Reason i think they would say they would sign such a bill that would weaken a critical component of Financial System reform aimed at reducing taxpayer risk. The senate could pass a bill as soon as today. Are we at bottom . Not yet. Oil closing below 60 a barrel for the First Time Since july 2009. This morning it dipped to 58. 80 a barrel. Theres speculation opecs biggest members will defend market share. West texas intermediate futures fell in new york. They have plunged 10 this week. Oil headed for its 10th weekly drop sense october after opec decided against reducing output. The director of the c. I. A. Made a rare move. He held a press conference yesterday to answer questions about the senate interrogation report. John beenen said it is unknowable whether Harsh Interrogation Tactics used oner it ror suspects used meaningful results. He also described soul searching in the aftermath of the 9 11 terror attacks. The Previous Administration faced agonizing choices about how to pursue al qaeda and prevent additional terrorist attacks against our country, while facing fears of further attacks and carrying out the responsibility to prevent more catastrophic loss of life. There were no easy answers. Yesterday marked beenens first public appearance since the report was released earlier this week. Yet another legal challenge for uber. Today a paris judge ruled whether to block the companys uber pop service. The service lets users gets rides with private cars. The startup is also engaged in legal battles in los angeles, San Francisco, spain, brazil and the netherlands. A french court will decide whether it constitutes unfair competition to taxis and other driver rentals. Ubers Office Services are not at risk. Yeah, i used uber last night. The San Francisco bay area, the storm out there is one of the biggest in decades. The National Weather service expects a slowmoving system to dump eight inches of rain on some parts of northern california. The weather left more than a quarter million homes and businesses, including selected parts of downtown San Francisco without power. It also produced widespread flash flooding, closed schools, and cancelled flights. Wet weather will continue today with the system moving slowly through central and southern alifornia. Let me run through a data check. It is amazing what were seeing. Futures, all you need to know, negative 14 on futures with 2 12 yield crunches to right now. Other currencies have trouble. Nymex crude is interesting. I saw that last night during a bloomberg panel. On to the next screen, which really begins to explain the tension. Were back to average on the v. I. X. From 12 to 20. Further curve flattening seen by 154 basis points, ruble causes major putin angst. 55 was a big deal. Weve blown out almost to 58 on ruble. Weaker russian ruble, 13 . 10 overyield there on our ruble bond, dollar index just to show that this is really discrete. There are discrete things going on. You thought the period between thanksgiving and christmas was going to be quiet. Gone. Does Vladimir Putin feel angst . Its going to be thrown in his face. My experience is, i dont care, i dont care, i dont care, guess what, he cares. Ok, over to the terminal. This shows the rate of change of the benchmark for angst, which is a japanese 10year. Heres the central bank ugliness in 2003. Forget about that. This is the acceleration in japan which, of course, filters through everything else, including the german 30year bond yesterday. Absolutely. Even with that last leg lower, moodys has declared japan is less creditworthy than a year ago, but japanese investors, anyone who is buying japanese bonds dont agree. Almost unraveling. This will be a major theme, but through the weekend of reading and into next week. It was something to see oil roll over late yesterday. The opening trading here with a 58 on west texas intermediate. The collapse in oil, the plunging Interest Rates are signals of looming crisis. They also signal that once again Gary Schilling is right. Schilling, without question, has the call of economics of the last two decades, a trend in past deflation. Theyre like little dolls where you stick pins in a Gary Schilling doll. Thats how much hes disliked. He joins us. We dragged along Shannon Oneill do the end, come on. I want to talk now, wait a minute, tom. Look at that chart of the 10year. What does that tell you . What it tells you its a screaming bye when yield is over 2 versus the one, which is below 1 , and the dollar is rising against the yen. You reaffirmed this morning, bond prices up, yields low, and the 10year yield goes to 2 . Its going to 1 . 1. 00 . 1 . Ok. I want to talk to dr. Oneill, ok. We ignored brendan and i were talking about this we have ignored venezuela. Theres putin and this and that. How critical is this weekend for the nation of venezuela . Well, venezuela has really entered a downward spiral. Weve seen the economy is failing. The Public Opinion polls for the president have been falling. Weve seen a huge spread in the Real Exchange rate and the black Market Exchange rate. The Real Exchange rate, theres two of them, six and 10. The black market topped 180. The economy really, in many ways, is in freefall. Which institution bails them out . Is cuba going to come to the rescue . Theyve been rescuing cuba. Yeah. I mean, who bails out venezuela . Well, theyre sending their foreign minister theyve been talking to the chinese. Theyve already taken 50 billion from the chinese in loans. Its hard to imagine the chinese would double down on that bet right now. Theyve really maxed out all their proverbial credit. And the chinese arent desperate until need of the one resource venezuela has to offer. They need less of that. They can bore free throw argentina. There you go. Get in line. How prepared is the u. S. For an economic and humanitarian crisis in venezuela . You know, the United States has been talking with many of venezuelas neighbors, brazil and colombia, trying to bring together a group. The neighbors of venezuela have been meeting together in a Regional Organization trying to work out an agreement, or at least talks between the opposition and the current government, but it hasnt been going well. The trouble in mexico in the 1980s and 1990s raid on ited out through latin america. Who is susceptible to a collapse . The interesting thing, is under the last 10plus years, venezuelas economy has just eroded. Its just oil. Who is it going to affect . It will affect those people that they import from. 80 behalf they consume comes from other countries, some from the United States, from colombia and the like. But this isnt going to, i dont believe, really set off an International Crisis in the way that some of the other countries, like mexico, thats so tied to the United States, that would be a huge effect in their economy went down. Both venezuela collapses in their oil production, down 30 already. Suppose its really taken out. Is that a big factor in the global . They have supposedly the worlds biggest resefrpbls they do, but theyre producing up to 2. 1 Million Barrels a day. Its not going to change oil market prices significantly. Also, were seeing so much other production coming up. The challenge for venezuela is, depending on which analyst you believe, their breakeven price is probably 70 to 80 a barrel. Even if theyre Still Producing was that all in . Margin didnt count when you get in a price car. Right, but still, its quite high. Can brendan ask a question . Im relaxing. Im like looking at schilling, drinking my coffee. Im having a good coffee. Weve been talking about. This you look at norway having to make moves. Theres this idea when the tide goes out, you see whos not wearing shorts. Mexico, norway, theyre actually having problems. Economy that is we thought were diversified. Is venezuela the nakedest in that metaphor . I think it is, because its not diversified. You look at their exports in the 1990s, and about 25 , 30 more things. Today its less than 4 . They make nothing besides oil today. Have they bony a path . Could we rewrite the last 10 years and have a different venezuela that could have survived this . We could have, but what youve seen under chavez and now maduro is really a hollowing out of the rest of the economy. Whether thats through regulation, bureaucracy, price control, just businesses, youve seen the Agricultural Sector decline, Manufacturing Sector decline. Even pg e pulled out because they couldnt produce clorox anymore with any sort of profit. Theyve tried to stifle the opposition. They wrapped that up. Is there any likelihood of a change of government, violent or otherwise . Well, theres a possibility of a change of government. The question is, would it be violent or otherwise . As things have gone poorly for this government, theyve become more and more authoritarian. Several months ago, they threw one of the opposition leaders in jail. Last week they came out against another one, accusing her of treason. I want to switch to the markets. How big is this moment that were seeing, the acceleration of the last month that weve seen the market . What does it mean for you . When the fed got out of the queque business, you had that support for a lot of markets removed. Youre going to blame yellen . Oh, yeah, definitely. They were moving together, and hedge funds were going nowhere, and managed money was going nowhere. I think thats the first thing. Is z oil print, does that change the december 17 fed meeting . I think it probably i think it probably does. I think it pushes out this whole thing. I dont think theyre going to tighten for years anyway. Well ark loft themes to talk about. Were also going to talk about disruption. Brendan is moaning and groaning right now, but our twitter question of the day, despite all the headlines, is uber winning . Uber claims its disrupted, but is it winning . Its facing lawsuits in San Francisco, l. A. Im hostile to the word disruption. It is only used by people i loathe. Despite headlines, is uber winning . Tweet us, bsurveillance. Good morning, everyone. Square kelly, i dont know, if youre going to charge me for my baggage at southwest airlines. For a while there, they were the only airline left standing. An update from gary kelly, 8 30 this morning, in the loop with betty liu. This is sursur, a tumultuous friday. Right now, scarlet fu looks to washington. The house finally approved the 1. 