Transcripts For BLOOMBERG Bloomberg Surveillance 20141114

Into ukraine. The u. S. And European Union are discussing whether to impose more sanctions. President obama is set to leave for brisbane, but he is still in myanmar. He met with the Opposition Leader today. The president underscored the u. S. Support. We will continue to be a and i know you will be a Strong Partner for the United States. The u. S. Is trying to make a full and painful transition from the military dictatorship to civilian rule. According to the new york times, the president will refocus the activity of the nations deportation agents. On the president threatening to take unilateral action on immigration, even though in the past he has made clear he did not believe he had a constitutional responsibility or authority to do that. I will say this. We are going to fight the president tooth thumbnail if he continues down this path. If he continues down this path. This is the wrong way to govern. Spendingould pass a bill that would bar the government from carrying out the president s order. The worst recession in greece is perhaps over. The sixyear recession ended marked by a bailout unless tourists. Things may be better, but there are still too many problems to count. Unemployment checks in at around 26 . Economies in germany and france have returned to growth. Youre upon gdp rose a colossal rose a europes gdp colossal 0. 2 . An american doctor infected with ebola may be flown to nebraska. He will arrive from sierra leone. If he is stable enough, he will be flown to omaha tomorrow. A missionary worker and journalist of already been treated at the hospital in omaha. Seven patients treated in the United States have survived, one has died. Lets look at equities, bonds, currencies, commodities. Churns. Crude, crude, crude. 74. 34 on american oil. The next screen. Weaker yen. Nt a the ruble blows right through 47. That is a weaker ruble by 1. 25 this morning. Brent crude is distant. That will be front and center in brisbane. But not as much as this. Lets look at 20 years of Vladimir Putins russia. Here is the stability of a good oil economy, a hint of capitalism, and another leg up. It was for a time Boris Yeltsins russia. Yes. This is where putin says, i dont care. And you see this over the baltic last night. You mentioned boats in australia . He is doing everything. Nobody is more scared than the baltics. They have a recent and vivid history of russian involvement. There is a huge russian minority in estonia. They are aware of their own memory of what russia is capable of. We are in by having mary advantaged by having mary childs with us. It is a little muted right now. The u. S. Looks pretty stable right now. Lets look at the geopolitics of the moment. Putin. El may meet with David Cameron calls for a new cold war. Inneed to go to hans nichols berlin. What is the hope of the western world . Not much hope. There might be muted opportunities for Angela Merkel and Francois Hollande to meet with putin. Merkel was not by these shipsd entering international waters. She wants to preserve her position as a gobetween between the west and putin. Ad is she the vl whisperer . I think some of that has been pretty overplayed. She has been firm when she has needed to be. Only one with the authority. She is the only one with the domestic stature. You look a germanys 30 of the euro zone economy. She has told Business Leaders that sanctions are important. She is the only one domestically strong enough. Joining us on set, Richard Dobbs with a terrific view from 35,000 feet, research on what is going on in the global economy. What has mckenzie learned about the value of sanctions . Sometimes they work, but youve got to be careful. It is a pretty fine art. There were sanctions one, sanctions two. What happens when you go to sanctions three . Sufferserman exporter as much as the russians. There is a real challenge of how to deal with that. What is the dialogue in berlin . On your weekend, when you go into the bistro in berlin, what do they say about the value of sanctions . Muted, right . First of all, i would say the debate in germany is more concerned about energy coming into germany and that is where you get most of the hot topics around. Wideere going to be an Eu Energy Policy . If you expand the individuals on the sanctions, ive got to be honest, there is not a great deal of conversation. On sanctions, we are just talking about tweaking them right now. We are not talking about economic, industrywide sanctions. One of the other priorities in australia is trade. We expect to get very little out of the meeting on that. [laughter] every 320 meeting, there is a big agenda. Meeting, there is a big agenda. They are almost always taken as are thents effects sailing warships off is bye conversation an events. Sailing warships off the coast of australia is the conversation. Just watch the body language at the class photos. Zero meeting . I think it is a g 2. ,ormally when we do that story xiis just the obama relationship that matters. But in this one, it is the putinmerkel show. Hans nichols, thank you so much. Coming to us from berlin to get our surveillance started this morning. Does mckenzie believe in the new mediocrity . We are going to be in a low growth world. We had a fantastic 50 years. We had demographics driving growth and productivity driving growth. What has changed . We are getting older. Excuse me. This is a surveillance breaksclusive. [laughter] every week, tom makes up more children. I have four. Where italy is have disasters. Germany is going to have a shrieking labor force. America is good, u. K. Is good. Other parts of the world, it is going to be a problem. Every time we talk about Monetary Policy in japan, we should be talking about immigration. Japan has a shrinking labor force. There is no way they can pay off their debt. To what extent does population offset it . Can we get a step up and productivity . Productivity . That is the question. Can we get it through technology . The real issue is that we have the technology. The politicians worrying about . They are worrying about immigration and all these other things. They are worrying about putin. That gets us started. Greely needs more children. [laughter] im trying as hard as i can. It is not about me or my children, it is about the g 20. Is the g 20 relevant . Tweet us. Will the