it is a big day for the bank of england governor mark carney. a report is starting less than an hour from now. topping lists -- the banks' interest rates and new forecast on the agenda. republican presidential candidates will debate for the first time tonight at 9:00 eastern on national television, and 9 of them will be trying to stop donald trump from stealing the spotlight. he is dominating polls heading into the debate on fox. one republican strategists said survivalists must tread lightly. time,has a set amount of six and half, eight minutes to engage in the audience something about you, your policy, and why you watch to be the next president of the united states and why we should vote for you. to waste time going after trump -- that will burn up a lot of those minutes. at the same time, if he goes after you, you cannot allow that to stand. you can demonstrate to republican voters he will be a candidate who fight back. vonnie: the second candidate who did not hold high enough to appear will be at an earlier forum. a plan is to vote on nine days later. president obama says turning down the deal would only benefit iran. the republican-controlled congress is expected to reject the deal, but not known as whether enough democrats will back the president's veto to push the deal through. bill ackman's pershing square is selling its $6.5 mondelez.ake in mondelez refused a shareholder fight with activist investor nelson peltz. and jon stewart is signing off tonight as host of the "daily show." to 2600 shows in 16 years, reaching audiences with news with a comedic state. the museum and washington, d.c. said it will preserve stewart's "daily show." tom: john stewart next to mark crumpton in a museum? scary thought. it is amazing. early monthsll the of the daily show, but one day it was iconic. brendan: i remember when it was craig kilborn. it was snarky, it was more about pop-culture. tom: what did mr. stewart do? brendan: he was the first anchor to look at what was happening in politics and find it absurd and admit that he founde it absurd. tom: watch his hands. when he is on air, what he does physically, like a comedian. brendan: the other thing he does let you talk about a lot as he purposely throws out a joke that he knows will not land so he can make the recovery funny. he is amazing. vonnie: he's on a whole franchise of comedians. brendan: absolutely. fascinating, jon stewart, particularly after david letterman where they get carted off the set. special coverage at 7:00 a.m., the markets and churning, euro weaker, but commodities is the 82 on american west texas intermediate, right now buttressing off of weaker lows. our guest will be defending gold -- that is a tough defense. this screen is for mark carney. brent crude well under $50 this morning. here is gold going along support, and brendan, i'm sorry, mark carney and janet yellen have to worry about brazil, mexico, you look at that -- we will do in a second -- these emerging markets matter. brendan: one thing it all comes down to, the same problem janet yellen had years ago is what mark carney has now, he is not tapering. he has to worry about a rate tantrum. his program at the bank of england, his communication changes by two votes, that can cause a change. we will have jon ferro with us later. right now at the bloomberg terminal, i have never done this before, folks. this is a classic cross rate, unobscured rates that tells a story. this is the brazilian rail as opposed to the mexican peso. strength, right here is the first bet on the world cup, the brazilian world cup team, and this is mexico relative to brazil. brazil has many problems, you can only solve one problem at a time. things -- one, he held onto the currency in a way nobody expected him to do. huge consumer boost with anti-poverty programs. you can only solve one problem at a time. it was reliant on commodities -- that was the problem. huge consumer boom here, and here is what you see -- the end of that bloom, and the end of the commodity super cell. tom: here we are in combined weakness this morning in brazil, and mexican peso, when indication of the global challenges that mark carney faces. we are going to call this morning one day before jobs day, a precursor to september 17, is the new mediocre going to the likes of brazil? the u.s. in the united kingdom honsider a torturous pat from an ultra accommodative financial crisis. governor carney in the bank of england consider not doing anything. they will have to much information. we have michael purvis, chief global strategist, to synthesize what is going on. what is great about having you here, michael, is not what is the fix going to do or what is , butcarney going to do some it all up, how can he ignore the global economy, the lme is here for him to see. michael: this is one of the issues in a central bank or has to take stock of right now, and janet yellen more than anyone perhaps. this very strong, obviously he is concerned about the pounds, but the dollar's first cousin, if you will, the bank of england and the fed as marginalhe coal thought across the world right now -- this impact of throwing currency, beating up on commodity currency and commodity-generating countries, as you were just referring to with brazil, is enormous. you are starting to get to the point where systemic tell risks have to be on the table. tom: interesting. it is a research morning, many on the bank of england. socgen,always good at perversely, the longer rates are lower, that if the heart of the matter, the more addicted the economy becomes to the abnormal settings and the greater than danger that rate never rise. to not act is to be so afraid of the cold sweat at come with quitting addiction that death by sclerosis seems preferable. that is a fabulous quote by kit juckes. brendan: he believes the flood of money is driving the central banks. believe central banks are driving the flood of money. defending votes, three defending boats, will we see a defense tantrum elsewhere in the world? michael: probably not. ook, at least at the relates to the fed here, i think the fed today is about as coalesced on this strategy as the fed certainly in a number of years across that. boe do the fed and the enjoy a relationship that is unique among central bank, but at the end of the day, what we have heard from the fed -- and we heard it just the other day -- is that read my let's, we are going to hike. the real question is not whether the that is going to take the if they-- take it away left off. i do not think they do. i think it is as relevant post liftoff as it is a year ago. vonnie: the bottom line, the bank of england raising for the first time -- after today, what will that change to? how will the markets -- what will the new expectation be? is that theguess bank of england is going to become pretty data dependent. tom: this is the heart of the matter is we do not know what will happen is that :00 a.m. brendan: right. we do not know. the trajectory, i guess they will be updated then as the fed is going to be. i spent too much time yesterday going after the may 2000 and inflation report, and a lot of the future prediction charts take a look at the inflation, just a nice gentle curve back up to the target of 2%. is that just an assumption of a reversion to the mean? how is that going to happen? michael: it will happen when you have commodities falling on an ongoing basis, when you have a second largest economy -- china, the growth engine of the world contracting, and you have transformative -- tom: brandon has absolutely nailed it. with all the jokes we make here at "surveillance," everything is based on smooth glide tasks. there's nothing smooth about oil at $44.88. brendan: has a lot changed since may? michael: the economic data from the world has been a little bit of -- some good, some bad. tom: i will go with that. michael: both to massively and arguably globally. tom: michael, you are a market guy, bring up your sterling once more, kerry, if you would. about strong mark carney, strong janet yellen, or is about the others are weaker? michael: that is a great question. city surprise index for the u.s. versus europe -- i sure do, it is a great index. both of those things have been outperforming over the last two months. to agree, a lot of this aggressive central banking has been showing results here. at the end of the day, i think yellen has to be very mindful -- she will not want to talk about be strong dollar, but i think at the end of the day, that is washing up on the shores of the united states economy. the same thing happens for carney in england. brendan: ok, michael purves of with us until mark carney starts talking this morning. coming up, viacom reports of the bottom of the hour. bleeding on a canvas. did you like that? it is a boxing metaphor. it is not going well for media. that coming up next. good morning. this is "bloomberg surveillance. " ♪ tom: good morning, everyone. "bloomberg surveillance." below $45 a barrel in america. here are top headlines with vonnie quinn. vonnie: production snagged deliveries of tesla's new suv's, the model asked. x. shares fell on the news after gaining 21% this year. germany's factory orders jumped 2% in june or analysts expected an increase of only .2%. benefiting from low unemployment in the euro area's recovery. and bank of america is pulling its money from john poulter john paulson's hedge funds. they are pulling $80 million from it because of a liquid investments and elevated volatility. days ago, disney cut its forecast for cable television products. down 5%,d of the day, disney down 11%, time warner down 7%. today we sit and wonder about the future of cable television. paul sweeney of bloomberg intelligence is here with us. dish and liberty global, which makes me wonder why is it better to own distribution, a channel, then it is to own the content right now? paul: yesterday with a media meltdown across the board. a couple of outliers yesterday dish.harlie ergen's he basically threw in the towel of the concept of building a new wireless service. he said i might just sell the lease off mice actor. that was a good thing. for liberty, they split up some decent numbers, and there are still some way to go on pay-tv and europe. that if the conference of all we heard over the last few days in the u.s., where it looked that mature business with some challenges. brendan: the idea for comcast, nbc, time warner was always that you can only wire, contents, and you could do something with that. has that idea died? died ise idea that has that consumers will pay more and more for a big bundle of pay-tv channels going forward. that model is really under question right now, particularly because people are cutting the cord. even the mighty espn had took knowledge that they have fewer subscribers. that is a problem. you're trying to sell them advertising, you are trying to charge affiliate fees, and your base is shrinking -- that is a problem. tom: i love disney, disney paid my bonus last year. you bring up the disney charts, let's do that, and you look at the meltdown, come on! within the trend of four years geniusity, is this an opportunity to rebuild shares or is something seismic going on here? paul: there is something fundamental going on in the media space, and that is the big -- the breakdown of the bundle because that affects everybody in the u.k. system, the comcast distributors, the disney comcast companies. all of those copies have to figure out where they sit in this -- all of those companies have to figure out where they fit in this world. a lot of investors say even if that is the case, disney represents a pretty interesting opportunity. tom: accounting question is critical here. there is a lot of good will come up at will, we make jokes about donald trump, trump will, on the balance sheet of disney. was that a balance sheet adjustment yesterday of the net positive value, the terminal of all of that goodwill, that untangiblele asset -- assets? what is the balance sheet -- it is fascinating. brendan: are we about to sign up the difference between a production company in a channel? take hbo, they always have a show they can sell. discovery took the worst hit yesterday. discovery is the worst channel that is not a collection of shows but is a thing you can turn to when you want to look at animals. what the discovery people say is they actually have brands. that is what you are a lot of these media companies talk about, not channels, but ran spirit when you listen to bob iger, he says we are a company of brands -- we have mickey mouse but we also have espn. that is a brand. forward, areing they distributed over cable television services, the netflix of the world, or the of the internet? brands win out long-term, content wins out long-term. tom: i will suggest you will be back. paul: absolutely. you soul sweeney, thank much with bloomberg intelligence. coming up in her next hour on commodity the gold explosion, joining us is axel merk. he is long gold, a tough place to be right now. coming up on "bloomberg surveillance." ♪ tom: good morning, everyone. "bloomberg surveillance." we are going to break a rule. no, not to look at the gorgeousity of new york city. it is beautiful. let's break a rule. we are going to redux an op-ed of "bloomberg surveillance" morning must-read. justin fox joining us me next hour. lous piecefantastibu of what we were just talking about with paul sweeney. who is watching or listening to what and when. they start out with a huge informational advantage over everybody else does they know exactly what the greeley house is doing. vonnie: yep. tom: i am sorry, it is worth repeating. brendan: i think it is a tremendous advantage. i think that underestimates the influence of the label right now. artists and consumers want to know what they are paying to musicians, to production companies, but standing in the middle, particularly for music streaming, are the labels. tom: what about tv streaming? what i see in my house is apple stuff, streaming stuff. amazon, netflix, and that. vonnie: chrome, yeah. brendan: but this is the promise of streaming. they are sharing data because they know that labels, the producers, are making less money to. they used i believe netflix for my know for fact that spotify -- they are sharing this data with the people who produce it. what we do not have transparency on is who is paying whom for what. tom: how do you adapt to it in the investment space? i know you will not opine on disney per se, but how you adapt to the media meltdown we saw yesterday? brendan: if you step back, you go back to the early 1990's, and you see the big megatrends that initially sound like some "star episode -- michael: you can watch the trajectory of early adopters to more mainstream, once those trends hit, and you just need to figure who is really positioning. tom: for your run on media. michael: it is amazing how many great companies have gotten blown up three years later. brendan: it is possible to think of pau the bundle, as paul sweeney was saying, as -- we will find out who can handle it without a subsidy. up, we arecoming going to ohio, to cleveland for a live report on how republican that state is preparing for the debate of the century. for our twitter question, we asked of course -- who is going to win tonight debate? just byple have won being there on the state feared i'm talking to you, john kasich. tweet us @bsurveillance. good morning. ♪ tom: good morning, everyone. "bloomberg surveillance. " greeley, andendan vonnie quinn with us today. and bank of england in half an hour. we will give you complete