Over 47, brent crude below 49. Goldman sachs says oil has two state lower for longer. That is the way the market will be rebalance. Gas prices have fallen . 27 a gallon. The average price of a gallon of regular gas is 2. 20. It has fallen below 2 a gallon in 17 states. A breakthrough in finding out what happened to the air asia plane. One of the black box recorders that may tell what happened in the final moments before the plane crashed two weeks ago. The black box is composed of 2 parts, a flight data recorder and the cockpit voice recorder. The one thing we managed to find is the flight data recorder. The wreckage is 105 feet below the service of the java sea. The crash killed 162 on board. The biggest crowd in modern history in france, 3. 7 Million People marched to mark the terror attack. French president Francois Hollande proclaimed paris as the capital of the world today. John kerry will fly to paris at the end of the week. That may be an answer to criticism that the u. S. Only sent in ambassador to yesterdays march. The Detroit Auto Show, gm is introducing the brands first convertible in 25 years. And to compete with bmw, jaguar says it will build its first Sport Utility vehicle ever. \ yes what are they, eight years behind . 15 years. A big night for boyhood, the movie won awards. It took 12 years to make an follows a boy from age six to 18 years old. Gran Budapest Hotel won for best comedy. The golden globe is a must watch for Olivia Sterns as she prepares for oscar coverage. I saw a lot of red gowns. Big winner was amal clooney, George Clooneys new wife. They presented him with the Lifetime Achievement award. Amal is a human rights lawyer tonight we are giving her husband a Lifetime Achievement award. It was all over twitter. Very cool how that couple came in. What is the difference between the Golden Globes and the oscars . Mine is they serve alcohol. The Foreign Press races the oscars, the academy. We will have some coverage on bloomberg surveillance. Lets do a day to check. Futures up 11. Eurodollar under 1. 18. That bears careful watching towards the ecb meeting. Nymex is the story, brent as well. Olivia sterns driving brent crude lower. A new low the sterns effect. Very narrow spread, nymex crude. Ruble weekends, nowhere near the 64. 65 from a bit ago. Lets make you smart. Monday, a simple chart. West texas intermediate. Heres the lehman low. Everybody calls it the lehman low even though it has nothing to do with lehman. Were back there. This is a bust in demand, this is a boost in supply. We are in the same place for different reasons. Microeconomic brendan greeley. During the crisis every other asset class cratered. There is a big disconnect. What did you do, get enough sleep this weekend . Right here was where i bought my vw diesel because i was concerned about the price of oil. Right there is where i will be buying a jaguar suv. We will go to the Detroit Auto Show and talk to the head of vw. Goldman sachs, oil for longer for lower. Edward at citigroup has been out front. Here is the Goldman Sachs piece. One year ahead, wti swap needs to be below 65. Near 55 for next year to sideline capital, too exhausted that animal spirit and keep investment low to keep investment rebalancing. We are thrilled to bring Tobias Levkovich and Craig Moffett. A nonopec note. The microeconomics of u. S. Shale. You get to the same summary but through saudi arabia. He is saying opec is going to be disappointed by the lack of u. S. Response to lower oil prices. If you have the infrastructure in place, the production trends and break even starts getting down to the 30s per barrel and not 40s or 50. The marginal cost of shale production is low enough that it does not force it. Our wall street audience owns the oil. How does Tobias Levkovich adapt when you talk to a guy like ed morris or talk to Goldman Sachs . I have a lot of good friends there. In terms of when we look at the Energy Sector as a whole, big o il is the heaviest weight. We are neutral on the area. We are interested in enp and drillers where weve seen growth. We are not going to fight that by 1000 cuts. The drop in the price of oil is not going to break all show producers. Who can hold out longer, big oil or saudi arabia . Then you start getting into speculation. To me, that is not investing. I want to bring back the year to date chart on crude. Olivia sterns started talking about the drop. Down it goes further. A bit away from the banner. That is an ugly price. Im responsible. How worried are you about contingent . A lot of Shale Oil Companies are heavily levered. That is where they got the money to do the holds. Banks could be exposed if it goes belly up. How worried are you about contagion . In a similar way but not entirely. Im worried about bond yield spreads, particularly in the highyield marketplace. High yield energy once have gotten into a funding issue. The cost of funding is higher than it was at the 2009 low. It is more expensive for these Leveraged Energy companies to borrow than it was when we thought we were at the abyss of an economic depression. Spreads have widened in the emerging market area as well. That is where i worry about it. This is in subprime. The entire Energy Exposure of highyield debt is 180 billion, it is not trillions of dollars in 2008. Lets bring in Craig Moffett of moffett nathanson. I remember you at sanford bernstein. Do you get awhat ed is thinking . Why do you care what they say about oil . Ive been talking about the affordability problem. The sectors that i cover, whether it is cable