that has really been the focus at pimco now for several years.we say, a lot of good news is priced in. we think investors, especially in fixed income, should have a keen eye on liquidity. to be frank, use rallies and spread tightening to adjust the portfolios out of less liquid positions. as new money comes in, have a higher fraction of it in cash, absolutely. jonathan: you guys are sticking with me. oksana aronov from jpmorgan asset management, richard clarida from pimco, and colin robertson from northern trust asset management. we want to get a check on where the market has been this week. it looks a little something like this. yields up at the front end by two basis points. the u.s. 30-year. up a single point at some very marginal corporate flattening if you account for those things right there. but compared to the last few weeks, price action pretty muted. still ahead, the final spread for the week ahead featuring rate decisions from the federal reserve, the ecb, and the bank of england. that is next. this is "bloomberg real yield." ♪ ♪ jonat

and of course, pimco the official sponsor of "bloomberg real yield."new york city, that does it for us. we will see you next friday at 12:30 new york time. this was "bloomberg real yield." this is bloomberg tv. ♪ david: did you ever think that one day that you would be chairman of the joint chiefs? colin: it was beyond any possible level of aspiration. david: people said this man should be president of the united states. colin: it had never occurred to me. david: any regrets about not having run? some people say it is a great job. david: no? colin: prove it. david: a new national security advisor came in and he wanted you as his deputy. colin: hello, general powell. this is ronald reagan. yes, sir. >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. all right.

and of course, pimco the official sponsor of "bloomberg real yield."rk city, that does it for us. we will see you next friday at 12:30 new york time. this was "bloomberg real yield." this is bloomberg tv. ♪ scarlet: this is bloomberg "etf iq." we focus on the asset-backed, risks, and rewards offered by traded funds. ♪ scarlet: we speak with the father of index funds on whether passive is helping to inflate a stock market bubble. the actively managed etf riding the bitcoin wave to the best performance of all etf's this year and 81% returns. and making investing a great great agai

director the managing to pimco. he has a sense of markets.nal affairs. a lot of his work focusing on foreign exchange and the very -- interesting economic research. and, a well-respected scholar. a money manager at pimco himself believes rich clarida would be a fine choice for the next fed chair. take a listen. >> being expert on the issues of monetary policy is important. think about ben bernanke, and advisor to pimco. he understood the great depression very well. it is very important in terms of where monetary policy could fit in and what it could do. kathleen: the other name, lawrence lindsey. let's take a look at things he has done. he was one of george w. bush's top economic advisers 2001 to 2002. an architect of the tax cut. and he was on the order governors from 1991 to 1997. how they -- how might they be different are the same? let's take a look at rich clarida. he sees maybe two or three rate hikes next year. and inflation starting to pick up. he has praised janet yellen's policies as effective. may be dovish, not sure. in 1996, they

coming up, we will speak with tony chris enzi of pimco.♪ copper surging to a three-year high after china orders its top producer to limit production. bitcoin and its wild ride. dipping below $16,000 after having ended a five-sessions a lot. the secret to success. sitting down with francine lacqua. how the world's largest products company stands to play best stay on top. good morning, everybody. this is "bloomberg surveillance." lacqua --and francine francine is busy, but she does have the day off overall. let's get things started with the first word news with taylor riggs. taylor: starting with that oil story. oil trading near the highest close in more than two years after an explosion at a pipeline carrying crude to libya's biggest export terminal curb to the nation's production. , pipeline exploded yesterday reducing output by 70,000 to 100,000 barrels per day. said it expects oil revenues to jump about 80% by 2023 to help the kingdom record its first budget surplus in a decade. the highesturged to level since 2014 after china ordered it

david: libby cantrill, head of public policy at pimco. still ahead, highlights from my exclusive interview with brian moynihan. find out why he is so concerned with brexit. ♪ julie: wanted to bring you a bloomberg scoop having to deal with double line capital. double line capital embarking on a plane to -- plan to -- this is a niche that has traditionally belonged to banks and brokerage firms. we will hopefully have more on this throughout the program. >> this is bloomberg markets. i'm julie hyman with david westin. let's get to the headlines of mark crumpton. mark: republicans want to use the moment them from their tax bill victory to take on welfare. house speaker paul ryan regards 2018 as a chance to reshape the social safety net for the poor and disabled. he also lost change the food stamp and medicaid programs. jim mattisretary visited that enables a very -- the naval secretary. it comes on continued abuse of the military. guantanamoo visit since donald rumsfeld in january of 2002 just weeks after the prisoners arrive from afghanista