1 trillion spending bill, but not without plenty of lastminute drama. Peter cook joins us from washington. We talk about how politics makes for strange bedfellows, but nancy pelosi opposing the white house. What happened . It gets even stranger than that. You have nancy pelosi, you have ted cruz, Michele Bachmann on one side, and then the president and jamie dimon on the other side. Thats who was involved yesterday in all the lobbying. At the end of the day, it was the speaker, the president , and jamie dimon who prevailed. That bill passing around 9 30 last night after about a sevenhour delay in the house as they tried to rally votes, twist some arms. They were successful. Now its over in the senate side. They got two days now to deal with it in the senate. We examine a little more drama before this is all over, but at the end of the day, this is in all likelihood a done deal. Peter cook, there was a great quote from max een watters. I know the president was whipping the bill, i know that jamie dimon was whipping as well. Thats an odd combination. Who is actually admittedly for this provision that would take out a piece of doddfrank . Whos saying, yeah, i like it, i voted for it, its a good idea . Well, there are actual al lot of people who voted for it, not just last night, but in the past, particularly in the house f representatives. You had a provision when this first came up out of a committee. Their argument is this was never a good idea in the first place, that even ben bernanke at the time and that barney frank at that time wasnt thrilled with this particular provision, which came in late n the doddfrank conversation. But perhaps the hue and cry may be more painful for wall street. Not month ago, that is whats happening. The story here is that the Democratic Caucus is pulling itself apart. Dont oversell the Republican Congress and its ability to rip itself apart as well. Youve got a lot of conservative republicans very upset with how this played out, and really, if they dont see a real effort by the Republican Leadership to go after the immigration actions bit president in february, they are going to be hot and theyre going to make John Boehners life much more difficult. But youre right. What we saw the tensions in the Democratic Party, the new wrinkle here, nancy pelosi reasserted herself. I know who youre not mentioning. What did Hillary Clinton learn last night . She learned last night that wall street is still a big issue. Her ties to wall street will be front and center, and also that she the liberal wing of the party wants to be heard and she needs to be careful how she reaches out to them. We could have very tough votes politically for republicans and democrats in the senate as this thing winds down. What did jeb bush, Chris Christie and the rest of the g. O. P. Field learn . Well, they learned that the republicans, if need be, can govern, even under difficult circumstances t. Is a win for john beaner no matter how long it took that the Establishment Republicans can still succeed, and next year, arguably, its going to be easier for baner and mcconnell, despite conservatives, theyve got more numbers. John boehner will next year. Its going to be easier to get things done. Of course, hes got a president standing in the way. But the two chambers working together, republicans cant wait for that to happen in january. Peter cook, thanks. Futures negative, 13. Dow futures negative, 120. Coming up, m a, how does it shift as we go to 2015 . Michael wolf among one of our guests next hour on wall street in the time of market turbulence. Good morning, everyone, bloomberg surveillance. Oil is 59 a barrel. Futures negative. Dow futures negative. Well cover the markets through the morning here on bloomberg television. Lets get the morning must read. Heres brendan greeley. This is dead serious, go. I was deeply moved by something i read in Bloomberg View this morning. The english pub is disappearing. Mark gilbert from Bloomberg View writes the threats to pubs are many. Cheaper supermarket booze keeps cashstrapped drinkers at home. The u. K. Property market makes anything with four walls and a roof a lucrative apartment conversion opportunity. My favorite detail in this story, did you know that the u. K. Has a Community Pubs minister. I missed my calling. But its a really concern. The pub is so central to british life that, if we lose them to property values, that a central part of english drinkingness must be lost. Give us wisdom. The only pub ive ever been is in the one in the basement of what are rods. I was looking this morning at the english pubs i used to go to. I used to work in st. James. The first one the red line, we have pictures, we have some pictures of the red line where did you. Heres the deal with the red line. People used to go there right after work, and i had to learn that once you go there, you may no longer eat. Get your eating done before you go to the pub. Thats cheating if you eat. I kept on saying, are we going to go out, get something to eat . No, no, no, you can get a bag of crisps if you want. I went looking for golden lion around the corner and perfectly, appropriate for this story, the golden lion has been. Old and turned into a dealer that is what is happening. Property values can no longer sustain simple drinking. Is that like an anchor in a mall . Youre saying that the pub is central to the community. Perhaps, yes. A little bit, yes, a lot like the macys in the mall. But i mean, one thing that scared me, the first time i went to a pub, it was summer. Everybody was outside. I thought, why are we outside drinking . Then i realized theres so few beautiful days in england. They did anything they could. This is aquive lent to the pizza parlor in new avon, isnt it . The english pub is like the people place in new haven. Maybe someone can build an app for it where you can gather virtually. I dont know. I think sometimes we get nostalgic for things that were not good to begin with. Plenty of untoward vomiting behavior happens. Theres plenty of overdrinking that i dont know thats necessarily good for sofmente well, some pubs have been upgraded. Theyve been updated to gastro pubs. Scar, fancy youre a huge fan of hub grubb. I am. Ladies room in pubs are about going with im going admit to you its not something i regularly check for. All right, weve got what you know i mean. Weve got more coming up on bloomberg surveillance. Coming up, spillover from falling oil prices. The risks to mexico and the u. S. From cheap crude, its not good news. Good morning, everyone. Amazing markets this morning. Futures negative, 13. Dow futures negative. Yen comes in, the global flight to quality, 118. 30 on japanese yen. We started the week with a 121 look there. Stronger yen through the week. Lets get it a strong set of top headlines am heres scarlet fu. All right, in washington, the senate will take up that 1. 1 trillion spending bill today. It passed late yesterday in the house despite opposition from both parties. House Minority Leader Nancy Pelosi among those angry over a banking provision that rolls back rules aimed at protecting taxpayers against bank losses caused by derivatives trades. Halliburton is laying off 1,000 workers brought on by plunging oil prices. The reductions will come from the companys eastern hemisphere region. The worlds second biggest Oil Services Company plans to take a charge as it cuts global head count and activities. And another trophy for jack, already enjoying a banner year. The alibaba founder now the richest person in asia. Thats according to the loomberg billionaires index. Jack mas fortune currently valued at 28. 