there could be a bear market for bonds as ray dalio said. steven mnuchin saying a weak dollar benefits the u.s. of 4% -- upthe vix 4%. vonnie: trade rhetoric heating up. shery: coming up, the bears are here, ray dalio says the bond market should -- could face its biggest crisis in 40 years. ♪ ♪ shery: this is bloomberg markets. i am shery ahn. vonnie: i am vonnie quinn. ray dalio ringing the alarm on a flashpoint on markets, he says they can come investors are in store for the biggest crisis in decades. sensitive,re more like a 1% rise in bond yields will produce the largest they are market in bonds we have seen since the 1980-1981 time. >> has the bear market started? >> we are in it. vonnie: let's bring in lacy hunt . you have been waiting for what may be this moment for a long time. why should the bear market started to happen now? >> i do not think it is starting. since 1990, we have had many predictions of a bear market in bonds but it has not happened. -- what we have been saying is that while long-term interest rates can rise over the

." ♪ lisa: coming up, billionaire hedge fund ray dalio.ing yields could spark the biggest -- in years. investors are earning the least extra yields on u.s. corporate bonds over benchmarks since 2007. are there any gains left? and ahead of janet yellen's last fed meeting, we discussed her legacy and the incoming fed chair jay powell. we start with the big issue, dalio's warning resonating from davos to new york. take a listen. ray: a 1% rise in bond yields will produce the largest bear market in bonds that we've seen since the 1980-1981 period. >> has that bear market started? are we in it? ray: i think we're in it. >> there will be a time the bank of japan and ecb begin tightening. that will be the time when bond yields increase. i don't see that now, unless i'm wrong on inflation. i don't believe the federal reserve will get the 10 year to 3.60%. >> i don't think the bear market is starting. since 1990 we had many, many predictions of a bear market in bonds, but it has not happened. lisa: joining me in new york is subadra rajappa, and rac

." ♪ lisa: coming up, rate dele alli -- ray dalio.estors are earning the least extra yields on u.s. corporate bonds since 2007. are there any gains left? janet yellen's last meeting. we talk about her legacy. we start with the big issue, dalio's warning resonating from davos to new york. >> a 1% rise in bond yields will produce the largest bear market we have seen since the 1980-1981 period. >> are we in it? >> there will be a time of the bank of japan and ecb begin tightening. that will be the time when bond yields increase. i don't see that now, unless i'm wrong on inflation. i don't believe the federal reserve will tighten before suggested. >> i don't think the bear market is starting. since 1990 we had many, many predictions but it has not happened. lisa: joining me in new york is subadra rajappa, and rachel , and coming to us from london is luke hickmore. i want to start with you, subadra. forthe selloff just begun, is this the extent of it and will people pile back in? subadra: that's a good question. i think there is still more

." ♪ lisa: coming up, rate dele alli -- ray dalio.rning the least extra yields on u.s. corporate bonds since 2007. are there any gains left? janet yellen's last meeting. we talk about her legacy.

." ♪ lisa: coming up, billionaire hedge fund ray dalio. could spark the biggest crisis of fixed income investors in almost 40 years. plus, investors are earning the least extra yields on u.s. corporate bonds over benchmarks since 2007. are there any gains left? and ahead of janet yellen's last fed meeting, we discussed her legacy and pass forward to the incoming fedha

all i can think about is ray dalio, saying if you're in cash, you're missing it. >> or you feel stupid if you're holding cash >> look, the bottom line, joe, you used the word twice, it's momentum you can factor sentiment into that but the point being is, rob, you're coming at it from an asset allocation view, great i'm coming at it from a portfolio management point of view i'm not selling anything until i see a reason what does that mean? if it's a particular stock, i need to see three down days in a row where the sentiment picks up to the downside because volume picks up same thing if i'm going to try to derisk the portfolio on the markets overall. my point being, let me make this simple don't be early selling this rally. enjoy it >> your point is, stocks may be a little expensive that's not reason alone. that's the same as the bank of america merrill lynch note they say over 18 times, s&p 500 forward p/e is at a 15-year high, at 18 times. let me finish. they don't see valuations alone as a reason to -- >> given this growth and inflation paradigm, that is not a worry. this growth and