or telecom they are part of the smaller set of companies that benefit from extra dollars in the consumers while it. Affordability is a real issue, especially on the media side. Prices keep going up and incomes do not. What you are saying is as wage pressure increases people are less likely to block at the bundle balk at the bundle. Over the last 10 years youve seen the price of paytv subscription rise by something, i want to say 58 or 60 . Incredible. Wage growth has been flat of the that period. You start getting people falling out. Where are we on cord cutting . Where is cord cutting 42015 . It is a drip, drip but you are seeing new services. The winner of the price was announced last week at ces. Did you go . I did not go lucky you. He is not a device guy. Craig is at the bottom of the stack. I and the infrastructure guy. You missed a lot of crowds. I want to point out that the stands effect is over. Brent somebody was about to put together a media page. Were going to talk about Tech Companies trying to cash in on video. What that means for cable providers. By the way, it is not good. Good morning. Bloomberg surveillance. Futures up 12. Olivia sterns with me. Brendan greeley . Online video advertising will be up 30 next year. Facebook is buying a video compression startup. Twitter is launching a video. Feature with us is Craig Moffett of moffett nathanson. The best way to explain what craig does. There is the story you have before you talk to craig and the story after. Lets look at facebook. Forget netflix. Is facebook the challenge to the cable bundle . Facebook is the challenge to the advertising bundle and that is where it starts. The pressure you are seeing in the ecosystem is not from people cutting the cord. At least not yet. The pressure right now is because the advertising dollars are leaving the traditional paytv system. My partner Michael Nathanson has been saying you are starting to see media buyers take money out of traditional tv instead of taking it out of print. For years, it was print that funded the growth of online. Print is not big enough to find online. Dollars are starting to come out of tv and that is a scary proposition. You look elsewhere for revenue and break the bottle. Ad spending is going towards smaller and smaller bits of video. And more and more targeted ad buys. Buying targeted customers, that is a big change. Is anyone watching insta videos . Yes. People much younger than you and i. I know. People like olivia. Thanks. It is funny. Here is my sense of the video bundle. Everybody is looking at new aggregation models. Everybody is looking at dish network aggregating a bunch of channels. Sony is about to aggregate a bunch of channels. I think we are looking in the wrong place. If you are thinking about what our millenials doing, millenials are not saying i need a better way to get the same dog food everyone is watching. Millenials are saying i am entertaining myself with a different mix of media from social media at is not the traditional paytv channels just in different packages. It is no longer i want my mtv. I want my netflix. The technical definition is born after 1980, thank you very much. Why is she onset . Im not going to spend 120 for a cable bundle. Millenials rent, they are not buying homes. They are less likely to buy a cable bundle. Pass stuff starts to be available in online, a la carte packages. Everyone wants to write the article that says if you try to recreate the bundle it is more expensive. Who once to recreate the bundle . Millenials are not trying to recreate the bundle. Tobias levkovich . Im not on social media. The millenials want to watch somebody with a go pro camera. It is weird. I would rather watch game of fthrones. I wont binge watch. We keep talking about how channels are becoming disaggregated. One of the things you have written, forget the idea of a channel. A channel is an app. Forget the idea that what we are going to take his traditional shows. Game of thrones is great for the people around this table. Except olivia. The real disruption is coming from companies you have never heard of producing media for 1 10 the cost per minute of traditional media. I want to summarize this. How afraid should every ceo in media be of facebook . Very afraid. Not because of what is this going to do to disrupt media. But afraid because of what it could do to deflate advertising. Getting into a price war of some kind. Cost per million. There is so much inventory that could come from facebook in advertising that it can be tremendously deflationary for cpms Craig Moffett with us. Smart people. Coming up from morgan stanley, betsy on banks. An ugly story about expense control for 2015. From our World Headquarters in new york city, say with us. It is surveillance. Good morning. Boiled down over one dollar a barrel. Wti and brent under 48. A morning must read. Interesting. Here is brendan greeley. This is from ken rogoff of harvard. It is worth bringing back up. The effects of sanctions are often fairly disappointing. So much so that scholars have included that governments can appeal to domestic audiences. I use it to sit higher in my desk. Very valuable work. Tobias levkovich,this is are there situations in which economic sanctions work . They are very limited. They have not worked well in the past. That is where rogoff is coming from. We have tried to moderate behavior but sometimes you are talking about people you have no interest in their behavior being moderated. Lets talk about putin for example. Somebody who does not seem to be that fazed by whatever sanctions are put in place. I think the question is are they effective, what is the history have they been proven to work . For the most part, they have not. I immediately think of russia. He debate on whether or not it is the sanctions or the price of oil. Richard haas often says the only sanctioned that works is the price of oil. Perhaps that is the only thing that can put pressure on president putin. Tobias does this change your view on multinationals in the u. S. . Youve got to change your earnings and adjust . Im more worried about what is going on in oil for earnings. If they keep coming down we look at the future and it is telling us earnings should be down 30 for 2015. 