Stories. Two turkey just crushed. Story, which you and lisa both mentioned, particularly since oppressor, bonds are going nassar gas bonds are going nowhere. The yield curve control is here. Outside of that, the equity markets are doing well. Materials surging off the march low not really disrupted with what has happened with big tech. That is just one segment of the equity market that has faced severe headwinds over the last couple of weeks. It is a big growth story. Tom a mystery enter friday and growth forward. Im completely distracted. You are going to have to save me. We need an update. Garrison sergio over the English Channel right now. I have got a much bigger announcement. Drumroll. I think we have got a birthday today. She kept it very quiet. It is a happy birthday for lisa abramowicz. Lisa thank you. Another pound is too strong to expect a gift from you. Jon i will do my best. Isa a pair of socks great depending on what this Consumer Sentiment survey is coming up at 10 00 shows thank you. I practice to that. Tom, you will be siding whether you have the sentiment to buy me a gift. Whethereresting to see it is shifting as he gets more air pads and air pods for his dog. We will be hearing from jim and neil. Tom do you buy this quadruple reaching stuff . Lisa lets just say quadruple switching is when the expiry of options and futures in four of the major stock categories all expire at the same time. There is a lot of volume and a lot of people are focused on this because of how elevated options trading has gotten particularly into big tech. Tom do you buy this stuff . Jon do you think we give her a break on her birthday . Lisa dont give me a break on my birthday. Birthdayings happy when we have a surveillance birthday. Seeing us a little tune. Jon can you say the . Sergio justn entered english territory. The armada is coming. Will get it together, i promise you. Equity markets going nowhere. We had south by. 1 . We have been for the last couple of weeks. We are flat in the middle of the trading range since early april. Highsis points between the and low end on the u. S. 10 year. The story over the last few weeks is the jitters around big tech, and they have not gone away. Joining us is david bailin. Your thoughts on what we have seen in the past three weeks . David at its peak, the nasdaq was up. Correction. A major i think what we are seeing now is a focus on the future. As a result of that, we see treatments for the virus coming ever nearer, we are going to see rotation of this economy focusing on materials and ultimately, small and mediumsized industrial. The closer we are to a treatment, the more we are going to see a rotation into cyclical stocks. Those indicate the next phase of this recovery. I think that is why you are seeing tech jitters. They are doing well and have brought in the next three years of revenue this year as a result of the virus and the huge benefits Technology Companies have brought. Tom the key question here is if , is it a rotation on an absolute basis, or a relative basis where tech participates even with rotation . David i think that is the question. The answer from our standpoint is that it actually doesnt. Lets assume the s p was up 7 next year, you might have tech to give back a small amount because they are not going to use a lot of share. Youre going to see the other sectors rotate undue far better than the average. What we are advertising our clients to do is cap the amount telecom in ournd portfolios and begin to deliberately rotate into these lesser valued areas now anticipating what we just talked about. Tom which is the area most attractive . David when you have materials rising but industrials are not, it indicates that companies are going to have basic increases in value and profitability are the ones to focus on. They are 15 to 20 down from their peak. We can identify them. Enormous amount. Lisa you seem to be chiming chiming into this going consensus that we are entering into a new bull market. Im struggling to see how this record buildup of debt is with a new bull market. David to answer your question, the market can afford this amount of debt because of the Interest Rates you already talked about this morning. The ability to carry that debt is sustainable. Second of all, we have an extraordinary amount of stimulus taking place. Seven to eight times the amount spent in 2008 and 2009. If you take a look at Consumer Spending as of last month, it was 2 above what it was in december of 2019. Housing data in the United States. Take a look at Consumer Spending in asia and china. All of that indicates we will get to the velocity before we have a cure or treatment for the virus. There was a lot of reason to believe the stimulus and the fact that we can afford the debt that is outstanding and consumers are free to do with her want to do, will give us quite a robust recovery in 21 and 22. Jon i remember Governor Carney talking about escape velocity back in 2013. Can you explain what that is and why you think we will get there so much more quickly than we did after the financial crisis . David it is a great question and this is different than the tookce crisis because it 14 months to get the appropriate government responses. Here, the actual response to the took place in advance of the crisis taking place. Stimulus was brought to bear immediately as people saw we would have to have response to the virus and mitigation. This was a global phenomenon all over europe. You are seeing an incredible amount of response understanding that the economy can be severely damaged. That did not happen last time. Growthan imagine gdp somewhere between 3 and 4 in developed markets, globally and more than that in china, that would make it to a point where the economy can accelerate and do that for about 24 months. Lisa bond markets dont seem to be dying that buying that story, do they . David no, they dont. I think there is a lot of risk in the bond market right now for investors. A lot of complacency. Remember, we were at 1. 