." ♪ lisa: coming up, billionaire hedge fund ray dalio. could spark the biggest -- in years. investors are earning the least extra yields on u.s. corporate bonds over benchmarks since 2007. are there any gains left? and ahead of janet yellen's last

billionaire investor and hedge fund manager ray dalio issuing a warning at davos world economic forumoday. >> it just takes a little change in interest rates to have a bear market the things we look at are in terms of tightening and monetary policy will it be tighter than is discounted in the curve? we have a very small amount of tighteni tightening, which is built into the curve. if it is greater and interest rates are greater, that can affect all asset prices. >> something to chat about in our "closing bell" exchange today. joining us, scott collier from adviser asset managers along with steve grasso from stuart frankel and rick santelli will weigh in on that steve, you've made it known. you would rather see the fed cut rates than leave them where they are. >> yeah. i wouldn't - >> but do you agree with ray that, you know, an aggressive fed this year could kill this bull market? >> of course i don't think anyone disagrees with that statement, but i do believe mr. powell understands who appointed him, who put him in that seat and what that person, president trump, gauges as his pa ro

francine: ray dalio, are we focused too much on inflation? the right policy mix for the world we live in today? >> four things that ave to be said. phillips curve. let's agree that any notion that the phillips curve is working, forget them. let's not be guided by the usual association of linkages between inflation and growth. francine: so, it is dead? it is not even broken? >> it is -- i believe technology and the nature of that is changing completely the relationship between inflation and growth. if you look at the breakdown of followed, itnd what has is in a cyclical pattern, but in a slower than normal pattern. if you look at good inflation, there is goods deflation. the emphasis of the cycle is exaggerated relative to what everybody leaves is the phillips curve. it is demonstrated. if everyone is so focused on growth and that gives way to inflation, yet after all of this quantitative easing and struggling, they are still struggling to get a core inflation rate in the united 2%.es, europe, and japan of so the headline should be we do not u

ray dalio called him a wonderful man. south korea wants to hold talks with north korea next week about the upcoming winter olympics. agrees,ong-un's regime it would be the first formal meeting between the two koreas since 2015. south korea is hosting the olympics next month. the north korean leader has offered to send a delegation there to approve overall talks. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. on courtney donohoe. -- i'm horny donahoe. -- i'm courtney donohoe. we will tell you what makes his new fund different. this is bloomberg. ♪ mark: i'm mark barton with the european close, 13 minutes away. vonnie: steve cohen is back. stanford harvard capital is set dollars-fouree -- $3-4 billion. we are back with ron and matt robinson. what is different about cohen's new firm? just served a two-year ban for managing outside money. he hired quite a compliance team of 50 members and they are following their traders quite closely. the new general counsel retired

." ♪ lisa: coming up, billionaire hedge fund ray dalio.ould spark the biggest -- in years. investors are earning the least extra yields on u.s. corporate bonds over benchmarks since 2007. are there any gains left? and ahead of janet yellen's last fed meeting, we discussed her legacy and the incoming fed chair jay powell.

ray dalio says the crash is a tragedy.better than expected pace, boosted by finance and insurance, gdp rose at a rate of 2.8% from the previous three months with steady growth and benign inflation. the government hinted it may raise taxes, while the central bank opened the door to tightening in october. south korean exports expanded to their highest in a decade, boosted by semiconductors, machinery, and petrochemicals. shipments surged to $574 billion, leaving a trade surplus widening to $96 billion from $89 billion in 2016 come exports leaving the bank to raise rates for the first time since 2011. that is your bloomberg business flash. positive indicators on the chinese economy and markets, the country is beginning three years of critical rattles against debt, poverty come and pollution. for more, we have our chief asian correspondent. the biggestsee as risks for the world's second-largest economy in 2018? >> there are internal and external. internal, they want to clean up the environment and tackle degradation associated

." ♪ lisa: coming up, billionaire hedge fund manager ray dalio. income investors in years. plus, investors are earning the least extra yields on u.s. corporate bonds over benchmarks since 2007. are there any gains left? and ahead of janet yellen's last fed meeting, we discussed her legacy and the incoming fed chair jay powell.

