Transcripts For BLOOMBERG Bloomberg Surveillance 20151102

Of course youre looking at the lire in turkey. Tom we start with american job economy. What i noticed by the time were done with surveillance we may get to a 3 yield on the u. S. 30year bond and would be a big deal showing the higher yearold environment and the optimism about september. Francine looking at the u. K. Manufacturing data we had from this country an hour ago and made it that more interesting that we hope to understand better how mark carney looks at inflation and thats superthursday this thursday. Tom did you survive halloween . Francine i did survive. I didnt dress up. Im so european. Tom i went as david gura. Francine lets get to david here with bloombergs first news. David . David a surprise win for president erdogan. His party defied the polls and swept back into office in the parliamentary elections and strengthens erdogans 13year grip in power and the majority gained in the elections they lost and turkeys benchmark index rose 5 . There was another surprise, euro area manufacturing increased this month according to research from market economics, the purchasing manager index unexpectedly rose and German Companies did better than forecast and manufacturing grew in all countries except for greece. Angela marckell faces more internal problems over the refugee crisis. Merkels Coalition Government couldnt come up with a position on how to deal with the biggest influx of refugees since world war ii. Merkel contends germany cannot close the door to migrants and as many as millions may arrive in the country this year. Experts say theres little doubt a russian jet that crashed in egypt broke up in the sky. Wreckage of the airbus 321 was scattered across a wide area of egypt and the Sinai Peninsula. All 224 people onboard were killed. Theyll look at the possibility of an onboard bomb or structural failure. And japan and south korea have agreed to speed up talks in one of the biggest issues that they have. There was a meeting in seoul and abe said hed seek an issue to korean sex slaves the japanese soldiers took in world war ii and south korea demanded they accept greater responsibility. Thats the bloomberg first word news. Tom . Tom let me do a data check. Turkish real moving, the euro up fractional, the eurodollar is fractional, 110. 06. The nymex crude, we saw elevated oil last week, back and fourth, 45. 90 on american oil. The vix is where it is, the punch bowl is full, one of our themes this week, 15. 07 with the dow dashing not near 18,000 but will take it. And very quickly to the 30year bond and then the lire. There is the bond, 2. 96 all of a sudden gets my attention for a dash. That 280 on turkish lire over to the bloomberg terminal. This is where slope matters. Heres the abrupt collapse of the lire 20 years ago, 15 years ago and then heres the success of the government with the devalueation and the new leg up is that weakness, new weakness in the challenges of islamist turkey with the erdogan victory and turn it around with trength. Policy by devaluation. Right now we have an important guest to get us started for the week. Francine we do and i like your chart there. If you look at the moving average, we had a brilliant note that said others see the lire climbing 2. 8 . Tom look at that chart francine im not sure why they are so optimistic. Lets bring in our guest for the hour. James, great to have you on the program. James happy to be here. Francine well talk china and u. K. When you look at turkey and see the lira soaring so much, what underpins it is people want stability. And there is so much concern how you see a country with concern about muslims and political stability. James and what will be the terms in Central Banks and i suspect well have easier policy than would be reasonably suspected if the Turkish Central Bank were generally independent. I think the political impacts would be higher. To me i expect shortterm strength for the turkish lira but be troubled on a 310 month view. Francine because of the central bank . Weve seen in the past mr. Erdogan trying to get as much power as he can but doesnt have the outright number of people to change the substitution to making it a oneman show. James increasing political influence on central banking and the emerging market will have to an tricky and difficult one. To me the shortterm rally will present a better selling opportunity and building a foundation for longterm progress. Tom james q good morning. Love having you starting us for the week here. Is turkey an emerging market . James to me it certainly is, an emerging market because of the deficit challenges it faces in common with so many other emerging economies. Very hard to argue its stock markets and Financial Markets are genuinely developed. Tom if mr. Erdogan is reaffirmed as the leader of turkey, can he be proactive about dragging turkey into nato and what shift will you see him dialogue with this victory for mr. Erdogan [james less european in his perspective and on the other hand, it is clear, longterm Financial Health of turkey is very dependent on it becoming a genuine part of the European Union. Francine gentlemen, you look at emerging markets, how does turkey stack up to others . Brazil is a mess, if you get russia, the price of oil is hurting the economy and inflation is high. James turkey is the more vulnerable emerging economy because of the deficit challenges and the ongoing weakness of the turkish lira will be a significant challenge for Global Investors want toing put money into turkey. Francine is there a single best emerging market you like exposure to or either direct or to companies who sell it. James i want to be in an emerging market for what they do best and see excellent Longterm Technology bets in asia and would be a buyer of taiwan semi and hunhai precision and are companies that demonstrated longterm deflation and make money. Tom well show the chart of euro lira and theres dollar lira in the rest of it as well. How do currencies play in their investment. Should they worry about currency movements as they look abroad to the philippines or south africa . James i definitely think they should because its easy to lose as much on the currency as you might gain on the underlying investments. The currency issue is part and parcel of the investment decision. Will tom with euro sterling, how do you field in making money with a currency play in Equity Investment abroad . James there are some economists where hedging the currency is extremely chief and very effective. Here in london we can hedge cable at sterling dollar very effectively and same with the euro against the pound. Very easy to hedge, take the risks off and move on. Nondeliverable currency such as the taiwanese dollar, much more tricky. Francine on the pound dollar we have u. K. Manufacturing unexpectedly accelerating and we happen to find out more of mark carneys thinking thursday but your gut feeling is what, a hike happens sooner than expected . James i suspect mr. Carney would want the u. S. To take the first step and i think he recognizes the u. K. Economy when all is said and done is small and needs to be a follower rather than a leader. Tom what portion do we need to have emerging markets, do you weight it to a portion or to turkey right now . James im interested in trying to find great Quality Companies and if you said what might i ook at in turkey it would be the ford motif and makes the white van, extremely run j. V. And would do well from the weaker lira. Tom mr. Bevan will be with us through the hour and we have a killer chart for you today. Hes not discontent with emerging markets but we look at globalization and misdiscontent. Coming up, the Nobel Laureate from Columbia University will join us, out with a new look, rewriting the rules of american economy. Francine lacqua in london, im tom keene. Bloomberg surveillance. Tom this is caroline hydes summer place and goes there a couple times a year over the winter. He bosferus in istanbul. Francine lacqua spent time there last year. In inistanbul, the most important election there. We need an important business flash. Heres david. David more problem for volkswagen. The german automaker failed to tell u. S. Regulators about one death and three injuries involving