tv Bloomberg Surveillance Bloomberg January 7, 2015 6:00am-8:01am EST
cash under the mattress. greeting 2015 with enthusiasm. what must they do to win november 2016? surprise as the economy improves. america is less and less disabled. good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york. it is wednesday, january 7, i am tom keene scarlet fu and brendan greeley. i wrote that script 20 minutes ago and markets already recovering off at ecb comments. >> at the same time, the euro continues to weaken. some kind of action could happen in january with black let's get to the top headlines. >> let's start with those who want the ecb to jumpstart the european economy. just got more ammunition. the inflation rate fell below zero for the first time in more than five years. prices declined in december,
more than economists forecast it. plunging oil prices is the big reason. the ecb working on a plan to buy government bonds. the central bank tried to prevent a deflationary spiral of falling prices and decline in consumer spending. oil halting its slide, at least, for now. we saw brent crude this morning dropping below $50 a barrel for the first time since may 2009. it was headed for a fifth straight day of losses, but both brent and of uti or racing games the last 30 minutes -- wti erasing gains in the last 30 minutes. crude oil stock piles he was probably increased last week. >> the white house and congress about that words on the keystone pipeline. republican senate leader which mcconnell has promised to make a gallant keystone the first measure to pass the new congress. here's how josh earnest responded. >> this piece of legislation is not altogether different than legislation introduced in the last congress.
you will recall we put out a statement of ministry to position indicating the president would have vetoed had it passed in a previous congress. i can confirm if this bill passes this congress, the president would not sign it either. >> president obama has been critical of the project he said would do nothing for consumers. staying on politics, the first rule for house republicans, you shoot the king, shoot to kill. john boehner was reelected yesterday as speaker of the house. a third republican who just did not vote for boehner will not be allowed to sponsor a bill. 24th the fellow party members cast ballots for someone else. we will be waiting to see what happens to them. >> if we cross scarlet fu, she is vicious. >> watch out. >> oil billionaire harold hamm and his ex-wife both came up short in the divorce hearing. a judge at obama says he will not revisit his ruling that
gives mr. him's ex honest $1 billion. the ex-wife wanted more sense hamm is worth 16 large. in november hamm wanted to pay less because plunging oil prices have cut his fortune to less than $10 billion. the judge refused to retry. >> you do not mark divorce settlements to market. >> really. exclusive from brendan greeley there it is. there is a check written out by the he side to the she side. scarlet was doing. >> handwriting analysis. look at the scrolling of her name. it was written in anger. >> he is angry at sue and are now -- arnalt. >> i did not know you could do two lines. >> you don't live in a world
where you need two lines. >> why does it say morgan stanley at the top? >> $.77 at the end. what is she going to do with that? >> the memo line is left blank. >> to the news of the moment this check was not cashed because the she side wants to go back and get more. >> oh if you cash it --i don't think that is demonstrating need if you cash that. >> check number four. >> why would you make that observation? >> hockey camp. there it is. why did i get that story? here is a data check. futures up come a dramatically improved in the last 20 minutes. euro-dollar 1.1854.
nymex crude was under 47 rebounded sharply the last half-hour, 48.51. the idea of the vix elevated as equities go down. rent under 52. the ruble is a age or story. really has not moved. yet to believe the government is supporting it, stronger ruble today. this is how switzerland has the knockout affect from europe with a one point 200 -- 1.2000. this is a log chart. it is the candlestick chart. what is cool are these curves on a log access. this is called a quadratic or a curve. this is something.
that is blue at 4:00 a.m. this morning. these abrupt little curves really show how this market -- >> look at the price of the very top. up $.60. >> i am going to say two things. after deducing this chart, you're never again allowed to say jargon alert. i am fascinated by this. we are finding out the true price of oil. that is amazing. every time you say you can't possibly go lower, it does. >> well said. it goes to the price of this rationalization in our financial system with markets recover off a difficult 4:00 a.m. david wu is at bank of america merrill lynch come aged in the last week. as we observe overshooting. i think of it as the pendulum getting to out front. how overshooting are we right now? >> i think in oil, seems like we
have definitely gone into -- the problem right now is nobody wants to cash the falling night. a lot of people making the case will probably looks attractive but it would wants to step up because most investors are struggling. a very difficult year and no one what's to stick your neck out in 2015. >> we have talked for years and years about the great distortion, bank of america or lynch looks one year out and then one year from that, you see a negative interest rate. how can we have a normal conversation given that deflation -- in europe this morning? negative. we are at deflation, are we? >> yesterday had a meeting with japanese company to discuss the outlook for markets. he was saying the bacon census among japanese a fixed-income investors is with 10 year as 0.3 basis points, guess what?