coverage including market reaction. right now, we need to react to top headlines. here is vonnie quinn. vonnie: interest rates will be the headline when the bank of england takes the stage half an hour from now. the bank of england governor mark carney will talk about the official vote and the inflation forecast on the agenda. the senate debate on the iran nuclear deal will start as to raise, nine days before congress needs to vote on the plan. yesterdaypeech pushing for the deal, president obama described what would happen if this vote is down. president obama: what is more likely to happen should congress reject this deal is iran would end up with some sanctions relief without having to except any of the constraints or inspections required by this deal! so in that sense, the critics are right -- walk away from this agreement, and you will get a better deal -- four iran! theie: republican-controlled congress is expected to reject the deal cured what is not known is whether enough democrats will back the president was the veto and push it through. the wing part found on an of remote island is sparking international debate. laser is the clearing today that it is from the missing airliner, but western officials are not confirming dr. a plane window 370 werer debris from mh also phone on the island. police are identifying the suspect to attack people in a movie theater outside natural. 29-year-oldy vincente montano had a history of mental illness. he was carrying a hatchet and a pellet gun. three people injured in the shooting -- in the attack needed minor treatment. today,ne -- 70 years ago an american plane dropped the first atomic bomb. a second bomb three days later brought japan's surrender in world war ii. germany honored more than 200,000 people killed, and leaders issued new calls to ban nuclear weapons worldwide. tom: on the river into hiroshima bay. i think the thing that has never been said with an american history of this event -- it was a gorgeous city. started in 1589, and there was a beauty to it that was flattened. brendan: what is striking as we roll through the summer of so many anniversaries of that war, japan still discussing whether or not to amend its constitution to allow a greater role for military. that discussion of the war come of their own history, is still very much alive. the same is true of germany in europe. tom: you've seen what we have done here at bloomberg. john'sber speaking with hour of the great history of japan after the war and how they adapted and adjusted, and i would to just more than anything they go back to hiroshima and nagasaki. vonnie: teenagers recounting that are now in their 80's. brendan: a whole summer of anniversaries that will lead to the one of the surrender on the missouri. moving back to the u.s., tonight, the quicken loans arena will squeak and 10 presidential republican candidates, but only one person will matter. mark joins us now from cleveland. who is more popular in ohio, lebron james or donald trump? anyone is not think possibly more popular than king james in cleveland, in fact, there is a 10 story poster of him outside the arena, but certainly donald trump will be front and center as he takes the stage tonight. brendan: what do republicans think they can achieve in cleveland and in cuyahoga county? a quintessential presidential swing state. it is a must win for both parties. no are public and has been elected president without carrying ohio. the republicans actually put their convention next year in cleveland as well. so the thinking is have this debate in cleveland, ohio is an important state that both parties want to win. ohio -- a look is really want to capture ohio after losing it both times to barack obama. brendan: can they win the city of cleveland, the republican party, or did they hope to pick people often the surrounding area? been aleveland has long democratic stronghold, but the hope is you can kick up some votes and do better than you have in the past. governor john kasich, who is actuallyor president, carried cuyahoga county when he ran for reelection in 2014. so there is hope that the republicans can do better in this region and help them win statewide. at cincinnatiok away from cleveland, there is an interesting town as we move to 2016 p or how has republican politics changed in southern ohio. mark: cincinnati as the city has become more democratic. mayor, it democratic is more democratic-controlled, the region is still republican, but it is more of a battleground area. tom: you would suggest that ohio is even more of a polarized state and ever more important as we go to 2016? mark: i think so. it is definitely a purple states, one where both parties can compete and win. there are areas of the state where you can concentrate your efforts and compete in a way that maybe you have in the last cycle, so it is up for grabs. brendan: let's look at the number 10 seed, john kasich. what do ohioans think of him? by a wideas reelected margin when he ran in 2014. albeit against kind of a weak democratic opponent, but it was testament that he was not challenged by a stronger candidate. he came in, he won barely in 2010, and he was very unpopular at the start. he pushed a bill that restricted collective-bargaining rights for public employees, but he has overcome that. the ohio economy has u improved over time -- so as governor kasich's approval rating. vonnie: will the candidates make any kind of impression on ohioans? mark: that is what we will be watching for. that is the kiddie table debate only happy hour debate, the seven candidates who did not make the top 10 in the polls. that is where fox cut off the list. we will be watching to see if one or two of those candidates can break through and grab enough attention to sort of outshine donald trump and sort of get coverage coming out of this event tonight. brendan: all right, mark iquette in cleveland, thank you caret we will be coming back to as this election progresses. who will win tonight's debate? let us know @bsurveillance. ♪ tom: good morning, everyone. "bloomberg surveillance." what a dative, 20 minutes away from the bank of england. special coverage. to those of you watching in the united kingdom, we will devote the entire 7:00 hour to the bank of england announcement it will cover that for you at 7:00 a.m. we will have continuing coverage for europe through the hour as we continue our global coverage here in new york. right now, our single best chart of the morning. what do we have? brendan: stock returns among major global asset classes? emerging markets. that is the answer of today's single best chart. this comes from a story on the terminal. highlights that dollar-denominated bonds sold by were theg companies best performer among 10 major global assets. 