its vehicles and has to do with a database made to save lives. It will have an audit on safety reporting laws. Manufacturing still has not bottomed out. Chinas official purchasing Managers Index was unchanged in october. Manufacturing has been battered by falling demand around the world and deflationary pressures at home. Europes biggest bank hsbc posted Third Quarter profit bigger than expected. Hsbc cut costs, especially those related to fines and legal settlements. The bank unveiled a plan in june to close money losing businesses and cut as many as 25,000 jobs. Thats the Bloomberg Business flash. Francine, i know you have more on this. Francine we do. One of the big top stories is bloombergs biggest bank. Lets bring in the u. K. s biggest banking reporter and james beva nsks. Thank for you joining us. If you look at hsbc, the big question, and it is will they leave the u. K. . Why should we take them more seriously now than four years ago . Steven hsbc has really stalled to put pressure on the government to get concessions from them in terms of taxation and the regulatory structure. We are noticing an internal change from their c. E. O. Coming through and they got concessions on taxation and recently just heard from the bank of england and will have much more control over their legally separated fenced u. K. Retail subsidiary. If anything they might be leaning authorize staying though the deadline will be pushed to next year. Francine on the profits, a lot of the revenue came from the fact they had left litigation charges. Thats a good thing. But it doesnt mean the business is strong. They were able to cut costs significantly . Stephen they were and at the first half they took a 1. 3 billion charge for exchange rigging and had to compensate customers for insurance they didnt need. And lloyd took pound of that. But we are seeing its kind of a lack of misconduct where there are some slightly worrying signs in terms of revenue and loan growth. Francine what do you think of hsbc, its still one of the biggest banks in the world. The c. O. Unveiled a threeyear Strategic Plan in june. Theyre delivering. James i was expecting more on delivery relative to the 10 points in the plan. I suppose you could say the good news was the capital ratio figure was better than expected and is good news with the revenue numbers because at the end of the day we need growth and you can only get so far by cutting costs and the revenue numbers i thought were quite off. Tom i find interesting the operating incough hsbc versus jp morgan, 20 billion in shanghai banking and 32 billion, a lot more for jp morgan. And yet the employees are flipped. Jp morgan has 235,000 and hsbc has not less but more employees. Is the real story here massive job cuts to come . Stephen were not sure about further job cuts now. Where the job cuts will come is from the u. K. And europe and mexico and turkey and potentially in the u. S. They are actually putting 4,000 more people in china, hsbc, and are really doubling down over there. Tom they have to sell off the other banks ala what Deutsche Bank is doing is resize their ratios with other banks, right . Stephen hsbc started to boost employees without looking so much at how profitable the businesses were and when you started to see a slowdown come through they had to look long and hard at their cost face. Tom what i would point out is they cant let steve major go. He wrote the Research Report the last week or two. They cant let steve major go. Im editorializing. Fope you heard it from tom keene, james, when you look at the banks, a lot of the european banks and a lot of bigger investment banks are cutting down that business to focus on a more retail side. We heard from Commerce Bank today and theyre training c. O. s and profits were up. James it demonstrates the lack of transparency. To me its all about reliability. Id rather pay more to own shares in wells fargo and jp morgan and own shares in investment banks such as Goldman Sachs and seen how much they spent on good quality i. T. And genuinely believe theyll be longterm winners. Stay there because well talk about china next. Coming up later on Bloomberg Markets well hear from the emerging Group Founder richard branson. Well talk about space and of course about airlines. They have a couple trains here in the u. K. And ask him whether he sees better business. That interview coming up at 10 00 a. M. In new york and 3 00 p. M. In london. This is bloomberg surveillance streaming on your tablet and phone and bloomberg. Com. Francine welcome back. This is bloomberg surveillance. And francine lacqua. Its a foggy london and you cant see st. Pauls. Usually this shows a picture of st. Pauls. Heathrow is canceling 10 of the flights. The fog is causing widespread transport problems. If youre meant to get on a flight, please call the airline or the airports. Tom keene is in new york. Time for my morning must read and from the Bloomberg View Editorial Board and is about china. That china stop focusing on their g. D. P. Target to focus on sustainable growth. The fixation on the growth target is a mistake for observers and chinas policymakers alakeeffect. Alike. This is about inflation. They stepped up efforts to averse the risk with a Interest Rate cut. When you look at deflation, how much do you measure it . This is chinas rising debt. Im going to put these two questions to james bevan from c. C. Direct. When you look at investors, are we focused too much on growth and should we instead be worrying about this chart which is deflation and debt . James i worry about all of these things. First, the chinese grade is not close to the official data and if you ask me to aggregate on how much growth there is in china, to me its about 3 . On the inflation front we know weve had c. P. I. , Consumer Price index inflation, less than 2 for 13 months. Much more worryingly, weve had negative inflation, in other words, deflation to reduce the price index level for 43 months. This is really toxic. And this december. The fact weve had 1. 5 trillion in new credit creators in the last 12 months and 10 million. In Growth Matters and deflation. Francine given the figures and how much theyre borrowing, youre right to mention the figures, outstanding borrowing and surged since 2008, why are we not worried about a credit crunch . James we should be worried about three bubbles that will have to be deflated and will be difficult to deflate safely. There is the credit bubble and the investment bubble and property bubble. Theyre all interconnected because the excess growth has gone to producing excess investment which has driven the consumer rate inflation and we need capacity reduced and genuine growth taking up that capacity and why growth is important. Francine we had a chart looking at the job market in china. If you look what we heard from the plight of lost weeks so weve gone from one child policy to a two child policy but how much does that spur consumption . James its important long term and will take years to feed through with a recognizable sense with regard to the impact on economy. Thom i like what we saw tom i like what we saw last week in china and im sure you were surprised by the news making ideas. What do you expect from the chinese leadership the next 12, the next 24 and for that matter the next 60 months. James i would say three things about china which always surprised me. One is that extraordinary to take a longer term view as we regard as normal in the west and is comforting in some sense. The second issue i think is very important is whenever i meet people who are within the chinese official operators, im amazed how competition and how capable and switched on they are. And that i think is a great source of confident. The first factor i think is critical is that they do recognize their role in the Global Economy and are extremely aware of the their impact on the policies in the rest of the world. Absolutely china will spend more money and continue to hes policy in order to ensure the landing is relatively soft. Tom the political idea of a generational sea change as well. James bevan will continuous. Our next hour, we link profits and revenues to the american economy. Steven whiting will join us, total chief strategist and well talk to him as