need major disruptions to get a meaningful correction, so you stay the course for now, but be careful about how much volume at this time you're selling and how much volatility you're giving up. i hear you telling me this market is going to continue to go higher, because the backdrop will spot that, and i don't hear you saying it will end anytime soon. >> the marketplace has been conditioned to buy any dip, regardless of the sources of this dip why? the option reason is that central banks, the ecb continue to inject tremendous liquidity, and the corporate sector is flush with liquidity second the global economy is picking up third, there's a

let's bring in global strategist advisor for pimco. great to have you on. from fed officials since we got that meeting has been more to the hawkish side. >> it has indeed. think these minutes and reinforce the theme that if the data plays out as the committee expects than a hike at the december meeting is likely. an 80% probability of a december hike going into these minutes and i don't think that's going to change very much after that. you are right to it knowledge -- acknowledge the hurricane impacts the data and will add some noise to the calculation. think the committee thinks at least some of the decline is transitory but i think longer-term it is something they will be watching. rate hike does look to be very much still in play. scarlet: the inflation point is what they will be watching. andpoke with charlie evans he talked about inflation earlier in the day. >> getting inflation up to 2% is something that's very important and moving expectations up i just talking about it, making sure we are willing to go above 2% if that actually happens. we have a

to people familiar, assets under management soared to $1.7 trillion under pimco, and that is your businessrobe on russian influence in the u.s. election is putting pressure on tech companies like facebook, twitter, and google. we will send it to san francisco where emily chang is standing by with more on that another big tech stories. emily? emily: looking at sheryl axial's speaking at the conference this week. i am joined by our executive editor, brad stone and i want to start with facebook. sheryl sandberg is meeting with members of the house intelligence committee, speaking out for the very first time about this. how has this been received? >> a lot of people are split. clearof people say, it's that they care. they want to fix it. other people say, it's too little too late. we already got manipulated by these russian ads. how much do we really want facebook to be fixing this in the future, and how much power should we have to see what their roles are? sandberg did not go into that in detail about exactly what would change? emily: very high level. she said that they support the public re

and we have an appropriate guest ur, richard of pimco. too many topics dimension.et's start with the fed and the bank of england. stay with us. from london, from new york, this is bloomberg. ♪ tom: good morning, everyone. nejra cehic in for francine lacqua. i'm tom keene in new york. an amazing news flow this week. greg valliere will join us this hour. a lot going on with the special counsel in washington. right now, brexit. simon derrick joining us and charles dumas, who has enjoyed working with jay femmnby. i'm struck by the lack of news of brexit. when do we get the next wave of a timeline, i guess, of how we get to the end of this process? what are we waiting for? >> in an ideal world, the period for these negotiations would have been six months, other than two years. we would have been forced to a conclusion sooner rather than later and everyone would have been forced to get to their positions, rather than this dancing about. the whole thing matters a lot less than people make out and so, there's a sense of inaction. there are very strong feelings on both side

kathleen: he is referring to the he went to pimco and worked there before he ran for governor of california at the middle hapless fed -- the minneapolis fed. he is echoing what another bond king said last week. he also thinks neil would be a good pick. the national economic council director who is also in the running, he was asked about this in a couple different ways in his interview with bloomberg. he respectively declined to talk about it. he said it would not be appropriate him for comment on it so presumably he still hopes he has the chart at the next fed chair. sophie: thank you so much. rishaad: we're going to take a bond.t john -- at china's twice a decade congress. sophie: that could provide a welcome opportunity for people elsewhere in asia. our reporter is here now. what are the opportunities that could be made of the expected slowdown from chinese issuers? guest: this presents an interesting issue for people who are less attractive to investors. down from china. ones whoe seeing canceled previously coming back to the markets. seeing issuers who have weaker credit often comes to

cap pimco at the -- catherine: at the oecd, we have been talking for more than year about monetary policyd to move forward on the fiscal side. we will looking for 25 basis points at september. i will take it in december. there has been a disconnect in the markets between the real economy in the financial markets. there is missing credit spreads, there is missing inflation spreads. there's a lot of pressing of risk and the financial sector -- in the financial sector. francine: catherine mann, thank you so much. really quite remarkable statements. we want to focus on the banks. coming up, mike mckee will be income position with boston fed president. -- be in conversation with the president. this is bloomberg. ♪ taylor: this is "bloomberg surveillance." let's get to bloomberg business flash. make wayselling off to for its acquisition of monsanto. another german company has agreed to buy the business for $7 billion. the assets include a number of businesses. the ceo at samsung electronics is stepping down in a surprise move. he has been with the company for decades. he says it needs new leade

we still have gerald in some -- geraldine sundstrom, pimco's portfolio manager.taly and germany are probably next in line with uncertainty in politics. how do you hedge? geraldine: the big case is that a complicated political situation remain peaceful. point. the starting when you look at it throughout the year, they have been relatively stable. us, we think it remains a localized event. a reason think it is to review our forecast in terms of europe or monetary policy, and it should remain contained. someything, we use volatility to benefit from entry points on bonds in catalonia, for instance. francine: euro-dollar, i , is the euro.1778 going to take some of the brunt of this? when people start worrying about italy, because people are unclear about what will emerge after the next election, which will not happen until next year. france, weitaly and have been reassured on the risk on the italian front. the fact that the euro is weak or is good news for the ecb. it is not positive for the growth of the area. i would say come in the same way of the french election,

ho says pimco is one w it was an eery sign of security. michael: the global economy is getting stronger. there is a stronger underpinning . they don't think we will see a recession anytime soon, but there is this overhang of the markets. are they getting ahead of themselves? are we seeing asset prices get too high? you opened the show with the news reports from avalon -- catalonia, from iraq, from south and north korea. could something happen that would puncture the markets? that was the overhang at the meetings. vonnie: speaking of things -- nejra: speaking of things that could potentially go wrong, we have two big wall street figures going up against each other. steve eiseman, featured in the book "the big short," spoke on gary cohn's comments. we have some sound. thet would be nice of treasury department would study the issue first before someone would come up with an opinion. i think people like to come up with all sorts of different things to hint at that the problems were not in the big banks. is it possible that there are issues in