9 on the 10 year last year. There is no reason in the world why tenure bonds cannot be 1. 25 or 1. 5 next year. At that point, you are talking about the yield curve. Have a very different portfolio construction. We want our clients to rotate away from these very low interest or no interest bonds. European investors, we want them to be worried about other credit instruments that are rallying for the wrong reason. They are rallying because people are seeking yield and there are far better ways than to do that at this point in time. Jon great to catch up, as always. David happy birthday, lisa. Lisa thank you very much. Jon you are going to be spoiled this week. If i had known on monday, if i had known this monday, we would have built something for friday, which is probably the reason lisa the reason i didnt tell you . Weekly,credit, just high yield, triple c just to get to the business about the conversation before we have to forcedple c rallying has folks apart. Credit is looking firm and ok. Financial conditions are still loose. Lisa lisa hornby nailed a yesterday. Basically, the fed is saying we are going to support you to buy risk. I guess of companies go bankrupt, that seems to have slowed down. It seems like there is a symmetric risk right now. You can either pick up a coupon or get blown out of the water. People are going to risk getting the coupon for now. Jon im herding cats this morning because i know what is coming up every segment. To manageoing to have it. Tom do you want to explain why this is so exciting . They almost lost to bulgaria so bad lost my. This is joy normas money. Know the financial details yet. I understand it is going to be alone deal initially. Tom i am a loan deal. Jon can we send you back somewhere then . Tom good morning, jon. Jon good morning to you all. From new york and london, this is bloomberg surveillance. Ritika the chinese owner of tiktok is gaining confidence beijing will ok its proposal line with oracle. Isomberg has learned it likely to greenlight the deal as long as it doesnt involve the transfer of Artificial Intelligence algorithms. President trump is ridiculing the fbi chief. He told congress that russia is trying to hurt jill bidens chances and influence operations. The president tweeted, chris, you dont see any activity from china even though it is a far greater threat than russia, russia, russia. Coronavirus vaccine candidates are making their trial plans public. This comes after efforts that efforts rts the the British Government says they have rounded trade talks. The president says that she is convinced a brexit deal as possible. All of that is in stark contrast to Prime MinisterBoris Johnsons actions in the last few days. He wants to tear up several sections. In spain, a takeover will create the countrys largest bank. These are signs the longawaited financial industry consolidation in europe is starting to kick off. Global news, 24 hours a day, onair and quicktake on bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Sadly, we have seen donald trump try to convince the American People that they should question the integrity of our election systems. It starts at the highest office in terms of doing everything we can to make sure everyone who has a right to vote has access to the polls. Jon Kamala Harris there. That is the message coming from team by then going into the election. We are about 12 minutes away from the opening bell this morning. It is a quiet into the week this week. We advance a little bit more than. 1 . Eurodollar, not much of a story here. The story for treasuries is that there isnt one. The 10 year yield, it is weaker today. It has just been in a range. Not an a range is our Kevin Cirilli. There are like eight ways to go. 40 something days to the derby or maybe it is the derby as well. Scienceine story, the story is all the rage among the science train delete. I dont sense it has any determinative traction with the undecided. Is it a Campaign Issue . Kevin it is. Should there be a Major Development that would prevent a vaccination from going into the timetable that the experts as well as lawmakers have suggested, which is between the end of october and next summer. The goal post on that particular timetable has not moved. Point, in terms of there being a headline that says vaccine approved and then a major bump in the polls for one of the candidates, that is not likely going to happen. Tom waiting this morning with what you have been talking about. Getsoctober, the president up 25, up 28, up 30 , oneoff gdp statistics. I take the point. This is a huge favor for the president , isnt it . Kevin it is a massive favor. Around that time, there is a scheduled meeting for the Health Experts in terms of vaccination approval coupled with Economic Indicators that are going to be coming right around the time of the last scheduled debate. In factor those two points with a third point, which is that there now appears to be a narrow, but still chance of fiscal stimulus coming before the election because Speaker Pelosi publicly saying yesterday she wants to keep lawmakers there through the end of the week and may be october to get to some type of fiscal stimulus deal. It would appear there does seem to be some new wiggle room for the republicans on the economy, which is still their strongest issue, according to the polls. Jon does anyone a member the books that came out six months ago . Does any of this stick or change on the back of these things. Kevin i think that is a great point because when you look at the books and whatnot and all of these developments, you are right in the sense that it doesnt appear the water cooler talk for the day is singing. 