let's bring in richard clarida of pimco. thank you for joining me.e have a few hours left before the fomc meeting. legacyll janet yellen's be as we head toward potential fiscal reform and a rate increase? navigateshe has had to the end of crisis monetary policy, again a rate normalization process, shrink the balance sheet here at things could've gone wrong that did not. historians may look back that inflation has been below the fed target under yellen and bernanke , and there may be some monday morning quarterbacks who say why hike at all? yellen has a strong legacy. vonnie: curious to what the dots will say. longer returned, there is a level of neutral. does that increase and that's -- at what point? richard: we think we may get an adjustment in the dots in 2019, but what we have called the new neutral at pimco says the terminal funds rate will be somewhere in this two's. the dots are currently at two point 75 and we do not think they will move. as inflation moves toward the 2% target or sticks to where it is now, stubbornly below it where it has be

and of course, pimco the official sponsor of "bloomberg real yield."york city, that does it for us. we will see you next friday at 12:30 new york time. this is "bloomberg real yield." this is bloomberg tv. ♪ . ♪ >> he has been dubbed the geek chic. he is a tech entrepreneur in the world of luxury fashion, founding the online retailer eubank is an online marketplace. 15 years later, he merged it with its biggest competitor net-a-porter creating the biggest online shopping giant. joining me is federico marchetti. thank you for joining

pimco's latest quarterly update is out.arring a zombie apocalypse or a sudden spontaneous collapse and asset prices, the goldilocks environment has synchronized above trend. low but gently rising inflation will likely present in 2018 -- in 2018."nd 2 not executive the for the investors to get altogether excited about. this seems like a fairly tepid outlook for the next few years. joachim: i think that is right. what we are seeing at the moment is peak growth, for close to peak growth. we have a goldilocks environment clearly with very strong globally synchronized growth. we think that will continue in may be a quarter-point on gdp growth from the tax cuts and some additional boost from spending from higher fiscal spending next year. that the issue is this is coming at exactly the wrong time. we are depleting the fiscal policy toolkits, rather than keeping it -- keeping the powder dry for when the next downturn comes. we are now adding roughly $1 trillion to the public debt over the next 10 years, budget deficits will be ris

any pc and pimco are going to be speaking there, okay? ellen just spoke about the chiller ratio. that's off the fricken chart. i sent you a few charts yesterday showing you that and a number of other things. i don't want to get into a discussion about that right now. you have to have somebody at the meeting who's presenting an opposite -- another point of view how over valued bond and stocks are right now. bring goldman sachs in right now. bring somebody who's going to bring a dose of pessimism and reality -- and i'm not criticizing. allen and i had a conversation before the meeting. we agree on a lot of things. specifically that you're going to see the financial crisis over seas, and you guys are never going to see it coming, okay? i think he would agree with me on that. i would suggest, if you don't want to do that, and you want to stay in your cozy little public pension fund that you at least bring his client, san bernardino. bring his client, because they do have risk hedging. bring them. it's your own little world. this guy, he's usually right. he's wrong. >> 30 seconds. >>

of pimco. a lot of them are saying the low return environment we have been seeing for a number of years is likely not to change so people are going to have to be creative and disciplined about finding opportunities so they can get returns in their portfolio. vonnie: peggy collins, great story. thank you. you can check out the series. shery: we have breaking news. the house ways and means chairman saying he has all the signatures he needs. that is a done deal. we are talking about the tax deal in conference committee trying to figure out a final bill. we reported earlier the conference report will be coming at 5:30 p.m. we will give you more updates as soon as we get them. ebitda coming up -- vonnie: coming up, bloombergs "real yields." you don't want to miss it. this is bloomberg. ♪ ♪ jonathan: jonathan ferro. with 30 minutes dedicated the fixed income, this is "bloomberg real yield." ♪ jonathan: goldilocks dominating 2018 again. central banks, say yes predicting high-growth. tax negotiation's

pimco says barring a zombie apocalypse, the good times should keep rolling. about to become a bigger force in hollywood. it is reaching a $52 billion deal that takes over fox assets. what is that mean for the future of moviemaking? vladimir putin holding his annual news conference. has the that this -- business climate changed in russia? we speak