drop in Oil Prices Extend to 2015 . This is bloomberg surveillance. Streaming on your tablet, your phone, and bloomberg. Com. Vladimir putin is watching as we speak. Good morning, everyone. Bloomberg surveillance. Grindthe most interesting guy on wall street. Jimmy lee is the vice chairman for jamie dimon. Conversation, in the loop this morning. Look for that. Good morning, everyone. It is bloomberg surveillance. With me, brendan greeley. Mary childs, and for scarlet fu. Policymakers are gathered for bloombergs year ahead conference. They will be talking about oil. Opec cannot seem to find a brake handle. Matt phillips knows more about oil than anyone i have ever met. In the year ahead, are we going to see 90 crude . Not even close. We might see 85 on the futures market. , the spread is back four dollars or five dollars. We are basically stuck where we are right now. In the stance between saudi arabia, we have actually found the level . This game of chicken is going on of how low can you go . The saudis are perfectly willing to play that game, it seems. There is an opec meeting november 27. Lets go right there, right now. This be the most important opec meeting since 1986 . I think you could make that case. The rate of change we are seeing right now, what do you in your reporting believe that will be . Does opec begin shutting things down . It really depends on the saudis. They are the swing. You might see marginal declines, but there will not be a huge decline. We had 9 Million Barrels per day. At what point do low prices start eating into that . What does this mean for Economic Growth for consumers . Is this the Christmas Present for consumers . But on the flipside, you have these Junk Companies leveraging to the hilt. Always back to the bond market. [laughter] you have the chance to say the phrase levered to the hilt, why dont you put it out on the table . Oh yeah. We have never had to figure out what the price point is. Who can produce at 50, 60, 70 . We will probably see a lot of bankruptcies. These assets will not just stop producing. Startwhat point do we seeing cartel like behavior in the American West . We cannot have cartels like they do. Do tell. That is the entire premise of opec and yet, west Texas Producers have been at this moment before when they saw themselves speeding 100 Miles Per Hour toward the wall in 1985 and 1986 and nobody was going to say, i will be the first to cut back and lose additional profits down the road to save us all from crashing into the wall. I dont think they are going to act to benefit the whole. The same thing happened in the Natural Gas Market three years ago. They produced themselves into oblivion. That is exactly right. It is interesting we are seeing the same thing happen in oil. , when opec meets, lets say they all get together and agree, can they do anything . Sure, they can. They can really pull back the lever. But Everyone Wants to produce as much as they can. Ok. Fabulous. Can you come back on monday . Saturday . Sure. We will do it. Matt phillips is going to move to new york. Where are you . D. C. He is going to buy more underwear and move your. D. C. Is so boring, move here. Ok. [laughter] we will speak on the fake blue sky in beijing. Economy on the pollution. This is bloomberg surveillance. Stay with us. Good morning, everyone. Bloomberg surveillance. 74. 19. As, lets get to my morning mustread. Elizabeth economy on china. Keeping china in the tent is no small achievement. She wrote a raven note on the american rave note on the american strategy. The victory is this idea of china back in the tent. Does mckenzie say about the future of china . Growth will come down. They are adding a canada every two years. That is amazing. I like that. Is the growth come delicate feather or a bowling ball does the growth come down like a feather for a full involved . Or a bowling ball . They have to be there. This is where the growth is going to be. Im curious on how your the otherhina back up emerging markets in the area . China will continue to grow faster than india, partially because of the quality of their education. Chinas education is very good. You go to a school in india, the absentee rate runs at 30 . That is the teachers. 30 of the teachers are not present. Chinese efficiency. Right . Or competence. It is discipline. Look at chineseamericans. Their discipline extends down to the local governments. There are going to be problems. We work through them. Is not to say that china going to be able to work through them where every country has, we are kidding ourselves. Richard dobbs, the generous man to china. Where it fits in with all of the other countries of the world. The twitter question of the day. Is the g 20 relevant . Did we spell relevant right . Yes. Good morning, everyone. Bloomberg surveillance. Brendan greeley. Mary childs in for scarlet fu. Lets get to top headlines. Deals. Iburton is in shares of baker hughes rose 15 . Hughesrton made by baker buy baker hughes and the deal may be sealed by next week. Airbus received net orders for the first nine months of the year and fulfilled its fullyear target. The commissioner of the National Basketball Association Says it is time to allow betting on pro sports. He calls for a federal framework that would leave the decision to the states. It is illegal in most of the u. S. Outside of nevada. It is really interesting. Adam silver, once again shaking things up. Finally, you can drop a dime on your puck and make some money. Im hoping that my nhl team will finally win a game. Im kidding. That get store next guess out of columbus, ohio. Economy that gets to our next guest out of columbus, ohio. The american economy. America is out front of the rest of the global economy. We need some optimism. Get do the gloomsters wrong . The economy wants to grow. It does not want to be depressed. The number one thing you get the rest of america can compete on wages to allow for return on capital and return on equity. Nobody in new york city believes this. You go to a deli and a pastrami is 18. Not paying 18 for a pastrami sandwich in columbus. Across most of the country, you are not paying close to that. That is part of the renaissance of Economic Growth. Productivity growth is much longer than the numbers indicate. Yes, growth has been read, week, but it has been a cyclical thing. It is not bad. We have Richard