6 billion. Those are your top headlines this morning. Right now on the markets and what were seeing, maybe on the speed and the movement through the week, the challenges of russia, its been front and center, placing the complete and total collapse of venezuela while we talked about that earlier on the back burner, even north of venezuela. Terrific must read, one of the great books of the year. She joins us on the console on foreign relations. Im hearing mexico this, they win every trophy. I dont buy it for a minute. Tell when he the real state of mexico right now. The pace almost always credits with oil prices and the s p 500. Weve seen over the last two years all these economics reforms that were successful, but the government is facing allegations of state associated violence and killing of 43 students. And then also some alleged corruption charges with a close contractor with this government and houses of various the first lady, the financial ministers and others that have bought from this. Its geo politics, but if is there a financial aspect to it, or is the experiment still dont known i think the financial experiment is beginning ho. The banks are very strong, the economy is fairly strong. Manufacturing is growing. All these things are doing pretty well. En credibly important, less for the economy today. Particularly for the government, a third of the governments revenues come from oil taxes. The sense i got from reading your c. F. R. Report about this is that mexico was doing all the right things in terms of you always the read . I always do. I highlighted it. Look, more highlighting. Do i have to do this every morning to prove i read the report . They were doing everything right, but it may not have been doing it fast enough. Does this drop oil prices in danger, the very real reforms that were happening. Well, it can endanger it in a couple of ways. One is they Just Announced the auctions that are going happening at the beginning of next year for deep water. This is the first time that Foreign Investment can come nto mexicos oil sector. Is it time when Oil Companies are a bit more pick snie thats part tv. Arent they going to have to cut back on the fracking and so on that are less attractive to Foreign Investors . They have a lot of reserves in potential fracking, but that really is not what these first auctions were going to be, because fracking, just 30 miles north on the border from where mexicos reserves, the rule of law is different. Everything is different there. I think that would have been a later part of the opening up. Scarlet, youve got a chart that shows this brilliantly. This comes from shannons work as well. Energy made up over 70 of mexicos exports, and oil revenues accounted for 20 of g. D. P. Mexico diversified its economy. What are the best practices that mexico has that states like venezuela, like russia can learn . Mexico, if you look back in the early 1980s when it was 20 of g. D. P. , it was a closed economy, and over the last 30 years theyve opened up to competition, thee opened up unilateral. They linked themself to the United States. You saw manufacturing there oom. Can they distance themselves when they look to the troubles of colombia, peru, venezuela, talked about before. From the financial stereo types of south america. The real story is mexico opening up to the world and linking itself to northwest. But they have in the last several years reached out to other marketfriendly, open economies, like colombia, like chile. Ke theyre not closing in when they hit hard times, raising tariffs. Theyre opening up to the world and facing competition. How much of their manufacturing growth is simply shifting from china as opposed o Indigenous Growth . Good question. Well, mexico had this outflux to china in 2001. A lot of industry went there. What mexico retained, because its more productive in terms of workers they retain, sort of advanced manufacturing, so automotive, aerospace, flatscreen tvs, thats what happens here. It happens with the United States. So production is not just in mexico, but its a back and forth for the United States and, to a lesser extent, canada. You laid out a couple of scenario for the price of oil. Only your two most dire scenarios show oil below 60. Have you been surprised yourself by just how fast this has moved . They never happen overnight. We look at some cases where it goes down to 40 a barrel. There is that sort of case thats lower than today. And really, its only, when this is an extended decline for several years where it really would hit mexico hard. You and jeff blake of arizona, you go down to tucson, green valley, arizona, right here the mexican border. You go into greg and amys twist and shout 190s diner and have a cup of coffee and somebody from arizona that cant stand those mexicans, what do you say to that person . Whats interesting is arizona is the only state that didnt join on the border, didnt join the lawsuit against immigration. Its interesting that they do see these ties. Whether you like it or not, our future and the competitiveness of our economy depends on mexico, particular physical youre in a Southern State right along the border. You benefit from mexico. Whats the biggest risk to exico as it moves forward . Its a lot more hostile to certain aspects of immigration reform. I think the biggest risk is what happens in our economy. If our economy grows, mexico will do well. If we fall behind, mexico will have a hard time. Weve seen that over the last 10 years, while brazil and others have benefited from commodity booms, mexico has not. I mean, the story of immigration from mexico over the last couple of years has been flattening out as mexico grows. Whats going to happen as the price of Oil Continues to decline . Are we going see increased immigration from mexico to the u. S. . Theres a possibility, but really, the big factor in the decline in immigration is emographic and mexico. Theres fewer mexicans turning 18 every year, and thats for the future. Let me have you jump in here. Is janet yelen, the central banker from mexico . Are we so messed up that were seeing that janet yell is not world and is mexico and venezuelas central banker . Probably, probably, yeah. The fed has to worry about whats going on outside the bothered. Bring up the chart from yesterday. Fiveyear forwards is two standard deviations. Weve only seen it three times in the crisis. Whats that mean . Very complicated chart. Thats schilling deflation. We need to have a talk about this. But janet yellen and mexico bear in mind, the fed has two written objectives in their charter, one is price stability and the other is full employment, as they define it. And what i found over the decades is the fed will make decisions that will help the rest of the world, but only if theyre at least neutral for the u. S. They never act solely in the interest of the rest of the world if it has any averse effects. Thats what we try to do here, a clinic on mexico. Thank you so much. Scarlet, futures negative. Coming up, were going to talk about commodities of another kind. Our guest host, parttime economist Gary Schilling will be here. Good morning, everyone. Markets on the move. Oil, 59. 32 on american oil. Brent crude, gold is flat. Futures negative, 13 right now. We need to get to a single best chart. This one a little different. Its a little bit different because of who we have here with us. Along with y2k, remember the mayian doomsday prophecy . There was a collapse of the honeybee. Big deal last year. Our guest host, Gary Schilling, lives in a beehive when hes not gazing at charts. Hes a recreational bee keeper. He has an apiar why in his backyard. Hes going to help us analyze todays single best chart, which is all about honey. Take a look, gary. Production has been coming down since the 1980s. Imports have been climbing. Imports continue to rise in 2014. Whats the story here . Whats the back story . Well, a lot of it is cost. Its a lot cheaper to produce honey abroad. Its more complicated because the u. S. Honey producers got basically antidumping against china and argentina, which are big honey producers. And theres also a real question. Ow, tom here is sampling this. A couple of years ago they were sampling some honorable that i came in from china, and they came up with a pestside that nobody could figure out. They finally got some old guy and he said, they used to use it on sugar beets 20 years ago. Guess what, the sugar in honorable sit same as the sugar in sugar beets, so the chinese were basically using sugar beets and calling it honey. We did olive oil the other day, which i learned a lot about that. Can i trust the honey in the store . No. No. Well, you probably can in the u. S. Most packers in this country are legitimate outfits. If its domestic, but the imported stuff, you dont really know, and as i say, thats a lot cheaper, and its filling in. Did w that chart, and so any of your colonies collapse . Whats your decision, tom . Awesome. I put my fingers in and said im going to give it to my executive producer. No, no, no, you double dipped. I dont think she wants it. Actually can we discuss that tom just stuck his fing near jar of honorable and i gave it to me . Not really, take it home. Let me explain this. That is 17 water content, which is lower than bacteria. Any bacteria on toms fingers in there are done. Lets get in the time we have, lets get to some of the myths. Shannon oneill, the killer bee hysteria of a couple of years ago, africanized bees, and the map shows they came north through mexico from brazil. Hold on. Thats Gary Shilling right there. Is that you, gary . Yeah, thats the bees on me because i was warmer than they were. They wanted the heat. Theyre just getting warm. Im a radiator for them. How serious are killer bees . They havent gotten north of the line. If you look at florida, go across alabama, mississippi, they havent come north of there, and the hope is they dont like cold weather. But they originally were taken to brazil to give the natives in the amazon a cash crop, and they got loose, and they went north and south. But the hope is that they dont go any further north. Ok. All right, lets get to top photos. I think that was our top photo. How do you beat Gary Shilling covered in bees . Were going try with a photo of protesters being removed after interrupting an f. C. C. Hearing. You cant quite see it, theyre saying reclassify now. As everybody knows, what theyre talking about is title two regulations. You actually cant see it. But it says me on the far side that have banner getting dragged out. Declassify now . Of its a Net Neutrality issues. It allows me to say title two regulation on television, which die as often as possible. They need to come up with a new word. Net neutrality doesnt get anyone excited. I cant tell you how eagering the control room is telling me to get past it. Another photo. Grand canyon in a rare weather event t. Happens once every several years. Its when theres no wind and the clouds are forced down by warm air. We are looking down at the grand canyon. Those are photos from the National Park service. As tropical rain number one photo. Tom, can i see your best grimace . This is a slayer kitty. I got my tattoo here. Slayer, the thrash metal band in california, they found a kitten while on tour in indianapolis. They bought it off a home else person for a dollar because it was freezing t. Snuggled in toot tour bus for a night, and after the concert, it found a home. Snuggle and death metal does not compute. Listen, death metal guitarists need love too. Those guys look like theyre just fine. Those are our top photos this morning. Coming up, do you have 100,000 laying around . Our next guest has some novel ideas for how you can spend that. Investment of a liquid source, well be right back. Good morning, everyone. Lets get to our top headline this morning. Heres scarlet. Markets on the move. And a major shakeup at gucci. The c. E. O. Is stepping down, and so is the creative director. The moves come as the owner has tried to revive growth. Shares of caring fell in paris. Bs is extending the contract of the c. E. O. , les moonves two years beyond his current deal. The 65yearold moonves will advise for five more years. At the end of that term, he will also have the option to create a production company. And a stellar trading debut yesterday for the london club. The companys valuation rose to almost 8. 5 billion. Shares climbed 56 to close above 23 in new york trading. According to data compiled by bloomberg, the lenders market value is higher than all but 13 u. S. Banks. Its i. P. O. Raised a larger than expected 870 million. Those are your top headlines this morning. It is 5 00 somewhere, and it is friday. If you have 12,000 of disposable income, we can tell you how to spend it on wine. Hes head of wine sales of the americas at christies, 12,000 on wine. That would be per bottle for the low estimate with a slight premium, yes. Which of these bottles that im looking at right now . This is from the roman eeconti, which is one of the most sought after vintages they have produced. I cant afford any of the things that youre touching. But what is this . Is this consumption . Is this an asset, an investment . Its for a lot of people, actually consumption, for the true, hardcore wine selector. People buy this and drink it . They do. You have to drink it in one go . You cant leave it overnight or a month . People use what they call you take out a little bit of wine, but i wouldnt recommend it. If youre going to go through, it i recommend you have a good party. We should do it right now. Exactly. Im going to take take look at this. You have a bottle here. This is a 300yearold bottle of wine. Im going to touch it. This is the oldest bottle of wine that we know of . We know this is the oldest known in existence bottle of madera. It was made in 1715. It was 300 years old. Its been kept on the island until we retrieved it. Ok. As we know, in 1715, that was the fall of the venetianturkish war. But you have the duchess just visited. They got the bank account to acquire this bottle, but this bottle was made one year after the house of hanover took over in england with scotland going independent and mel gibson in a kilt and all that . Thats what this started . Thats correct. That was the harvest for that year. Are you confident its drinkable . Oh, absolutely. It is fortified wine, so you add some alcohol to keep its freshness, just like we do with port, for example. So in the Patrick Obrien novels, theyre at the end of napoleon. Theyre 100 years on from this bottle, or 90 years on, and this is what they had on the boat . Correct, absolutely. This is what they put barrels of. Where did you get that bottle . Directly from the island of madera. Theres some old families that have passed down by generation. What is the story behind that . When does the family decide to sell the bottles of wine . How does it happen if theyve been sitting 10 generations in the basement . For some people, its pride to take it to market, to share it with the wine drinking community, whatever we like to call it. Its something that should be brought into public. You are the litmus paper for the state of out of plutocrary. How are we doing . How rich are the rich as we go into the Holiday Season . I think we have a very hilty interest in wine, and a lot of people are coming back into wine. Did Clinton Clinton use one of her speaking fees to buy one of these bottles . I dont know if she makes enough. Remember, Hillary Clinton was broke. Its very cool. I know nothing about wine. I took an introductory to wine class at cornell. I can remember nothing. What about young people . Their attraction to wine . Has olivia pope, the way its depicted on television, does it change the way young people consume wine . No, i think its, overall, america as a society, we started to drink more and consume more wine. If you compare to 30, 40 years ago, the traditions of drinking wine with your meal and making it a part of your meal, its shifting, becoming more and more popular. I grew up on cold duck, so for new years eve, i got cold duck, a 60 bottle. Do i need to pay up for the Winston Church still in do i need to go up to that 150, 200 a bottle . Can i tell the difference . Or should i stay with cold duck . For new years shannon knows. She drank a case one night. You can tell the difference. For new years east, theres a celebration, absolutely. Go to the Winston Church i will. Get an extra bottle. The contents of my cellar, thank you for bringing that in. We need a forex report. Very quickly, futures negative. You see the foreign exchange. The ruble blows through 55 to 57. Weve got another hour this friday of bloomberg surveillance. Pelosi breaks through obama. Baner and Senate Republicans flex new muscles. The plunge in oil prices creates true Global Crisis. Is a collapse of venezuela or the general markets, is it imminent . And mergers and acquisitions in the oil patch, it will not be pretty. Good morning, everyone. This is bloomberg surveillance. Were live from our World Headquarters in new york. It is friday, december 12. Joining me, scarlet fu and brendan greeley. Lets get to washington. In washington today, the senate will begin debate on a 1. 1 trillion spending bill. The house narrowly passed a plan despite opposition from both parties. Nancy pelosi among those opposed. She spoke out against a banking provision inserted by republicans and agreed to by the white house that rolls back protections for taxpayers against bank losses caused by drivetives trades. Im enormously disappointed that the white house feels that the only way they can get a bill is to go along with this, and that would be the only reason i think they would say they would sign such a bill that would weaken a critical component of Financial System reform aimed at reducing taxpayer risk. The senate could pass a bill as soon as today. Meantime, are we at the bottom . Thats a neverending question. Not yet, it would appear. Oil closing below 60 a barrel for the First Time Since july 2009, and overnight, the price of crude dipped as low as 58. 