the whole fixed-income industry in japan is bankrupt. >> merkel meeting with cameron. you mention germany is at 0.458. >> it must be a relief for her to be meeting with cameron because he is the only leader in europe who doesn't need the ecb to do something who is not when a be begging her to intervene. he is on his own. as we watch the price of oil dropped and the dominoes fall country after country, it is going to get more brutal in russia. we are not done their. >> as you know, back in december, the russian consumers were doing christmas shopping three weeks earlier than usual because they expected to collapse in the ruble to eventually hike prices. they were doing their spending forward, which means under the first quarter as prices eventually go up, you're probably going to see a sharp collapse of russian consumption. the rush of slowdown has yet to play out. what that means for europe especially germany, something still ahead of us. >> that is classic inflationary behavior. are we going to start to see the
real worry is consumer behavior delaying purchases instead of frontloading them? are we going to see that in europe? >> two weeks before christmas i was in milan. i walked into an expensive store to buy my wife something. there was not a single person in the store except for me and the salesperson came up to me discreetly inside, everything is on sale 20% just for you. an expensive luxury store. if you know anything about shopping, a week before christmas discounting is unheard of. it was shocking because the russians were simply not to be found anywhere. >> they were hoping your chinese government official along the way. the other thing you mention in your outlook for 2015, people are worried about the right trade but also worried about the crowded trade. a lot of these traits become crowded. the dollar, for instance, a strong dollar. the week euro. understanding positioning is crucial.
what is the positioning? >> this is what you're seeing playing out. the biggest position in market as long dollar and long u.s. equities. with the opec decision not to cut production, the short oil position has become part of it. oil going down, good for u.s. consumers. good for the u.s. dollar. i would say the long dollar, long as equities and short oil becomes one single dry and -- giant trade. where can it go? oil going down is not good for u.s. equities. if the dollar were to go up further, probably not good for u.s. equities, either. you now get in a situation where you will see a lot of volatility because the crowded streets have no place to go. >> is it time for wednesday microeconomics? "bloomberg surveillance." >> i believe it is. >> there is ambiguity in these microeconomic relationships. what you're saying is at some point the ambiguity gets clearer
and we shift with a vengeance. when does that occur? >> i think you're asking, what is -- i'm not predicting this is going to happen. the last six months the markets of an trading on decoupling. we just had a not that great i is some -- ism numbers. if the u.s. data going into january were to turn, for whatever reason, and we work quickly going into a re-coupling world, risky assets will underperform the dollar might get hit, and treasury yields keep going lower clearly, 10 year treasury fallen below 2% yesterday as an indication the market -- >> david woo with us for this hour. we have a bid to the markets. a better taken the last 30 minutes. >> the chancellor copper rises. we will go live to london to find out how angela merkel is offering an olive branch to
>> good morning>> "bloomberg surveillance." dow futures up a good 104. a better take to the market. >> angela merkel on a mission to save the eu, in london today to convince prime minister david cameron to keep the u.k. in the european union. jonathan ferro joins us from london. what does merkel have to say -- to offer, to keep david cameron and the brits from bolting? >> the big issue is there isn't a huge issue between these two dumb. they agree about most things. the big issue for david cameron, domestic audience with a rising
sentiment and it situates that discussion around the issue of immigration. both of the issues -- for angela merkel, there is severe pressure because she has two elections this year. they're not german. one is greek and chest to try to keep eurozone together. the other is the u.k. election. she asked to try to keep the european union together. we're not going to get any concession on the free movement of labor in the eu that is a redline for the germans. what we may get is a concession about welfare tourism, the identity could come to the u.k. or germany and start getting benefits. today is very much about that word concessions. >> apparently, a one-day visit and the two will tour a museum together. >> going to the british museum? what are they looking at? >> i have no idea. maybe they are checking out moneys -- mummies. >> help me out with the
immediate news of deflation in europe and the numbers we saw this morning. david woo with us. how will the banking system interpret this news? we're in recession. we have deflation. does everybody just hunker down? >> that is what you think, is an? there is a big argument stripping the oil price out of the inflation number you have inflation. leave it in, you have deflation. when they go to that meeting on january 22, it will be about that magic word. transitory. you the issue of january 25, the greek election. tom, look at the bond market. it is telling you investors are not expecting growth anytime soon. >> david woo let's bring it over to the real economy. just bank of america, merrill lynch have to shift your for the recession or is it almost a depression in europe? >> right now with five-year