Dobbs with us. Ive got a note from mckenzie in november 2013, the biggest beneficiaries have been governments and nonfinancial companies. Households, insurers, and International Investors have fared less well. How are insurers faring in the slow interestrate environment . For Insurance Companies and other firms, we are in business to pay off Life Insurance and annuities 100 years in the future. It is difficult when Interest Rates are low and it means Insurance Companies with long liabilities have to diversify into a number of areas. You cannot concentrate just in treasuries anymore. How much risk to you have to take on in this environment . Run, if youlong diversify well, you are not taking on more risk at all. In the long run, they are going to give you a higher return. In the long run, you will take a diversifying more. What is a bogey . I think its from golf, right . [laughter] how does it make its way in here . You are both talking about investment. , do youto strategists believe it . Where is the investment . Where is the cap ex . We are seeing growth in Capital Spending in real terms between 5 and 10 . That is not too bad. It is enough to keep it going. The other thing we have not seen in this expansion is housing taking a part of it. If the gses are going to expand a little bit with the credit box. Mary childs, what do you see on the bond desk at Bloomberg News . Rates do not want to go up, right . Curious about your thoughts about millennials as the next generation of home buyers. The big thing with millennials is that they have not yet married. Their marriages later than usual. If you dont get married, you dont have to buy a house. They are no less anxious to buy homes than people the same age 1030 years ago. So it is just a generational delay. Is the pilot light lit for the American Consumer . It is better lit than anywhere else. Many of the baby boomers have not saved enough in their retirement. They will be living off their houses and if they can get cash in their houses, they will be ok. Nice work, boomers. This has been a big pitch at black rock over the past couple years. People have underfunded themselves. People dont have the cash. The normal Economic Growth to get a spec to the good feeling that you write about in your notes . Is it 3 . 3. 3 . It is more than 2. 8 . We need to see growth at or above 3 . But even that is not great compared to what we have had in the past. What do you have an columbus besides a hockey team that has lost nine games . A shameless plug for the mayor of columbus. Very wells has done as opposed to some of the rest of ohio, some cities i wont name. Of fortunedquarters 500 companies and a state university. They come together to give it pretty good growth. It is a great place to do business. It is. Lets talk about savings and growth. One of the lessons we are learning as that when you cannot expect growth, you have to save more. But we dont do that or think that way. As Interest Rates have gone from 15 down to 2 , we have seen massive asset price appreciation and a means they have got the wealth in their house. The next generation is not going to have the asset price appreciation. They are going to have to save more and consume less. As asset prices have been appreciating, people are already saving less. Nationwide is on your side. Is washington on my side . Been on the side of trying to boost the economy, but not necessarily on the side of savers. Help mary childs out here. It is not coming tomorrow, i think it is going to happen the second half of next year. Lower for longer . I think inflation is going to stay lower. Thank you so much. Greatly appreciate it with nationwide. Optimism on the economy. How original. Two optimists with us. I am feeling so good. Which countries have the best chance of catching up with United States . This is bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. Lets get to our single best chart. Courtesy ofs Richard Dobbs. The standard model says we will drive with more productivity, more capital, or more people. This chart shows the u. S. Up top. Fabulous. India. He bottom, we have you have to have Structural Reforms and urbanization. When you take someone from a village to a factory, you double gdp by a factor of two. Where is the best nation in the world as far as productivity . When you look at real scale, the u. S. Is one of the highest. As far as Machine Learning ,nd Artificial Intelligence expanding the talent pool, these are some of the things that have been destructive for jobs in america. Absolutely. Is the prescription the same all over the world . Think about the impact the had on the monks are used to write bibles. Have you seen typists complain about using their jobs losing their jobs . We retrain. It is a process that takes 2530 years. Think about the typists. Many of them are redeployed already. Another chart has been making the rounds. There is a beautiful trend line. Wages stay flat as productivity increases. U. S. Ishallenge in the the unskilled salaries have been in decline since 1975. You look at a Male High School salary has been in decline since 1975. We have been in this decline. As you know, i was at Oppenheimer Fund studios with amherst p or pond global strategist robert finch. We spoke about lower oil prices. Here is bob finch. This external force bringing inflation pressures down and it you a lot more flexibility, better spending power in the economy, and potentially the purchasing power which allows you to undertake some of the Structural Reforms. And tends to feed on itself i think there are some emerging market economies that are going to suffer. At really want to look emerging markets. I think the energy thing is for real. Athink you want to look emerging Market Countries that can benefit from greater flexibility and policy from Lower Energy Costs and what that does to domestic consumption. Stunning the way oil has moved in the last week, since we filmed that. It is a plunge today in oil. We have photos today. We are going back to australia. These are protesters in brisbane. If there is a meeting of heads of state, there will be protests. The worlds race took offcar yesterday in santiago, chile. Would you like to know how fast they can drive . 