30 . Over 30 . Current consensus is about 21 . I do not think we have covered this. What is your appetite on equities this morning . My appetite is i want to buy weakness. I still think 2200 by the year end. I was thinking more about back to sanctions. We were wondering, there are few conditions in which they work. There have to be international consensus. You can talk about apartheid in south africa. There has to be some will to change and that is the other point in rogoffs morning must read. In russia there is no will to change. How do you do sanctions against islamic fundamentalists in france . That is an interesting question. You cannot. This is the dynamic that has changed. We have a justice ministers talking about there is no state actor to do anything about. Back to the sanctions point would you say they worked in cuba . That is what obama was saying we tried the same policy and it did not do the trick, they are changing the course. We must do something, this is something, therefore we must do it that is not working. Ultimately you can talk about radical islam. You can talk about cuba. What you are punishing, typically, is a much Broader Group than the very targeted delete that you are trying to force change from. So, those are the interesting effects. Well, there it is on sanctions. Rogoffs piece is good. He is scheduled to visit with us. We will have to see. Our twitter question of the day. How low is too low for oil prices . We want to hear your thoughts. Tweet us bsurveillance. This is bloomberg surveillance on Bloomberg Television. Streaming on your phone, your tablet, and bloomberg. Com. Good morning. Top headlines. China auto sales slowing down. According to china, total deliveries may top 23. 5 million last year. John paulson posting losses in his hedge funds after bad debts on energy security. The Advantage Plus Fund itself fell 36 last year. Shares of a holding up more than any other time since his 24 billion reorganization plan. His fortune stands at 30. 8 billion. That puts him ahead of alibaba chairman. No one getting a raise. That appears to be the take away from the jobs report. Wages decreased. They are climbing at a measly 1. 7 . I am not interested until something 30 off. About a 1. 5 trillion dollars global decline or shift if you like from producers to consumers. That gives people a little bit more money to spend. I was impressed by the things i have seen in the last few months. We are seeing better wage gains. If you look at one month data point we are seeing things improving. One thing we want to the number of civilian unemployed. If you have six unemployed workers for every job, where down to about 21 right now. Energy prices, people think it is going to be a boon. Is that really good for the entire sectors a good for the Dollar Stores . It is good for the lower end. It will be fast food restaurants, etc. We have upped our gdp forecast. Can you take the retail and bring it over to content . Is a stimulate advertising . The bigger push is if you are a telecom and you are running out of the cycle of smartphones and trying to figure out how to get more money out of a household, income is a real issue. U. S. Household net worth has climbed roughly 30 trillion since 2009. It is the rebound in stock prices. Securities are a bigger proportion. This goes back to the earlier point. The third issue i was going to talk about was the net worth. Higher income households own 80 of the stock market. It is the top 20 . 80 of the stock market. That top 20 accounts for 37 of all Consumer Spending in america. A lot of these names you cover have been some of the biggest winners in the bull market the past couple of years. It suggests this is not the time to buy. True. We break it out into various industry groups. This is your chart. We are neutral autos in consumer services. We think it will play in with people going to buy more from retailers. There are challenges in the retailers. You see it in the valuation from online purchases. These things have not gone away. You get some upside here in retailing that you did not have last year. This is the environment like jcpenney. Wet seal has gone belly up. Arent you concerned about the stores shutting their doors . It is more about can you get cost reduction. Estimate revisions starting to pick up off the bottom. We watched not the magnet team not the magnitude, but the percentage of changes. If you have 90 of estimates to the downside and it becomes 60 some of the downside, that is an improvement. Which retail . General merchandise is the biggest. You have some online retailers. Walmart and macys just slowly understand, the amazons are in retailing index and walmart is in Consumer Staples retail. I did not do that. Talk to s p. We are about Consumer Discretionary behavior. In retail. I want to suck rate from the media content. We