I am manus cranny. Roaring in the woods, coming across the equity markets this morning. This is the performance on the shanghai composite, year to date. Down eight team. 9 , the worst literally index, anywhere around the world. Nevermind the bloomberg terminal. Down over 8 this week. We are heading towards their territory for the longest losing streak since october of last year. Despite the jump in a credit numbers in shanghai this morning. Yuan purchasethe getting a record. They doubled to 700 billion in december. In terms of the rest of the risk markets, money coming out of equities and oil. Let us take you to the other markets. This is how you are trading day is shaking up. Real going into the yen, concern that it is rising against all 31 currencies across the world, even though governor kuroda said they are ready to do more with a lot more. The third weeks of losses, down 8 on the crude. As i ran gets back in the market, we take a look at those very shortly grade we are seeing a real sort of pressure on these markets this friday morning. Let us get the first word. Nejra Goldman Sachs has agreed to settle a u. S. Probe to the handling of mortgagebacked securities for about 5. 1 billion. That would cut fourthquarter profit. A closes out a year of record Legal Litigation costs. Expected to take a writedown of 4. 9 billion on the value of its u. S. Shale assets. Cutting Capital Expenditures as it grapples with a slide in oil prices. The next safeguard against the collapse may be to abandon its decadeold pledge to maintain or raise its dividend. Chinas view of credit surged the most since june, as Companies Increased borrowing on the corporate market. Yuan into 1. 8 trillion december. That underscores a shift away on reliance on the state for funding in the worlds secondlargest economy. And chinese dots are headed for a third week of losses, sending the shanghai composite to a fourmonth low grade and lost more than 17 so far this year, amid lingering concerns about the governments ability to manage the economic slowdown and evaluation. That is your first word news. For more on those great, customers can head to top go. Is standing ingles the bear market territory. Take us to the interesting moves. David i think what is also astounding about that is just how quickly we got here. I mean, normally, a downturn takes anywhere from six months to three weeks three weeks from late december, just before christmas, to get to these levels. Turned out ok. We had a bit of a tailwind from wall street on thursday, midmorning here in asia, things started to turn grade the japanese yen was really the measure of risk aversion, it was weaker. It is now stronger, as you just showed. Of 1 rated this to give you an indication of where he are at the moment, we are pushing towards fresh threeyear loans. Putting that into context with the last time asian shares were at these levels was right before japan embarq on the economics, right before this multi tiered equity bull run. We have really come back quite a lot in just the last 10 days or so. Nine days out of the last 10, asian equities are falling. We have a few bright spots here, but these are the markets that matter the big ones you have the most. I think what we are seating is that some of them after the pickup good names. Valuations, at these levels, that is when you see by ends. But the problem is people are selling on the value, which does not give a good indication of risk appetite. Again, another down day. Back to you. Manus david, thank you. Let us get to one of our top story this morning, the oil rights claims another victim. Having to make a heavy writedown on u. S. Shale assets. With more on the story, Caroline Hyde. Caroline as if it could not get any worse, the commodities slumped hurting you on the metals front, and while it is the Biggest International investor in u. S. Shale, having 5 billion into terms of a writedown on u. S. Shale assets. This is also seeing a cut, we are seeing investment under review. This asset for 20 billion in 2011, now worth just eckstein billion dollars. Clearly, chelating to 8. 7 billion across the board. This is a whole array of woe. You have the deadly down breach in brazil. The companys top earner, remember, slumping for three quarters since 2011 in oil price. That has to hurt. Now oil is some 31 a barrel, no wonder they are feeling impairment during the big question, manus, will they have to cut their dividend . When it no longer be progressive . Analysts said we could see it halved. Manus not the only ones feeling the pain. Caroline exactly right. They are putting a freeze on the pay, and we had the likes of the Trading House in japan taking a hefty writedown to its nickel assets. Also, the pain is widespread. We know that this oil selloff actually is dragging every sector down. That is the tail wagging the dog that is the market. All companies and analysts starting to recalibrate where they see earnings are actually going to go. There you have citigroup cutting s p 500 and the earning outlook for 2016. He is the chief u. S. Equity strategist. 150sees the s p 500 now at 2 by the end of this year. That is up 12 , but it is a 2 decrease in what was thought grade he thought the s p 500 would rise 14 . 