german government bond yields minus three basis is telling you the market is expecting depression, essentially. lasting for 3, 4, maybe five years. >> this is critical. how you define depression? >> expecting interest rates to be near zero for the next five years. >> we are there in selected geography. >> i want to push back, doesn't sound like angela merkel is making any kind of concession at all because the real problem with them european union right now is you have people moving to germany they aren't paying into their tax base back at home. the real problem is there isn't a common system for pensions and the european union, not that there's welfare tourism. she is really giving up nothing. >> she would be giving a concession if she allowed him to tie something's up. i have to go to the point that david woo is talking about, depression. there is a depression in greece. the issue in europe is the
issues that has always been there are 2, 3 different worlds and eurozone. record low unemployment in germany this morning, 6.5%. record high in italy. how on earth do set monetary policy for such a diverse european zone? >> david woo as we noted earlier, the markets have recovered a little bit. the euro continues to weaken. a lot of people saying that is on concern there be bad qe. >> i think any qe is better than nothing. the important thing for me is the last two weeks of the market are long-term -- long way. this is why the euro has collapsed. white tenure basically spanish government bond yields is based only at 1.5%. to me, what is interesting in the last couple of weeks, the
market showing skepticism about the effects of kiwi and that is probably -- >> going back to not central-bank lather, but the real economy, whether it is lagarde's new mediocre in europe -- i spoke to your colleague ethan hears about this the other day. i'm sorry, he is relatively optimistic about the u.s. can you sustain that optimism? >> i don't know. until now, this has been the case. but we don't really know what is going to happen -- we started to go into the fourth quarter basically, earning season starting in three weeks, because [indiscernible] the dollar has been surging over the last three months. tenuous companies be able to absorb this basically shock on their overseas earnings and be able to make up for it? that is something we won't know for another three weeks. >> and we might just be a collapse in margins. they had been peeking in the last earning season. coming up in the next hour, guest host on television and
our guest host david woo you have been in five countries in the last four weeks. you're intimately familiar with the misery of modern air travel . >> it is been crazy, actually. but i have to say, flying in europe has been a lot easier this year simply because fewer people are traveling because of the recession in europe. i was in paris staying at the most expensive hotel in paris. you walk into the lobby and see -- >> hold on a minute, brian moynihan. good morning. did you just hear that? >> we get great discounts ok? corporate travel. >> you see two red giant basically, polar bears. you don't know if it is christmas decoration or art. it was explained to me by the manager there may to basically attract russian tourists.
except, there were no russian tourists because of the collapse in the ruble. the dining room was empty, the lobby room was empty. the russian crisis is basically hitting hard for luxury travel especially in europe. >> let me talk about air travel. ♪ every night in my dreams ♪ it is all titanic. it is jack and what's her name rose on the bow. there is the madness of what the business class ticket costs. >> i will take your "titanic" and raise you. i think there was -- megan is right about this. if there's sufficient competition. i don't think we know there is sufficient competition in the airline's. >> there's not. >> then we would know it is absolutely our fault for buying on price. was there, edition entrance and it -- transatlantic travel
around the turn-of-the-century? >> for jack and rose? >> all i'm saying is you when a ticket at the poker game you get what you pay for. >> there is not very much inventory -- what is the word i'm looking for? there is not a lot of supply and terms of seats when it comes to the u.s. more so in other parts of the world. our twitter question of the day -- tweet us @bsurveillance. oil prices below 50. ♪
>> the associated press announcing a shooting in paris. the report on a satirical newspaper, if we can go to what we are seeing from france 24, the television organization in paris, live, deadly shooting in paris. a french satirical magazine. rending greeley, you're up to speed on the story and you're not surprised. >> i am shocked, but this is not the first time this is happened. in 2011, they actually decided
the paper was going to be guest edited by mohamed and changed the name. there was a firebombing at the office. when we are talking all morning about the problems they have politically in europe that their anti-immigrant parties, they are in part stoked by these isolated acts of -- it is a very, located issue. >> they goes to the nuance that many of us don't understand, the difference of islamist thought between the united kingdom, france germany, etc. each nation has its own tensions and challenges. >> there are a lot of muslims from north africa in france algeria and tunisia. it was following the to news and elections they did this in 2011. >> this is why everyone even knows about this, the joking about muslim leaders, publishing cartoons that raised a lot of outrage. >> i was just in israel for the holiday. last year, 5000 french jews