26 i go back to 20 when there was such an obsession over paid speeches and comey. It was health care that was something the republicans continued to hammer home on. Im curious to see if they can sharpen their turn on the economy and if that is going to becausesed subjects the Biden Campaign has not been sharpening the effect of their Economic Vision especially when it relates to infrastructure and more masks and stimulus. Regardless of the outcome, should there be a Democratic Victory in november . In the First Quarter of next year, there will likely be another massive round of stimulus. You say the water cooler talk isnt changing, but you keep talking about the stimulus. Lets talk about the likelihood of this fiscal support bill getting through now that President Trump seems to be throwing his support behind something more in the sphere of 1. 5 trillion. What chance does he have to get republicans on board . At jobless you look claims that came out yesterday and you look at the economists that are saying maybe the pace of this recovery, as they have been predicting is starting to slow down. They need that upwards momentum heading into the third year of this Third Quarter of year. For the sunrise, sunset clause in the march proposal where, based upon the data, physical levels would increase or decrease based upon the virus data is something that could ultimately make its way into the final version of this bill. There is a lot of pressure in terms of how middleclass, lower middle class folks are starting to peel this. More than one million Americans Still not able to mortgages. That is impacting one million families in this country as a result of the lack of communication coming from both parties in washington. Tom lets get on with nancy pelosi a pairing with bloomberg this hour today. What in gods name is nancy pelosi doing . Kevin based upon my reporting, what i can tell you is that her signal yesterday that she needs to keep lawmakers here to get this type of deal is being determined by rankandfile is starting to come around to the notion that as muchtimulus a not be a political hot potato as once thought, but is really important for millions of americans who need this to keep their homes and also need to keep their jobs. Jon good to hear from you. Tom keene, the pressure to do more certainly not going away anytime soon. I can tell your story on this side of the atlantic. It is about this pandemic and testing a local lockdown taking place in the northeast of the country. The house of secretary earlier and he could not rule out another lockdown. I think there is a little bit more wary in this country over the last week, some worries that were not there a week or two ago. Tom what is the distinction of the weekend . Gettingll businesses crushed and areas of the United Kingdom going into some form of a lockdown. I think that is critical to realize. Not a nation wide lockdown or a shouter shelterinplace, but certainly, restrictions being put in certain cities across this country. The hospitalizations are increasing as well. It is a concern going into the winter. Tom again, i am trying to get to october. We have schools in new york y, the Public Schools lisa, am i right to say not opening until a second time. Lisa yes, not until october with many questioning whether they will open at all. A lot of people wondering if the u. S. Is going to be safe as things try to restart. Rebecca just emailed it and said tom, do something. Lisa a better person. Tom i dont know, lisas birthday. Jon that is a transition. Tom thank you. Jon thank you for that. This is bloomberg. Look here, its your very own allinone Entertainment Experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Jonathan this show is off the rails this morning. I will try to get it back on the rails. Here is the price action. Equities going nowhere. We advance five points on the s p 500. In the fx market, the euro stable. Range bound 10 year over the last several months. 67 is your yield. The route in session for the nasdaq does not follow through into friday. That is the story for the equity market. Tom it will be interesting in the equity market but far more fascinating is the bond market. We have the right guy for a friday briefing at your weekend reading to try to get recalibrated next week. James karen is it james caron is at Morgan Stanley and does strategy. Thrilled to have you here. What are you writing for monday. What is the single idea for monday we need to know . Jim i think after the fomc meeting, the Market Reaction has been disappointing, but it is also misunderstood. This has been a watershed moment for the fed. We talked about this with jackson and what have you, but the fed is changing their policy reaction function to essentially inviting much more inflation. I talk about this concept of the phillips curve, which is an inverse relationship between the Unemployment Rate and inflation. The lower the Unemployment Rate goes, in theory, wages and