111 Miles Per Hour. Just on those panels . With less energy than it takes to boil your daily cup of tea. No, i just made that up. Number one photo. President obama embraces and kisses the myanmar opposition photo. You need to go and meet with her to show who you are really standing with. This is something that Hillary Clinton did when she was still under house arrest. This is almost expect the unexpected. Absolutely. Burma or myanmar is a very interesting problem. They have three challenges. They have got to move to democracy and do economic reform and at the same time they have Something Like 15 areas of dissent that they have to deal with. They have to make all three things happen at the same time. The gdp of myanmar is the same as the gdp of fresno. I like that. We are going to rip up the script. We have one more photograph. [laughter] 58 having a rough time in 30 knots of wind. Is this you . Swan 58. S our guests say, that isg to Vladimir Putin. [laughter] this is where Vladimir Putin has is both at the moment. Has his boats at the moment. This can be one of the most brutal races in the world. How long does it take to sale from sydney to hobart . How cold is the water . It is quite warm in sydney harbour. It exist down to about five degrees. At what point in the trip do you say im never doing this again . Normally, when the first to gayle hits gail hits. You have to drive the boat with ski goggles on. Is the rest of mckenzie on the boat with you . We have some mckenzie people on the boat. Did it i had a 75yearold with me. Why is he looking at me . It is a mackenzie trust building exercise. I would not want to do it. Im going to talk you through it later. If the martini is below the rim when they bring it to me, i lose it. When the control room tells me to tease, i tease. It is bloomberg surveillance. It is not on a boat. Good morning, everyone. Bloomberg surveillance. In our next hour, must watch, must listen. Elizabeth economy on the pollution, the Climate Change, and the momentous announcement by china and the United States. Really looking forward to Elizabeth Economy on foreign relations. Good morning, it is bloomberg surveillance. Mary childs is with us today on bonds. Scarlett fu has the plague. Top headlines. Here is brendan greeley. Vote on the Keystone Pipeline again. Republicans seek to gain an edge in the runoff for the last Undecided Senate seat. Democrats say it is a risk to the environment. The World Economy is in the worst shape in two years. Of those surveyed said the economy was deteriorating. That is more than twice the number who said that in july. Alibaba plans to raise up to 8 billion in its first u. S. Bond sale. Ago, themonths Internet Retailer completed the biggest ipo in history. They will use the proceeds to refinance the credit facility. Those are your top depressing headlines. Money is free. Connectivity is disrupting growth. Is driving india growth in emerging markets. Place . A next connected what is it going to do for us . It. Think india is part of i think indonesia and Southeast Asia could be much more exciting in terms of growth areas in terms of geographies. It is going to be in the house. We are going to see greater connectivity in the house. We are talking about geographically offshore into the kitchen. How so . What does that mean . We talk about Energy Prices coming down. And her g very expensive. Isyou are more energy still very expensive. If you are more efficient, it is better. When i login and change my nest thermometer at my home, how does that drive the economy . You are going to be spending less on gas in your house because it switched off the heating when you leave your house and you have more money to spend on other things. I believe in the manufacturing multiplier. We have all these toys, facebook, the iphone, the sony camera. None of it matters because telecom owners in india have to figure out how to employ 200,000 people. Jpmorgan has to figure at how to employ when i did 60,000 people. 160,000 people. The tech world is not just the people designing the product. It is the knock on industries. It helps in the income state. I get that. How does that employ the world in the next 10 years . Think about the people developing apps. They are in the apps industry, but not on the apple fox. Books. Canyon is way ahead of us on ahead of kenya is way money, fore example. Them . We be watching of 100,000the future companies in the world . It is going to change. Alibaba means that if you are a small factory in china i just wonder how we are going to employ people. Richard dobbs, always great. Research with a friday morning forex report. Always interesting. Yen weaker, euro does nothing. Nichols will come to us in a couple of moments. Weaker. N currency goes watching it every day. Well. Ction as stay tuned. Futures are flat. Elizabeth economy is next on bloomberg surveillance. The g20 meet in brisbane. Further sanctions are front and center. Oil continues a brutal slide area when will north dakota and canada go dark . We will speak with Elizabeth Economy. Surveillancee haircut we are live from new york. It is friday. I am tom keene. Joining me is mary child and brendan greeley. Scarlet fu is off. The g20 summit has yet to begin an already Vladimir Putin is playing with his toys. Nato says he is sending troops into ukraine. President putin stationed warships off the us trillion coast. President obama is on his way to australia. He left burma less than an hour ago. The president underscores u. S. Support for her. You will be an advocate for the people of burma and a future of democracy. The u. S. Is trying to help burma make the painful transition from a dictatorship to civilian rule. Are vowing to stop president obama from overhauling immigration by himself. According to the new york times, he will refocus the activities, up to 5 million emigrants will be protected from a deportation. Many will get work permits. This is what john boehner have to say. The president is ready to take action on immigration. He has made clear he had the constitutional responsibility or authority to do that. I just say this. We are going to fight the sident to submit nail tooth and nail. If this is the wrong way together in. They could pass a spending bill that would bar the government from carrying out the president s order. Longest recession in greece in half a century. The Greek Economy grew 7 10 of 1 . Mark the drought . Greek still has too many problems to start with. They have a 26 unemployment rate. Economies