immigrated to israel, basically, triple the number from the previous year. i think the election people are not paying enough attention to is in france, this spring basically -- no question extreme right is gaining -- >> let's rip up this script. 18,000 legitimate protest in dresden yesterday. this voltage your world, david woo of reduced economic might chronic recession, someone even say depression. it comes over the social issues whether it is dresden or paris. >> and with intensifying social issues, that is basically weakening governments and their ability to implement right policy. undermining confidence at the same time. we get into a little bit of a vicious circle am a downward spiral for europe. >> the important distinction is it is not that immigrants are
radical, it is that you are seeing a radicalization of some immigrant groups. with the german turks that was not an issue for a very, very long time. >> we will continue to cover this news in paris. in washington, six years on since the passing of the legendary buffalo bill. the congressman from western new york was a certain kind of republican. that was back in a time when republicans likely spoke to democrats. bruce bartlett served ronald reagan and has been a harsh critic of modern gop politics. mr. bartlett joins us this morning from our washington news bureau. we have talked about this many times before. what is the challenge that john boehner has so different from the time of reagan, bush? >> the party has been greatly radicalized. you have a certain number of people who really don't want to
govern they just don't care they vote no on everything. their idea of the ideal government policy that just shut down the government and leave it shut down. i mean, it is absurd to see these fellows yesterday voting against john boehner, the speaker of the house of their party, and then he punishes them and they are astonished. oh, we are standing for principle. i mean, these people are crackpots an idiot. >> how does that play out over the next 90 days? we will talk later in the hour about the trip to 2016, but what does bruce bartlett presume your republicans will do just to get to march 31? >> good question. that is john boehner's and mitch mcconnell's challenge. the republicans have said for some time they want to prove that they can legislate and be responsible because the people are not going to elect another
president of the republican party if it has the same kind of tea party extremism that it has displayed over the last four years. and so they have to satisfy the right wing of the party as well or they will get challenged in a primary and so on. so it is threading the needle. >> i want to bring us up-to-date on the breaking news in paris. we're starting to get a series of reports including "the guardian" of 10 killed. we had one earlier. there was some confusion. new or reports from "the guardian" is of 10 killed. >> this will change politics all over europe. >> let's continue with mr. bartlett. >> bruce, your written for a long time under skepticism about whether or not republicans are being honest with themselves about how they use budgeting numbers. do you see anyone on the republican side in the new republican controlled senate who
from your perspective, a straight shooter on the numbers? >> not really. but the key question is, who is going to replace doug ohman dorf as director of the congressional budget office? there's a secondary question of whether tom bartel will be retained as chief of staff of staff of the joint committee on taxation. those are the two key number creating number crunching agencies for tax and budget numbers. if they put in somebody who is unqualified, who is just a political hack into these kinds of positions, that will tell us a great deal. if they can find somebody rubbed a ball -- reputable, who is qualified, then i think a lot of fears that people like i have will be assuaged. >> from your perspective, the economics of this idea of the way they want to change this the way the cbo scores, what is
wrong with the economics of it? >> there's nothing wrong per se with the economics, it has to do with the nature of budgeting. what they want to do is use dynamic scoring, is what they call it, which means taking into account the macro economic effects of tax policy. and what they believe will be the case is that if you cut taxes, you will get so much additional growth that the net costs, revenue costs of the tax cut, will be much less. and this will allow them to have more and bigger tax cuts. that is really what it boils down to. the problem is, there is no generally understood or accepted methodology for doing this. so we are really shooting in the dark and the numbers that are likely to come out of this exercise may not be worth the paper they're printed on. >> bruce, you have called out george w. bush for not enacting meaningful health care reform,
vision through a medicare drug program. what are the repercussions currently? >> the medicare drug plan has added hundreds of billions of dollars to the deficit. it was perhaps a program worth doing. my main criticism is they simply did not pay for it. it all went on the national credit card. and even budget hawks like paul ryan voted for this program. and now they say, oh, we have to cut or benefits from the poor to balance the budget and it would be much easier if they had not and i to the medicare program. >> we will come back with bruce bartlett as we look toward republican majority in the senate. breaking news and we will revisit this when we return, calling for an emergency cabinet meeting in paris in the shooting of 211 dead according to bloomberg's headlines. -- up to 11 dead according to