will take a look at the Banking Industry and where they are parking their assets. We will talk to mr. Moffat about the telecoms here. It is an elephant in the room. What is the Fastest Growing asset at u. S. Banks . Excess reserves. It is earning 25 basis points. Bank deposits spiked in 2000 nine after feds offered a return on them. A 15 year on year increase. Is this the best they can do . In the demand. You need people to move the reserves to the market. And they have access cash. They do not have to go to the banks and borrow money. The consumer has been deleveraging, particularly in the credit card side. You have not had the demand. If you are paying people and you are making 25 basis points, you make the spread without risk. Why wouldnt the fed take this away . They mentioned they were going to do this a few years ago in the banks had a freak out. The banks were wary of doing things that would get regulators and a half. There tends to be gun shyness coming out of the banks as well. They have gone negative on the overnight rate because banks are desperate to stash their cash. They goes to show the limits of monetary policy. You can cut rates, but you cannot press a button to get money flowing into the economy. It is flat forever. This is not your normal bank behavior. It is unbelievable motion on the chart. The second the fed started offering a return, what a wonderful place to park our assets. These are not happening in a vacuum. You have a Global Environment struggling. The u. S. Is doing better than everyone else. I have had people tell me this might be the best way to move in the future, rather than move Interest Rates up, to move down a little bit. It makes sense. I think we have to be careful when we try to extrapolate them. Were going to france. A march was led by Francois Hollande who linked arms with Angela Merkel and david cameron. Crowds marched. What an incredible sight. How often do you see leaders taking arms, united in this front. I thought it was significant that to the right of Francois Hollande was the leader of molly. When it comes to france confronting extremism, they are very concerned about the rise of the islamists. France had a much more muscular policy. You pointed out that most of what you had in terms of heads of state and government were coming from within europe. They are seeing this as a domestic problem. You have europe getting together. Justice ministers are getting together saying what we do about this . The Empire State Building went dark for five minutes. It displayed only red, white and blue lights to show solidarity with the victims of the terrorist attacks. Did you see any articles of what they are going to do . I have yet to see an article on what leadership is going to do. They are meeting in paris today. Are they going to boost surveillance . There was a great article in the times. This is someone who was i thought this was great. He is a rock star it is the best way to think about it. And 11 mile fire on the outskirts of perth, australia. It has left wall is it has left koalas with burnt pauls. People donated so many mins that they moved on to aiding possums and others. They can be sedated with eucalyptus. One member of our control room was an intern on wild kingdom. They will take your finger off. The Dallas Cowboys appears to make a 31 yard catch. However, the call was reversed. Watch this. It is so close. His elbow hits the ground, both of his feet touched the ground, but the ruling was passed incomplete. They got a very nice call in their favor in the game last week so maybe this is retribution. Either way, the packers won. Had he not bobbled on the bounce off the ground he had it in control they change the rules. Next block, we talk about investors in the telecoms industry. Moffat will give us his word. Is there hope on the telecoms . This is bloomberg surveillance. Good morning. If you are part of global wall street, the must watch at 7 15 this morning. Expense control will be front and center. This is bloomberg surveillance. Olivia has our top headlines. World bank looks to put most of it to banking business up for sale. The ceo is said to be Holding Meetings today in an effort to scale back the business. They are trying to reverse six straight annual losses. The biggest takeover by a pharmaceutical. They will pay 46 a share in cash. Status a 9. 8 premium. If being separated from your iphone makes you feel anxious you are not alone. Iphone lovers perform poorly on tasks like puzzles when they were separated from their devices. It alters physical changes, like elevated heart rate. I am sure those are top headlines that you can relate to. There it is, a revelation we all know. Glued to our phones. It is over. Look at yesterdays tmobile adds. Some kind of gimmick to move your data forward 30 days. Out front is the Senior Analyst at moffat. You have been cautious. Are you more cautious now . Each time we have another leg down, there has been an occasion to say lets see if they have gotten to the point where they are attractive. These are heavy index weights. To be bearish, it is a tough thing. Even now, they have underperformed for six, 12, 36 48 months. Each time we look, they are not there yet. Bring up the telephone chart. All of my rate horse are up. 5. 