pimco last week was talking about for hikes.hen you look at the risk to the united states of america, the fed may not get the growth numbers that they think. we've got to shut down and inflation spike. what is my biggest work at risk ?oing into 2018 for the fed >> right now it's about 60 basis points of hike priced in between now and the end of 2018. the risk is probably that they could do more. pickup ind be a pickup inflation in the second half of the year. there is still a lot of uncertainty regarding what the impact will be on the tax reforms that have just been passed in the u.s.. there's a lot of elements that could be pushing for more aggressive fed. manus: have a look at this, the 10's.ndetween a more aggressive fed, this that invert the curve? it could. the question is, should be as should we be worried about an inverted curve? typical --we in the it's nothing new, just reinvention. we have had a new buyer and a lot of the u.s. treasuries are now owned by the federal reserve. so if a big buyer were to interstate let's l

new reports of possible candidates for those fed openings with pimco's rich clarinet talking to the white house along with larry lindsey. and getting to know. british prime minister wants to get past her role as madame brexit even as the new year ramped up the pressure to get those trade deals done so britain can work its way out. ♪ david: those new tax laws go into effect next monday come on which means that many taxpayers right now are rushing to make sure they take advantage of any deductions they have today but will lose next week. to take us through how it all will work, we welcome now laura davison. welcome back to the program. on the individual side, there are reports, and i must say, i'm in new york resident and i'm looking at it how you can pay some of your taxes next year because you lose the deduction next year. laura: what the new law does is that it limits the state local taxes that you can do. to $10,000. if you live in an expensive state like new york where you have a property tax bill and your state income tax bill could exceed $20,000 or $30,000, if you prepay those now i

bloomberg's tom keene caught up with pimco's ceo. >> he is taking his holdings and rgest holder la inney. so basically he understands globalization, he understands scale and he understands the direct line to the consumer and has these challenges, so i think unexpected was different -- part a, he did not go out and find a premium for his voting stock, but he is paying a premium -- $8 billion, maybe a lot less, $6.5 billion depending on the tax structure -- he is going to spin new fox and merge with disney and becomes a large shareholder. tom: with this is bob iger. my history of bob iger, he ended food abc, went up the chain. if disney does this, it will fail. no. what is disney going to do, for example, with the simpsons? what is the pixie dust that bob iger has with content? pays about company $4 billion of cap x, ok? they are taking on $5.5 billion, the way i look at it and with growth, they are talking $6 billion, but the capex is $100 billion -- yet, they go global, they go direct to consumer with sports and entertainment. that got content. what would be able to have all of the bi

pimco had predictions.global growth improving, but they have a warning, brace for a downturn, and maybe zombies? adam: ultimately, they are saying the goldilocks environment of steady growth but not inflation to worry investors, remains intact in 2018. it is a place you want to be reasonably invested in. they are warning into the second half of next year, whether inflation does start to pick up materially. a lot more than markets are priced for the moment. i think as we look at how investors are positioning for that going into the back end of the year is an equity market. trying to buy some downside protection at this moment. let's dive into the bloomberg, g #btv 9573. it shows in the uptick in people buying puts. the number of contracts being written for those puts has climbed to a record. it is not the surprise you would expect, given we had a stellar run for equities. investors now need to be positioning for this next phase, if the bull market is coming to an end. there are some things that need to be do

i curl what about pimco daily newspaper called the exile that was designed to be a sendup of the american expatriate community. we actually had a goal of being the most offensive and history. our idea was there was actually at one point satirical idea in the book, which was that the americans who are coming over, who are pretending to help in baghdad we are offering to bring the american way. by night, we're actually taking a huge consulting fees and billing into orgiastic clubs and party and in with russian women and it was a pullback and so we were -- the idea was to expose all of this to talk about the corruption of the community, but we quit we became the community were trying to satirize and that caught up in the community. the book we wrote, the exile detail some pretty ugly things that i would be ashamed for my kids to read. i will be ashamed some day for them to read. i have three young sons and their safe passage in there and one of mark's chop yours that talks about harassing women in the workplace. that part of it isn't true, but there are other things that we wrote that were a

callu believe the pimco that it is all about the tax?e answer the questions. ♪ matt: good morning, it is 6:30 in london, 3:30 in the afternoon in tokyo. looking at the u.s. dollar-japanese yen, down almost 0.2%. let's talk about the u.s. gop congressional leaders are racing against the clock to finalize their tax overhaul. yesterday marco rubio would oppose tax legislation unless they agreed to a larger child tax credit, the president trump says he is very short rubio will vote to pass the bill next week. uncertainty around taxes is weihginghing on asian equities overnight and the u.s. dollar this morning, affecting the treasuries market as well. globally, it affects markets. mike bell is a global market strategist. he's still with us. how do you view this? this isn't exactly a reagan tax reform. even janet yellen and the fed said this would maybe have a small effect on growth during a short time period next year. why is it so important to all markets? mike: i think the key question is what is already priced in. our best estimates only a