bloomberg's headlines. >> they're saying at least 10 but also showing gravely injured leaving the building. it looks like the gunman got into the building. >> their policeman and journalists if not killed, then injured. >> this from paris, france. we will have more when we return. >> we will be back. ♪
>> good morning, breaking news from paris, france. 10, even 11 dead, including two police officers according to bloomberg news. this is the first images we have from paris. president a lot has called for -- holland has called for an emergency meeting. charlie hebdo goes back to 1969, the storm of 1968 folded and began again in 1992. what is the satirical magazine? >> they are not sorry. in 2011, they decided the newspaper would be guest edited by mohamed and depicted him on the cover. they were not afraid to do that. there was a firebombing after that. this is an article from the guardian pointing out next week
they ran a cover with a cartoonist kissing a bearded muslim man with the headline -- "love is stronger than hate turko what is amazing about this magazine, they're unafraid. they are paying the price. >> we also have an update from the paris mayor's office that the paris shooters are still at large. there are at least 10 dead in the shooting, but the shooters are still at large. >> this will change everything. >> you said that twice off air. explain why this changes the dynamics. sarkozy has struggled and hollande -- >> we have been surprised year after year at the success of the party. this is -- in the 1980's, there was a very far right in the 1990's a very far right fringe party. what she has done is she's the daughter of the founder of this party and she has changed the image of the party to be
anti-euro instead of anti-immigrant. with those ideas are entwined with each other. what we've seen in the last several years as the unbelievable rise of this party with this event. there really going to have news they can hang on. >> i want to bring in david woo. let's recapitulating a chart from yesterday. >> are single best chart. not just the rise of this sentiment in france, but across europe. you can see in spain, in the u.k., increase him it has been steadily rising -- in greece, it has been subtly rising. david woo this is something that will factor into how you view the stability of the euro going forward. >> absolutely, especially france is so important for europe. you also have to take a shooting at a consideration of the fact during christmas week, there were three schappert -- separate shooting incidents in the
government was trying to play down the importance of their connections. this will play to the hands of nationality is already being joined in increasing popularity in france. they are in favor of exiting the euro. they're also calling for import terrorists to protect fledgling industries at home all of which will be very protectionist. that is something the germans don't like to hear. >> going back to ian bremmer, they made a very big one which is friction among eu states is working and the politics of europe is their top two political risk. >> the satire of this magazine. is there an american equivalent? >> no, there isn't. this is a european tradition -- >> no american equivalent? come on. >> what the onion did right after september 11, they had a meeting and thought, how can we satirize this? they thought no, this is our job, we must be unafraid.
they came out with an amazing issue right after september 11. >> but these people do it every week. >> this is an amazing example of how comedy can do things that the straight news cannot. looking at a live feed. with the mayor of paris, hollande headed toward the attack. let's bring up that chart. the chart we were just looking at. what is amazing, what you see with these parties, there are now at 30%, 40%. these are parties of five years ago with the french are potential coalition partners. >> david woo do you link this into the start of animal spirit of nominal gdp across -- this is part of what lagarde was talking about. >> as you know, anti-foreign sentiment very much connected with basically recession and also i think within france, you have to remember a lot of these people don't have jobs and the economic recession is only
basically weakening their belief there's a future for them and i think all of that is creating social strife. >> help me out with the monitors. you see the reaction of the euro, which is weaker -- >> it was already weaker. >> to recap, scarlet, help me. we have an account of 11 dead first one, then 10, no 11 including two policemen. >> to give you a sense of the importance to france of this event, hollande's hourly on the scene. -- is already on the scene. >> 11 dead, six years late injured, hollande on the scene and has called an emergency meeting and the shooters are still at large. >> we see it again in the markets. we have done a little bit better in the markets today with oil catching up. we're going to come back with continuing coverage from paris
president of the french republic is at the scene. brendan greeley, this is something, to get the leader of the friends at the scene. >> we're learning a little bit more. lamont reporting shooters left the location of charlie hebdo and fired on police and police fired back. another thing that is amazing, all journalists in paris, have him placed under the protection of the police. this is such a stark reminder that what we do, if we do it right, is dangerous. we do it in such a bloodless way here on the fourth floor in a middle of protect in manhattan but if you're doing your job right, then you are angering people. >> david woo to get perspective on your recent travels to france and into the netherlands there is an underlying tension between what we do at "surveillance" every day and these outbursts of violence. they are dovetailed together.