6 3 . Every time i see some form of equity with that kind of yield on my radar goes up. Do you feel the same way . These traded as bond the surrogates. Late 2007 until about 2013, more or less they traded. They are a high yield upon service. That is a good way to think of them. Think of the measured junk bonds, particularly for at t. It is a high yield, but there is a tremendous amount of risk in the cash flows. At t has its dividends in free cash. If you count spectrum purchases over the next five years, for the industry as a whole. Can i get a special icon that lights up when they say spectrum . It was revenue. Revenue per loser. How long into the future do we expect verizon and at t to keep going with that . Verizon and at t are lows to reprice their base of subscribers. Traditional behavior is more or less what you are seeing. They get promotional around the edge, but they will protect the base. They are more inclined to allow customers to leave then reprice the base. You are seeing these customers creating upstarts, particularly to tmobile. It has gotten more aggressive in its pricing. They are starting to take customers now, lose customers a little more slowly. Where does the growth come from . For a long time, at t and verizon said it was coming from incremental usage. Is there a since the government may be right and there will be massive consumer friendly war of three or four within the Competitive Industry . Wakes they would not let sprint and tmobile merge last year. They have kept four. You will hear the rhetoric around it is still a duopoly and we need more pressure from the upstart, but all of the economics at we just took telecoms must remain neutral. We recognize performance. At some point, you say we do not want to do bit. You said where is the growth going to come from . Verizon is considering buying aol. Aol for verizon will be a small acquisition. 3. 5 billion on a 200 billion enterprise. It would be small. There was an argument they would be looking at the ad tech part of aol. That is like saying to have a Cable Network you need to own nielsen. I do not know the logic. Thank you. Lets do a four x report. Oilbased, front and center. Another hour of surveillance. Stay with us. Goldman sachs suggests markets turned upside down by lower for longer crude. Big banks cut cost. Millions march in france. And good morning, everyone. This is bloomberg surveillance. I am tom keene. Joining me, Olivia Sterns. Lets get to our top headlines. Trading slightly over 47 a barrel. Brent crude dipping below 49 a barrel. Gas prices fall and . 27 a gallon. The average is 2. 20. It has fallen below two dollars a gallon in 16 states. Divers had recovered a key piece of evidence from the ocean floor. One of the black box recorders that may tell what happened before the plane crash. It is composed of two parts. The flight data recorder and the caught that voice the cockpit voice recorder. The crash killed all 162 people on board. The biggest crowd in french history. 3. 7 Million People rallied to mark the worst terrorist attack in more than half a century. More than a million marched in paris alone. Francois hollande proclaimed paris is the capital of the worlds day. John kerry will fly to paris at the end of the week. New cars go on display at the Detroit Auto Show. G. M. Introducing the buick cascada. Lets visit will build its first sportutility vehicle ever. A big night for the movie boyhood. It took 12 years to make. If follows a boy from age six to 18. Julian moore tried to dress like Olivia Sterns. The Golden Globes is the start of the awards season. You are sort of our saw a lot of red ball gowns. The winner for me was amal clooney. She looked stunning. Tina fey and amy poehler made the best joke. She was appointed to a threepointer son commission a threeperson commission. Tonight, her husband is being awarded the Lifetime Achievement award. She looks fabulous. Who made you cringe . This is not fashion police. Keira knightley and chanel. I do not know what she was thinking. Lets do a data check. Oil front and center. Futures up 96. We are near bottoms on west texas and brent crude. Lets talk oil and markets. The big news is jeff and Goldman Sachs, looking at the entire capital used in the u. S. Industry and saying we will have oil lower for longer. What does that mean for our portfolios . It is a great tailwind. This is a tax cut that consumers did not expect. This is going to be a little more extended. I want to go into this. The partial differentiator here is the time function. Is Goldman Sachs saying longer . How does that filter through into a portfolio . What does it do to pe . Some industries go down. We are talking about wage gains. If you do not have them, you have money in your wallet. You look at things people will buy because they feel richer. Look at individual Companies Like macys or hudson bay. Those are ideas that we like. You and i were talking about 39 a barrel by fourth of july. This is about a new order. You sent us some notes about your prediction. You said longerterm oil will rebound. Based on what . Over time, what happens is the dynamics in this incremental production that is coming once everything is done you cannot do it anymore. Labor is going to dwindle away. Everything will cost more. You and i have the supply. Then price goes up. You will have a cap on it. As soon as oil goes up to 60 or 70, you get fracking going on. The majors start moving into the oil fields. You have seen the stats. As soon as these companies die off, the majors come in. The majors, maybe they do not want oil to go down as much. You will get more of a band. At some point, you will have a lot of capital here. That will come back once it hits 50 to 60. Will we see a wave of bankruptcies or will it be able to ride the storm until Oil Bounces Back to 80 . Blackstone did an agreement with energy. What will happen as some of these a big producers will partner with other people or they will go down. The Goldman Sachs note they all get read. This is a great boon for india. One of their biggest issues is import of oil. That taxes no longer gone. That is good. It is the production that is going to i think it will help a lot. They did the right thing. You reduce the subsidies. That was block or timing. It is the local farmers or the local industry. I have been here for two years talking about the airlines. Who thought oil would go back to where it is. There is a band, but you always go above and below. You are telling me the stock markets will benefit . It is the unknowns that people are afraid of. What exposure are the banks taking . You have the other issue of what about Certain Companies that are bent on producing pipelines. That is a shorterterm issue. Longerterm, these Balance Sheets are spectacular. Keira knightley will join us later in the hour. To defend on her hideous outfit. Bloomberg surveillance is streaming on your tablet, phone, and bloomberg. Com. Time for surveillance correction. Stearns and i disagree. I think Keira Knightley looks darling. I think she looks great. If you are going to do fashion analysis, you use a little credibility when you call it the butterfly thing. She looks lovely. She is a beautiful woman. I get looks frumpy. I think it looks like she has a doily around her neck. There is enough on Keira Knightley as we agree to disagree. My morning must read comes from common cause with its oldest ally, france. The recent view is a memory. I am sure you saw the hubbub over social media. No senior u. S. Officials were part of the World Leaders linking arms. It looks like that had a lot to do with security concerns. It is important to keep in mind so much of the American Revolution came because of the ideals of the french revolution. Prime minister cameron was in the first row. We imply enlightenment values different. The enlightenment values and france mean you have to be secular. In america, you are allowed take you are, bring it with you, and hold onto it. Those values are at the heart of what the problem is in. What we saw over the weekend was a reminder that these are some of our closest allies and our oldest allies. They are so outside this violence. They have to adapt. I just want to know what theyre going to do today and wednesday to move france forward. Secretary got flack for not being there. He was in india, but he is heading to france. There are live photographs from paris. We will be joined by betsy graseck. Mrs. Bloomberg surveillance. Good morning. We are watching oil, the major story area and apple raising the prices in response to currency fluctuations. Like apps . The changes took place last week. Is being without your iphone makes you feel anxious, you are not alone. People form poorly when they were separated from their devices. Elevated heart rate, blood pressure, and exciting. The Green Bay Packers advance in nfl playoff action. The colts upset the broncos 24 to 13 as andrew threw for two touchdown passes. Michael mckee in the morning wearing black intouch borate. The patriots won. It is a question what mr. Manning want to. Are you not happy . You can forget the happy talk. 2000 15 will be a brutal year for the banks. It looks like m a is back volatility is back why will it be so hard for banks to generate revenue. We are looking for things to be under pressure. We have been expecting some pressure on cop and headcount as long as they yield curve is under pressure. Quarter to quarter rationalization. That is the case for banking. It is going to be an back office and then Branch Management as well. That is our house for you. Our economists are looking for the front end of curve to go out. Part of it is a feeling that we need to see how the end of qe goes. Vince reinhardt has a different view on what janet yellen is going to do. He is going to say were going to keep low rates for longer. We are in that camp. You have to amend your view. What i have to be clear about his we are able to have our own views, but let me jump in your. Im going to drop a chart. You will recognize what that is. That is the rise and excess reserves that banks are parking in a coffee can. Is that the best they can do . It is not the best they can do however we are sitting a world in we are sitting in a world with low Interest Rates. At some point they will go up. At some point people are going to move deposits. Youre not assume that all that money is yours for the long term. It would be irresponsible if i did not ask should we be breaking up these banks. Should we split up fortress diamond . Two and a half years ago we wrote a note on this. This views we have in that note exists today. We think breaking up is hard to do. Can you buy the banks . No. You have regulatory issues and expense issues, but there is a piece of that would the Asset Managers. Which banks will get more value because of the Asset Managers . We have those views as i mentioned, but we are overweight because devaluations are low and we expect over time they will go higher for a variety of reasons. But from your perspective black warlock owning the bank is a little tough to pitch. Lets look at jpm specifically. They have a fairly large asset manager. Lets say you want to spend that out. You get some dollars for it. We think we are 85 done. Is 80 a good place to invest . Is haiti a good place to invest . More answers on that. This surveillance bank. This is bloomberg surveillance. For whatever the reason oil this morning. Surveillance with Olivia Sterns and brendan greeley. Critics china auto sales slowing down. Forecast to expand by 7 . That is half the pace achieved in 2013. According to the state total deliveries may top 25. 