with the ceo of pimco was saying is we will see a bifurcation of the bigger firms already that are able the medium-sized smaller ones that are struggling or will just be pushed out as the biggest ones rest for scales. it is really part of the way to passive.n the rush to scarlet: it's going to continue to be a big theme. i want to move do something i referenced in the story about hedge funds incorporating machine learning. one surprising thought from one of the hedge fund managers that you guys interviewed was the idea that google and amazon could become asset managers. peggy: yes, this is something we looked at in the series as well. the ceo of japan's pension funds that he could see google or amazon coming into the asset management world, and one of the things really driving the speculation around this is the fact that it is already taking place in china with alibaba. julia: i was going to say, alibaba is the classic example. peggy: what a lot of market managers are thinking is how do we position ourselves for one of the big tech firms to come in because they have access to you and me

that's consistent with the pimco forecast for the economy.the economy picking up a bit next year. where we would differ from the fed and the market is the market is pricing in only two rate hikes next year and we think we will probably get three and if you really pushed us, the bias could be more than that. remember, these tax cuts are coming at a time when the economy is already at full employment. the unemployment rate is at 4%. there are already wage pressures out there particularly for skilled workers. this will further exacerbate that situation. the reality is that wages are probably going to be headed higher, as will inflation. this tax stimulus could ironically be upset by faster rate increases from the fed. do you think -- how much of a risk is there of a curve inversion? mark: i don't think that the curve is going to invert. i think that the very flat curve right now reflects slow risk curve in the marketplace. as inflationary expectations pickup, which they should, we should see that curve steepen. the other thing that's very import

the white house has interviewed the pimco managing director and lawrence lindsey for the position ofto the wall street journal, citing unidentified people, mohamed el-erian is also being considered and they said a first-person for claritin declined to comment. >> he is a great leader and exceptional lead -- listener, he is an expert. if joseph, he would be what -- if chosen, he will be well suited for the job. i can only say great things about rich. just got a line crossing the bloomberg from the russian news agency interfax who , thets that sergey lavrov russian foreign minister saying that russia will respond to new u.s. sanctions. we will bring in the implications as we get more information, this is after the u.s. state department said that sergey lavrov and rex tillerson spoke by phone. let's get back to lena komileva from g plus economics. let's talk about your thesis on the biggest risk racing markets in 2018, you say it is inherent in the risk cycle and a gradual divergence between the markets pain threshold and the fed pain anesthetic dosage. explain. lena: markets are in the

and 2020.e into 2019 we have clients and investors that about things like the pimco total return fundhen they look at the 10 year treasury? they will lose money. when people lose money, they sell. jonathan: what do they sell? brian: there bought products. jonathan: or do they sell their stocks? brian: why would they sell stocks -- jonathan: why would you cash out a losing position when you could cash in a winning position? brian: that is a trap. if you look at where people are positioned, they are not in stock. there may be some in spite his or etf's, but the majority of assets come in fixed income. we have seen the movie before. it is not different this time. they will sell the assets that are underperforming, and the assets underperforming the next three to five years will be bonds. jonathan: thank you for joining us. coming up, netflix getting a boost in the premarket. we will hear from the analyst behind the call. this is bloomberg. ♪ ♪ from new york city, 19 minutes away from the opening bell. risk on very much on the table. futures firmer by about 14 points on the s&p 500. time

the "wall street journal" says pimco money manager richard clarett is under consideration mohammed elariyancandidates for that number two slot at the fed. current vice chairman jay powell is set to succeed janet yellen as fed chair and is expected to be confirmed he early next year. >>> china wants to see the ramp-up of electric vehicle and hybrid sales to continue the government has extended a tax rebate on those vehicles until the end of 2020. that had been set to expire at the end of this year >>> harbing capital is suing apollo global over the wireless venture known as light squared remember that? harbinger claims it was defrauded by apollo and that the firm knew or should have known about flaws in the technology. apollo says the lawsuit is without merit. andrew >>> elan musk teasing some details on twitter about a pickup truck that he says would challenge automakers and one of the company's most lucrative segments the tesla ceo tweeting i promise that we will make a pickup truck right after model y. have had the core design, engineering elements in my mind for almost five years, and am