3.5% here it if you just have it parked in treasuries, obviously you are making a mistake. vonnie: did you say 3.5% returns? brendan: i did. vonnie: that sounds pretty anemic. brendan: cue tom saying "the new namormal." michael purves. problems are so different than brazil's problems today. india's problems are so different than russia's problems and so forth. and of course within these economies, just within china, two years ago you had a fantastic run in chinese tech, the broader market was doing horribly. the nuances within these markets are more and more important, and corporate's are increasingly better managed as well. for all the macro issues, you know, you have to put in context. brendan: joe biden use the term "third world country," we prefer "emerging markets." as that term irrelevant? nohael: semantics, but comment is not relevant here to many are having higher growth in developed markets .it will probably stay on for some time . ultimately, the world will be pretty flat, and basically a lot of these emerging markets have emerged. look at korea, for example, spain was an emerging market 12 years ago. standards, most would say today it is not. so the terminology will evolve over time, but i do not think it is tomorrow. tom: can i rip up the script here? we have the advantage of brendan greeley's perspective on brazil. emerging-market debt on brazil, we are moving away from petrobras, rio olympics analysis to just plain debt. what if the character of their debt as you look at the single best chart? brendan: i have to say i was surprised to hear that, too, david goldman -- tom: but others as well. brendan: the funny thing about brazil is that they weathered the financial crisis very well. they learn from their own debt crisis. i read an interview with moreyes, and they did remarkably well during the crisis. it turns out the problem with not that potential for instability within the financial sector, and with the fact that as an economy, just in and out on the government's account, they were over levered because they depended too much -- tom: what do u.s. investors do when the price of the brazilian paper starts to go down? they have got to get out, right? you pick up the phone and call whoever and say "sell it." michael: you are seeing that in the reality as it continues to deteriorate. part ofe non-commodity the brazilian economy was the stronger part of the last few right and i think, tom is -- structurally long-term rate. brendan: will we see of her structuring of brazil's debt in the next five years? michael: you have to look at -- there is a lot happening within the political structure within brazil. that probably determines that. havei do not think we enough information to do that. oil going to new lows. let's go to top photos. vonnie: all right, number three top photo, the world's newest island still unnamed. tom: gorgeous. vonnie: 30 miles northwest of congo. it was formed after the congo volcano erupted in the south pacific. the island mass will not last long. tom: it sinks? brendan: i think it is only a matter of time before libertarians go and have a new tax-free paradise there. vonnie: number two top photo -- people in dallas, texas yesterday got a little surprise. tom: this is great. vonnie: george w. bush walked into the courthouse for spent about three hours injury duty misery. [laughter] brendan: it is a felony case, you look up in the crowd. tom: you know how they go, they go no, no, no. good morning, sir. [laughter] vonnie: number 1 -- brendan: i always found it easy to get out of jury duty. what do you do? i am a journalist. goodbye. vonnie: have you met dog bun? it is the newest look for trendy pups. brendan: [laughs] oh, that is not right. tom: this is the perfect last photo for our photo editor lexie. she is moving on to more important senior duties. photo. such a lexie bring the photo of again. i mean, it is so lexie. that is the stupidest photo. brendan: oh, lexie levin, we hardly knew you and your dog. vonnie: that is her dog? tom: that is her dog, yea. h. we have a special guest for you this morning. this is what we love about "surveillance." michael purves joining us at the top of the hour. wer will joinlou us at the top of the hour, incredible on austerity, we will see that at 7:00 a.m. this morning. purves and blanchf lower. stay with us worldwide. "bloomberg surveillance." ♪ tom: good morning, everyone. "bloomberg surveillance." let's get to top headlines. is in the rough and is hiring a bank to explore options. tailor-made was a drag on profits. revenue fell 26%. the company focusing on his athletic shoe line. the world's second-biggest mining company is reporting a better than forecast first-half profit. spending ins in response to falling iron or profits. rio tinto is down. hitching a ride with russia. the international space station a prettyg america penny. nasa says it needs half $1 billion to send as many as six astronauts, about $82 million each. u.s. does not have rockets to do the job right now. those are the top headlines. am: yeah, the rush of spaceship having some challenges to say the least, maybe the ruble as well. i missed this this morning. with so information, i miss greeley, oilan just rolling over. items are, how can janet yellen, how can mark carney avoid five days of this? brendan: they can't. the question is -- is it their response ability to do it? about the ruble, the concern within russia was always -- what happens when the ruble and dollars reaches vladimir $62.'s age, tom: there you have it, $64. macro thoughts. the reality is they want to avoid tantrums, those pesky market disruptions. they tarnished legacies. yellen, carney, terry they take a meeting with michael purves at weeden. antrum? a market trai michael: i think the term -- two years and two months ago when -- anke said taper it scared everyone. not only that, the market has been called old by -- been c interest an rates-excessive fed. the combination of those two factors got you was someone dubbed a tantrum, and it kind of stuck. brendan: the focus on better communication has not really fix the problem of surprising the market because no matter how well you communicate, markets find some other thing to fixate on. tom: exactly. brendan: this one, we are talking muffin number of defense in a vote to keep the rates -- what do you do to avoid a tantrum? michael: the impact of monetary policy, i mean, in our country and in others, it has been as aggressive as it has ever been, right? its impacts in the markets and how it is the finding so much, right, central bankers are rock stars now. ones will getnew over exaggerated by an analyst. endan, let's frame this. really is there a dissent at the fed. england is not that way. today is what, 7-2 is the expectation? dovish?h, 2 brendan: no, the other way around. tom: two people saying let's go. brendan: and then we start paging through this 60-page inflation report, the new one that will come out today. vonnie: in the u.s., if there going to be a defense, there is one, and it is a symbol of there is some dissension. tom: may i suggest that 7-2, the real news is 6-3. if we get three hawkish. vonnie: a forward guidance day when so-called data dependent now. brendan: that is a great point. data dependent the of making it up as we all go along, if you will. michael: it is a huge same here. i think you are absolutely right, you are spot on. tom: i want to get to this before we get to jon ferro and danny blanchflower. this is nominal gdp, the animal spirit, there is the tipping point, down we go, and to me, dan, the headline here as they have not gotten back to normal. brendan: i went through yesterday and looked at their trade numbers, their x boards by region, so -- their exports by region. u.s. is $38for the billion. i would not have thought that it was so tight. is $31rmany alone billion. michael: right. for a long time, they have been a very export-intensive economy. 