inflation are supposed to go higher. The problem is this has been tattooed on the brain of every member of the fed and now they are starting to walk away from this principle. That is the concept of this flexible average inflation targeting. What we saw last week, which was extremely significant, is that in the summary of economic projections, what the fed called for is a policy rate unchanged through 2023, it was. 1 . To fall toyment rate near full employment levels of 4 . In the past we wouldve said the fed talking about preemptively hiking inflation. There is no talk of that. The fed saying we will not hike until we overshoot, which might not be until 2024 2025. What i want to know right now is what is the balance between the nominal yield, the inflation break even, and the residuals of real yield . Which of those should we focus on as a determinant of how this market will break . Jim unequivocably the real yield. That is what the fed is pushing on. The nominal yield is going nowhere. It has gone nowhere. It is between 60 and 70 basis points. Pretty stable. That is by design. You have qe keeping yields lower. The fed is also inviting Higher Expectations into the future, that is pushing down the real yield. The 10 year real yield is 1 . It weakens the dollar and is the defective policy rate to ease financial conditions because you can choose to invest in 10 year treasuries with a negative real yield, or you can buy highyield bonds or investmentgrade or equity or other assets. That is the way the fed is trying to support the markets at the zero lower bound without cutting to negative because we do not think they want to do that. Jonathan it is a bit cliche, but you know the phrase if there is a bubble forming, buy it . Do you think one is . Jim i will not say there is a bubble forming, i will say there is a potential. The way we have to think about this is theirs a lot of liquidity being injected into the market for a worstcase scenario in the future. If there is another lockdown, a second wave, a big economic decline, then we have ample liquidity to get through that. What if that does not happen . What if we get a vaccine . What if we have better Economic Conditions . All of the money will stay in the system. The fed is not hiking. Then we start to get m a activity and private equity activity and all kinds of different things. Share buybacks. At that point i would say maybe there is a bubble forming. At this point, we are Still Standing in front of what could be a steamroller. We dont know. Tom john, i know you are going to name your show yields going nowhere. The not give a dam about yields, i just wanted to promote jonathan ferros real yield in london. Jonathan i appreciate that. Jim caron was a guest last week. Tom your front running us again. Jonathan jim caron, lets continue this conversation. If they will start behaving that way, do i want to earn the equities or the debt . Where on theds capital structure you own the debt. I would say you want to own the least duration sensitive debt. I would go into the highyield or start to go down in quality if you are optimistic about the future, or even an Asset Backed Securities you could start to work at some of the higheryielding sectors. The equity should i am a bond but not an equity guy from a financial positions perspective what it tells me is that at a low Interest Rate for an extended period of time, at 10 year treasury yields around these levels, the equity risk premium should continue to come down. What that would mean is that would be supportive of risky markets. You have a slightly more optimistic outlook, you want to be in less Interest Rate sensitive sectors, but what i say is have a diversified portfolio, if the time of stress comes, it will be the liquid assets that are more duration sensitive that 10 to be a lot more liquid. If you need to raise cash you can do that. What we do at Morgan StanleyInvestment Management for our clients when we are investing as we try to keep that risk, i say we lean to the optimistic. However, we want to make sure we have ample opportunity to raise cash if we need to or become defensive quickly if we have to. Lisa to put a bow on this conversation, you started by saying this is a watershed moment for the Federal Reserve where they change their guidance on inflation. Markets are not buying it. Yet investment strategists are saying they should and yields will eventually rise because inflation will eventually pick up. What will drive this new regime, aside from the fed, which has yet to prove they can have any effect on inflation . Jim i think that is a great question and this is something we are hearing quite a bit. The big disconnect in the market is that what the equity market heard was the fed was not extending their purchases for they did not do anything more in q. Week and they are not doing anything actively to promote lower yields. This whole thing about the phillips curve and the Unemployment Rate, i think that gets lost on the equity market. This is much more of a bond technical, a lot of bond guys have been looking at this for the past several decades. I think with the markets were looking for was a statement where powell says we will increase our purchases, do more qe, do something active to keep the yields lower. Then what he said as we will invite inflation into the future , and yields started to rise after the fomc meeting. That is when equity started to turn down. That can probably be get more selling and some adjustment. I think this is temporary. The longerterm technicals for this