12 ave come up to increases. He is also saying that profits are not going to be nearly as improved as they were before. Manus yesterday was israel going down, caroline, thank you very much. Let us bring our guest host for the next 45 minutes. He is chris wiley them of the cio. Let us talk about this story. It opens up the much more expensive discussion now, which is our progressive dividend policies which something that have to be laid to rest in the interim period for real for the miners . Chris the thing about dividends, once you get progressive policy called into doubt, when you start to get being talked about in the market, there is a strong tendency for it to become a selffulfilling prophecy. A disrespected in the share price that it gets reflected in the share price. And if it is not supporting the dividend, and this case is in question anyway, there comes a point when the management of the Companies Look at the yields and say what is the point of sustaining this dividend . The market is not rewarding us for it. Let us cut the dividends s. Goesometimes, share price up when the dividends are cut because there is that relief at the moment has passed. Manus do you think that 2016 inl be a fat year for miners terms of dividends . Chris i would say that were it not for the case that someone could have said that in 2014 and 2015. Having said that, i think the stars are beginning to a line. Capitulation,tain and i think that the way in which the oil price is behaving, it has some of those characteristics of a oneway trade. That normally occurs just before the floor is finally found. Having said that, you know, one of the problems we have got is that the oil store is full. There is nowhere for people who want to come in and take a punch, by the oil and sell it later at a high price. They have nowhere to put it. Manus hold that thought. That brings us right into our morning mustread. This is for our viewers and those at the terminal. It makes sense for the ipo. This is andrew logan, one of the think tanks a notforprofit think tank. The most obvious way to read it is that they are starting to see the writing on the wall. The age of oil is coming to an end. They are looking to cash out while they can. His refers to the saudiiran ipo talk around that. Oil, itead the notes on is always it is interesting. You use the word recapitulation again. Fromon would be the theme andrew logan. But i think of norway, andrew dabi. Incrediblender pressure. How much repatriation of funds is part of the equity move in 2016 . Chris it is a big issue, a slowmoving story. Which is out there, but very difficult to quantify. It is all happening under the radar. It is definitely one of those things which is influencing the market. I put it all under the heading of the unintended consequence of the oil price fall. A fall in oil prices is generally seen as a good thing, particularly for western economies, the most indebted ones. I think everyone understood that. But an ever falling oil price, down to potentially a rational level, has unintended consequences. One of them now is the shift in savings around the world. So clearly, the savings glut that had been in the Oil Producers being reallocated. In the longterm, that might be a good thing. But in the interim period, it is directed. Manus it will pay through. Pay drop, there is also the through the american consumer. And to industry. That will come through. We can get through the bigger causes when we come back. That is chris wylie. Credit, a surge in new does little to reassure investors in china. The shanghai selloff continues. Are you . Nearly 6 15 in london. Let us get the Bloomberg Business flash. an expected take to take a writedown of nearly 4. 9 billion on the shale assets. Theyre cutting Capital Expenditures as it grapples with a slide in oil. The collapse may be to abandon its decade pledge to maintain or raise dividends. Goldman sachs has agreed to settle a u. S. Pro into the handling of Mortgage Backed securities for about 5. 1 billion. That would cut fourthquarter profit i about 5 billion, closing out a record year for legal costs. Syngenta has thrown support behind a potential deal with China National chemical. The board met this week, and voted in favor of pursuing advanced takeover talks. China last month made an offer, 48 billion. That is your Bloomberg Business flash. Manus china has a new measure of credit, the most since june of last year grade this, as Companies Increased borrowing on the Corporate Bond market, away from the state banks for funding. Good news, some would say great let us get to hong kong. Scott is standing by. What do these numbers tell us about the economy, does it give us hope . Malcolm it certainly does that. It is a bit of a mixed signal. There is a big surge in the aggregate, the broader measure very encouraging. By a big surge in banking, showing that the demand for credit is out there, especially the nonstate backed corporate. He also saw a big rise in Corporate Bond sales, and that went through last year grade corporate moving away from the state banks, looking to markets finance operations. There are good signs. There was continued reluctance, it seems, the part of the big banks to lend. Loanssaw on the new yuan come a bit of an miss from what economists were forecasting. In that context, it makes some kind of sense, given that the government is looking to cut back on some of the overcapacity in the economy. In its own line with what they are trying to get rid of zombie companies. That means it could continue to rise. Manus collegiate gdp numbers next week. What is the consensus view . Malcolm that 6. 9 is in contrast to the stock market, which would indicate things are really falling apart. 6. 9 for the full year, that is a steady bit lower from the Previous Year grade no panic yet, the Fourth Quarter number also expected at 6. 9 . Manus malcolm, thank you very much. Is still with us. Trying to look at china, and we talk about it on a daily basis, here we are. Which is the real economy, credit is jumping by the most ins last year. Ok, the new loans were not as good as they thought. You have the hysteria of market and the real economy. What are you convinced about in china . Chris i am pretty convinced that i do not trust many of the statistics coming out of china. The more official, the less i trust them. I think this question about credit, neatly summarizes the slightly schizophrenic attitude of markets to china at the moment. China isd, the bind then. On the one hand, because of the concerns about growth, people are reaching for the old remedies which are get the economy a boost, give it a bump in credit. Is thatterm story there has been too much credit creation, too much surplus capacity. Which is not productive in earning a decent rate of return. Reaching incremental units of credit, you have less umph provided to the economy. You have this conflict tween the drug,term clamor for the and the longterm cold turkey. Which the economy needs to go through. Manus i