1.i want to go to is you talk prices, with for inflation excitations in this country or in the u.k., you will see a real tightening of the correlation, so i do not think carney nor yellen can really ignore the deflationary issues that come with, you know, below were oil prices, even if a lot of good things come from it. tom: oil is down $.20 since purves started talking. they cannot act. michael: no, they cannot. brendan: this goes back to the thing we were talking about earlier this hour which is all the models have seen a reversion to the mean, but that is not what is happening out there in the actual world right now. the world is not a world that will look like it did before. michael: right, right. you are referencing earlier the forecast is revised by the fed. sort of newa wildcard here, right, with oil technology driving the price of oil down for potentially a longer period of time -- tom: michael purves will stay with us as we go to 7:00 with david blanchflower of dartmouth college, and john farrell will be with us as well. with us ferro will be as well p i am looking at the euro sterling, stronger british pound, one of the indicators of perhaps a bank of england that will speak today and ask next year. stay with us. bank of england coverage worldwide and from london, "bloomberg surveillance." good morning. ♪ . tom: good morning, from new york. the bank of england and governor mark ernie battle and debate over whether to raise interest bank as deeply divided pound sterling strengthens. commodities catch a fragile bid, does gold signal global deflation? with the bank of england and the drama seeing from september 2007, we need to go to jon farro. what do you see? jon: rates unchanged. we go straight to the minutes, we can get them right here. the mpc voting 8-1. a bit of a surprise. we were expecting 7:2. the one hand going up for a rate hike. a dovish surprise. tom: we see a weaker pound sterling, 155.41. splitting of hairs, but very important. we expected 7-2 and we see 8-1 and a more dovish statement. what do you see within other market reaction, particularly in the gilt market? jon: you see that the risk the town could have -- the town could have. another reason you have a weaker pound. i will bring up the gilt strip. a 10 year u.k. guilt down by two basis points. a little bit of a reversal. , wherelook at forwards pricing in that first rate hike of the bank of england. we were looking at may 2016, i am looking at the first all hike pushing -- inching from may to june. still in may, but pushing back towards june. a lot of people thought we would get the six-through, we would come back. effect withinn the u.s. markets. with the u.s. 10 year, 2.2573 lower yields. carney and yellen are linked at the hip? jon: they are. they are looking to normalize but the data is not there. forow danny will do that you. you look at these broadcast, look at the gdp forecast, that has been raised. the 2015 forecast or gdp raised that isversus 2.5%, decent gdp growth into next year. the question will be asked -- why are you normalizing that process earlier? 8-1.'eapon -- more dovish. the first action at the bank of england, the lender of last resort was near our civil war, 1866. mr. carney provides a most dovish statement. what is the drama at the bank of england, is it business as usual or something different in the air? >> something different in the air. what is happening today completely unprecedented. we know what they have done before, release is rate decision, the two weeks later we get the minutes with the inflation report somewhere in between. today, they have released, all three pieces of that data at the same time. overwhelming the markets with this information that came out just a few minutes ago. we are likely to see a lot of pound volatility around this and mark carney will give more information in 45 minutes at 12:45 london time. tom: that press conference very important. thank you so much, at the bank of england. he worked at the bank of england, david blanchflower at dartmouth, the most vocal leaders in economics on the negative affects of austerity. getting theflower vote he wanted. why did mark carney and the bank of england go to 8-1 instead of7-2. david: the data had not sustained it. we saw production numbers that were week, the strengthening of the number has been a part of it, up 15% against the euro. i think the data have not been clear. i know mark carney said rates are probably going to rise this year. there was a lot push back against that, at the guy who took over for me, and his last of 75 meetings never once voted for a rates change. governorok at what carney and chair yellen at the work in and it is commodity implosion with oil making recent lows. how does that play into a guy like plants flower --blanchflower. when you are the governor or the president of the fed, how does the global commodity deflation play into your intellectual makes? danny: i think we are in a world of trying to look at the data more than ever. we are in a completely new world, very deflationary, thinking about what inflation will look like two years ahead. that is central to what a central bank baz. this means -- central bank does. very hard to pull the plug. the big thing about being a central banker, you made a decision last month, if you will change this month, you have to say to your self, what has altered, what has changed? you think about the decision a month ago, the world looks probably worse than it did a month ago, this deflationary pressure on commodities and inflation means it is probably not the right time to pull the plug and they will have to retrench back to wait to later. brendan: things are loading slowly at the bank of england. i am looking at theflreport. it has inflation rising, close to 1%, early in 2016, is that reasonable? danny: i think so, i am trying to load it to. the reason it must do that is mechanical, from the base effect. a -.9 the worry just drop out. that means inflation will take up a little bit. it is whether the inflation out,ast says two years inflation has to hit the 2% target and give it -- given the they thinkink inflation will not get that high. inflation atsee 2.03%, but cuts inflation next year to 1.5%. forwage forecast, looking three point two five quarter percent wage growth -- how do we get there? danny: it is a big issue i have focused on for a long time. there has been a couple of months of strong growth, to around 3%. we saw that go up in the united states for a couple of months, then pulled back. the crucial thing in the u.k. is to look at wage settlements and the bank has been doing that and been -- and they have been flat. the recent rise was a bit of a surprise. with the current data, i do not think they will see that. they have been terribly wrong on wage growth for seven years, they have been predicting it will come every quarter for the last 20 or so. ,om: danny blanchflower formally of the bank of england with terrific coverage. michael purves with us, the chief mobile strategist for weeden. this is not a tantrum, but you're if you double come of the bank of england acts and u.s. markets move. we are all linked together. michael: one thing becoming more arguably the fed, and the bank of england are increasingly inclined to say if we get an inflationary push higher in the next couple of years, they will get ahead of that. they are inclined to say that upside risk of inflationary breakout is more easily managed should it come. somehow, getting behind the eight ball on inflationary breakdown is more remote and if it does happen, can be more managed at that point in time. and may get people more dovish stance for the longer-term. brendan: the data we are getting that is finally loading, around the expectations of gdp growth and looking at the data, when compared to predictions, has consistently been at the bottom of that middle band of their predictions, do they need to become more pessimistic in their modeling? michael: official sector forecasters for a long time, and mr. blanchflower was referring to that -- so many deflationary forces happening in the world, the cpi is estimated to be 03% in the u.s. this year. tom: thank you for your coverage this morning. i should point out that tom stirling, through 154 print, weaker pound sterling. coming up, coverage of the bank of england will continue. mark carney will speak later this hour, those of you in the united states, axel joins us. tom: brendan greeley, vonnie quinn, and tom keene from new york. the bank of england, a dovish statement. let's get to morning must-read. brendan: trop and bush thinking fast and slow. and bush thinking fast and slow. two politicians are not exactly thrilling but seem to be right for the job. john