is much more supportive and favorable. As far as risky assets go, whether it is highyield, assetbacked securities and some of the higheryielding sectors, i would be a buyer. Jonathan great to catch up as always. Jim caron of Morgan Stanley. Want to turn to the equity market quickly. Some headlines. The Commerce Department tiktokts wechat and transactions. Wilbur ross is currently on foxbusiness, and he only said a couple of minutes ago that talks between tiktok are ongoing. He will be putting out these new rules on tiktok and we check, and heres the headline, that the Commerce Department prohibits wechat and tiktok transaction. With is some price action, oracle down about 2 in the premarket. If you can find facebook in early trading, facebook picking up a bit. Tom i find it extraordinary. I know i am a criminal, but iphone andchat on my it is how my family talks to each other. Lisa you not alone. Million daily active users in the United States. This will affect a lot of people. There has to be a lot more clarity. We have been getting such bits and pieces. It is a head scratcher if you go back to what dan ives said. This edifies that. Jonathan you mentioned the most important words, that is clarity, and right now we do not have much clarity. The only headline, hopefully i can receive the statement from a member of our team, but the headline i have right now is the Commerce Department prohibits wechat and tiktok transactions. Wilbur ross sang the tiktok shut down would be november 12 if no deal. Wechat andying some tiktok transactions prohibited september 20. It is hard to understand what the hard deadline actually is to achieve a deal between oracle and tiktok. It keeps coming through these transactions will be prohibited. How will i get messages that say, dad, can you send money . Jonathan are they the messages you receive . Just listen to Michael Mckee, who says download the app now. Tom i agree with john, we have to monitor this and get clarity. A big announcement. Jonathan it could be a big announcement. Lets get a couple of the minutes to get a member of the team to go through. Hopefully Michael Mckee will join us. Love to catch up with Kevin Cirilli as well. We need to get this out. Setser,ext hour, brad senior fellow for International Economics at cfr. From new york and london, futures positive four, but little more than. 1 on the s p 500. Alongside tom keene and the birthday girl lisa abramowicz, im jonathan ferro. As nice as i will get this friday. [laughter] this is bloomberg. Ritika with the first word news, i am ritika gupta. Congressional democrats are weighing the next steps after President Trump backs a bigger stimulus plan. Some are putting pressure on nancy pelosi to bring a new relief will up for a vote. Pelosi says some lawmakers do not want to advance any legislation until they have an agreement with the trump administration. President trump announced 13 billion in new farm eight at a rally in wisconsin. The move has been widely anticipated. Wisconsin is critical to the president s chances and he is trailing in the polls joe biden in the polls. Joe biden is drawing a sharp contrast between his middleclass upbringing and President Trumps wealth. The stateo voters in of pennsylvania where he was born. He returned to scranton for a cnn town hall meeting. He said the campaign as a campaign between scranton and park avenue. The Federal Reserve may extend the restraints on Dividend Payments and share buybacks. It is now conducting stress test, regulators and poster cap in june when the fed said there were no risks to banks if Capital Distribution continued at the same pace. Secretary. , Health Matt Hancock is refusing to call a Second National lockdown. Up ofd the bbc the speed coronavirus cases and hospital admissions represents a big moment for the country. According to the financial times, Boris Johnsons science advisor is proposed to two week locked down october. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika gupta. This is bloomberg. Jonathan from new york and london, this is bloomberg surveillance. Alongside tom keene and lisa abramowicz, im jonathan ferro. The department of commerce announcing prohibitions on transactions related to mobile applications we chat and tiktok to safeguard the National Security of the United States. These are the dates you have to keep in mind. Some we chat tiktok transactions prohibited september 20, some transactions prohibited as of november 12. We need a bit of clarity from the team at bloomberg news. Tom the story is very broad. Security. Ational faries ferries bill can tie all of this together. He has taken that to the National Security beat at bloomberg. I get the idea the dates are in heated negotiations into the weekend as well. Lets take a representative u. S. Family, how about the rubio family in florida with four kids. The only way theyre communicating is half of their kids will speak to them, is wechat. Are you telik me marco rubio will not be able to talk to his family because donald trump will take wechat away . Bill the first thing i thought when i saw the news is i need to go home and see if the phone still works because we will have a problem if it does not. Is aews this morning hardline tactic by the administration to put the pressure on china to agree to some sort of a deal ahead of sundays deadline. The reporting we had late last night was many of the people in the administration who still had been opposed to the deal on National Security grounds were starting to fold a little bit and as they got briefed believe