80 a barrel. Theres speculation that opecs biggest members will defend market share. West texas intermediate futures fell in new york. They plunged 10 this week. Oil head for the 10th weekly drop since october after opec decided against cutting output. Brendan . In a rare move, the director of the c. I. A. Held a press conference yesterday to answer questions about the senate interrogation report. John beenen said its unknowable whether harsh interrogations tactics produced meaningful results. He also described soul searching by the u. S. Government in the aftermath of the 9 11 terror attacks. The Previous Administration faced agonizing choices about how to pursue al qaeda and prevent additional terrorist attacks against our country. While facing fears and carrying out the responsibility to prevent more catastrophic loss of life. Here were no easy answers. Yet another legal challenge for uber. Today a paris judge rules whether to block the companys uber pop service. The service lets users gets reads with private cars. The startup is also engaged in legal battles in spain, brazil, the netherlands, the french court will decide whether it constitutes unfair competition to taxis. Very quickly, a storm update on the west coast. One of the largest storms in of rain eight enchings in northern california, the weather left more than a quarter of a million homes and businesses, including parts of downtown San Francisco without power. Widespread flash flooding closed schools, cancelled flights. Wet weather, it continues today through central and southern california. There is our top headlines this morning. I want to run through the data check very quickly and get to Gary Shilling. Crude oil well under 60. On to the next screen. Weve got the flattening out. The ruble blows through 65. The dollar index doesnt move all that much. This is an interesting market right now. Shilling shilling is still with us. Ets bring up the oil chart. The oil chart, gary, just says it all. The brutality of this move, you do a 40, 50page monthly report for your clients. We are well in excess of two standard deviations through the 10year trend in oil. When you see this brutality, what does it mean . It means were not through it, because theres really no bottom in sight. The saudis are playing a game of chicken with the waco peck members. Exactly, not with north dakota. No, theyre playing it with the frackers too. Theyre playing it, and theyre really saying we can stand a lower price than you can. Remember, its not the average cost thats important, its the marginal cost. Where is that marginal cost now . For frackers, some of them its probably below 10 a barrel. Where is the price within your reading and your sources, where is that price for saudi arabia where they say enough . Its probably somewhere between 20 toed pods a barrel. That low . Oh, sure. Once you got the pipes, i feel like all the argument about the the price of oil are just based on the assumption of reversion to the mean. What evidence do we have that its ever going to climb back up . You dont. You dont really have that. But forever is a long time. I want to know right now, michael wolf is here, and all the finance of the world, how do you pull the Gary Shilling world into the michael wolf world . I think you probably do it with a lot of trepidation. Obviously you have very heavy everage. Is this going to precipitate a Global Crisis . Youve had a tremendous amount of money pumped out over the years, and a lot of leverage as a result, and now you get a big you get a big decline in the market. Whats the fallout . We dont know. Have you begun to see this in your world . Is Gary Shillings world creeping in to m a and technology . Well, in the tech world, in business, part of the question is, will this translate into spending by consumers . So far this season, it hasnt. The consumer is seeing lower prices, but not equating that with what theyre employing to spend on things like consumer electronics. Right, yeah. It is a tax cut in effect. In other words, people benefit from this, but the question is, are they going to save it . Theyre either going to work till they drop dead, or if they save more, maybe they can stop it at age 89, 90. But yeah, youre absolutely you dont know this. You really have two things here. Youve got the effects of Lower Oil Prices on the consumers, thats a benefit, but youve got on the producers, its really the good and services versus the financial. The financial is whats really the unknown, because you try to leverage this but scarlet, were going to see three mergers monday morning. Will we . Weve been hearing from a lot of experts that it will take six months before anyone actually does anything and merges with anyone. Well, sure. Who wants to step in front of a moving train . Today we see halliburton cutting 1,000 people. Gary shilling, you dont see whats going on now as part of business cycle. What is the indicator that we need to look at to know that this is over . To know its over . Yeah. You probably have to see some of these ratios of financial, outside financing by a financial sector. You need to get back to where its normal. Industrial classic consumers, theyre borrowing in relation to their aftertax income. The norm is 65 . Its now 103. I mean, a long way to go. Were waiting for consumers to get back to 65. Is apple seeing a bangup christmas . Apple isnt, because theyve come out with new phones and new devices. But its not clear that others i mean, samsung is really troubled. Other companies are having trouble getting their sales up this year. I mean, im looking at a 2. 12 bounce, and folks, bloomberg radio, dr. Shilling will join us later this morning , a 212, 10year yield changes the world. Yeah, and i think its going lower. I think that could go to 1 . What does the c. F. O. Do . Michael wolf, help me here. What does any chief Financial Officer do with the full faith and credit of 1. 95 . They have to refi. They load up. Theres the line in Silicon Valley for startups, as well as for Big Companies, which is you borrow when you can, not when you need. At these kind of Interest Rates, theyre absolutely going recapitalize. Doesnt that just beg the question, what are they going to do with the cash . They already have so much cash. Theyre going to borrow more. Then what . Its not clear whether theyre going to turn it to shareholders or use it for acquisitions. So far, for some sectors, weve seen returning to shareholders. Were also going see a lot more acquisitions, a lot more activity. What were not going to see, except in some of the best companies is a lot of investment to r d. Thats where the feds policy broke down. They pumped out all that cash, but it hasnt gotten into the economy. It went to highincome people, and they dont adjust their spending accordingly. Theyre not spending on capital investments. I mean, the fed has got to be very frustrated, because what they hoped was to be a generation of Economic Activity stopped at asset appreciation. Its stopping, thats exactly where its stopping. Yeah. Gary shilling, thank you so much for joining us this morning. Gary shilling, he will object radio later on. Well get him back to talk about deflation. Come back to talk about money. You call it shilling deflation, as if its his fault. No, bring up the book right now. Quickly here, we got to get this up quick. Bring up the book for Gary Shilling. Folks, this is the book on deflation. I get a royalty, ive seen so many copies of that. The movie is out memorial day 2017. All right, were going to talk about ube when her we come back with michael wolf. Good morning, everyone. Markets on the move. Oil right now at 59. 40 a barrel. Lets get to a morning must read. Heres scarlet fu. Its an uber world, or is it . Its certainly an uber america. This is from a columnist at Bloomberg View. She asks, can uber and its app rule the world . She writes that uber pioneered the idea of getting transportation instantly from a smartphone. Just because thats become routine for urban nomads doesnt mean it will be the choice for others around the world. Were seeing the pushback from cities and countries around the world. Is there a pileon effect here, michael wolf . As well, if you look at, it its almost like countries have been trying to find a way, an excuse to shut uber down. The problem is that its already uber is already in the behavior around being able to order a car service through your phone, thats a behavior that a lot of people are expecting to have. Just because governments try to put it out of business, its not going away. Do you think the governments are looking for an excuse to put it out of business, or can you lay the problem at the feet of uber which expands first and worried about regulations later . The whole internet is about not asking for permission. Uber is not an internet company. Its not like facebook or twimplet as it scales, its got realworld friction. Even though the name is uber technology. Its going against some very entrenched interests. People like taxi drivers and government regulation, the real issue is nobody should think they can get in the way of what you want. If you make it illegal, theyre still going to find a way to do t. Ubers valuation is the last round of capital that went in t 40 billion. Its likely to end up with very well influence, really more of a passive investment. They dont need uber to launch a service in china. Why would it want to buy a stake in it . It gives them real knowledge of how its working, and it gives them the ability to have an influence for the course of the company. Real quick, does uber have a groupon problem . Can anybody pick it up and use it . Its got the network effect, which is already a lot of people are using it. In some countries, other services are emerging. But certainly in the u. S. , its already got a whole system. Drivers are making their living people have gotten into the business of limo driving because uber has enabled t. Created a whole new class of employees, i suppose. Some of the best Internet Companies create opportunities for whole, huge groups of people. Michael wolf, our guest host for the hour. Despite the headlines, is uber winning . Tweet us, bsurveillance. Good morning, everyone. Bloomberg surveillance, negative 13 earlier, but negative nine right now. So yeah, its a weak market, but better than it was one hour ago. Lets get to top headlines. A stellar trading debut for lending club as the companys valuation rose to almost 8. 