f. kennedy and ronald reagan did the first profile while lyndon johnson and george h.w. bush matched the second. we have justin fox, from the ofvard is this the once, now bloomberg view, is this a reasonable way to look at candidates -- are we all living in this world? andll of us have system one two in our heads and even ronald reagan and john f. kennedy had their moments of collective thought. clearly, trumps appeal has to do with this -- do something. i like the analysis, i do not know if it splits that evenly. brendan: i think back to the 2008 convention with sarah palin and john mccain. in --ow much more excited excitement in that auditorium, it was not there for mccain. justin: it is the difference between politics and policy. that is one of our national problems. tom: you are fabulously qualified for this question. can't a businessman the president -- can a businessman the president? justin: i'm trying to think back on who has been -- tom: in the modern day, can a businessman be president? could. i am sure one there is this classic you out of the business world that if only we got a business person into the role, then everything would work better. that is so often disappointing. john hickenlooper in colorado is a successful governor. tom: mark warner in virginia. justin: if you come out of business, you have certain skills in getting things done, managing people, if you come into politics with enough humility to realize you have to learn it was, yes. tom: i have so happy he is with us, i am excited about this debate. i do not give a dam about debates and this is cool. brendan: it is our twitter question of the day -- who will win tonight debate in cleveland, will be donald trump or jeb bush? let us know @bsurveillance. ♪ ♪ tom: good morning, "bloomberg surveillance." what 80 -- what a day with the bank of england signaling a dovish tone. vonnie: viacom, singing the blues, the owner of mtv and comedy central posted a third-quarter revenue decline wider than expected. sales fell 11%, just over $3 billion, analysts were looking for $2.2 billion, the fourth straight decline in u.s. ad sales. the company is struggling with falling viewers and questions about the health of the cable tv industry. expectations.t pershing square capital says it bought a 5.6 real estate and a snack maker, it includes forward purchasing contracts and options. year, -- bank of america is pulling its wealthy clients money from one of john. -- they are viewing a second fund. the bank is selling financial advisors. because of a liquid investment and elevated volatility. tom: i would suggest that is an important story, a margin call. we have not seen those. the paulson story gets my attention this morning. england, there is a commodity implosion as all metals and softs catch up with gold. axel merk looks at gold with this historic task. the value has been decidedly soft. gold does not pay any interest and as long as people think you will get your moneys worth when you hold currency, then maybe gold is out of favor. my view is the fed will be behind the curve. tom: what is the similarities in the way we are writing gold and the way we did in the 1980's? i remember the talks we had about with people and then it just went down? axel: in the 1980's we had volcker, who put up real interest rates. interest rates are at zero. tom: what does that mean? axel: we have no interest in gold. brendan: less of an opportunity. is thend the question trajectory, will we have volcker come in or the new normal where the peak might not get us to significant -- tom: the donald trump say if he was president that axel merk would be head of the fed? vonnie: what will the catalyst be? axel: for the market to realize the fed does what it says. the question is, what real rates will do. you sound like mark carney. we want to get real rates up, mark carney does. the fact is, with consensus, the tooktook the day -- doves the day, what signal did we get from the bank of england this morning? axel: they were different from the fed. they have everybody giving up their own opinion, and then carney is like greenspan, think the bank of england will be on track with the fed in raising rates. i do not think they are married to the fed, they will go a and have their own set of challenges. brendan: whether gold is a commodity or currency, the sliding gold, does that change that discussion? axel: no, what happened with gold, speculators hopped on and commodity. financial then we need to have the grinding to get back to the more sustainable level. ultimately, everybody likes gold with hindsight and nobody likes it going forward because how can something that is a brick the a value. ? vonnie: the event the bearish call? -- defend the bearish call? axel: eileen against the consensus. i think the fed will not be as tight as the market expects, i think europe will not be as dovish as the market expects. is a mess,- europe but if something has value it goes up. tom: the movie is out soon, just a box with us desk justin fox his gold part of the rational space? justin: it is sometimes, yes, and sometimes it is an expression of people's fears and hopes. tom: is that fear there or is this a new paradigm? -- is cash a rational investment, is it along the risk spectrum? almost all assets are inflated right now, gold, nobody likes. it provides a low correlation. it is worth taking a look at. if you talk about fear, the dollar has been rising and the risk on environment. if we work to see fear in the markets, the dollar may not benefit and gold has a chance. the euro might have a chance. thanks are turned upside down in the current environment. tom: do you agree? justin: i keep thinking about what is really dramatic about the environment of the past few years, is all of these inflationary forces. the fact that inflation is so low. that is causing these central banks to act the way they are. this fear that something weird is going on. if we are to aggressive, we are afraid they's will spiral into deflation. tom: come back when goal is night hundred dollars an ounce -- gold is $900 an ounce. did you know there is a jobs day tomorrow, we will have our usual coverage. justin fox will help you get prepared for that american report. stay with us, this date with an importance bank of england announcement. ♪ ♪ ♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. ♪ tom: good morning, "bloomberg surveillance." sterling, 155. weaker pound sterling. let get to top headlines. vonnie: a consensus on interest rates from policy makers in london, the bank of england leaving interest rates unchanged. mark carney says only one of the banks nine policymakers voted to raise rates. the bank is cutting its outlook on inflation. 