well particularly as we begin to look to friday and the american jobs report. Thats an important one. With futures flat, stay with us. Oh, the mets. The mets. Tom good morming, everyone. Bloomberg surveillance. We have daylight savings time. I was going to swing forward and david gura said no, stupid, fall back. We welcome all of you not on daylight savings time in hong kong. You got an extra hour of sleep. For first word heres david gura. David were here on time, thats what matters. Angela merkel is battling over immigrants. More than a million may arrive and a meeting with Party Leaders failed to come up with a position they could agree on. A number of Coalition Members disagree with merkels decision on there shouldnt be caps on how many migrants germany will take in. A russian jet that crashed in egypt appears to have broken up in midair and wreckage was found in a large area of the Sinai Peninsula and all 224 people aboard the airbus 32 is were airbus 321. They are looking at a bomb on board or a technical reason. The republicans will be the Opposition Party on capitol hill. Paul ryan made the rounds on the talk shows and said republicans will be a more productive and open force and he promised to open a clear agenda on the economy, health care and Foreign Policy. Theres been a stun ago election surprise in turkey and the a. K. Party of erdogan maintained their authority in parliament and retains his 13year grip on the parliament after turmoil. It is similar to junes election when erdogans party lost. He takes a tougher line on nationalist and criticized others as traitors. You have more on the story. Francine this is a critical point because we need to understand how erdogan will govern turkey and lets go to a man with more of a clue than us. Tom mckenzie on the banks. Give us details on the election. This means people want stability. What does it mean for how erdogan will govern from now on . Tom m. absolutely. A reminder with, erdogans name wasnt on the ballot but looms over this electoral process over turkish politics and his party pulling off a stunning win beating the forecasts by the analysts and experts and got 49 of the vote and up their vote total by 4. 5 million. And theyve done incredibly well here. They won support from the nationalist party and even won support from the prokurdish party. Those kurds who have supported the party is coming back to the a. K. Party, winning overo on a message of security and erdogan pushing the security message and the turks saying theyll buy into it because there has been rising tensions since the Inclusive Elections in june and seems the voters have wanted stability over all else and of course there are also economic challenges it now faces that the new government. Now back to you. Francine tom, youre absolutely right. They wanted stability and got it for the moment and see what the lira has been doing and it has been soaring and may soar another 2. 8 . How much does it actually make sense when you look at the challenges ahead . Tom absolutely. The market reaction, big relief, big pickup in the risk assets in turkey as you rightly point out. But as investors weve been speaking to today say this is really shortlived and is their opinion. They say longterm, one investor speaking to us, the lira will come up. There were big structural changes that needed to take place and growth is flowing to around 3 to the first half of a. K. Party rule was around 6 . There is the question of unemployment which is rising and inflation which is rising and then theres the question of the constitution. Two things, key. Constitution. Will the president push for president ial powers. Secondly, the centralization of his power, will he continue to put a strong grip on institutions like the central bank and will that put off Foreign Investors who were so key to the Economic Growth in turkey . Guys . Francine tom, basically youre saying he wont have enough vote tots change the constitution to make it a oneman president ial rule but thats how hes been governing in the past. Tom right, exactly. At the moment he doesnt have the votes needed to push even through a referendum. He needed 330 and looks like 316 in the parliament here. They had 330 and will go to the people of turkey and say do you want this executive star president ial system and he doesnt have it but the critics say hes been pulling in these power anyway and acting like a de facto executive president anyway and will continue to do that. Other people we have spoken to say they may try to win over votes from the nationalist party to get them to back a referendum. Guys . Francine from one tom to another, tom keene, you have more on turkey. Tom lets do a briefing on domestic turkey and in our next section will look at turkey as well. Walt is absolutely wonderful on domestic turkey and his book is turkey at the crossroads and joins us now. You set up a dichotomy between the Prime Minister and president. To most of our viewers thats foreign. Explain to us the domestic tension between mr. Erdogan and his colleagues . The tension has come down during the Election Campaign and had to work as a team. The policy for erdogan has been in the previous Election Campaign to amend the constitution and be more of the power of the president. As it is now the president of turkey, according to the constitution, the powers are limited and the real power play is the Prime Minister. Now, is there going to be tension between the two . Certainly a possibility. The reality that erdogan doesnt have the numbers in the parliament to amend the constitution and they can try to reach out to some of the Opposition Party to get to this 330 but dont think it will be a shortterm priority. The focus in the short term will be about security. Tom when i look at turkey we go as tourists and our image of turkey is so shallow and amateur, who will mr. Erdogan play to or work to or be political with within turkey . Is he speaking to the working class of turkey, is he speaking to istanbul, ankara. Wolfgang the party sporters. You can rely on the average man on the street until their party goes into power. Tom is his election a defeat for the elite . Wolfgang to a certain extent, yes. A good part of the rule is the leader, we are betting and with erdogan embroiled would be constrained and this didnt happen and theyre hoping that erdogan will use the political mandate hes got to start the Forward Momentum because the turkish economy over the last two years have seen four elections and taken a huge hit. Theres a huge need to restore the reform process and restore the central bank and put together a very good economic team. Thats a question now. How will erdogan use this mandate, for constructive purposes or weaken the checks and balances . Tom francine, step in. Francine youre painting a realistic, difficult picture, right, more tension, little reform and actually we have mr. Erdogan back in power and causes its own set of concerns. Why is the lira soaring by so much . Wolfgang say it again, excuse me. Francine the lira has been soaring quite a lot but you paint a picture of tension. Wolfgang investors like uncertainty more than they dislike their party being so strong. Now, the election the outcome of yesterday clears the way in terms of political uncertainty. We know we are going to have a government and strong government and they have a strong record in office. Tom lets continue this discussion and bring it over to europe for that matter to the United States as well and continue on nato, certainly turkey is a part of that. Joining us in our next hour is the dean of the Fletcher School and formerly with nato, an admiral will join us and on the task forward for nato. With wolf picolli. This is bloomberg surveillance. Francine welcome back, this is bloomberg surveillance. Im francine lacqua. You barely can see st. Paul. Tom its a fire . Francine youre a man of literature. Im more pragmatic. And it will continue to affect flights from heathrow. If you travel, check with your airline if it makes a difference. Tom dickens never did the flight path into heathrow, did he . Francine im sure wed have a book about it if he had. Lets get to wolfgang. We were talking about egypt and of course what we saw over the weekend and turkey and the election