1. Newspaper, alle 2000 London Police officers are authorized to carry a gun on duty. Intelligence agency has warned that islamic terrorist may be planning the attack and a european city. Market news with julie. Julie if you take a look at features this morning, you will see very Little Movement on this last trading day of 2015. That means there is as little suspense. We do not know if we are going to have a gain or loss for the s p 500. If you look at the year to date chart, we are hanging onto a gain of. 25 . What happens today will be pivotable if stocks rise, that will be the fourth consecutive yearly gain. If they fall, it will be the worst year since 2008. In 2011, stocks were almost unchanged on the year. So, interesting here that we do have its down to the wire on the last day. Want to check on crude oil prices put a have been watching closely this year as well. There, too, youre seeing them unchanged. Very unusual but perhaps not as unusual on the last trading day of the year when you do not have as many market participants. Crude oil has been one of the big market stories. 31 drop. The biggest twoyear drop in oil prices ever appeared backtoback declines amount to more than 60 here. We have seen stocks following oil. Oil is not doing anything today. Stocks are not doing anything today at least not for now. David they are getting ready for the holiday. There is more trouble in paradise and puerto rico. The governor said wednesday the island will default on 37 billion in bond payments due at the start of 2016. Laura keller has been following all of this. We are turning to her. They the 37 million 37 billion, what are these bonds . Laura those are two different types of bounds. The Public Finance corp. , 1. 5 million and theirs 35 million for what they call the infrastructure agencies. David there was originally 1 billion that was coming due. Does that mean that they will pay the rest . Laura yes, they will pay the rest. They have things going on with the electric authorities. 350 million for the rest of it will be paid. Puerto rico wants to have an orderly default. They are in a real crisis. Weve seen this happen with other countries. We have seen it happen in u. S. States as well. Who is going to be the biggest opposition to puerto rico going through an orderly restructuring that will allow it to smooth out some of these issues and move past this massive debt issue . Laura those are going to be the holdout bondholders. People who bought at a higher price. There are who would not be favorable and accepting anything less. Sometimes that could be the bond insurers. So, those are what we call the holdouts. That would be adverse to any kind of deal that would cut the Principal Amount or be opposed to having payments stopped. David keri, you have cover other bond crises. What i am curious about is the rhetoric we have been hearing about. It is similar in every crisis. Yesterday, the governor said him he talked about amounts of money that had been thrown already into avoiding an orderly restructuring. Does the rhetoric right now, is this part of a pattern weve seen in other defaults . Keri it is. You do see puerto rico following similar steps. As we know, they have one thing they cannot do that almost every other default, basically every other country or state that is had this issue, they can not to fall. So they are short a major tool they cannot default. That is what makes this one interesting. Brendan they are not a state or country. Aura they are in a quagmire. They are defaulting. You start to have these defaults and creditors will start to sue. What happens . You have a port. Yes, they should be paid. If they do not actually have any money, how do you get puerto rico to pay . It gets into a place of no return. Brendan do we know how they are coming up with a 960 million to pay and how long can they keep is going . Laura the general obligations which is about 350 million that was due. Fromclawed it back other types of accounts. They have fuel taxes and pulled it from different accounts to meet those payments. Theyre pulling cream from pulling things from different places. David you will be back for more on this story. It is far from over. Turning to another story. 2015 was not a bad year for most residents. Go, michigan. Bloombergs michele joins us now from washington with the biggest wage gainers, luckiest homeowners. What were the surprises . Know, one of the categories we looked at was home prices. We are used to seeing places on the west coast dominate the housing affordability, or affordability ranking. What we saw is that florida locality has dominated the top 10 in terms of the highest price, the biggest appreciation and homes over the past year. That was one little surprise. There are a few Different Reasons. A lot of foreign buyers in that area. Supply constraints, job gains pushing up prices. Brendan isnt that also that the florida prices at the farthest to rise . Michelle that is one thing we kept in mind throughout this ranking is when you judge the winners of the last year, some of them are the people that have had the most to gain. Most in thee crisis. Another area we looked at was unemployment. It was kind of surprising to see how much unproven was made in the least educated category. We broken up to four categories. Those folks who have less than a High School Degree made the most progress but they still have a 6. 9 Unemployment Rate. Meanwhile, those were the most educated are at 2. 5 . Americans with the bash this degree or higher. Fed has been saying the entire year that one of the biggest impediments to raising ands is under Employment Unemployment rates. We are seeing a little progress, given what the researcher put out today is, what is your outlook for 2016 . The markets you are looking at come from a low place. Recovery then growth. But do you expect to see growth as opposed to Just Recovery . Ichelle we would all expect to see a little bit more progress in the Unemployment Rate. Range of the feds definition of full employment. There should be more improvement but one of the longer rage problems is under employment, longterm employment. All these other parts of the labor market that are not quite recovering. These people on the fringes who feel like they are in a job that they want more hours or they earn a job that has not paid as well. And people who are out of the workforce because they have given up looking. Those are segments of the economy that policy would like to see improve a little bit more. One thing about unemployment and skill levels as there has been a bunch of Research Showing the the skill divide in labor market is giving way to one where basically if you have a job where you interact with other people, there are job gain s. Which you arejob really good at something be it operating a machine or computers, those jobs are decreasing. This might be the beginnings of for people who may be our low skilled but are in jobs, retail, and other really sort of straightforward jobs. David im going to cut them off because that was a point. Not a question. We have got to get out of here. Keri staying with us. Next on bloomberg , we take a look at the Global Economy. Guess to outpace china . Think about my last name. Vonnie here is your latest Bloomberg Business flash. Microsoft if they are being targeted by a governmentbacked hacker. The Company Tells you if they believe an account has been compromised. Evidence ofys statesponsored attacks can be more sophisticated. Sugar prices will post an annual advance. Up more than 4 in 2015. 2016 may be better. Producing give the credit to el nino. Crops in india and thailand. Brendan now we go to global. today we had to hong kong. Curan joins us to discuss the world economys biggest winners and losers of 2015. Justin foxton keri geiger are on set as well. We are going to start with ireland. Economy grew 7 in the Third Quarter. In a way, ireland is the model european economy with its exports. How much of that growth is Companies Using ireland as a tech shelter . How much of it is the Irish Economy . Ongoing debate. I think the irish story, they have considerable exposure to the u. S. Strong export base in the pharmaceutical sector. K. Is one of the fastestgrowing major advanced economies. They are benefiting from the oilp euro and cheap prices. They are getting the benefit of perfect tailwinds now. Mixed economy. Like you say, not all of it is as good as the headline suggested. Itsits just shows you how comes off brics and emerging asia, smaller advanced economies are doing better. Who wouldve predicted that . Brendan it strikes me hearing you talk about all the favorable winds helping ireland, is ireland lucky or good . Did they do something right to end up in this position . Enda it is a very open economy. Withof the problems iwh Irish Economy as it goes from one extreme to the other. Of what is happening in the u. K. , the flip is when those big export markets are on the way down, it hits that small country even more by much more significant degree that it would other trading partners. That is one of the issues in ireland what extreme or another. Modest sizeds a economy. Lets go to a couple of larger ones like perhaps china and india. Tell us about how they did in 2015. Enda yeah, so these are the Global Growth drivers. China undoubtedly a disappointing year, especially when you consider all of stimulus, not just the central bank cuts, not just all their special mechanisms to get credit flowing, but also on the fiscal side. How much the government effort the government took to get local governments going. A disappointing finish of the year. The congress was say there are signs of stabilization in china. Is great transition happening. It is a question of not happening fast enough. India, on the other hand, as a standout in the brics acronym. They are doing quite well and have managed to succeed with major structural reforms. They have a new inflation target mandates. A new centralbank policymaking board. The trimester is pushing through reforms, not as quick as somewhat hoped, but people suggest the work is in place for a decent couple of years. Brendan is there any hope for brazil in the new year . Back onen we did look the Global Economy in 2015, brazil this not come out very well at all. They have political problems, credit rating, fiscal downgrades, a corruption scandal. It is hard to see them turning the corner as long as the big commodity zoom continues. Anita circuit breaker. Brendan they need a circuit breaker. Brendan happy new year. Next we will hear from oaktree capitals howard marks on liquidity concerns. David welcome back. How to invest during the time of reduce liquidity . That was a big theme on bloomberg and something we spoke at length about with oaktree capitals howard marks. Marks told stephanie and me in october about trading versus investing in these ill liquid investment. Howard ill liquid investments are good for traders. They are bad for investors. I wrote a memo about liquidity a few months ago and i concluded by the best defense is not needing it. Not eating liquidity. Buying things you can hold for a long period of time. Ostensibly, the lower prices go, the easier it is to do that. January, are we going to see last hedge funds. We are seeing a lot of traders set up shop saying i can do this and they do not have investor backgrounds. They are traders. If this is not a traders market in the did not raise longterm locked up money, what will happen january 1 . Should i talk about what happen and not what what will happen. The two are different. Look, the Investment Business has excess capacity. There always should be a weeding out. 2004, sayingo in the average hedge fund over the next decade will return 5 and people will get tired of paying six. Nd 20 to make five of hedge funds are much bigger than they were 10 years ago. People come and go, but for some reason it is kind of like hedge funds tend to attract capital and not lose it. David i come back to the basic question of liquidity. The report you saw that came out of the new york fed that supposedly looked at the numbers and looked at the data and said as far as Corporate Bonds go, there is no liquidity problem. So, is there isnt there . I dont know. Weve talked to other people who said there is an issue and the fed comes out and says that there isnt. Markets thosethe who trade every day say there is a big problem. The fed, no problem. David how do you account for that difference . Howard i have not studied the study but practitioners think there is less liquidity. And ive taken part in some meetings with some officials trying to get at why. And i dont think the concerns were imaginary. Concernhe way, the real is what happens if there is a real market incident. David exactly. Stephanie do you think there will be . Howard there always will be. I will not know when or how bad it will be but stuff happens. Stephanie youve criticize liquid alternatives. Etfs, for example. In august, we were ready for those etfs to get tested and they did in the health rocksolid. David bond etfs. Equities did not do so well. Stephanie have you changed your view . Howard no. I do not think we have had a serious panic in bonds. David the market is getting a little bit nervous. If you look at, for example, swaps and the spread credit default swaps which are ensuring in this case ield, credit default swaps ensuring investors against failure, a default, and the spread to treasuries, it continues to decline here. So, at least the market is sniffing something out, even if the new york fed thinks that all is clear. Stephanie what do you think . Howard i think investor swing from optimistic to pessimistic. At both extremes, it is excessive. One of my your job, favorite cartoons from the 1960s has a news reader sitting there stephanie are you calling me a news reader . Im out. A newsreader . Howard everything is good for the market that is the way people flipflop. David talking about flipflopping, i want to come back to that question that is bothering me. It is one thing if the regulators and practitioners disagree about what should be done. It is different if they disagree with the facts. If there really is a difference between what the regulars are saying that they do not believe there is liquidity problems and the practitioners do believe, that is a dangerous situation for the markets . That is not healthy. We can disagree about what has been done. 2007,nie in 2006 and the regulars not know what is going to happen. Howard there will be a debate that will go on until it is really tested. What does howard marks invest in now . You must see lots of opportunities. Howard what matters is value. Equalerything else being as prices go down, the ability to access value cheaply increases. Stephanie what does that mean. Oil and china are attractive to . To you . Bond yieldsyield have backed appearance of this is a great opportunity. Howard thats right. David so, youre going to pile in. Howard well, things are going our way. We have been reticent for the last actually four years. We have had this motto. Move forward but with caution. Says the less prudence with which others conduct their affairs, the greater prudence we must conduct our affairs. There is a bull market in prudence, or it is on the rise, anyway, and that means we can turn more aggressive. We have been very cautious for a long time because nobody else was. David that was howard marks. Strikes me he was pretty prescient. One is fewer hedge funds. Every day we hear another closing. The other is challenges to liquidity. The third avenue situation appears to involve some liquidity situation. Justin i love the general tone of the guy who makes his money off of other people running into liquidity trouble. Lowhaving to sell to him at prices not been too worried about the liquidity prices because that is how he makes his money he put it nicely. There was this for a fiveyear period where was good to be a trader. There was lots of liquidity. That does not go on forever. Who knows how bad it gets over the coming year, but we have had a few of these squeezes that give opportunities to somebody like howard marks. David it is always nice to have patient capital. Next, we had to london where markets are just closing the books for the year 2015 on bloomberg. David welcome back to bloomberg go. We are delighted you are here. We go to europe and a moment, but we start with the first word. The counselor of jim germany wants her country to coping with the refugee crisis will take time, effort and money. Use germans will economic power to turn the crisis to the Nations Capital bandage. Enrique marquez is accused of conspiring any terrorist attack, also charged with lying. An unscheduled stop or an air canada flight to toronto. It was forced to land in calgary. 21 passengers were injured, but none were lifethreatening. David this last trading day of the year, the few markets that were opened have now closed. We had to london. Caroline is there. It is official, we have had the worst december since 2002 when it comes to the european markets. Germany and italy already dusting off and putting the champagne on ice for new years eve. The rest of the market is not as quite in the mood. Spain trading lower. Nearly every Industry Group is down. What is in this interesting, forth toback and athens over the summer, it created so much volatility, greece, the market, the concern it would leave the eurozone, today it is the one area of green. Meanwhile, the rest of the eurozone is lower. Miners in europe down by 36 , also also down oil also down. I want to put this in perspective because today stocks are up, but wind it back and look over the year to date and we are up 7 . We are on for the fourth Straight Year of gains, the longest winning streak since 2006. Not all sunshine. Lets talk about where i should have been putting my money, what were the winning bets . One is checked and one is green energy. All about the fight for clean energy in paris. You could have put your money into wind systems, up more than 100 . This has been want to keep an eye on. We have seen the share price continue to trend higher. We expect more growth to come, wind turbine installation globally expected to rise 30 next year. Got to be the one you should have put your money into, check this out. You cannot even see the number, , that is how much t