5 billion. The shares climbed 56 to close above 23 in new york. According to data compiled by bloomberg, the lenders market value is now higher than all but 13 u. S. Banks. Sony film executive amy pascal says she still has support, even of being criticized for racial jokes targeting president obama. Pascal is the cochairman of Sony Pictures entertainment. She hasnt offered to resign and doesnt want the sign air tack to be defined by the release of private emails. In an email exchange with producer scott rudin, she joked about what films the president might like. He mentioned django unchained. One billion sold, thats what taco bell says about its popular doritos taco the thats about three for every man, woman and child in the u. S. The restaurant says that number of crunchy snacks would stretch from new york to los angeles 37 times. Gross. Taco bell is owned by yum brands t. Introduced the offering in 2012. Its been a hit, to say the least. Oh, i could eat taco bell in my student dining card when i was in college, and ive never been able to touch it since. Probably still in your stomach. No, its gone. On to washington, the house has gone home, but before they left they pulled the pin out of a grenade and tossed it to the senate. Spending bill that is most a continuation resolution and omnibus allows a rider with a guarantee from the fdic. Phil mattingly joins us now with more. Phil, Elizabeth Warren is going to conduct this fight in the senate. Is she going to win this battle, or is this bill going to pass . Its going to pass. I think theres a reality here that finally showed itself last night after a lot of hemming and hawing, and that is that people actually want to go home, and this will fund the government through september, which for people on capitol hill, thats like the longest time period theyve actually dealt with in a very long period of time. So for economic stability and also for the ability to actually come back in january and do other issues other than fight about spending bills, this is important. Whats amazing about what happened with Elizabeth Warren because of her in the house yesterday, its the ability of this kind of antiwall street strain, which has kind of been immering for a while, really think this changes the dynamic as we head into january. Democrats have found an issue, and they want to seize it. What he wants the lesson for democrats . What did we just learn about he Democratic Party . Nancy pelosi 48 hours ago was not planning to take this going forward. She knew what the agreement was by the appropriations negativetors. She knew this doddfrank provision was actually in this bill. Elizabeth warren went to the floor, started talking about this, raising heck about it, and all the sudden nancy pelosi as on board. Does senator warren change the debate and dialogue, say in iowa, x number of months forward . Did she change the president ial debate last night . What Elizabeth Warren is doing right now is playing a long game. I think shes very cognizant of the fact that the idea that shes going to be able to pull out this provision over the next 48 hours is just not really possible. But she wants to be able to move the party left. I think shes smart enough to know that it is clear the party has already decided on Hillary Clinton and that all she can do is drag hillary as far to the left as possible before she runs. Very tactical. I want to bring in our guest host here, michael wolf, founder of activate. You specialize in consulting to telecom and Tech Companies. What does Silicon Valley think about washington . Theyre worried about what washington will do to them. One big issue for both media and Tech Companies is the potential of the internet being classified as a utility. They could hurt a lot of innovation, and its ridiculous. Internet is not a utility. There are lots of competitors. Are there any republicans in Silicon Valley . Really, no. But i think there likely will be over time. There are a lot of libertarians. But phil, i think thats important, phil. How critical is michael wolfs world to raising money for the animals you cover every day . Extremely. Over the last two years, theres been house leadership thats made a concerted effort on the republican side to make connections in Silicon Valley. John boehner . No, no, no john boehner is . No, no, you send out the emissary you think will be most effective. Kevin mccarthy is super wonky, into tech stuff, owns every single apple product you could imagine, read steve jobs book. Theyve been sending him out, and its helped on some level. Still, i think particularly on the social issues, it thats where Silicon Valley has it made. Even the libertarian strain has a major problem. Thats where republicans recognize the money really is right now. Theres a perfect 10 in cupertino, california, for speaker boehner. We know that phil is right. Weve been watching both chambers, house and senate, teach their members, both caucuses learn more about technology. Phil mattingly, thank you so much for joining from us washington. Phil with the latest on the house spending, passing the spending bill, and throwing the hot potato to the senate. I think i called it a grenade. Same difference, right . Thats a surveillance exclusive. There are no republicans in Silicon Valley. He said basically no. Basically was in there. Basically were going to have a smart conversation on m a, not only michael wolf with us, but robert will join with us Morgan Stanley, and we will look forward to energy and technology m a in 20 when is it going to happen . Crude fell below 58 a barrel. What happens next . Well be right back. This is bloomberg surveillance. Im scarlet fu here with tom keene and brendan greeley. We start in washington. The senate will take up the 1. 1 trillion spending bill today. It passed yesterday in the house despite opposition from both parties. House Minority Leader Nancy Pelosi was among those angry over a banking provision that rolls back rules aimed at protecting taxpayers against bank losses caused by drivetives trades. Another triumph for jack ma. The 50yearold alibaba founder now the richest person in asia. Ma passing the hong kong Property Owner who held the top pot since april of 2012. And cbs extending the contract allowing les moonves, him to keep the top post through june of 2019. Thats two years beyond his current deal. The 65yearold moonves will advise cbs for five more years and also have the option to create a production company. Hes been c. E. O. Of cbs since the Company Split from viacom in 2006. Those are your top headlines. Michael wolf, founder of activate, is knee deep in technology. We use it each and every day. Its something we all know our Attention Spans diminish by the very second. It is a profound change for all of us. This is topic one for every parent out there. Is there anything good in this digital stuff . Well, first of all, younger audiences are consuming more information. They may not be diving as deep, but theyre consuming more. Our firm has done research about how much attention there is in a day, and we look at this, and you really add it up in terms of its duplicated. Theres about 30 hours of attention in a day. It means people are sleeping less, but theyre also consuming a lot of different types of media and content at the very same time. Is there a class distinction . Do we have a hyper Internet User thats elite, thats getting smarter and smarter . Al hunt of bloomberg once said to me, every kid in my penn class is smarter than everyone of 40 years ago, and then theres the rest of america which is just not getting it done on digital. When you look at this in reality, there are a lot of americans, its become a big equalizer. People now have access, they dont have to go necessarily to the best school. They have the ability, if theyre selfmotivated and driven, they can get a lot more information, learn themselves. Also, when you look at things like academy, which allows which really no longer accounts for the effectiveness of a teacher, but is more about a students ability to learn, were seeing more attention on those vehicles. I want to go to the money question of the moment. Facebook in their news feed, everybody curious about how they put information on facebook. How will that outcome play out . The first thing theyre focusing on is video, because they want to have they want to be able to people watch video. How long . Two to three minutes. Oh, come on. 20 seconds. No, no, no, theyre watching whole videos. But the thing is facebook has put them into the stream, because facebook is trying to compete with google. But theyre way behind. Yeah, but the heart of the matter is, youre watching a twominute josh of bloomberg digital knows this, theyre not watching lawrence of arabia and peter otoole, are they . Well, some films, but they are watching fulllength television shows, because if you look at the amount of Binge Viewing also, you look at movies. Look at frozen. With 1. 3 billion in revenue, the fifth largest film in the history of Television Im sorry, in the history of film, and so people are watching well, let it go. Are we going to let go . Is michael wolfs future and Attention Span thats so short we dont read books . I think people are going read books, just differently. Theyre certainly not going to read them print on paper. I dont think were going see the bookstore exist in the same way we have in the past. Theyre consume ago lot more information. The facebook feed gives a lot more, is not just what my friends are doing, its what my friends, the articles and things my friends want me to read. Ok, michael wolf with us as we talk about technology. Im really skeptical, this whole Attention Span there really should be front and center for next year, particularly wrapped around the profound impact of facebook. Lets get a profound data check. Heres scarlet fu. Its pretty straight forward right now. Were all keeping our eye on crude oil. Nymex dipping to 58 a barrel last night. Right now it came back, still down to 59. 30. Futures are lower by eight points. They stayed that way overnight. He 10year yield down to 2. 13 . Wholesale inflation due at 8 30 a. M. This is bloomberg surveillance. Im scarlet fu with tom keene and brendan greeley. For aleproducing countries, the collapse to 58. 88 a barrel may be the worst of times. For investors, it may be the best of times. It has been predicted that the fallout, in short opportunities galore in the energy sector. The cohead of mergers and acquisitions at Morgan Stanley joins us now. Steve schwarzmans blackstone is raising a second fund. Is what hes saying correct, that this is the best opportunity in years for energy . I think its certainly an interesting opportunity. I mean, youve had a fundamental reset in valuations in the industry, the price of oil has kind of, in a very short period of time, changed the complexion of the business f. Youre a value investor, a distressed investor, theres more opportunity today than there has been in years. So this idea that well have a flurry of deals, is that misguided . Big landmark deals, i think that might be tough. Is stability is important, and in the absence of stability, when the price falls, i think that makes it tough. Are c. E. O. s changing plans by the day . A month ago we reported that halliburton is going to acquire baker hughes. Today we report theyre going lose 1,000 employees. Is this moving too fast to make any predictions . I think the pace of change makes it hard for the m a business. I think its always hard to make predictions in the oil and gas industry. I would say its probably a net positive for m a. I want to get to the energy market. I would suggest there will be three transactions by monday morning. Theyre down 60 . Do you represent transocean . We do a lot of work in energy. I want to be careful i dont step on your private matter, but the ferment right now, its great for you, but what is the angst for the Energy Business right now . Whats the level of sweat this friday morning . I think everyone is focused on their business, trying to understand what this means to them. Theres no business. Its imploding. The Second Derivative of oil, and you have i never seen this. Steve roach was shaking yesterday. This is not the first time the oil industry has been through retrenchment. Correct. S it another midland, texas . I think we will see companies that are in more stressed situations, looking to get through. You got the guy to get scale merger. Somebody is get to get crushed here. But to toms point, the istress does ripple off shore. The more difficult it is, theyre, again, up in canada, theyre changing plans by the day. If youre in the middle of a project, you are rethinking to determine whether youre going to get an adequate firm. If youre in the oil services industry, youre talking to your customers about kind of the economics of all the drilling theyre doing. Youre talking to your customers, keeping an eye on your competitors. What about regulators . What level of involvement would regulators have as Oil Prices Continue to fall . Well, Regulatory Environment in the Energy Industry is around the environment. I dont think the price of oil is going to change the environmental regulators look at fracking of horizontal drilling. But these are National Security interests. Weve seen this come up before. Some nations, yes. When i look at the energy, well talk about technology later. When i look at energy m a now, its within the great distortion of where Interest Rates are. Does the workout that were going to see in energy benefit from janet yelens fksal low rates . I think every industry has have better access to capital, and energy is no different from that. Spreads are going to gap out over the benchmark yield because theres greater risk in energy today than there was a couple of months ago. But yeah, theyre going benefit. Dont you think theres a difference between m a from Big Companies and what Companies Like blackstone, who are private equity firms, were investing in discount nights versus just taking advantage of how they get bigger as companies . Were going to have to run to a break here, but thats an important question. Well come back with michael wolf and robert eatroff. Were going to talk m a in the tech sector as well. Theres m a in the world of uber. According to people familiar with this situation, theyre looking to buy a Minority Stake in uber. Is uber winning . Tweet us b and had surveillance. This is bloomberg surveillance. Im scarlet fu with tom keene and brendan greeley. The Airline Industry reaping the benefits of oil falling. Southwest airlines has seen traffic ascend, up over 120 year to date. In the loop betty lieu joins with us more, and theyre not even charging for checkin baggage. I know. How long . Thats the big question for gary kelly all the time, how long can they hold to this no baggage fee policy theyve had . Theyre becoming the lone wolf in all of this. So Lower Oil Prices, as you just said, have been a big boon for airline stocks. Theyve now hit their highest level since 2001, so more than a decade run here for airline shares. But theyre not actually affecting Airline Companies yet, right . A lot of them are hedge, so in fact, some might actually be losing out on the benefits of Lower Oil Prices. They started very early on publicly saying that they were hedging themselves when oil prices were heading higher. Who could have really predicted wed be at 60 or even below that by this time . I did. I made a minute. Brendan, why are you here then . Exactly. So ok, anyway, it hasnt really hit them quite yet. It might actually hit them also on the negative side, because hen you have Lower Oil Prices, airlines see perhaps theres an opportunity here to add some more capacity. That could bring down ticket prices, also consumers may say, hey, am i going to fly or drive somewhere if gas prices are this low . I might actually drive now. There could somebody negatives. I want to bring in bob eatroff at Morgan Stanley. Lower oil prices and consolidation in the Airline Industry, i thought we were done with consolidating. How much more smaller can the Airline Industry get . Lower oil prices is positive for consolidation, period. There are plint of other airlines out there besides the majors, so you cant rule on the the possibility of consolidation. Theres no doubt that Lower Oil Prices is positive for m a. Its not just the airlines. Its any industry that consumers energy, and its a boost to the consumer. The airlines are doing better because they have pricing power. Well, yeah, ticket prices have gone up about 25 in just the last several years. Let me rip up the script this. Fws back to a surveillance moment of a number of months ago when our josh mentioned from Bloomberg Business week an essay by tim cook, the Financial Times this morning naming mr. Cook their person of the year. Its really a lovely read. A fullpage read in the f. T. On tim cook, and they mentioned the Bloomberg Business week earlier in the year. That was a bit of a shameless plug. Well, it, is but im going to go with it. At least Lionel Barber and the team do mention what they did with mr. Cook. And betty liu will be making news with gary kelly, c. E. O. Of southwest airlines. That begins at 8 00 a. M. Eastern time. Thanks so much, betty. All right, we want to get you our twitter question of the day. Last chance to answer our twitter question of the day. Is uber winning despite the headlines . Lawsuits in San Francisco, los angeles, pushback from thailand, from the netherlands, from paris, where else . Pushback from me, brendan greeley. Im going to be here monday. You should too. I love this guy. Guy kawasaki. Hes 1,000 volts of intelligence of what we actually do with all this garbage our kids buy and that we use. He is brilliant. He will be with us monday. And he used to work at apple. That our kids buy . Whatever. That we buy. You buy. Well, hes very controversial. People really get upset about a lot of the stuff guy says. Im thrilled that he will join us on monday. Hes a former chief evangelist over at apple. Hes really twisted, really interesting. Really looking forward to that. We say good morning from new york city from bloomberg surveillance. Brendan great lee, scarlet fu, and tom keene. A major shakeup at gucci. The c. E. O. Is stepping down, and so is the creative