>> absolutely. france because muslim population in france is about 10%, so it is one of the highest in europe and i think from that point of view, the french have not been doing a great job. the friction is coming out with a high unemployment. >> francois hollande saying dealer is at the highest level. david cameron has also made some comments. he put out on twitter that the murders in paris are sickening. he says we stand with the french people in the fight defending the freedom of the press. he will be meeting with angela merkel later today. clocks brendan greeley, within the nuances of the nation, my first conversation with lagarde at least 15 years ago, she lectured on how protests in france is different than the u.s. of course, she'd spent many years as a child in the united states. it is different over there. there is a right to protest which has a different color and
flavor to it. >> i'm sort of looking here, we have comments from francois hollande saying this is a terrorist attack. there can be no doubt. those who committed this act are being pursued. we are seeing -- i mean, i've always been fascinated by the difference between integration between the u.s. and france, in particular. we do a better job of integrating people. for all of the frustration in this country over the last 10 to 15 years over immigration policy, we do a really good job of making people feel american. this is not as true in france. so you have these two tensions, very real tension about immigration, and then this horrible radicalization it leads to acts like this. >> what you suggest, i've heard from interviews, the polarization of a major city in europe is different than in america. the muslim or the jury in part
of paris is further removed from the paris we know and we travel or in germany, that say the turkish population, there is a starker divide? >> there is. it is definitely true the north africans that live in paris to live way out on the edge. it is not the beautiful city of light that we know when we go as tourists. it is start the soviet- style housing. all of these issues are so tricky because you had very real immigration. you have integration problems. you have islam is a within this party problem with immigration and this is tied into anti-eu sentiment. >> how much of this did you see when you lived in london? >> i don't think london is quite as serious as in france. we have to remember, it goes
back to his point, the u.s. does the population is less than 1%. tim percent is a very large number. in some cities, as high as 20%. this is why i think the big change in 2014, somehow, extreme right parties in europe are becoming more legitimate. in holland. in sweden, basically came out with -- >> horrible attack in public where in islamist tilde film director. >> italy legitimizes further the extreme right -- >> there's video of the attack. >> frame for me the likelihood of the -- i don't way to predict the election, because that would be irresponsible. >> what you are saying all over europe, and this is with the u.k. independence party in the u.k. as well, is the possibility
of these parties, which were considered french parties two years ago, five years ago becoming coalition partners. it is unlikely they will win an election, but we are already seeing what happens when these parties become more popular, they drag the centrist parties to the right. we are seeing this happen with david cameron as well. i honestly think we can lay some of the blame at the dominant parties in all european democracies because they have not paid attention to immigration and not paid attention to real frustration about the pace of eu integration. >> you wonder to what extent these french parties will work to unwind some of the reforms, fiscal balances other hard-fought situations of the euro zone crisis resulted in. >> much more in the next hour. 11 killed and many others -- very difficult reports coming out. the president of france at the scene in paris. david, thank you for your perspective today. i should mention, doesn't matter right now, but futures up 13. >> 11 dead, four people between
quick good -- >> good morning. 11 dead in paris, france. the french president lond -- a lond is on the scene. brendan greeley is spending much time there. very quickly, brendan, the surprise of this event, you were not that surprised. why? >> i am looking at the live feed from lamont --le monde. you could hear allah akbar. this was a terrorist attack. quick and the shooters are on the run. -- >> the shooters are on the run.