market doing a big spurt and they're going to regret it people should not time, they cannot time like ray daliohey should earn index funds and a couple of stocks >> how is your play book going to change when you know we are in the midst of it because you may have a sense that we are >> when you get companies, like my position in facebook that we talked about in average around 55 it is way too big. you cannot have it it is too big. we call that a high quality problem. >> sure. when you have companies that's just nothing but right it is important and taking some off the table but not the leave the stock market because the choice cannot get you to retirement we do not want people that are 72 to say what am i living on here that's our job race to make people billionaires and our job is to make it so people can live on retirement. >> as long as they are going to live >> that's a growing teheme with us when we come back, we'll get cramer's mad dash. and we'll count to the opening bell on this tuesday, don't go away (daniel jacob) for every hour that you're idling in your car, you're sending about hal

hedge fund legend, ray dalio runs brit water saying quote, it is stupid to own cash in this type of environmentrket will keep roaring the next 12 to 18 months until the fed getting involved or derails it a little bit. our. we have the chief portfolio manager for hennessey fund. what is the benchmark, neil? >> i think we're marching towards 30,000. i don't think it take as genius how you get there. 4% a year, you will be there in 3 1/2 years. more importantly, liz, there is two factors that are driving this bull market in my opinion. number un, there is no euphoria whatsoever in the overall market. maybe in bitcoin but not in the oh all market. no matter how good the news is, the headlines are always negative. so essentially, when i start to look at the 21% tax rate, everything being equal today, liz, that means pes will drop from 22, maybe down to 19 or 18. that gives you a lot of room to run. i know there is a lot of talk that the pes are expensive now. but they're nowhere close to the end of 90s, early 2,000s. we have a long way to run especially with earnings going up and capital expenditure

ray dalio called steinberg a wonderful man.ner,ga became a top taking in $533 million in north beating out2017, "beauty and the beast." that is your bloomberg business flash. tom: thanks so much. with eurasia group. ian bremmer to be with us shortly. francine lacqua in london, holding court with geoffrey yu of ubs. where can i make money in foreign exchange this year? i do not care about economics, i do not care about ian bremmer's deal politics and all that, i just need to make money. where will i see that move in foreign exchange? geoffrey: zero and on your ecb proxies. euro stock people talk about 10 to by year end, we took the -- we could be talking about nine. switzerland calling for a rate hike at the end of this year. if that happens, the dynamics of how the world views the swiss bank will change. tom: does mr. jordan of the snb have the courage to do what he did a few years ago and provide a stronger swiss franc? geoffrey: i think he will. if eurozone growth holds up, if inflation continues to move in the direction it i

listen to what ray dalio had to say about cryptocurrencies >> it's a bubble >> still a bubble? what bubbles are. they have their own particular dynamic. a perfectly good market can be in a bubble. dot-com bubble, we hint net companies and so on. they had a bubble and then a bust i don't trade up dmoinlt how to value it. i believe in the block chain technology i think it's great but that notion of how to trade it and value it is not my expertise. i'll kp eemy mouth shut. that was a bubble. it looked like a bubble. 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. >>> the 48th annual economic forum is in davos switzerland. andrew has a special guest hey, andrew. >> hey, carl we have mark benioff from sales force th

thank you, meg meg terrell at h.g we'll have b of a's moynihan and schwartzman and bridge water's ray daliond a lot more that starts tomorrow on "squawk alley. >>> facebook's announced plans to rank new sources by trustworthiness in an effort to battle misinformation. theres a lot of controversy around this and other measures that it and alphabet are taking, private search engine duck duck go ceo tweeted, "promoting trustworthy news sources is a reasonable idea. relying solely on crowd sourcing to determine trust, though, on making trust scores individualized are both poor implementations that will create more negative unintended consequences." he joins us now at post nine g gabriel, good morning. of course you have a duck in this fight to modify a common phrase duck duck go makes money through ads in search and sometimes when people buy something, say, i search for a 4k tv and buy one, you get a cut. is that right? >> yeah. it's maj you need to track people to make money in search we just base it on the key word you type in. you type in car, you get a car ad all this tracking that's going

if it becomes slightly more hawkish, ray galliano -- ray dalio says don't sit on cash, that's music to bankers years. you would agree with that, but this adding of value can't be unseated by the fed. it has to be -- david: it can be unseated by the fed if there is a perception they have to raise interest rates because it's behind the curve. we are a long way from that. you need six months of above expectations. you need a range of other things like eci pointing to inflationary pressures, hawkish rhetoric, etc., commodity prices rising. you can get to situation a couple quarters from now when it affects of valuations. remember 1994, terrible year for the bond market. people lost money on bones. earnings went up 20%. the stock market didn't go anywhere. multiple contracts. right now, people are looking at 20% earnings growth. it could be a nice 94 rerun, but that's a pessimistic view. we don't thing bond yields will breakout this year. anna: before bond market is something we don't talk about. thank you very much. chief client investment strategist at j.p. morgan private bank. let's tell

ray. leo dalio. >> good to see you. tell you that there is a lot of happy talk about the global economy and financial markets here in davos. goldilocks, and i have heard it from a lot of people, but you are already looking forward to the next downturn and even to the next election. how come? dalio: we are in a perfect situation. problem, is not a growth is good, but we have to pay attention to the cycle that we are in. >> where are we? stage we are in the late of the cycle. time thatriod of might go for 2 years. when the central bank thinks that they should begin to put on the brakes -- >> take the punch bowl away? >> that's right. economic capacity is built at a certain rate and then there is the growth and demand. think of it as driving behind a truck. the truck is going to 50 miles per hour. if you're driving at 70 miles per hour, that is fine, until you get to that capacity rate. you can't have the economy driving at that same 70 miles per hour, it has got to slow down, and so the central break -- bank starts to put

david: both ray dalio and larry fink saying there is way too much cash that needs to get deployed.ash go? alix: howard marks said all the easy money has been made. at the 9:00 hour, i will be in place of jonathan ferro. i will be speaking with david lebovitz of jpmorgan. happy friday. david: happy friday. alix: this is bloomberg. ♪ for ourom new york city viewers worldwide, i am alix steel. 30 minutes until the start of trading. this is the countdown to the open. ♪ coming up, coming to america. the president tells the world's elite in davos america is open for business. for itsdollar down biggest losing streak in more than three years. and the u.s. economy growth is lower than projected in the fourth quarter, but there are signals of solid momentum. happy friday. here is where we stand in the markets. s&p futures continue to grind higher by about nine points. the best january since 1997. highero-dollar grinding as well, up three times of 1%. around the highest level since around the highest level we have seen since 2007. and oil continuing its outperformance w

toryone from warren buffett bridgewater's ray dalio, and you just heard mr.k. go risk is that things could , turn very ugly very quickly. there has been an extraordinarily volatile ride, even though the gains have been astounding. melt down ifkly there is some regulatory risks, money laundering risks, or other rears itsg issue head, so one of the hedge funds aself said invest as much you can afford to lose completely, and that seemed like sound advice. haslinda: sound ice into the -- advice indeed. 1.2%.ng seng up i the hong kong index came close historicalo a record. our gadfly columnist joins us now. record. confident of a why is that? >> it is not a tall order to break the record. the hang seng we see is inferent from back then 2007. if you look at the index composites, china mobile was the , now it isght replaced by tencent holdings. china mobile and tencent holdings are complete different companies. one is state-owned, the other has a good track record. his performance, it has reported investors. last year, it more than doubled. yvonne: the macro landsca

ray dalio called steinberg a wonderful man. that is your bloomberg business flash.s comes on the heels of the compass ceo dying in a plane crash near sydney with his cousin. it is unbelievable. david: terrible, all of these people with their families on a recreational trip, small airplanes. alix: do not charter small planes, apparently. david: it raises questions. the ceo from the british company. alix: compass point. david: what you need to do to's -- to support your ceo and make sure they stay safe. alix: the three drinks wall street -- things wall street is stevecoheout -- -- steve cohen's come back, mifid. i love the story. here are three points i want to illustrate. the client money could reach between $3 billion to $4 billion. the fees are crazy. two and three quarters and 30%. talk about two and 20, forget it. three and 30. you will also be dealing with an intelligence team. jason: this is going crazy on the terminal. his comeback has been one of the most anticipated in wall street history, probably. you think about michael milken and that sort of level of at

you heard ray dalio, who is among the most respected hedge fund managers in the world, say that maybes yet another sort of blowoffstage coming in the market maybe we're in it now. what do you think? >> well, all the people commenting were reasonable sounded reasonable, but i think he's right i agree with him that you can do better in cash he runs a diversified fund similar to something we run. i think if you do have a blow off or a period where you need to hedge your bets, so to speak, i think you can do better than cash by being in a diversified portfolio. i would agree with that. the blow off situation, i don't know if you look at the stock market right now there's a reason it's going up granted the moves have been bigger on the up and down side a little more volatility this year than last year so far you look at corporate earnings you look at the impact, the expected impact of the tax cut the way the corporations appear to be spreading around the benefits of that tax cut some going to shareholders some dividends, some to employees. some business development. you look at excess depr

is bob the co-cio with radel io and greg jensen at bridgewater -- ray dally oh and greg jensen -- ray daliond greg jensen. david: it was interesting to hear. lisa: real commodities and assets are undervalued, giving this idea that they could rally. he said stocks are going to perform better than bonds in this environment because he expects even though the fed will tighten rates more than the market is currently pricing in, it is not enough to offset the economic benefits from the positive earnings trend. david: we have to put that together with what we heard from his boss yesterday, who said it would be stupid to hold cash. larry fink said there is a lot of cash out there that might drive asset values. >> we do not talk about the pool of money that is still sitting here. our financial markets are up three times since the financial crisis, three times. the pool of money that is sitting in cash worldwide has never been greater. there is a lot of cash on the sidelines. investors have cash on the sidelines. consumers have cash. they can feel they are being left out. they feel stupid with cash a

i am watching bonds after we heard from bridgewater's ray dalio.limbing come and look at what that is doing to the 210 spread now, wider to 58 basis points, david. david: thank you so much. earlier today, saudi aramco's m&s are -- amin nasser spoke with bloomberg. amin: stronger in the second half of 2018, and my transaction team is currently waiting for the decision from the shareholders. there is work that needs to be exchange,e stock definitely in saudi arabia, which we are here for, but we are open in saudi arabia, so as a company, we are ready, hopefully we will be listed by the second half of 2018, but we are on the second venue. francine: to you think that the government is in agreement?? what kind of things are they looking at? amin: we also have an issue with this decision. is a majoro contributor to the gdp of saudi arabia. so a lot of information with that, the government committees have been looking at listing saudi aramco different, exchange decisions. each need to be evaluated. ultimately, needing to come up with a decision on pros an

zach cal zach >>> we'll have brian moynihan, blackstone steve scharts man, cisco's chuck robbins, ray dalioy, many more. again, this will be live all week long from davos, switzerland. we're going to see the crew, joe, becky, andrew coming up hopefully. they're all on their way, which is why you're stuck with us this morning. >> they're hopefully all there, not just on the way. >> that's true. >> exactly the guest lineup starts kicking off tomorrow i think the guests are on their way. >> we don't know if trump is going to be on his way the longer the shutdown continues, the less likely that's looking. >> it's interesting he's going this year because he's only due to speak on the friday so it's eksz tending the kind of importance and length of the week it usually winds up when you get to wednesday night. >> did you see what macron, the french president, is having all the ceos come to versailles, come bring us deals you want to do in france and we'll wine and dine you. >> another thing that was interesting is bank of japan meeting and ecb meeting which slightly takes the focus off >> off davo

. >> ray dalio is the founder of bridgewater, chairman, chief investment officer we're always happy toeas about where you think the market is and how the machine, we've always talked about the machine and your principles work right now. so where are you >> so i think we, let's particularly talk about the u.s., but i think it's generally true of the world, we are in this goldilocks period right now in which we have had a beautiful leveraging the inflation isn't a problem. growth is good everything is pretty good with a big jolt of stimulation coming from changes in tax laws and such that is going to at the part of the cycle where the -- at the later part of the cycle if you look at the operating rates, you look at the gdp gap and measures, we're going to have a jolt of stimulation into that and there a's a lot of carbosh h sidelines. banks have a lot of cash corporations have a lot of cash. i think we're going to be inundated with cash. i think that's going to produce a lot of stimulation and i think perhaps a market blowoff in other words, we're in a situation where if you're homing ca