10 top republican candidates will debate for the first time tonight on national tv. nine of them will be tried to stop donald trump from stealing the spotlight, trump says dominating polls heading into the debate, one republican strategist says his competitor must read lightly. -- tread lightly. >> set a limited amount of time to convey to the on and something about you and your policy and why you should be the next president and why they should vote for you. if you waste time going after trump, that will burn up a lot of minutes. if he goes after you, you cannot allow that to stand. you have to demonstrate you will be a candidate who fights back. vonnie: the seven candidates who did not poll high enough for prime time will appear at an earlier platform. malaysia is prime ministers declared that the play and he's found is from a missing airliner, but western officials are not confirming. malaysia officials say a window and other debris from the mh 370 were also found on the island. ewart airrt -- to 2600 shows reaching an audience that once news of the comedic sense. the museum and washington, d.c. says it will preserve his daily show set. , withustin fox with us his great work and his book on the rational market and at the harvard business review. a journalist or comedian or did he invent something different? justin: he started out as a comedian and started taking his job more seriously. everybodyt like this, -- his importance is probably being blown out of proportion, but he did come at a time when the network news and cable news were losing a bit of their authority, he was a large segment of the american population, they became the most authoritative news figure. brendan: i thought it was disingenuous of him to continue to insist he was just a comedian when he was obviously so much more than that. what is amazing is how many that havedeveloped become a part of we assume is on television, jump cuts, pulling clips, things like, i refer to someone as our chief european this function court nader -- correspondent, this is that -- that is lifted from "the daily show." tom: a big surprise from the bank of england -- top nine -- topline gdp, here is the normal, mervyn king saving the nation. up we go. the headline for americans is we never got back. we are still not back to that memory that we had. that is the rational thought. justin: right. this is a different economy. slower moving. one of the questions is about measurement, we have these crazy things going on in technology that people claim are being under measured in standard gdp specifics. there is also this malaise. brendan: the problem with the u.k. right now, a bit of a rorschach test, the success of austerity, is it being dragged down by the eurozone, where it since the lion share of its exports. transitionis in a from a manufacturing to a service economy, exports more services and goods. good. goods -- than justin: the overall impression you get, is that is not -- tom: they blinked. we saw it with the stirring -- sterling market. didn't we have strict instructions not to say -- tom: i'm saying it in hindsight of the meeting. we have a press conference and 12 minutes. brendan: if you find that, it is not super-thursday. until tom declares it super thursday. tom: this is serious. there is a press conference in 12 minutes, what do we listen for? vonnie: inflation. brendan: i do not know. justin: he will try to confuse us. what has the world come to? tom: justin fox with us, the sterling weaker this morning. brendan: i am brendan greeley with tom keene. tom: the bank of england today, american jobs report tomorrow. it is a tale of two americas, is not to united kingdom's, a tale of prosperity and a bit of austerity no one mentioned possible. i think of olivia blanchard and larry summers, their iconic work on long-term unemployed. this is key issues. front on thatout american angst. it is still out there? justin: we have a lower labor force participation than we did 10 or 15 years ago. a lot of people who would have thought -- would have wanted to look for jobs who are not in the u.s. brendan: can you fix labor force participation with policy? justin: i think it has to be partly -- one of the dramatic things -- at the end of the 1990's, a few compare the u.s. to anywhere in western europe, the u.s. had much higher labor force, now it is flipped. part of that is focused policy in countries in germany to get people back to working. u.s.e: you wrote that the -- will it change more rapidly? justin: if you look at the basic numbers like we will be getting tomorrow, they do not show a shift away from full-time work. when you look at people who do have jobs, the percentage doing full-time versus part-time's is not dramatically different from historical levels. 'off that. a big 'but justin: there are tons of anecdotal evidence that there are people doing these funny little jobs on the side. it is not that many people yet. doinghave been people these jobs for hundreds of years. far more 100 years ago than today, which is a lot of white color, college-educated people are doing it now, which is different. brendan: is it possible that with the fact we can track these things, we are taking what we call the graymarket labor and bringing it into the dark and making its tangible. justin: that it might be that people -- that it is not showing up when a person from the census bureau comes up to ask a question for the monthly report. it is dramatic how it shows up from a bunch of other data , but thend anecdotally main labor force statistics we have do not show any kind of the shift to contingent work or part-time work. tom: we will talk about uber later in the hour, there is this whole battle over what a real job is. arein 99 jobs not a real -- 1099 jobs not a real job anymore? jobin: technically a 1099 is not a real job, you are an independent contractor, it is real work, but you are not an employee. tom: it is not what it used to be because you have the fica taken out and any kind of benefits taken out, and a net clean person is not what it was 20 or 30 years ago. justin: there are a lot more people getting 1099s that there were 20 years ago. a lot of people are doing things on the side. uber has a big lawsuit going on. that is coming up today. it is all over this question is if you drive are you a full-time employee. tom: to talk about the job economy right now, you mentioned the labor participation rate is a revolution. revolution,is not a just a trend we have counted on, women entering the workforce did not continue the way it did the last half-century. basic maternity and paternity leave policy. i am obsessed with that because it is near and dear to my heart. tom: i would recommend the economic policy institute for clarity on some of these ratios. let's get clarity off our twitter question. we have had a cleveland like response, who will win tonight's debate. bloomberg politics with coverage all over our media properties. with special coverage of the republican debate. stay with us. ♪ tom: good morning. a busy morning to say the least. funny quinn, what do we have? vonnie: monta lea's billion forl, $5.5 a 7.5% stake in the company. is with us, she will be discussing this on her show. what is bill ackman wanting to do? 3gphanie: he is asking for a special. we know what i said he is of this and warren buffett. he knows this company, he was a shareholder, knows irene rosenthal when they bought cap very. -- cap very. they are in is the highest margin business snack. vonnie: up 27% year to date and the last 12 months. e: lowest in terms of productivity, massively underperforming. think of the brands, oreo, noble labor -- nilla wafer. they are inexpensive. this is a time for a merger. if you look at how well 3g did got heinz, by the time they into heinz, nelson peltz had been there for three years. 