1 million vehicles. 2014 losses. He also had losses tied to a failed merger with freddie mayc and fannie mae. Staying with billionaires is set to be the richest person in asia. He stands at 30. 8 billion. That puts him almost 3 billion ahead of alibaba chairman. It has been five years since the 7. 0 magnitude earthquake brought down haiti and killed hundreds of thousands of people. Stephanie ruhle just returned from haiti. They want to tell the world they are open for business. They want to be open for business. The earthquake happened to five years ago. Over 9 billion in government aid has made its way down there. The rubble is gone, but 90 of the people do not have running water. There is a horrible power grid. No public transportation. This is a vast swarm all of 100,000 people that did not exist before the earthquake. What do they need . Jobs and infrastructure and coordination. I spoke to people on the street. All you can do is buy i swore to dollars a day. All you can do is buy ice for two dollars a day. How much is that cost . Two dollars. A piece of ice in the house is a luxury. It cost 2. 50 to buy ice. It feels hopeless. What do investors see . Opportunity. In the third world, if you have a cell phone, it can then she. Heineken has a brewery and they sell to locals. There is a great case why there should be more manufacturing. It is the same island as the dominican republic. What they need is a government to get coordinated. This is a country born out of slavery. It is the government who said we are open for business. The Prime Minister was pushed out. It is a desperate situation. A lot of the problems is the corruption in the government and a lack of infrastructure that existed before the infrastructure. Did you get a sense of how much was caused by the earthquake . The earthquake was haitis opportunity to turn things around. They had all of this money coming in. There is some improvement, but that money has run out. No one is giving new joe new dough to haiti. Stephanie talk to Foreign Investors and some people who live in haiti. It is skeptical about what is open for business. That special airs tonight at 9 00. Lets take a data check. For futures pointing to a higher open. We are seeing oil falling. 39 a barrel. Youre seeing the euro weaker against the u. S. Dollar. This is bloomberg surveillance. We ripped up the script and bring in the decadeslong perspective. The world reacts to Goldman Sachs. Lower for longer on oil. When i look at the time function of the Goldman Sachs research to me, it is profound. What would it mean for the big Oil Companies if we are lower for longer . Bad news all over. If Oil Prices Stay at the current level, all of these companies will have to rethink their strategy. They will have to go smaller. Some will not survive. It is a mixed bag, but generally, bad news for the industry. Do you agree with Goldman Sachs and the cost the most of the group or can you be more optimistic . I thought lower for longer we should have coined this. When we see the contract, somebody is betting their dollar or their clients money that oil prices will go lower. Lets put it into perspective. This is oil adjusted for inflation. We are back to the extended low price from 86 into the 90s. And has turned into a game of poker. As we look what we are looking toats who can hold out the longest. Who wins the game of poker . I doubt it very much. Some weaker members the situation as per terry is good theyre producing less oil than they would have liked because of the economic sanction and are getting less than what they hope is they are getting less than what they hoped for. We need more than 70 or 80 oils just to make it. We are in a bigger hole. Saudi arabia is not going to change. They are likely to change its strategy anytime soon. As it were talking about earlier, the last time we saw oil come down this far this fast, it is irrelevant at this point. The demise of opec is greatly a saturated. Having said that, it has to change its tragedy. They get the in out. Do you have a tipping price on a barrel of oil where our behaviors change dramatically . Thank you. If you are just waking up, Goldman Sachs with a bombshell report on the new oil order. How low is too low for oil prices . Stay with us. Critics good morning. The north american car trade show is kicking off. Ill handed over to you. Thank you for joining us. The one thing that i get excited to ask is the exchange rate. With you, it is almost no point. Not all that we produce, the biggest part of it goes outside of the country. Youre selling about 30 . It has been a successful experiment. I would not call it an experiment any longer. We have been wellestablished now. We have invested 6. 