victory of erdogan changes the dynamic with europe. It was strenuous relationship at best. How soon will we know where president erdogan will take the next step with europe . Wolfgang i dont think erdogan will take any step. I think theyre waiting to see what europe can offer to him in terms of what turkey can do with the migrant crisis and i think the price erdogan will ask for this is now higher because its stronger than before and has a full years mandate and is not basically going to compromise with the europeans. Also, this election was nothing about europe. Europe is no longer a voting issue for erdogan and its up for the europeans to see how they want to deal with turkey but the price will be higher than it was until saturday. Francine but of course the strife of syria and iraq is now spilling over to the borders of turkey. And i guess the question is how will president erdogan deal with that . Wolfgang that will be certainly a priority. I think the threat has already gone beyond the border, meaning the threat is already inside turkey. Just last week, two journalists were decapitated. So certainly there will be a priority. Weve seen already raids by the Security Forces in turkey against isis affiliates. Well see more of them. The challenge here is phenomenal because the border between syria and turkey has been permanentable for a very long time and theyre unclear in turkey how many are now in turkey and certainly they dont even know where they are. Tom the magic of your education is youre educated in turkey, educated in italy and then at the university of wales. I dont think theres anybody out there like you with this Cross Section of academics. Let me ask, the United Kingdom and the United States, do we want turkey in nato or is it to our advantage to have this perpetual, what, a thousand year old tension . Its almost like the pope in constantinople a million years ago. Wolfgang we need turkey in nato. Tom why . Wolfgang turkey is able to deploy the troops not europeans are willing to put on the table and lets look at the location, all the hot spots from iran to syria to iraq and so on, and russia, turkey is a key player here. Turkey has been a longstanding loyal ally to nato. Now the year turkey immediately will say yes to requests coming from the sea is over. And so what we need, we need a more constructive kind of dialogue and a better understanding from the u. S. Perspective of what are the priorities of turkey in the region. Tom im embarrassed by our stereotypes of turkey. I want to you defeat those stereotypes right now. Whats your single message that we need to know about the modern turkey that we dont know from what we learned about in 1923 in our history books or for watching laurence of arabia for the 17th time. What do we need to know about the modern turkey . Wolfgang i would take a very close look at the map and look the a the hot spots around turkey and try to understand what this means from a turkey mans perspective. Its very easy from the u. S. Perspective to go in and bomb here and there and work back. Tom theyve got to stay there. Wolfgang theyve got to stay there and work with the countries and trading with the countries and seeing the threats posed by the countries. We need to understand what is the point of view of somebody stuck in that region. Tom thats not a difference answer than t. E. Laurence would have given a thousand years ago. Thanks so much, from teneo research. From bloomberg, the global head of m a from Goldman Sachs. Well see how close it is in m a. Perfect time for speak to mr. Lemkau. Futures up 16. Bloomberg surveillance. Good morning. Tom good morning, kansas city. Its a mets orange sun rise. Down in flames. Well cover that in the next hour. The mets. Im speechless, francine. I dont know what to say here. The mets, just down in flames. Francine i know, tom. You bore me with the mets. I want to talk about rugby and stock in london. Tom australia gave a good fight and i watched the mighty all blacks take it but australia was tough all the way. Right now we need to catch up with the news and economics and finance and investment and International Relations, also on airlines. Heres david gura. David quarterly profits soared in the largest Discount Airline in ryanair and earnings rose 41 in the fiscal second quarter. Ryanair said it attracted a Record Number of passengers in the summer and the airline said fullyear earnings will be at the top of the range. A prediction from the analyst who correctly forecast oil prices would collapse. Gary ross of the p. R. A. Energy group said opec probably will hold production steady at its meeting next month and said Global Production will keep growing and output from nonopec countries will fall. Fiat Chrysler Jeep is a huge hit and last year Consumer Reports ranked them the second least reliable in the u. S. Market but consumers dont seem to care. Jeep is closing in on a second Straight Year as the Fastest Growing major auto brand in the u. S. Jeep sales are up 23 this year. Thats the Bloomberg Business flash. Francine, over to you. Francine thank you so much. Now lets take a look what were watching the rest of the week, weapons, the fed chair janet yellen gives testimony on regulation. And on thursday the bank of england releasing the Rate Decision and its super thursday and were expecting forecasts. And then on friday, tom is very excited about this, the monthly u. S. Jobs report and were all excited because it gives us an indication or hope it will give us an ineducation when the fed hike may come. James bevan is still with us. Its a great week because we hope to have more of a clue when we look at the data, with the forecast of the bank of england or the u. S. Jobs report. James i would have added to the events mr. Dudley and mr. Fisher talking wednesday and ill be looking to clues to how they see the evolution of fed policy from here. Francine were always looking for clues and were expecting more clues. By the end of the week come friday, will you have a much better understanding of when the first rate hike will come from the b. O. E. And the fed . James absolutely. For the fed, i would say theres now high data dependency in the jobs numbers and Unemployment Rate. Im looking for 170,000 on the jobs numbers and looking to 5 on the Unemployment Rate. Anything that says the economy is stronger there i think raises the possibility of a fed rate hike in december. I do believe well see a spike in december. Francine this from the fed, what does it mean for the bank of england . We were promise that come september well understand the thinking of mark carney a little bit better. Manufacturing was strong. James i was wrong especially by the manufacturing numbers and thought wed get a relatively poor set of numbers which wouldnt fit with my perspective of how the u. K. Economy is moving. And to have these numbers basically say youre wrong, u. K. Economy is in better shape does i think put a lot more pressure on mr. Carney. I wouldnt be surprise fed we see the bank of bank ending at 21. 16. Sorry, tom. Tom i dont mean to interrupt. Francine interrupted us, its a one group interruption. James, when i look at the reality, it is better in england but theres no inflation. Are we going to see another headline out from b. O. E. That says we really, really, really want to raise rights but theres no inflation. Thats what we saw last time. James a 1 3 of the british c. P. I. Is down to globally traded goods and services and we know theres widespread deflation in global goods and services and therefore it takes a lot to move the Consumer Price index number north in the u. K. I think when the shift in the Oil Price Drops out of consideration, then well see things move up quite smartly. Tom i think this is so important as mr. Bevan states we have important speeches this week from fed officials. Im more worried about the actions of the central bank. And the last time mr. Carney, like janet yellen, had to blink. Francine this again throws up what weve been discussing, tom, which is communication if the bank of england is indeed a little bit more dovish than the markets are expecting, how does it get transposed to the real economy without actually hurting the pound . The pound is a problem. Jake theres a fascinating interplay with them. I think theren is an expectation you would expect a easier bank of england with a tougher government and we dont have a particularly tough vernment as someone missed mr. Osbornes proposals on supporting incomes and that would encourage mr. Carney to think he needs to tighten earlier as otherwise would have been the case. Francine if we look at the pound dollar, 1. 