the oracle agreement would work and would cut lip 40 and not and gordian knot and find a way to protect National Securities even if oracle is not the owner. Jonathan from what we understand, it seems that as of monday what United States would be doing would be banning tiktok in the u. S. From updating, and as of november 12, that is when we Start Talking about a full shutdown of the app in the United States. When you are having this conversation continually over the last weeks focused exclusively on the u. S. Side, the administration on whether they would or would not accept the deal oracle is proposing, what is china saying . China has its own interest in protecting its own company and its own intellectual property. They have been trying to find a would get to u. S. Concerns and gets them to continue to monetize the program and the app that has been hugely successful. Usually the relationship has gone the other way. It has been the u. S. Developed apps that to cover the rest of the world. This has been one of the cases the u. S. Has not seen a lot of that something endogenous to china has become wildly popular. If you have kids, you know how much time they spend on these things. Tom no. Jonathan i guess what we are finding out is bytedance and china do not want to sell this thing, and what United States has found out is the only kind of deal they can get done is the one being proposed. Could the two sides come together based on that . Bill the one thing we have not talked about is the election and whether the u. S. Government wants to be the position of cutting 100 billiards 100 billion users in the United States off of the service that is getting a heavy workout. This is the agreement both sides are inching towards. China will not sell this outright. This will not become tiktok u. S. By the chinese authorities that are helping negotiate this. There will have to be a middle ground and it will probably not end up with majority u. S. Ownership. Said thisthan rightly is something we need clarity on. Clarity has been lacking. We get any clarity with respect to the statement in terms of who has the upper hand in trumps cabinet, the china hawks or the moderates . Steven mnuchin on the one side and mark meadows on the others . Bill i think ultimately this has been driven by the hawks. You see the people who we sometimes put in that category, someone like mike pompeo, who was starting to dial back some of his opposition, you see the gradation in hawkish this in the administration. From the beginning, this raised concerns about whether the administration was picking and choosing things popular from china that it wanted to take a political stance on, or whether this was going to be a policy of we want clean networks, we want to make sure tom can i go back to First Principles . Isthere any evidence wechat taking our data or using it in a devious National Security way . Bill no. When you talk to the people who dig into the code, they will say more ofucks up a lot your data and does put it to certain uses. U. S. Concern as there is enough potential china does this that it is a problem. When you look at the algorithms and the way the software works, google and facebook are vacuuming much more from you. Jonathan bill, great to catch up. Appreciate you jumping on the phone. Clarity was needed. Bill faries on this situation. There is a question about credibility. Youre either willing to shut something down or you are not. If you are telling someone they have to sell something, then they should have to sell something. That story has changed. It has shifted. It is why we do not see it get sold to microsoft and why all of a sudden a partnership evolved with oracle. That is the story for me and that is the tension between china and the United States. To be credible with china you have to follow through and we have not seen the followthrough on this story in the last couple of weeks. The surveillance bluster meter is off the chart. How does china go if they take a hard line on this . The first thing i thought of was what does china do in reaction with something tangible like Apple Computer . As bill faries said, where is the evidence of a National Security violation . Jonathan i would not know. The Commerce Department says there is worry, the secretary of state says there ares worries there are worries. You can see why there would be. You can see why there would be if there are huge amounts of people in the United States using an app and the Chinese Communist party can get a hold of that data, you can see whether could be. Tom i get the could be, absolutely. Lisa it is bipartisan. People think there could be a potential threat. The question is what is this deal doing to stave off those concerns . Tom can i look at global wall street into the weekend . The structured bond world has been turned upside down by derivative mistakes mostly centered out of paris. Did you see the headline on hsbc . Jonathan what was the headline . Tom they will shut it down. They will shut down structured products in paris. Jonathan from new york and london, this is bloomberg surveillance. Staying on top of the news flow, this is bloomberg. The state of quality has been deteriorating for years. This vshaped reaction or recovery is not going to happen. Inflation could come back faster and harder than anyone is expecting. As much as i appreciate everything the fed is doing im not sure they have the tools. Austerity does not work. You cannot shrink your way to growth. This is Bloomberg Tom keenece with jonathan ferro, and lisa abramowicz