>> what will this mean to the people of paris? classic good morning. the people of paris are pretty shocked. -- >> good morning. the people of paris are pretty shocked. all this week in france you've already had debate about the fear as -- the fear of islamism. the national party is obviously taking advantage. this is a satirical newspaper and they have had a whole cover this week, a whole article about
a fictionalized islamic state in 2022. >> is this anger over french domestic fares, or is this more about relations with the islamist movement? is this domestic or international anger? >> i think it is more international anger, although we do not know any details yet about these two gunmen who are still on the run. police are still looking for them. at the moment in paris, you can hear police alarms and police cars everywhere looking for these gunmen. until we know the identity of these gunmen we cannot know for sure. but it does seem like it's more connected to an international anger rather than problems, the domestic problems of the french.
>> caroline, talk more about what came out this weekend by a very controversial french author who predicted a dark future. this novel was a big deal in france even before it came out right? >> it was all over the media this week. just last night it was on national television the 8:00 news, which is the news that everybody watches in france. if you only watch one news, that is what you watch in france. he had about half an hour on the 8:00 news last night. this book is called submission and it is a fiction. it depicts france in the elections in 2022 where you have an islamic party against the national front. in this book, you have an islamic candidate winning over
the election against the other candidate. in france women cannot work anymore. they are wearing the veil. they are banned from school. it is obvious a very dark fiction. >> this is one of the central frustrations in europe right now, that you have this good proud tradition of multiculturalism. and one of the things in france and germany and the netherlands that they are being frustrated with is that you have this rise of intolerance and ironically it is being accepted in a very european way. it's a cultural situation that nobody really knows how to handle. >> caroline, thank you so much. i'm sure we will be speaking to you. scarlet, give us an update. >> the euro is up this morning,
not necessarily on the news of these shootings. and we should mention the front -- the french cac 40 is holding. >> we have two guest perspectives on france this morning, robert nardelli on airplanes, and of course it was with general electric that you did a transaction? >> we did. first of all very unfortunate to have this over there in france. >> but your france of another time is not the one just an old -- just in melt -- jeff immelt faces today. as brendan greeley said surprises there is no surprise. massive inflation and then deflation. >> when i was there it was more
about the number of hours people could work and so forth. but we had a very good relationship. it was a very successful acquisition and we were pleased at this relationship that we had there. >> david in your travels, explain to those outside of france, and by that i mean deep paris from the eiffel tower. come on, we are all tourists. you have gone further. it's a different france than we perceive day-to-day as tourists. >> absolutely. paris is still very liberal. it is when you go down south that you encounter a france that is much more nationalistic. you have a higher concentration of foreign populations creating a source of friction. >> we have a precedent for what
this can do politically. in the early 2005 a dutch director was brutally murdered in the street. -- in the early 2000 a dutch director was brutally murdered in the street. a note was left on his body. that change the netherlands. again, a very tolerant place coming to grips with the place that there are very intolerant people living there. >> the half-brother of these former president of the french republic was with us a few weeks ago. mr. sarkozy is thinking about running again in some form. the surprising -- the sarkozy that we know or schrock -- or c hirac, does he find himself in a different france? >> he will have to find himself in coalition with the parties. that changes things in france. >> they did not even figure on
the map four years ago. and in greece, we've already seen what can happen. >> there is an amazing movement. again, 30%, that is coalition territory. that is no longer we march on the fringes. >> this is an economic metaphor isn't it? this is about the knock on effects of bad policy from your world. >> and it will prevent good policy from being implemented going forward. remember, in sweden a government almost fell two weeks ago because they could not agree on a budget because the extreme right party is now the minority in the country. week governments across europe are quantified it more and more difficult to do the right things. >> it will prevent good policy, but will it unwind from the good
policy in the years before the crisis apoplexy -- before the crisis? >> i think so. >> some of these issues that we sleep under the carpet, i think we have to raise our sensitivity to some of these issues. it is dominating, whether in france, or the two policemen that were executed here two weeks ago, we have to raise our sensitivity on these issues. >> you talk about politics change in europe, in a sense there is a postwar tradition of further european integration and tolerance toward integration in europe. these are two traditions that are banging slacken -- banging smack into the wall of reality. >> a one to say this is gracefully for the dead, and as president ollanta said, for the immediacy -- president hollande said for the immediate in