5 Million Dollars into the plan. It will be our biggest plan. You are showing cars you do not feel desk a peasant successful for you. Hi and that luxury. Are you focusing on the higher and now . Weve always been a premium brand. One are typically coops. We have not changed our policy. We are not focusing on any part of our lineup. What would be your daily driver . My daily driver is the eye three i3. Electromobility is really important. We are happy with the sales. You are such a sports car guy. The eye three is a computer oriented car. You cannot help but being impressed. It is a true bmw. You are still the leader here. What to expect for 2015 . The same thing. The leader in the u. S. And worldwide. Back to you. Thank you. What do you think about that . Everything seems to be the hybrid between the suv. Coming up, the macro analysts. They answer the twitter question of the day how low is too low for oil prices . The story of the morning. Oil breaking through 47. This is a different kind of below 47 print. Much of this coming off of a Major Research note. The entire oil order has shifted by the way capital will be deployed. There is oil. West texas intermediate, 47. 05. That takes us to india. Breaking news with john kerry. He was in a car accident. His driver on the way to the hospital. There was an accident. Carrie john kerry is unheard. This is what we can call the modi effect. Is that what we are seeing now across india . One modi is trying to do, you saw the stock market reflect the optimism when he got elected. What he needs to do is do a couple of things. One is the tax. Taxes in india are so open a. Are so opaque. You have no rights to intellectual property. The judges sometimes do not give you rulings. The other one is majority investments. We see this in the u. S. We are honored to have you here. Lets bring this back. Bombay is on the west side of india. It has been the americanlike capitalistic success that has propelled modi to his election. Who is he meeting . Ahead of a diverse india or a capitalist . Of both. He is representing all different sides. You have the socialist side that we do not want to give up. You have the other side where he wants every person there to rise up to the middle class and above. That combination is harder than modi thought it was going to be because india is stuck in a bureaucratic nightmare. The Infrastructure Investment is under way. It is being built from mumbai to delhi. If we can get infrastructure in india, you have things other countries do not have. What you really need is to get things across from one area to another. How is president obama viewed by the greater indian people . The elites, the basic people of india. I do not think it is that people know that. This is more of the middle class. You spent some fair time in india. You can feel the energy. Looks like it is only india and china anymore. Everyone thought china was a miracle because they had moved to become more capitalist and india could not do it. Do you think you will be able to cut through the red tape . It will take a longer time. India and china are importers of oil. You are seeing the disparity now. You see it as a commodity story. It is a tailwind while he is trying to fight everything else. This is the biggest cost for india that they are am porting. Four and cora c foreign curis cut foreign currency is going to hurt them. Bricks 10 years ago now you have to you have to pick your spots, not the overall markets. Where is your single best by sector . We have done best in transports. You agree with tobias. Retail is the place to be. That is where you will see more i would say qualcomm. It is the cheapest. They have issues. Time for the agenda. Brendan, you are kicking it off. I am looking at the fee for goal of the year. This is amazing. Here is what you are looking at. You can barely see it. She picks up the ball with her right, she has her back to the goal. She dribbles it to the left and swivels to the goal and pops it in. You will have to do that again. That is what she did, but it worked. There are so many professional male Football Players on this list, that she made it this far is being celebrated. People would be foolish to not make it her year. The championship playoff at 8 30 p. M. It will be the buckeyes versus the ducks. A lot on the line. I do not know how much you follow college football. The winner of the Heisman Trophy is on track to have the greatest season ever. If you care about college football, i do not, this is a big deal. Oil is what is shaking the markets today. Commodities in general moving down. Copper moving down. It will make for an eventful week, to say the least. A huge twitter response. How low is too low for oil prices . Under 20, the oil prices. I do not like the idea of steak knives. There is the pressure that the strongest u. S. Dollar is putting on the price. It is Getting Group and ask it is getting rubenesque. It has this. How long it will take to clear off this glut of supply. Oil you mentioned is interesting. The currency is going up because people are still buying our treasuries. Once you see growth outside the u. S. , you might see pressure coming off of our dollar. Thank you. We will have full coverage from our news bureaus at the end of the month. Secretary is going to paris. Futures up 12. We leave with futures up and down futures ebbing up 70 right now. All right. Bloomberg surveillance continues on the radio. Stay with us all day on Bloomberg Television and radio. A good monday morning, january 12. You are in the loop. We are 90 minutes away from the opening bell. It is the start of earnings season. Copper is falling to a new fiveyear low. A lot on the agenda. Is it a rerun for mitt romney . He is thinking about a third run for the white house. Will three be the charm . We will talk to jon huntsman who is on a mission to annihilate the partisan divide in washington. Alibaba rocked wall street when it went public. How do we topped that this year . We will talk with liz myers who spearheaded jpmorgans babe licks biggest public offering. We will talk with one space expert who says