in germany and france have returned to growth. That boosted the gdp a little bit. An update on ebola, another patient maybe flown it to the states for treatment. A team from being a brascan Medical Center will evaluate a. Rican doctor martin caeli to nebraskalown tomorrow. Been paul patients have treated in the United States. One has died. Those are the top headlines. Breaking news. It has to do with compensation. Mary child has the story. Is mr. Grosss paycheck. By colleague has documents that show compensation or bonus figures from 2013. It looks as though pimco paid million. S about 290 how does that compare to someone else when they are not a majority owner of the firm . It 23 millionmade dollars. That is tenfold. That is not the paycheck. That is part of the ownership. Equity that shadow is accounted for. That is a very complicated thing. What we know is you just got this lump sum of 290. Within that, was this a negotiation years ago or was this a belief that it was some form of new calculation . With the transaction there was a profitsharing agreement. That feeds into this pool. It builds a pool for them to pull from. In your reporting, was this mr. Lved in the exit of gross from pimco . Would you hang around for 230 million question mark did they gross up his compensation because they knew somebody was leaving . Just to be sure they could buy the San Francisco 49ers . Pimco is known for getting people paid. We knew that they were making bank. That is the news from mary child. Onwill continue this Bloomberg Radio and at bloomberg television. We need to go to berlin with hans nichols. What will you look for over the weekend from g20 besides photo ops . The first thing to look for is whether air force one when it leaves and flies to australia, if the president will be able to see russian warships out of his window. It is a remarkable moment. Think about all of history. Has air force one ever flown over russian airships. Putinhere be a vladimir meeting with merkel. Will she talk about individual sanctions . That she talk about sectorial sanctions . Youre such a beautifully cranky skeptic about these meetings. Will anything actually come out of them . Do people just get together and try to deal with protesters . Sometimes on the sidelines you do have important deals and important conversations. I wont be entirely dismissive of it. Unless we want to report out what the g20 countries are going to do for Food Security or something. In the communique that everybody thinks is the great moment. We always think of g20s for their failures. The one successful, the london one when people pledged a lot of money, that is the outlier. You can make about a decent g20 and pittsburgh. They are mostly marked by what didnt get accomplished. Think about president obama in 2010. He goes to soul, korea and comes away completely emptyhanded with a trade pact. These are members more for their failures and not their successes. We were just looking at video of everybody arriving. Vladimir putin just arrived 20 minutes ago. Merkel. Ee some video of she shook tony abbotts hand and whispered to him. What do she want out of this . There is so much i could do with that. When it comes to Angela Merkel and having any can of bodily contact with heads of state, we try to stay away from it. Bring up the george w. Bush shoulder rub. Noses zealand, she rubbed. I always thought that was an eskimo kiss. Thank you so much in berlin. Isht now, Elizabeth Economy a student of a new world order. Secretary kissinger just spoke on your council of foreign relations. I have given it a rave review. You were just in dubai and china, what is the urgency at these meetings . Is there Something Different in the air . I feel like i am almost in a tuchman novel from a hundred years ago. Think president obama is leaving a pack in a much stronger position than anybody wouldve anticipated. Signed three surprise agreements with the chinese. , away fromlines aipac, there was an agreement with india that is going to break open the trade facilitation agreement. I would say we have a public and congress that might help the present with trade. We saw mr. Modi getting off the plane. An update on the always contentious india and china relationship. They have partnered over the years in issues like Global Climate change where their sovereignty is going to be involved. They have worked together. An underlying suspicion there. I think Prime Minister modi spoke of that. Spoke to the he council on foreign relations, he said india is the only place the brings everything it to the table. C has to get that shameless plug in there. See how she got that shameless plug in there . Are they really that blue, the skies over beijing . Twitter,time for the question of the day. Is the g20 relevant . Tweet us your ideal g configuration. Weeken a busy wake four m a. Bloomberg surveillance on a bloomberg television. Good morning, everyone. I am tom keene. We are back with Elizabeth Economy. The media and the gurus are getting it wrong on a china in the last week or so. I thought we were geniuses on Climate Change. Tom keene crushed overnight. What that i get wrong . It is not in agreement. There are two sidebyside pledges. We dont know with the chinese are pledging to do yet. It is a start. What really matters is the diplomacy of it. This does inject some energy into the Climate Change negotiations moving in the 2015. Can paris be different than copenhagen . Paris is the next step. Looking at the g20 and everybody going to us trillion, Prime Minister abbott is the one who repealed the carbon tax in australia and set them back a decade in terms of addressing Climate Change. There might be some pressure brought him him by a hopefully president obama. In your piece about the imperial presidency, you wrote that we have we have a quote here. That is awfully hopeful. Did you read the rest of the piece . I saw that and it jumped out at me. What about that one glimmer of hope . I would say five or 10 . I think he is moving in a nationalistic direction. It doesnt lend itself to a lot of cooperation with the United States. I want to know about this diplomacy. Is this changing between beijing and the cities . I think that they really run things. Will that change at all this . I think one of the things we have seen is centralization of power. Power thansed more any leader since massey