5477. At what point does it start biting . We have guests coming on the program saying its not great, not great. But there must be a level where exporters really start squealing. James i certainly still believe the dollar will strengthen against the pound on a trend basis. When i look at the fundamentals of the two economies, thats the logical place to end up. Francine tom . Tom lets bring it over to the selfishness of this friday in america. Were all dependent on data. I like dependent on data rather than datadependent. If were dependent on a jobs day, what will we look at besides the headline jobs number . It has to be wage growth, whether in the United States or the United Kingdom. James we have to look at wage growth and the employment number as opposed to just the shift in the number of people with jobs. And also looking to see what revisions we had in the prior months because when i join the dots on the numbers, i think were due two months of quite serious revisions. Tom what is the run rate on g. D. P. If we have a moldy Third Quarter, do you just assume we bounce back with a stronger Fourth Quarter . James there is growth for a bounceback in the Fourth Quarter. To me there are two real issues for the u. S. , one is the domestic economy continues relatively strong and i am surprised how strong the domestic Housing Market has been in the u. S. , just as im very surprised in the u. K. , house strong sector. I look at the detail of the data as i know you do. And its these pockets of unexplained strength i find particularly intriguing right now. Francine what about manufacturing in the states . James in the states, u. S. Manufacturing is not going to be everything that everybody expected because the export situation with the strength, the dollar is noticeably more challenging. But domestic construction activities associated with the Housing Market clearly has me constantly surprised. Francine youre expecting a fed hike in december. James i am. Francine the end of the year and december and a wobbly month. This would be desperation . James absolutely not. Francine if they miss the slot they go back to square one . James weve all agreed whether it be dependent on the data or data denied answer well have to see ms. Yellen come to the table and say look, these are the numbers and this is my decision. My expectation well see a hike in december is predicated on the perspective well have good numbers between now and then. If we dont get good numbers, its game off. Francine thank you so much, james bevan. Great to have you. Now bloomberg surveillance continues on bloomberg tv, streaming on your tablet and phone and bloomberg. Com. Coming up next hour, we speak with the global chief strategist at Citi Private Bank and well discuss the jobs report and the bank of england. Tom it is jobs monday, and this friday brings Economic Data for janet yellen. Slack in america. Is it a bear or able market . Can you tell . Are they in asia, or is turkey in europe . We speak with admiral James Stavridis. This is bloomberg surveillance , live from our World Headquarters in new york. It is monday, november 2. After a fourweek vacation, shes back. Francine lacqua is in london as well. Francine the u. K. Manufacturing feature that came out figure , growth isut expected to be a little between. A little bit weak. The bank of england is just as data dependent as the fed is. Think they areot going to wait for the fed. They are going to get out in front of the dow. In . Like how i got that very good. Geography with tom and francine. Lets go to our bloomberg first news. Heres david gura. Shanking the 13 year group on power. His party regain the majority of loss in elections five years ago. Stocks benchmark rose 5 . Plane blew up in the sky over egypt. The black box has been recovered. They are said to be in good shape or u. S. Safety investigators may have found the faro. Of cargo ship el 33 people were on board. The ship had been found on sonar 15,000 feet below the oceans surface. Investigators are witty for confirmation. New House Speaker paul ryan says he will not work with president obama a conference of immigration plan. He says he does not think republicans can trust the president on the issue. He promised a clear agenda on the economy, health care, and Foreign Policy. He spoke while making rounds on the sunday talk shows. Fred thompson has died. The republican from tennessee spent almost nine years in the senate. Nbcs law lar on order. He died at 73. Tom what is it without a biopharmaceutical merger on sunday . Company. Ion for a tiny dyax. To buy maybe all of our other drugs will come from dublin as well. How about a data check . Equities, bonds, currencies, commodities. Futures up one. Eurodollar back to a 1. 10. A little bit of a blip for the euro. U. S. Bout the 30 year bond . 3. 0. We have to put in dollaryou lire dollarlire. 2. 82, showing dollar devaluation. A little bit of a bounce of the erdogan election as well. Starts devaluation 15 years ago, and a persistent weakening of the turkish lira, and then a new leg of weakening with all the tensions and a little bit of a list. It is economy by devaluation. Steven wieting demanded it with his green m ms. Global chief investment strategist. How do i blow up my portfolio buying emerging markets . That seems to be what everybody does. Even lots of easy ways to do that. One of the biggest things that has gone on, in the past year and a half, Net Petroleum consumers and producers, those exporters that rely on Petroleum Exports have diverged meaningfully. By buyinged simply consumers and selling the exports. As the china fears grew acute and less months, they were misplaced fears, but while he came into the fray, we saw tremendous correlation rise. We saw stock to stock correlations, 75 , and every emerging market act the same turkey, for example, taiwan. Just a generalized view that they worried that they would be in a global downturn. Will seeou discrimination against her they are going to see the producers and consumers trade differently because the downturn in petroleum is a real one. Tom it is easy for citigroup to have a bluechip field. Disaster foris a the year. I have to reposition for 2016, and my bluechip anglosaxon i did not even get to the end of the question. Im trying to do a long question. Or do i want to have a little em in it . Steven i think the idea here is that some of the best Strategic Investments for folks who have a five to 10year window, some of the best opportunities are in fact in some of the beatendown assets. When you have an utter bust in petroleum investment, you are going to get reductions in supply and a higher price over time. Many of the emerging markets that have underperformed in this recent period have sold off so severely that their future rates of returns are good. But are we now in that world where we will immediately perform, where you will find instant gratification . I do not think that is the case. Tom francine, bring us in on this europe angle on visa. It is a big deal, isnt it . Francine it is a 22 billion euro deal it is a 22 billion euro deal. What this means, it means get control of the same europe. That means 3000 outlets or 3000 banks actually use this. It is putting much more pressure on its competitors. It also announced visa announced this as part of its profits, and it reported a new 5 billion by back. This was expected. However, the valuation is a huge number, and it does mean that they see value in europe. A macroook at it from perspective, this is visa saying there is value in europe. So fortunate to have Steven Wieting with us on his expertise on how profits and revenues fold into the economy. This is a good example of there is no nominal gdp, no animal spirit. When in doubt, synergy and combine. I know you cannot comment on visa per se, but we are seeing this in the industry, arent we . Steven buy, not built, when rates are low. For companies that have good Balance Sheets, money has been remarkably cheap. Tom you have to do the synergy thing. In an you are going to be pinto just ahead where we will probably get some recovery, industrial profits and growth. The thing we saw, these tremendous drag stash the Energy Industry has seen a 60 drop in profits. It is like the story janet yellen tells third some of these things are enduring, but others are not. Tom francine, the enduring thing i see with the conversation with the nestle ceo the other day is europe is doing better than the gloom, and all of it is about the confirmation. Francine it is, but is it doing that much better than the massive evaluation than the massive devaluations . Are you concerned . How much do you look at mna as a potential investment opportunity, or how concerned are you that the megamergers will unravel . Steven it is a specific opportunity for the best managers to determine whether there is an opportunity or not, and it will depend on deal by deal. Europe, wepicture of are more optimistic than you suggested because of everything that has gone wrong in europe monetary tightening in 2011, fiscal tightening and weakening longdelayed Bank Deleveraging in europe these things have left a performance cap on employment in europe. Periods a catching up for the eurozone, and we think that will offer good opportunities for investors for a few years. While there is any growth in the World Economy, there is a higher recovery in the eurozone. Francine you are not concerned that all of these encouraging numbers from europe are fictitious because of the lower price of oil, because of the . Eek euro and the cheap money it is not really filtering through anything apart from the weak euro . Steven it is very fundamental. You can see this in other parts of the world that and if it from the loan oil from the low oil. In asia, they cannot depend on a 60 drop year after year. Spain is growing employment a percentage point faster than the United States. We are seeing italy start to grow its employment. It is picking up toward the rate improvement we see in the United States, and it is far from a full recovery where they are considering monetary tightening your it where they are considering monetary tightening. Tom doug kass says, look, it is one big roll up. I want to get back to no nominal gdp. We are seeing consolidation like Andrew Mellon in the 1930. Is there a point where the government gets in the way of industry by industry by industry roll ups . Beenn i think there has some argument that lots of Monetary Policy and fiscal policy all of the things that had been done to cushion the keep in place some of the supply excesses, and certainly there are valuation problems. One of the things that has happened with Monetary Policy on hold for eight years in the u. S. , china revaluing its isrency up very gradually that there are problems with slow movements like that. At the same time, you cannot go in the other direction and say let the weak takedown the strong. Tom is that what is happening . This is a critical question. Steven i dont think so. The policy around the world is showing us that we can absorb hits like the excesses of the Energy Production bill and what it has meant for the price. Tom Steven Wieting is with us from citigroup. James stavridis is with us later. , our guestsorning from Columbia University. Joe staley its. Iglitz later today. Morning, speaker ryan. Hope you are well. Washington waking up on monday with a new speaker of the house. Pageantry last week of a new speaker of our house of representatives. Speakerw we have a new for business news. Vonnie quinn is not here. Here is david gura. Visa has agreed to buy a former subsidiary of visa europe. The lack of contributions from europe has long been seen as a weakness for visa. The fiat Chrysler Jeep is a huge hit. Consumers do not seem to care. Jb is closing on the second straight jeep is closing on the second year as the fastestgrowing automaker in the u. S. Thatral reserve will is the Bloomberg Business flash. Francine, over to you. Francine Saudi Arabian officials are said to be creating a special department to control government spending. Country leaders are trying to curb spending as oil prices have ravaged this has a huge impact on its neighbors. Editor, elliott gotkine, joins us. This is huge. Banklima, peru, the imf meetings, most economists were talking about the demise of saudi arabia. It is borrowing. Gets 80 saudi arabia of its revenue from oil, so when they plunge, so when prices plunge, that impact saudi arabias finances. The surpluses they have experienced in recent memory, an average of 7 of gdp, put out 15 years, that will swing wildly into deficit this year. , and thatet deficit justifies downgrades the other day on saudi arabias credit rating. In other words, saudi arabia needs to get a grip on this and start doing something. If it does not and keep spending at the current rate, it will run out of money within five years. Francine you were mentioning the rising deficit, the high price on energy revenue. So used to being such a rich country, providing so much largess for its citizens. How do you turn that around . Elliott it is important to note that saudi arabia has still got 650 billion burning a hole in its pocket. It has hardly stopped being a rich country. There is kind of a social contract that the saudi rulers, and a lot of it trickles down to ordinary saudis. If you went to riyadh right now, it would look as business as usual. Business has never been better for some. Retail sales are up 10 compared to last year. Elliott, state the pessimist case. What is the worry about the transition of the royalty, the transition of power, given the fragility of a fiveyear Business Plan . Saudi arabia is dealing with a number of factors, not just the plunge in oil prices. It is also engaged in a war in yemen, also against Islamic State as well. There was a 30 billion giveaway to civil servants. There are concerns that the saudi citizenry at some point will become dissatisfied, whether it is clamping down on freedom and whatnot. Elliott gotkine, thank you so much. Greatly appreciated, briefing us from tel aviv on saudi arabia. That was Important News buried in the headlines this morning, but we think it is important. Later, an important conversation and america. Pe, admiral James Stavridis will join us for a briefing on Surveillance International relations. Stay with us. Bloomberg surveillance. This is bloomberg surveillance. I am francine lacqua, from a very foggy london town. British airways is canceling within one 200 flights. London city airport are actually close. Do not travel unless you have confirmation that your flight is operating. Time for toms morning mustread. Tom lets look at a great morning mustread. This is fabulous. Fabulous. This is literally so good, it should be in the cfa level one curricula. Read the whole damned thing. It is absolutely superb. Read, read, read this. It is great. She goes after Merrill Lynch and ubs collegially. Steven wieting, you and i know this. Gap, gap, gap. Explain to mere mortals why so much of wall street adjusts the proper rules. They do not do this with mets baseball, do they . Steven you have to look at all the numbers. Life is complicated, and sometimes things that build up over years, when you readjust evaluation on the Balance Sheet, you say that we completely miserably failed this quarter on generating income. Take a look at government numbers. The corporate profits concept analysis ofnomic europe uses is probably the most liberal interpretation. Where you ignore Balance Sheet information. You ignore even in the Financial Sector bad debts, these sorts of things, and get a sense of operating without kabul without commenting specifically, she says everybody does it. Valeant did it worse. Thatere any way to police come with companies that are in excess of their norms steven . I think really of their norms . Steven i think investors do that. They have to do deep dives. This is some of the Forensic Accounting that investors hire and work to do and that Research Firms do, to ferret out good and bad in general for all firms. Real investors do this bottomup, company by company. Tom is it better than 2006 . Steven 2006 being the worst point, i think there might have been earlier points where these issues were there. I think it is difficult to see whether it is better or worse than in earlier periods. Certainly the accounting requirements ask more now. Tom Steven Wieting and. Itigroup coming up later, nobody on Virgin Atlantic is having trouble seeing through the fog. Branson with his fogarama on the front of his planes. He will bring the fog to Bloomberg Television at 10 00 a. M. This morning. Stay with us. Bloomberg surveillance. Francine this is bloomberg surveillance, and you are looking at gorgeous live pictures. It is amazing when you are looking at the oil tankers going from and to that place. You would not look and realize what the country has been through. Lets get to bloomberg world news. David is here. David a surprise for turkeys president erdogan. Parliamentary elections strengthens his grip on power. Turkeys benchmark stock index rose 5 . The Russian Airline whose jet crashed in egypt says technical faults are not to blame. Investigators are not so sure. The wreckage was found over a large area of the Sinai Peninsula. Everyone on board was killed. Possible reasons for the crash include a bomb aboard the plane to structural failure. Angela merkel is battling members of her own coalition over immigrants. As many as a million may arrive in germany this year. A number of Coalition Leaders disagree with her. The u. S. And south korea have approved a plan to do with the threat of north korean missiles. The plan calls for both countries to detect, disrupt, and destroy the missiles if necessary. There is growing concern that north korea will find a way to put a Nuclear Warhead on one of those missiles. And the Kansas City Royals beat the new york mets 72 in 12 innings, winning the series four games to one. Salvador perez was named as the most valuable player. Tom i dont know that much about kansas city other than they had this big park. It is great for baseball. David did you stay up late . Tom i did not stay up late. Both teams do not have the big payrolls. They are like mortals. These guys get out and paint houses over the winter. It is great. Mr. Harvey delivered for the mets. But they fell apart. Congratulations to baseball on a great world series. We need to turn to International Relations. You never know if you are going to speak to James Stavridis at Tufts University at their esteemed Fletcher School. He was the supreme allied commander in europe for nato. Lets rip up the script. Lets start with saudi arabia, which is running out of money, or at least that is the theme. I would assume stability with saudi arabia is front and center. What can the United States due to help riyadh . Very upe should be front with them on the security front. They are overextending given the level of resources they have. , troupe exchanges, training alongside them, intelligence, and information, supporting them is where we can help them. Tom nobody looks as good as omar sharif or Anthony Quinn over in the middle east. You wrote a brilliant essay for Foreign Policy on how lawrence of arabia would defeat the Islamic State. It is not funny, is it . It is a serious question, isnt it . Serious, and it ties into the elections in turkey, where we see a return to the strongman posture. Erdogan with a lot of juice all of a sudden again. That will play into what happens on the syrianturkish border. Francine admiral, what role will mr. Airdrie gunplay in defeating isis . They had very crucial borders. Will we give them 3, 5, 6 months to understand how we he will do with it and whether he will be Strong Enough to deal with it in the right way . James as we look at his resounding election victory, it will give him the confidence and the domestic base to potentially move troops on the ground into that region. We need some kind of ontheground troops because clearly we are not in the position to provide them as this administration goes forward. So a strong effort from turkey in the wake of this election could be a game could be a game changer against Islamic State. Tom you have been front and center. Tell us what it is like in a nato meeting to discuss turkey. I give you an open question. C from jamesty stavridis. Ihave to get my great up, so raise my hand and say what is turkey like in a nato discussion . Nato athey have been in long time, and as you know, they have participated in every security operation the alliance has done, from libya to afghanistan, to piracy, to the balkans. Effort for a for playing in the military field. On the other hand, they are a challenge because of the long border. It is not against russia, it is against the border to the south. So whenever turkey raises their hands, 27 other nations are thinking, what can we do to help . I know this will be a big ask. Tom i am trying to get the b out of professor stavridis. Are the borders still any good in the middle east . Do you look at it as a fiction of borders in these two mediterranean . We are going to give you a b plus for even knowing how to pronounce it properly. We will see syria break apart in an s couple of years, much as yugoslavia did in the balkans. We saw yugoslavia break apart along racial, ethnic, and religious lines. I think that is coming from syria. Tom francine lacqua, i just cmin it a went to a us. I was thinking about the tragedy of the plane being shot down. Whether it is or is not isis, they lay claim to it, which means russias Pivotal Point in the region, they just upped the ante. What will russias end game be in syria . James it goes right back to what tom and i were just discussing. The potential breakup plays right into the russian strategy. In the see a carveout western part of syria along the Mediterranean Border where the gas and Oil Resources are centered, as well as the warm weather mediterranean ports. Russia will play strongly for a , and the worstd outcome for all of us would be continuing chaos. Political activity, diplomacy, what is going on in vienna is what we can hope for right now. Not know whato happened, but if it does get confirmed that isis shot down that russian plane, will that be a turning point in the way that russia views itself in the region . Will it ever stop supporting president assad . James i think russia will play the long game, not necessarily with president assad, but with the regime in syria through the chutedown of the plane, which i think it is too soon to tell what happened there i think it looks more like an internal explosion. It was at 31,000 feet. Isis really does not have that capability in sinai. Within it nato, or modern europe, is there a Different Institution that will the fractious internationalizations International Relations in europe . James the European Union, despite all the frustration that the internal stresses and the grexit, theof a United Kingdom leaving, i think the eu is still the best hope. Nato is very coherent, but it is strongly in the security dimension. You need the 360 economic, cultural and electoral that the European Union gives. Group 21commanded the in the persian gulf a million years ago. Like it was barbary pirates in jefferson that were trying to figure out what to do with tunisia. When i look at this, the application you have lived you have been on the boats in the persian gulf do we have the sailors backs right now as the navy is deployed . James we do, although it is worth cleaning out in a couple of decades. We do not have an arabian gulf aircraft carrier. That means our destroyers and cruisers are there without the airpower at sea. That is very worrisome. The good news is there is landbased air force power. Never quite as good as the navy givebut the air force can that protection to the smaller ships. Idestroyer squadron 21 read wikipedia, with all of its pluses and minuses. James wales will join us tomorrow for the entire hour. I am a huge james wales fan. Tom ierg surveillance am smarter everyday because of him. He should be like jimmy lord wales or Something Like that. Stay with us. Bloomberg surveillance. We say good morning. Francine it is going to be a busy week. Here is what to watch fed chair janet yellen gives testimony to congress wednesday. On thursday, the bank of england will release its Rate Decision. Watch out for the manufacturing report. That was better than expected. On friday, it is the monthly u. S. Jobs report. The fed data dependent as well. It is time for your single best chart. Tom we are data dependent. The sillyeneath headlines that everybody will look for. , the all inu6 Unemployment Rate. This is not spoken up enough. Chair yellen has talked about the slack and the economy. Steven wieting is with us from citigroup. We look at the quiet success. We are really almost back to normal, arent we . Steven absolutely. This particular series has some predecessors. Over the last four years, the Unemployment Rate based on these higher levels of underutilization, the availability of people working parttime, to possibly be fulltime workers, has fallen below the longterm average. It is not that that is a critical problem and that profits will be enough live, but the trajectory of decline in unemployment is one percentage point drop in unemployment per year, for five years now. Tom it has been a huge success. Marvin goodfriend was on bloomberg surveillance last week, and he and alan meltzer, his colleague, are in the aggregate analysis of america. Angus deaton, alan krueger, say there are two americas. Do i go bimodal, or do i have to go with the high . Steven you cannot adjust these sort of disaggregated issues with macro holidays. That becomes part of the problem, that you look now and you take a look at unfilled job openings in the United States, there is little variation monthtomonth. But we are at alltime highs in unfilled job openings in the United States. There are people who do not have skills at a particular pay level to fill those unfilled positions. That is the thing that has to be addressed, and often you cannot address that without buying some treasuries in the qe. That is what we have to realize and adjust it. Francine when you look at unemployment worldwide, europe is Getting Better and we are creating more jobs and we are becoming slowly a lot more like the u. S. Europe, greece is at 45 , spain at 42 . Steven i look at it this way. Ago, people told me unemployment was 10 in the United States. How could its economy begin to recover when unemployment was 10 . In the Great Depression, unemployment reached 25 . That is when the Great Depression ended. You recover and you create jobs. The recovery itself reduces unemployment. In the case of the eurozone, you have depressed labor markets, and that is a sign that there is a lot of runway for future growth. Sadly, the World Economy may not give europe enough time to get back to a fully utilized stake, but the trip from here to there tom Steven Wieting is with us. We will continue this discussion. Lets get to top photos. David gura has invited 6. 5 lengths. Winning, pointing to the cameras. This is trainer bob bafferts baby. I spoke to him a few weeks back. Tom did you . Did you have on one of those stupid hats . David i was there for the yearling sales. We go now to number two, with francine. Francine on saturday, new zealand beat australia in the 2015 Rugby World Cup final. Hisw zealand player gave winners metal to a young his faners medal to a young who ran onto the field and got tackled by security. He felt bad for the fan. I am just glad that the rugby world cap the Rugby World Cup is over. Im glad to get my husband back as well. Tom it is like real football. Francine we david we had the marathon, of course. This is photo number three. 50,000 runners in new york city. The woman who won from kenya last year, she won again this year. I love this 1 a guy running with some sort of model eiffel tower affixed to his back, showing that not only can he complete a marathon, but with a large cardboard construction. By and conagra for 3 billion i have my hand out like im doing a marathon. The van that was at central park later seven avenue today on bloomberg radio, Joseph Stiglitz will join me and michael mckee. With astiglitz is out new book, rewriting the rules of the american economy. We will talk with him about the republican field. That will get his blood going on a monday morning. Stay with us. Bloomberg surveillance. I am running next year. Tom good morning, everyone. Bloomberg surveillance, new york city and london. Hot for the runners yesterday in the marathon. It is gorgeous out there, the third week of september as well. It is time to do a forex report as well. There is not much going on euroyen shows a little bit of lift in the last week toward abenomics. I am going to look at turkish than dollarlira stronger 2. 81. This is good news off of the erdogan and election. Lets go off to our business flash. Heres david. David the irish drugmaker shyer has agreed to buy dyax. The perdition from the analyst to correctly forecast that oil prices would collapse gary ross says opec will probably hold production steady next month. Getting one big investment can make up for a lot of laggards. Berkshire hathaway is expected to report a quarterly profit on friday, a pretax gain of 7 billion on a stake in kraft heinz. That was a bright spot for a challenging year for berkshire hathaway. That is the Bloomberg Business flash. Tom david gura, thank you. Westin andext, David Stephanie ruhle. What do you have with us today yeah cap stephanie good morning, tom. We have a lot. This is a big weekend we just came off of in new york city. We are not going to talk about the beloved mets, we are going to talk about the beloved market. We are coming off and extraordinary month where we ended on a high note, but so much was absolutely chewed up. We are going to look at did markets and china. And turkey, the big victory for the ak party, erdogan really entrenching his party. Joined byng to be a good friend of yours, tom, and francine. Stephanie if there is anybody tom greatly appreciate it. Bloomberg. E talk a lot about revenues will they generate profits . Do they take it all from expense control . Steven i think there is going to be a bit of pickup late in this economic recovery. Dragll lose the tremendous of a 60 drop in crude oil. But take a look away from that. In the United States in the first half, earnings gained bps, basis of value and shares, rose about 6 , exit energy. At energy. I think you will pick up a bit in the Fourth Quarter. What weve seen here has been a demandstrong, productionlight economy in the United States. Take a look at auto sales. Take a look at truck sales in the United States. They are strengthening. You will see some recovery, probably a 5 gain. Plugins the inventory in gdp how long does it take to clear a buildup in inventory . Steven at this demand pace, this will be fast. The Third Quarter we saw the largest sequential drag from inventory accumulation since 2011. Production will recover right now. Over the course of the Fourth Quarter, we will improve some, and you will improve it in 2016. This does not song this does not solve the longterm issues, but beneath all of this really severe drop in energy and the impact it has, as you have been talking about, on saudi arabia, these important issues, there have been benefits, too. The beginning of the year was all net stimulus. There is nowhere a here. Ant is wrong and there was oversimplification. There are debt problems for oil process for Oil Producers with debt there are debt problems for Oil Processors with high costs. Tom thank you. We will pick up much more on wednesday and thursday, and then with our usual coverage november 6 for you. Withmberg surveillance joe stiglitz. Looking forward to that on radio. All of that is coming up. Futures up one, dow futures up 14. Dollarmindy, a little bit weaker today. Dollarrenminbi, a little weaker today. David can the rally keep going . Stocks begin a new month after the best october in years. Charlie munger unleashed. Warren buffetts Business Partner rips valley and rips valeant. And investors vote yes in turkey. What does this mean for president aired again, despite the victory in turkeys future . David welcome to bloomberg go. Im david westin. Stephanie we are coming off a big weekend. We brought in a big team this morning. Joe weisenthal, and michael purves. David when you say a big weekend, you mean for you. Much bigger than mine. Stephanie it is not because i ran the new York City Marathon clearly i did not. We are New Residence on the upper is