found it fascinating, onberry return to growth mainland china. I know it is not the best we all cannot afford a burberry trench coat. I cannot. The markets are looking at 16 . I am wondering, our job is to look through the tea leaves. What is that i you about china story . Chris it tells you that shortterm the bad news is getting reflected in the forecast. And i think that is no doubt we will get onto the broader discussion about what is going on in the markets but it kind of epitomizes the point that we may be starting to approach. Just in the shortterm, people are probably overshooting the mark in terms of how bad things are. Manus that is the theme that is coming through from a whole variety of managers. We have global earnings downgraded from this bad in seven years. Most since 2009, i wonder in my well, the buy side tea, is not to read the leaves. But also to look at the market as a mechanism, looking at sentiment in the marketplace. Canmarket tends to be it only think about one thing at one time. At the moment, we latched onto this very bearish perspective. Look, if their stuff going on at the moment which is concerning . You know, is it going to be a case of one leads . Absolutely not read this needs to be worked through. And i dont think right now it is as bad as people are starting to discount rate everything you say, though, about the earnings backdrop is correct, of course. Understood and known about, in the pipeline for a long time. It is heavily influenced by what is going in for the commodity sector. Manus a healthy adjustment, you have been on a rocking chair for equity markets 0 . It is natural, healthy, disconcerting for my pension fund, but it is healthy. Chris disconcerting i have been using that word. Healthy, potentially, as well. It certainly raises expectations. And we always go through this process when these things happen, which is that people start one set of assumptions, then it moved to another. And a mechanism for reflecting that is price. Down, are coming expectations are being lowered. Eventually, they get to a place where the expectations are less realistic. Actually, they are too low and we overshoot them. The markets will then rally. Manus the u. S. Recession, the highest since 2011, the median credibility of the u. S. Recession jumped to 19 on the bloomberg server, the highest since 2013. Would you join the chorus or stand apart . Chris the biggest risk factor at the moment is a u. S. Recession. When i say risk factor i mean that something that is not couldtly priced in, but become priced in. If it did, it would change those expectations and prices. Right now, is it likely . No. It is still only a 19 probability. Manus stay with me. Chris wylie, cio. Now, heres a name for you annie leibovitz. One is a global icon, the other is a global bank read the photographer has been 10 citiesed to visit over 12 months. I had the opportunity to speak to her about her role models in business and politics. Annie it shows how diverse women are. Know,e imagery that, you have not seen before. Globalk up with the iconic photography . They came to me, they can to my office in their suits. You always suspicious, know, in my work for vanity fair and vouge. I cannot take the pictures i really want to take. I said would you consider doing and updating of this project . Manus do women have bigger and stronger role models now . Annie absolutely. It was interesting about sheryl sandberg. She sort of is helping people, helping women come along. Different not that from me, in that respect. Know, i felt sort of nervous about playing that role. How to help women go through the next step. It has a whole new kind of residents. Many ceost know too of companies that come in and to set like that in a chair. Manus is america ready for a female president , annnie . Annie absolutely. Hillary clinton, that is another question. Us it is almost like let elect hillary and move on. It is inevitable, the way obama was inevitable. She is going to present a whole other side of things. Now, sheher experience is the best qualified for the president of the u. S. Be socialuld it media hillary or the real woman, hiding behind the buffont . Annie i think you are seeing the real person. In the past, you would think some kind of strange hairdo. She does not kind of care about that stuff. He does not have the time. I think she is being a little bit more careful about how that is presented. Manus Annie Leibowitz there. Hat opened in east london it is phenomenal. It is a year to the date since the shocking decision to drop the swiss franc. Potentially gain . Is 6 30 in london. 7 30 in brussels. Let us get you up to speed in terms of the market, the shanghai composite to date, it is down. We are down 3. 7 . We have dropped over 8 this week. The birds are calling. That is the model on my bloomberg terminal today. This is the shanghai composite, down so far in 2016, by eight team. 16 . Are headed for the longest losing streak since last year. The credit market jumps in china, that is not enough to get succor to the equity markets story. What you are looking at is the flow of money into the yen. Oil is down 8 this week. Let it you the equity futures, drop and set for the lower yield. U. S. Equity futures indicated lower. You have the dow down. Are shifting gears here in the u. S. Equity futures at the moment, on the back of the shanghai moves. Lets get you up to date with the first word. Nejra chinas broadest measure shows as Companies Increased borrowing on the Corporate Bond market. Trillion rose to 1. 8 yuan in december. That underscores a shift from the state in the worlds second largest economy. Ofected to take a writedown 4. 9 billion on the value of u. S. Shale assets, cutting Capital Expenditures as it grapples with a slide in oil. May be toity collapse abandon its decade all pledge to raise the dividend. Has agreedhs says it to settle a u. S. Probe into his handling of Mortgage Backed securities for about 5. 1 billion, that will cut fourthquarter profits by about 1. 5 billion. It closes a record Fourth Quarter for litigation. For more on those stories, terminal customers