tongue. He is trying to clean up the corruption. Can he clean up the air . We will wait and see. Forces theh economy cars to shut down. Stay with us. Good morning. Breaking news. Announcing a landslide of headlines about a restructuring. It is that time of year and this is what you do in midnovember as you look over to next year. We have Jeffrey Mccracken that with us. He is our chief reporter. Hertz, mr. Mcdonald of he is a transitional management trying to improve this car wreck. Who is mr. Thompson . You can almost say be careful what you wish for. Two years ago hertz and 50 came together. It seemed like a dream deal. At dollaras the ceo rent a car. He made his money and got out. He got pushed out. The thought is they are going to try to bring thompson in. People have been speculating it. He is going to come in and run the company. They are going to allay the delay the spinoff. Revenues are coming in light. I would suggest we are seeing this company to company. What is different in the air in november when Corporate Officers say we have to do something as we go into 2015. What is different this november . People have been really optimistic this year. This is been the year of the big deal. We have seen that over and over all year long. In the case of halliburton, this is an oil and gas situation. This is a three year restatement. Errors, but it shows the time. It seems like the bond market perspective, it is the opposite. Lame for the next few years in terms of growth are that drives emanate from that perspective. You are not going to have the organic growth. Is that something . It is sneezy growth. People say that they have cut all they can cut. Theyve shut divisions and gotten rid of people. Now ive got to look out. In halliburton, they are looking at their arrival. They are the number two and they are trying to buy the number three. Cutting orount on growth. You cant squeeze more out of your business. Then you look to m a. Are we going to see this in the actual Oil Producers as well . It seems like some the smaller ones just cant compete in this environment. The next three months look like the last few months in terms of the price, a lot of guys are going to feel pressure. Just a few months ago, they were between 4 billion and 40 billion. Slowdown inommodity this dampening of global gdp. It goes right over into the corporate world. Everything is growing on the back of chinese commodity demand. Its going to be a real problem. Its a problem for australia. That is why they are trying to move into services. How did houston go right over to china. Demand. It is not there in other parts of the country and it is killing oil and gas prices. There is a disconnect between the biggest guys who can withstand this and the smaller players that are getting called from the very biggest. Saying itd conoco are might be time for us to made up. We had the ceo of emerald oil on the show. He looked like a for old who cant find his mother. It was awful. Its just a small oil producer and they just dropped a rigged. He could not answer the question if you are dropping one rig, how are the other two going to make money . Are here in january or february with these oil prices, the market . Sk is there are a lot of companies that are very levered. They set their oil price expectations. Is there a price that matters . Belowould say anything 80. Is there an oil price for china that makes a difference . X oil demand continues to grow in china. That is when the few commodities that is driven by car demand. Indonesia is the most interesting story. They are in opec member but they bring in oil. That is an oddity. They have to import the oil because they cant handle it domestically. Barrel, youre going to be very busy. It would be one area that starts to get busy. Particularly, thank you on hertz. We see that breaking news. See who isme to go decided to merge the last 30 seconds. It, youd not talk about full tof huber uber the renter car business. Is the g20 still relevant . This is bloomberg surveillance. To the topt headlines this morning. The g20 summit has yet to begin, but Vladimir Putin is already hard at work. Nato says the new sending troops into ukraine. They are discussing whether to impose more sanctions and Vladimir Putin russian warships off the australian coast. Halliburton is in talks to combine two of the largest names in the energy business. Shares of baker hughes rose 15 yesterday and halliburton was up just over 1 . A deal could be announced as soon as next week. Kim kardashian is back in the news for bottom bearing images and paper magazine. , aboutbehind the times 6500 years behind the time. The marble stop to greek in origin and stands eight and a half inches tall and represents nurse meant and fertility nourishment and fertility. Had itabeth economy might geek beach read of the summer. Near the treeplanting smiles, it isrced still china in search of a new china. Does it include commodities . It does. They have plans to urbanized 200 Million People by 2030. They are not going to be able to do that without config continued investment. They still have highways and airports. We have a temporary slowdown now, but we will see commodities grow over the next decade. Obama administration giveaway the jewels . Absolutely not. Kudos to the president and the whole team a. Progress ont of getting china to reduce or eliminate tariffs on Information Technology goods. This is a boom for u. S. Companies. This is a win for the United States. I look at the stereotypes and wonder what we really know. The copper inventory, do we even know what china has . We dont know. We find out that they have been reporting that everybody has been betting on the same shipment of copper and leveraging themselves off that. We dont know what theyre doing it. Transparency is at ground zero. There is a real issue with data in china. Shanghai like shanghai shanghai iron or prices. By all means necessary, theyve got to create a fiction to keep it going. How fictitious is commodity pricing over there . Nobody knows how fictitious the situation is. I think everybody has to approach it with a degree of skepticism. My favorite line is always from a neck lardy. Dont look at the numbers today, but how the trend aligns. Australia greets the g20. Massive yen it weakness versus the Australian Dollar dollar. I think australia has been worried about