3g steps in and does a massive overhaul and we see even on it 40%.idta improved if you look at heinz crap, where the potential deal is trading, is a potential deal. this is an actual is -- acquisition target, can you expect a company like this to have a huge cultural jet -- cultural shift? we are bringing in justin fox. does it make sense because their products are in the same ios crap and heinz and therefore belongs in the same company? she was talking about how these stocks have been up, probably because of these mergers. i think it is a category a lot of people think has topped out, high-margin, low growth. stephanie: developing countries want to buy things like oreo cookies and they are going to be able to. do these stocks looked top py. irene says you wants to have an approval by 100 basis points. vonnie: will there be job cuts? stephanie: who can tell, honestly what they did with burger king, huge cuts, huge changes. if you maintain the same and management structure, i'm not saying -- can you have a huge overhaul with a management team who has been there for years? vonnie: thank you so much, you will be discussing that. tom: coming up, a real change in economics worldwide, he is canadian and an irish citizen, mark carney, the governor of the bank of england, in his first press conference, carney after a dovish statement. stay with us. ♪ therough --mark: composition of that growth is rotating from emergent to invest economies. despite global growth, u.k. exports was built be held back by the strength of sterling. risk to global growth are just to be skewed of moderately to the downside, reflecting risks to activity. demand, private domestic is robust and expected to remain so. this year, household spending has been supported by the poster real incomes from lower food and energy prices. more recently, wage growth has begun to pick up as the labor market has tightened and productivity has strengthened. consumer confidence remains at its highest level in over a decade. credit conditions have continued to improve. with historically low mortgage rates boosting activity in the housing markets. tom: the first headline from the bloomberg terminal is the 120th of the governor of the bank of england speaks is of the striking inflation. let me read it to you, most striking u.k. development falling inflation. that is the movable force that confronts governor carney, the former goldman sachs executive four-year, making history. as he stops the drip feed policies of the bank of england. we are bringing you justin fox who owns the territory on writing on rational markets. our central bankers beginning to act more rationally by giving us more information? justin: the idf has been over the last 20 years to move towards not trying to be these magicians behind a curtain who were steering the economy, but to say what they are doing. listening to carney, it is more sleep-inducing. tom: i have heard him speak before, and ordinarily matter. he sees little evidence of deflationary mindset. brendan: i do not know what that means. the relationship between central bankers and the market is the worst relationship anybody has ever had. you cannot communicate so much that you are not still being misinterpreted. wonder whether it is possible to communicate as a central bank chief. justin: it is remarkable, a very different economy 30 or 40 years ago, there were not all these endless discussions on the new data releases. there was not nearly as much mental energy being put towards these kinds. brendan: it is like giving a dog a stay, the doctors not say i am done, the doc says, i love steak, can i have more right now. similarity of the u.k. economy and the u.s. economy is we have people who buy stuff. consumers who like to buy stuff for themselves. the adjustment germany and china are having trouble making. vonnie: he just said that demand growth can return within two years. this is an optimistic speech. he is saying that little evidence of deflationary mindset, to me that means the commodity prices are transitory. the oil impact will be transitory. tom: do we have a chart ready on the deflationary mindset? they are working on that in our studios. movableble force -- the force is inflation has rolled over in economy after economy. colors, 28ifferent flavors of deflation. how do central bankers respond to this e-mail global --immov able force? justin: they respond by doing weird things. tom: extrinsic -- the terrific chart on twitter, these banks had to backtrack, whether turkey or canada. brendan: when we hear a phrase like deflationary mindset, we are talking about psychology. this is something we cannot measure, we do not have data on. at some point the economy tips into deflation and people think differently, he is talking about culture, right? justin: i would say, in the u.s., anecdotally, i would imagine most americans think we have inflation and is probably true in the u.k. people are waiting -- they are not buying their oreos this week because they will cost less , that is not happening. on to a when do we move new economist worried about something new? justin: to some extent, we are here. wall street economists are likely to be more focused on inflation because they are advising people, bond investors, if you look at the economics profession, people who study macro, they are more interested in other stuff. yourthe answer to question, brendan, it is an important question, do we get away from core cpi analysis and go back to what we used to do, look at everything. the chart the united kingdom faces is how you get an 8-1 vote. no inflation. the elephant in the room, is governor carney's first quote said. brendan: the idea of missing the target is so much ordinary, i love the ceremony, the governor of the bank of england has to deliver a letter to the chancellor. when will that be so non-extra ordinary where we missed our target that he no longer has to deliver that letter? at 154.82.rling is he is basically delivering a letter, carney says cpi near-term outlook is muted. tom: fascinating. i thought this would be boring and it is not. vonnie: you will continue this conversation on radio. countdown to our twitter question -- thank you for tweeting -- we ask who would win the debate. a few of them tonight. and -- first dems answer, dems and liberals. second answer -- the loudest, biggest bully, who other than trump will get a word in? brendan: the smart play is to not go for trump. you know he will delight in going back and he sees no underside and coming back at you. do not get in a mud fight with a big -- pig. vonnie: i am looking forward to seeing how it all plays out. third answer, foxnews wins as they tighten the grip on the republican party. probably fair to say. justin: i do not know they quite thiso be crazy, they want a bunch of candidates and a bunch of interest. this may be too much. brendan: my agenda is watching the debate, a couple things to watch, the undercard, how do you break out of the undercard? it is not an accident that this debate is exactly like the convention, they are being held in cleveland -- what do you see when you look at this -- what the republican party is trying to do in a traditional democratic stronghold likely one -- clevelhe and? justin: ohio matters a lot and if you get more ohioans to pay attention that would be great. forie: the forecast is 272,000 jobs tomorrow, but over a year we had -- a large increase. in the context of tomorrow's nonfarm payrolls. brendan: carney, we will watch the bank of england although long. we are trying to -- all day long. we thought we had not learned anything, it was slightly more dovish than we thought. we will watch what happens in the eurozone. i think we will see movement in the euro. what are you watching in the wake of this announcement? justin: if i could i would be watching england, australia ticket -- cricket. vonnie: what day are we in? justin: i cannot get into cricket talk -- england had a great morning. they got lots of outs. -- theree have to go we go. brendan: the test will be going on for six months. justin fox cares about cricket, talk to him if you care. soccer is my cross to bear. this is "the bloomberg surveillance" continues on radio . "market makers is up next. ♪ >> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. stephanie: good morning. it is thursday. i'm stephanie ruhle. erik: im erik schatzker. big names on our agenda this morning. stephanie: bill ackman to kick it off. stake, like about $5 billion. john -- will be here at 9:00 for an extended conversation on the agenda. fed regulation for sure. bassist damocles important financial institution. plus, acquisitions and why more of them are not on the horizon. stephanie: maybe there could be one on the horizon. it could happen. turn to somecally of the top headlines at this point in the show. feel like taking a $5.6 billion stake -- stephanie: