131 since the first round of quantitative easing began. Rising tension over eastern europe. Exercises have been described as those conducted during the cold war. The west is been highly critical of russia over the fighting in the ukraine. For a second straight day, president obama warned that quarantines and travel bans wont stop ebola. I want america to understand that the truth is that until we stop this outbreak in west africa, we may continue to see individual cases in america in the weeks and months ahead. Because that is the nature of todays world. We cant hermetically seal ourselves off. The state of maine has an ebola quarantine on a nurse who is fed up with being quarantined. Hickox is in defiance of maines governor. Bankks secondlargest said profits unexpectedly rose in the third quarter. Bank has set aside 800 million to settle allegations it rigged currency markets. It was very, very special. Hydrometer truly in game seven of the world series last night. Igh drama, truly, in game seven of the world series last night. It is all over. The giants win a third world series in five seasons. Rner was historic, brilliant and relief. No question about it, the m. V. P. Just extraordinary. Bloody . Is sock it was not. There was a missing element of drama. This was extraordinary, going back to sandy koufax. Christie matheson was the modern workhorse. Also the consistency that madbum has given the giants. It is remarkable. Given the flatness of the season, what a way to end it. I think the San Francisco giants fans would disagree with that. Returnncle bob in omaha reports that with a heavy heart he can return to work. [laughter] lets get a data check. Yields, higher. Euro, weaker. Crew does not do much. Crude does not do much. Yen is weaker. Abenomics does not do much. The ruble, there is the ruble. Lets go to the bloomberg terminal. Here is the jump condition. This is the janet yellen jump. Moscow, we have a problem. The ruble is ever weaker. This is really something how the central bank of the world begins and ends in washington. We talk about this as if it is going to have an effect on Vladimir Putin. It has not. He is enjoying his approval rating. Russia buzzes in europes airspace. Ex, the market reacts. The focus for janet yellen is always the strange link between inflation and Interest Rates. We parachuted in a lady in green. She writes about the bond market. [laughter] she writes about people in the bond market. Robert michael is a person in the bond market. [laughter] it is never dull. It is not. You look at the end of qe. What would you advise clients this morning about their fears of when the fed raises Interest Rates . I actually think the fed got it right. Scarlett started in by saying easy money. Case. S not actually the you have zero Interest Rate policy and you are still running the fed rate. Unless they get to zero or positive, that is easy money. Clients should not be wary right now. We are returning to old normal easy money. That is a lot of adjectives. [laughter] i will go along with that. Is it parsing the fixed income market . You say, now what across all assets . We have been saying now what across all assets for a while. People are looking at the pricing of different parts of the bond market. The fed started by calling out the bond market a few months ago and talking about highyield and loans as being overvalued. Much where credit is priced or where risk assets are priced. It has always been about real yields being too low and the government market. We know the taper tantrum is also lisa tantrum at the desk. [laughter] what did you observe yesterday . What part of the bond market took the news most abruptly . People were hoping the fed would be a little more dovish and come out with a soothing credo to say we are holding your hand. Their hopes were dashed. The most interesting things is that volatility has scared the fed in the past. Here, we are seeing the opposite. They are saying, go forth and conquer. Allow the volatility to come on up and lets see what happens. How much volatility can we tolerate . Puts there a janet yellen out there. She could have been a lot more dovish. The very fact that she did not suggested that they were ok with the volatility they have seen in the recent weeks and the correction in asset prices. I think they desire greater volatility in the markets. Of course, they dont want runaway volatility. They want some control, but i think they left themselves enough leverage to pull. The dove this time was from the minneapolis fed who was worried about the possibility of not deflation, but less inflation. Does it concern you that we are not close to 2 . It is supposed to be the ideal environment. Inflation. Y moderate when you look at the decline in inflation expectations, it is clearly being driven by energy prices. That should be a tail wind to the economy. I think it is a little bit off base, but i get the point. Six weeks ago, bill gross was unconstrained and said financial repression out to the end of the decade. The you agree . I think there will be a lot of elements across europe, possibly not in the u. S. We may actually make some money . Yes, i think were headed in that direction. Can you write a story about that . It depends how quickly yields can rise. If they rise to quickly, it is not good for investors right now. Look at this, the Job Interview for you. [laughter] here is a good story. In new jersey, governor Chris Christie marks the second anniversary of Hurricane Sandy by getting into it with the hecklers. This man interrupted a Chris Christie speech to protest the slow pace of rebuilding. Here is what Chris Christie said. Into are going to get debate and it is going to get very interesting and very fun because somebody like you does damn thingw to do a but do something when the cameras around. Sit down and shut up. I dont know if saturday night