chinas slowing economy and commodity demand. They have grown over the next decade. Now what do they do . I think they have been thinking about transitioning to services. They want to develop things more fully. They want china to do more with it. What did you learn on your trip to dubai . The japanese are not happy about chinas bid for the they view this. As a direct hit to them. Etcheded the chinese are it in innovation and they want to try to figure out how to develop their own a silicon silken valley. I dont think i can do it. The Prime Minister really tried to smile. He wanted that meeting to work. There is an exclusive. We are going to take a look at the data. Yields are up right now and taking just slightly green. This still get you a buck and a quarter. The yen is up a little bit. This is bloomberg surveillance here co surveillance. Scarlet fu is off today. November has brought difficult news. Bonuses will be a bit light, not so much for the elite. Then there was William Gross formally with pimco. The math is simple. With us today is mary childs. Mary, we talked about this before. How did you receive these documents from pimco . After the palace coup, it seemed like there was an. Nternal split within pimco people who were glad to see gross go. There were some people who were. Ot thrilled to see this guy the parity letter i published last month, his farewell letter, struck a chord with people. Even though it was made up. The idea of a tuna million 290 million number, that is not just managing the funds. The way the managing directors get compensated, the bulk of their money is the bonus. Point was paid quarterly. Each december, christmas comes early to newport beach. 1. 5 billion was divided among the 60 top managing directors area a third of them went to gross. That is the critical point. Its a bad thing that this is out there. That is a ton of money that you are throwing at your guys. Both of them are gone. You get 500 million back just like that. You can think that we are hiring. We are looking for the best talent. Come to newport beach. People are reluctant to move to newport each of beach. It is one of the nicest places in the world. This is unprecedented. Isrybody forgets that pimco a publicly traded company. This sort of bonus pool is relatively unprecedented either for a bond house or part of a publicly traded company. The closest thing i can think of is milken and they were driving. And then there was the whole jail thing. Is interesting to compare that. There is a little bit of a delta there. In the column this morning, thehow grosses bonus versus next 20 finance company ceos. It is about even. 20 of them equals bill gross. Bring about bar chart that we just had on. This is the distinction the get you to these large bonuses. Conflated with major houses. Asset management company. Amerco. Nue is truly do they deserve whatever the compensation is because theyve got a bonus sharing partnership with their acquired worth . The bonus pool is a quirk of history. That is a longer story or story. They left the remaining 30 in the hands of pimco. That continues to own 30 . Once they bought the rest of that, the arrangement to change a lot. It became a case of the tail wag in the dog. They were able to retain a huge chunk of money. Itit was a u. S. Company, would be hard to imagine a 1. 5 billion bonus pool would have been material and disclosed to shareholders. Feelinge agree to stop bad for bill gross . Point, howe are going to discuss chinese personnel are rated in it run away pollution. Or can they . Are emanating a straight from toms brain. This is bloomberg surveillance. Scarlet fu is off today. My morning mustread is from tyler callan. A blog what he wrote for on chinas pollution policy. The Chinese People are more concerned about particular matter than they are about carbon. To reducedecide carbon emissions, they may not have the machinery to get it done. Weve seen that china is very good at setting targets and timetables for pollution reduction. They are not good at meeting those targets and timetables. What are the essential elements of actually being able to implement laws and regulations. You need transparency and enforcement. He the technology. The needy political will. Some of thesehave elements, but not all. You need a Civil Society. Richard nixon it created the epa, that he was being pushed by a broad environmental movement. They had that bottomup push a few years ago. Crackdown notlly only on the internet, a big source of the environmental push, but also on environmental ngos. Mandatead the economics outweighing the environmental. Is that at a creek appoint now . The hope is it they reach the Tipping Point and the party will become the environment over Economic Development or a better way to integrate the two. We need to wait to see if they put in place necessary mechanisms to make that happen. So far, that has not happened. , thatnmental investment is well below the 2. 2 they say is necessary to keep the situation from deteriorating further. Until i see the capacity developing, im not optimistic. Problems in china is the local government. Theyve got a huge debt load and very little insensitive to change anything. One of the myths that has developed in the United States is that beijing what beijing says it goes. And it comes to health care, education, the environment, when it requires local governments to pay and make something, policy is not implemented well. It is one thing to unleash the local officials to fill their own coffers. Its nothing for them to pay in and make a change. To takeil society has that job on. Has allowed an opening, but not the kind of Real Transparency that would force change. This is our twitter question of the day. Is the ideal makeup of the g 20 . Is it the g eight . Is the g4. Is it relevant . This is bloomberg surveillance or co we are on it, tv, and your tablet. Good morning, everyone. Importantand an conversation. Were looking at the transactions. Jimmy lee will be here at 9 00. Brendan greeley and mary childs through the short straw. She is in for scarlet fu. Lets go to top headlines. Hurts says it will revise results from 2001 to 2013. They are going to investigate accounting areas errors. 2013 financials would cut net income by 20 million. The house is poised to avoid keystoneallow the pipeline. This time, the promise of a senate vote is waiting. The gop says the project will add jobs and democrats say it is a rest to the environment. Same as its ever been. Commissioner of the nba says its time to allow any nonpro sports. Tom is seriously not in his said yes. The framework would leave the states. Betting on pro sports is illegal in most of the u. S. Outside of nevada. Those are your top headlines. What do you think . I feel bad for pete rose. Dont that but on sports because i dont know enough. I do have the money to lose right now. I just wonder, the pros and cons of it. It will be interesting to see how this goes forward. Adam silver is shaking things up in sports. There is a lot shaken up in our geopolitics. What will be the new world order and how should america act in the new world order . One actor is Vladimir Putin and he has boats off a skill you. Air force one it travels from burma to australia. We go in search of an american order. This goes back to your michigan a phd. What is going to be our new Foreign Policy forward . President obama has two years left in what everybody calls a lameduck residency. I think he is off to a strong start. Within asia, and his come to fruition. This is an expression of american values. Is it a bilateral pivot to china . Can it be a multilateral pivot . The pivot is much more than china. It is to all of asia. It is an expression of u. S. Of trade on treat free and human rights security. It was a response to the demand from within asia as a hedge against a rising china. , can republicans who supported part of the chinese experiment, can they get on board . Thisat we can see out of Republican Congress is the desire to promote u. S. Power and u. S. Trade. President obama has on the dockets this partnership. It is the essence of our Economic Engagement with asia. This is the most dynamic region of the world. Towe can make this come fruition, it is going to be a milestone for the u. S. Economy and the influence in the region. Chinaseems like good news friday. As they send out tendrils into the ocean in various directions, what is the right stance on responding as it expands its map . If they are expanding through Something Like the Asian Infrastructure bank or helping develop to fulfill this need for infrastructure, thats ok. If it means warships are moving out to try to enforce their claims, thats not so. Is one of the accomplishments that came out of aipac, an agreement to sit down with the u. S. And negotiate rules of the road. That is something they have been unwilling to do. Undersold a competent. That will bring china into the fold. What about other countries in the same region as the pivot takes effect . Do they want to purchase but . Everybody wants the pivot. They want to make sure that president obama can deliver on the pivot. Will therity crotch, United States be there for japan . Will the event states be there for the philippines . Those are the countries with china challenges on the security front. Can we deliver . A huge issue. Essential a is an competent of obamas last two years. You point out that there is some nationalism he is trying to stoke. There is a tiny bit of a Vladimir Putin and what he is doing . It is unfortunate. He is stoking this kind of nationalism. On the one hand, you can understand that he has the second largest economy in the world. That is ok. The kind of nationalism that doesnt tolerate diversity of opinion and demonizes western culture and values and cracks down on intellectuals, that is unattractive and ugly. It undercuts his own desire to leave the country. He is not attracting anybody else outside of china. The romance of this and you have been so good it stripping romance of asia, what is the romantic illusion and delusion that we have about china . What is a thing we most get wrong in our synthesis . What do we get the most wrong . That somehow china has it right. That they have this hundred year vision of success, the Henry Kissinger view of china. Thank you so much. Is some a goode news and Civil Society is alive in china. There is a new word that has been created, aipac blue. A relationship can just be a blue relationship. Day,witter question of the is the g20 relevant . The answer. Relevant. Influential countries share a common vision. It is just a form for egg headed intellectuals. Time for the agenda where we look at the stories shaping the day. Thats got to be g20. I think we are on the edge of seat g0. This is an amazing backdrop in ukraine. Tom, get out of here, youve got to go to the radio. I have been fixated on ebola like everybody else in new york city. We were able to have a guy coming back from africa. He is going to land in the bresky. I think it is really interesting. With curing the disease in the United States. That is reassuring. You hope that is scale. I think it is good news. Need reassurance that they could get airlifted out and get treated. We can encourage more to help out where the real crisis is. They will land here where there is less of an epidemic and we can scale to that. My agenda, im going to louisiana. , Mary Landrieu is my to hang on at the last chance for maybe a democratic when in the senate. She is doing all she can to run as far away from president obama as she can. She is coming out in favor of the xl pipeline. Im not encouraged that she will be successful. Elizabeth economy, thank you so much for walking is all over china and given us a glimmer of hope. I think it was a win for the u. S. It is a big sunburst of hope. Thank you so much. Surveillance continues on the radio. In the loop is up next. Any lou will be in washington talking about m a. We thank you. Putin live from bloomberg world headquarters, we are in the loop. Im olivia sterns. Taking you to washington, d. C. Sitting down with global Business Leaders discussing what is in store. Betty liu will be speaking with the vicechairman of jp morgan chase. That is coming up in the next two hours. Heres a look at our top headlines. The g20 summit in australia might have to rewrite it agenda, blame Vladimir Putin. Troops andending tanks into ukraine and the u. S. And European Union are considering more sanctions. Putin marked his arrival in brisbane by stationing russian warships off the australian coast. President obama says he will act on immigration before the end of the year. Up to 5ected to protect million unauthorized immigrants from deportation. Many