directory. The moves come as the owner has tried to revive growth at the luxury label. Shares of the owner fell just over 1 in paris. Halliburton is laying off 1,000 workers as it tries to weather a slowdown brought on by plunging oil prize. The reductions will come from the houston companys eastern hemisphere region. The worlds second largest oil Company Plans to take a 75 million charge as it reduces global head count and activity. And a piece of history unearthed in boston. Crews fond a time capsule dating back to 1975 from the cornerstone of the massachusetts state house. They think it was put there by revolutionary war heroes, including samuel adams and paul revere. Its believed to contain old coins, documents, newspapers, and a medal plate that was owned by revere. They want to xray it before they open it officially. Unbelievable. Very cool. It had a six pack of layinger theyre in there. Before october, before the recent moves in oil and foreign exchange, mergers and acquisitions, there was a positive spin. I guess its still there, but so too is something different. What will be the spirit of m a . What will be the tone, the tenor as we go to next year . An important conversation with the cohead of mergers and acquisitions with Morgan Stanley. Michael wolf with us with activate as well. Its wonderful to have both of you here just to talk about the shift. Its like in the movie mary poppins whether the weather vane changes before they go to cherry tree lane. Ive only seen the brief version. Well, theres a shift in the wind here. What is it . Thats not an analogy ive heard before. Ok, well, you can go with it. Welcome to surveillance. 2014 was a long overdue bounceback. We had three years of flat m a volume when the markets were rising. This year was really more of a cashup year, where all the conditions that were necessary to have strong m a were in place. You have corporate confidence and scarcity of growth, plentyful capital. Those conditions are still in place. Nothing has changed. We look at 2015 nothing has changed. But does the behavior change from strategic, you mentioned halliburton earlier, mergers, do we go to we got you mood or we have to mood . Not at all. And i think you can the best metric to lock at in that context is how are the shareholders reacting . They love it still. Two out of three deals in our math. Two out of three deals the stock is going up. If that werent the case critically you dont see that shifting . Not today. Interesting. Its interesting, the sectors that i look at, tech is about got you, because theyre trying their best to stay relevant, and thats why we see facebook buying whatsapp n. Media, its about getting new areas. Is there an air of desperation . I dont think. I think its about moving to new opportunities fumble look at what happened today, the big Internet Companies, good and he will facebook, are doing acquisitions. The old ones, a. O. L. , yahoo and others, they missed out. Yeah, the its like two different worlds here. When you look at tech acquisitions, its not that standard acquisition that we look at in other industries. Theyre not combining forces to lose labor. Theyre actually trying to figure out what happens next and trying to buy a piece of what happened next. Well, this is a bar bell industry. You have companies on one side of the bar bell that are super high growth and super high value. You have companies on the other side that have a tremendous amount of cash flow, and the values are more in line with the overall market. Both sides need to do m a. M a looks different. Weve been talking about m a and corporate confidence right now in Silicon Valley. I want to take the opposing view. This is a quote from one of the people we looked at, the person we look to to understand the value. She said i watched two crashes now, end of the dotcom boom, and one thing that was true of both is that a chorus of observers and analysts saying the tech sector was overinflated before it burst. Is it not even worth it to call it down right now . Depends on the companies. The valuation of big publicly traded companies is based on expectations of growth. The valuations of private companies that are expecting to be acquired, those are really out of sight. Bob, do you agree . I think theyre based on growth as well. You look back at any period of time when people said the tech market was overvalued, and there are companies that you should have owned. The size of the market and the Growth Opportunity is significant enough that these companies have grown into their valuation. 40 billion for uber, is that accurate . Youve go on to ask the investors of uber that. Oh, he dodged that. What about the valuations of the spinoff from hewlettpackard and ebay . Theyre going to be based on their market value. Take out by another company . No, theyre going to the shareholders and theyll establish a price for them. In the case of ebay, theres a lot of creation of value. I think ebay was holding pay pal back, and they missed some of the big opportunities in payments. Thats not going to be the case. Dan shulman, who comes with a lot of experience to run that company, hes going to do a lot to get pay pal back into the game. All right, thats on the 2015 agenda. Speaking of the agenda, lets take a look at the stories shaping the day. Tom, get us started. Oil into the weekend, it will be fascinating to see where we are monday. Russian ruble weaker. Venezuela, ugly spreads there. This is the real deal, and theres no bid in sight. It was stunning last night to see us go through 60 and indeed get a 58 print. It was the way we went to 58 that was so distressing as well. Theres oil, what im going to be reading about into the weekend. Im watching about another another finite resource spectrum. You know, this was well, there you go again. Net neutrality. This is one of those things that is never important until it becomes important. The spectrum auctions for this band were not expected to bring more than 10 billion. That was going to be a win for the f. C. C. Right now theyre at 43 billion. This is comparatively worthless spectrum. Its not amazing stuff, and yet youre seeing amazing values for t. Is this the market telling the government forget about it, were in charge . This is the market telling the government spectrum is always going to be valuable, and its always going to be worth more money. Brendan, i have to disagree with the comment that this is worthless spectrum. This is midband spectrum that fits perfectly within the carriers existing portfolio. The spectrum can get pulled very quickly. The chip sets in the phones are already supported. Its incredibly scarce. I completely agree with you. I deferred to simplicity in that case. I was talking down to tom. Theres a good spectrum. The bigger issue, frankly, is the battle for spectrum, not just into your home, but the battle into your pocket with your phone. Yeah. Lets get to uber, certainly facing a legal challenge in paris as a judge rules whether to block its service. We know l. A. , San Francisco have piled on as well, suing the company. It was a really good week last week when it was valued at 40 billion. This week is the no good, very bad, horrible week. Is it aged . Thats a good question. But you noticed a different in tone. Theyre saying completely different things. Whats it saying . We understand regulation is necessary. We are not above regulation, but its got to be sensible. Thats a huge change. Lets get to our twitter question of the day. Despite all these headlines, is uber winning . Yes, uber is changing the game. The reason the headlines are there. Fair, ok. Second answer, its certainly winning at getting negatives headlines. Winning. And finally, time to reband uber to over. Addicted to it. Hold on. Were in manhattan. Were in new york. Is it as big a win as it is in other parts of the world . This is very much the new york view of the world. Im trying to figure out if i got spectrum in here. This is important. What is spectrum . What youre saying is wifi here. Spectrum is the highway of the wireless world. If you want traffic, you need to build lanes in the highway. Spectrum are your lanes. Elegant. They need a better and cleaner answer. Is this a good week . This was a good week for us, certainly. Any week that is over is a good week. We did it without colby in the control room. Our thanks to bob and michael. Thank you so much for joining us. Surveillance on radio continues. Good morning. It is friday, december 12 really are life from bloomberg World Headquarters december 12. We are alive are live from bloomberg World Headquarters. We will speak with the author of following oil, who says now is the time to lift the u. S. Crude oil export ban. We are no longer in the 1970s anymore. The world has completely changed in energy. Airline stocks are soaring. Southwest airlines ceo will be joining me on whether this is really a gift for the airlines. Dear here is a look at our top stories. The Senate Begins a debate on the 1. 1 trillion spending bill. Late in the day yesterday, the house narrowly passed the contentious plan, despite opposition from both parties. Nancy pelosi was among those who opposed, beating out against the banking provision inserted by republicans speaking out against the banking provision