live could do a better job. [laughter] was he running for office right there . I think he was. This is why he was so popular. He is so good at channeling that. His popularity has nothing to do with policy or his record as governor. The heckler invited Chris Christie to dinner afterward. [laughter] he is as much playing for iowa there as he is for new jersey. Became popular three youtube videos of these kinds of performances. He shouted down a teacher at a Union Meeting once. Will this fly in the midwest . It is soaring in the midwest. A meeting ofnt to republican lawmakers at the state level and they were desperate for Chris Christie to run. That was the cry. He is so good at this. I think it plays. The man invited Chris Christie to dinner and his response was classic. Thousand about a things to do tonight and going to dinner to you with you is 1000th on the list. [laughter] then. Minutes in. It is bloomberg surveillance. Five days away from the midterms. We have a lot more for you. Bloomberg surveillance. In the words of Chris Christie, shut up. Sit down and shut up. [laughter] good morning, everyone. Bloomberg surveillance. 1. 0. T, studio at 8 30 eastern. Good morning, everyone. Im tom keene. Brendan has our morning mustread. From the wall street journal. Oil prices drop all over the world. Norway. About i am a pro. I do my homework. [laughter] they are really one of the poster childs of responsibility in wealth investing. A lot of nations have adopted best practices from norway. The whole goal of having that fund is so that they can diversify the economy. Norway is finding that to be a challenge. If norway is finding that to be a challenge, you have problems with others sow the friend Sovereign Wealth Funds. Has oil adjusted what youve done a jpmorgan . Yet overe adjustments where oil is . It has. Certainly, growth expectations have to rise because you get this tailwind. I would not necessarily shed a tear for norway. [laughter] exporters. L if you are looking at the russian ruble, they are bringing in dollars, which are very high, and norway is doing in the same thing. Norway is bringing in u. S. Dollar assets. It is a mixed blessing. Sovereign thatst japan,ed about it was when we talked about the impact of a higher currency. They have to import oil as their currency was declining and it became a huge turn for them. It has been a huge problem for nigeria. Nigeria has to import oil because it does not have refining capacity. Norway has a very robust sector. Norways Sovereign Wealth Fund has done interesting things. They have been moving into more assets they can yield a little more. Im wondering how much will investors suffer in this high yield . Does volatility matter . It matters quite a bit because they are always looking for opportunity. In our conversations with a lot of the Sovereign Wealth Funds, they have a lot of cash to put to work. What has frustrated them over the last couple years has been the lack of volatility. They have not seen enough opportunity to put that money to work and they like this environment. It does not have to be the Sovereign Wealth Funds. It could be official institutions in japan that are trying to diversify away from japanese government bonds. A lot to talk about here after janet yellen ends qe. We will continue the conversation on investment in our next hour. We will speak about the strange brew known as the Hedge Fund Business going into 2015. Stay with us. Bloomberg surveillance. We are on everything that is digital. Fromding my flip phone 2003. [laughter] good morning, everyone. Bloomberg surveillance. Twitter question of the day. Should the government of the United States of america push for fancy bachelors degrees or apprenticeships . Are we an apprentice nation . Thank you, donald trump. Do we need more Training Programs . Good morning, everyone. Bloomberg surveillance. The fed has spoken. Qe is over. Investors are pricing in the guidance. The Dollar Strengthens. Foley. Us is jane we heard from a less dovish, more hawkish chair yellen in the statement yesterday. Should the emphasis be on the dollar or are we really looking at a euchre weaker yen, we aker euro . I think it is a little bit of both. The u. S. Is still doing pretty well, certainly compared with countries such as japan, certainly compared with the eurozone. Youve got a situation whereby the japanese are doing huge amount of quantitative easing and their is no sign that they are going to stop doing that. U. S. Is far more mature and its economic cycle. , many of point of view the long dollar positions have been pared back. The dollar is still the best bet. Dismiss any type of improvements in economic fundamentals . Again, it a lot of priced into the dollar. The dollar bulls have been ready vocal for a lot of years pretty vocal for a lot of years. They have been wrong. Finally, market positions have seemed to ratchet up. Athink when we are looking japan, for instance, that what is a lot of disappointing news. This week am a have had good news in japan in production. It is still really poor. Lets look at dollaryen. This is abenomics. Call it abe strong dollar policy. His janet yellen the central banker to the world . Whereuppose it depends you stand when you consider that. The u. S. Economy is the biggest economy in the world, so she does have that mandate to set a point of view. That is not technically her mandate. First and foremost, she has to try to generate growth in the u. S. Economy. We have had a lot of debate about this from the Central Bank Governor in india saying that the fed need to be very careful about their policy because of the impact it has. That is the point. This is the key point this morning. Janet yellen fx what goes on in other nations, whether it is malaysia or germany. I want to talk about the brazilian currency this morning. They announced surprise rate hikes to control inflation. Inflation is higher than estimated in brazil. They say there is going to be a fiscal adjustment that was described as violent. Issue turning or flailing . Is she turning or flailing . The market is very skeptical of this president. The market wants to see economic reforms. Until we see those, the market is going to remain skeptical. That means the currency will remain on the back foot and that inflation pressure could continue to build. One last question. Where does Vladimir Putin begin to worry about the ruble . The ruble weekends and weekends and weekends and weakens. At what point does it affect him . If we look at the opinion polls, he still has a lot of popularity. It seems like the people like his strong line, strongarm approach, but the economy really is suffering. We have higher inflation in russia. That is not a pretty situation at all. Interestingto be through the winter to see how the polls to react. He seems to have a fold firm hand for now. Jane foley, thank you for joining us. You see the volatility in the fx market. Stay with us. Good morning, everyone. Bloomberg surveillance. Good thursday morning. Im tom keene. Lets get to our top headlines. Peshmerga is ready to battle isis at kobani. Kurdishaccording to state run media. Cheered thepeople troops. Earnings rose 16 at volkswagen. Ends sixal reserve years of bond buying known as quantitative easing. It added trillions of dollars to the fed Balance Sheet. The Central Bank Still plans to keep shortterm Interest Rates near zero for a considerable time. Those are your top headlines. Alan greenspan was a little critical. How about what the fed did . It is over. It is over for you, janet yellen, and even bill gross. It is over. Robert michael has had a storied career in fixed income. Are you managing for the coupon now . Do you get your scissors out at j. P. Morgan . There was a lot more to do in the bond market right now. Such as . We were talking about highyield earlier. Credit spreads are 4. 5 and default rates are 1 . I would like to collect that 4. 5 . How do i do that . When you do that, is highyield another phrase for high risk . The energy prices, oil prices coming down, it is a fundamental threat to the oil companies. We learned this yesterday. They are a big part of the highyield market. They have increased their proportion of debt in the total index dramatically, almost double the proportion in the past. Do you worry about that . We do. That is the unanswered question. What will be the impact of the Energy Companies . Historically, when you have had a decline in energy prices, it has boosted corporate earnings in the u. S. , but now that energy is such a much larger part of corporate earnings because of the investment in Energy Companies, they are the ones that are going to get hurt. It does concern me. I think corporate Balance Sheets look very good outside of energy. I think it is pretty safe to still be in there. Im going to pile on to highyield. You said the default rates are low. How long do you carry that trade . Until the fed takes the punch bowl away. When you look back at the tendsy of when highyield to correct and go through convulsions, it is after the fed has finished tightening monetary policy. Then they have burst whatever bubble has occurred and then you have the deflationary spiral and highyield collapses. I think we are several years away from that. You say we are about 65 of the way through the current credit cycle. I know you see opportunities. Where are we in europes credit cycle . Of the way. Near 65 i think we are a third of the way through. The banks did well. It is not a surprise. They have been focused for the last five years. We were talking about spain earlier. Forfive years ago, they were taking in deposits by posting 45 deposit rates. They got a lot of capital. I think there is some pretty good value in the european bond market and the punch bowl is not going to leave europe anytime soon. Lets stick with europe. I want to read Something Back from your research note. What countries are we talking about . I think you can look at hungry, turkey, those are the places that benefit in the current environment. Regulators are increasingly concerned about the potential mass exodus from bond funds. How concerned are you about Something Like this . A career bond investor, i dont like to see anybody leaving bond funds. [laughter] there is no doubt that the exit can be crowded. One of the unintended a career bond investor, i dont like to see anybody leaving bondconsequences of thew Regulatory Environment is to increase dealer Balance Sheets. Everybody is trying to think about where the new Balance Sheets to absorb outflows are coming from. Is the petroleum bond. This is not the stock, it is the price of the bond. You made a lot of total return. You have the coupon. 6 along the way. Capital gains from 80 to 100. Then you get this. Your worry in your crowded market is that all of a sudden higher yield, this rolls over. Is that a 2015 event or is that farther out . It should be the feds worry. And our viewers. It is a lot of peoples worry. I go back to how the fed manages a normal station of Interest Rates. If they do it rudely have pricedd they in pretty accurately how they are going to do it, you can have a pretty good bond market and not an immediate rush. Dudleyspport bill informed complacency versus what , hear from marty fritzen who is really worried about instabilities. , it is noteverything all one and not the other. You can just answer that and say the San Francisco giants [laughter]. [laughter] that is one of our top photos. This is our number three photo today. This is as, celebration for a convoy of peshmerga fighters in turkey. They are coming from iraq, through turkey, back down to syria. This is really important. Not excited about allowing kurdish fighters from turkey. They need the economic and po