france, does this change the dialogue for the actors at the meeting? >> clearly, the ecb sees itself as the only entity that is able to save the euro. i don't know if this will do it, but from that point of view, the only institution in europe that can answer and cut across all of the differences in the countries, it's the ecb. >> david, thank you so much. we will continue with much more on our reporting in paris. again, 11 dead and some grim reports as well. stay with us. ♪
work in? >> paris is a very open city and susceptible to these types of attacks. but what we are seeing globally around the world in major cities is the evolution of the lone wolf and small sleeper cell attacks that have been so devastatingly effective. we had this effect in norway where the entire city center was taken down and 21 or so children were killed of the political party. and we see the attack in new york with hatchet attacks on new york city police officers. now we see the political magazine who as been under fire for decades on the muslim community with regard to its satirical cartoons regarding mohammed. >> anthony, i think of the blitzer prize-winning book "the goldfinch" with the metropolitan
museum in new york as the book opener. what is the protection our audience has? what is the protection they will not be involved in the next sydney or paris? >> i'm afraid with regard to private corporations, the situation is not good. most security at private corporate centers and media centers is moderate at best. and those that have a moderate level of effective security are few and far between. it is generally a low level of security that will not be effective in these kinds of approaches surveillances done prior to the attack and the attacks themselves. the police department are quite different. they are trained. they are communicating with their countries intelligence unit -- with their country upon intelligence unit -- with their
country's intelligence units. they are trained to respond and the effective containment of terrorism to date is excellent. with anthony, thank you so much for your perspective. much more news from paris. the headlines come out fast and furious. the gunmen are still at large? >> this is the latest as they hold their news conference in paris. 11 people dead. ♪
>> good morning, everyone. 11 dead in paris, a terrorist attack, no question about that. the french cabinet meeting in 45 minutes. brendan, you have looked at the plan in place now. >> the country has a countrywide plan that was updated in 2012 after some shootings in toulouse cultural centers, transportation
centers, and this time other centers are being protected. there was a siege in south of france. >> we go to our discussion with five journalists and police officers dead as well among the 11. >> the attackers are on the run according to french president hollande. several high-profile attacks have been foiled in recent weeks as well. we want to bring in the chairman of eurasia group. he joins us from washington. cliff, we had you want to discuss the top risks of 2015. you noted the politics of europe was the top political risk of 2015. full in how you see that with the risks we have seen. >> a lot of people want to
disrupt european politics right now. we do not apparently no exactly who did this, but there is certainly a risk from radical islam. isis is frustrated in this area and will be turning toward europe. that could well have been. and there is also a rise in populist movements within jura -- within europe generally. it will threaten stability and security. >> one of the things we understand from here in new york is the connection of these far right parties between anti-eu sentiment and anti-immigration sentiment. how do we disentangle those? how do we understand those from here? >> they are tangled, just tangled. they are anti-eu anti-immigration. this witches brew you also get in america to a large extent. it is the upward push on these groups generally that poses the
threat to european economics and stability. >> cliff, we were talking earlier about how this is one incident in paris. of course, we have seen crimes in the netherlands and other parts of europe as well. you noted in your top risks for 2015 that friction among eu state is worsening. the best case would be germany, france, and the u.k. working together to provide leadership. good incidents like this out coalesce european leadership, or will they move further apart and retreat into their homes? >> this might give you a bump into operation but look, there are deep structural issues austerity or no austerity, pension reform or pen -- or no pension reform. terrorism will not overcome the structural issues. secondly, a major hurdle is what i see as a u.s. retreat. usually, you have the world's leading power setting in one
stuff it's the fans like this -- stuff hits the fan like this. the u.s. will not be stepping into european economics like it used to be. >> what does this mean for the effort to continue to grow the economy, to get it out of recession, to generate inflation, and to build on the reforms after the eurozone crisis? >> i think it is going to be again, an impediment, but not a strong one. it will suck resources into homeland security type departments, but the main issues are dealing with these rising parties, with dealing with lack of coordination among the major european powers. the politics are not shaping up in a way to make economics work. that is still the main problem. >> a couple of years ago i spoke to an academic, catherine devries come out of oxford.
she referred to these parties at issue -- she referred to these parties, and at issue entrepreneurs. there are issues that remain unaddressed in europe and they are picking them up because none of the parties are begin him up. do you see more of this political activity? >> i think there is a lot to that, but look a lot six is about the issue of entrepreneurship -- but look politics is a lot about the issue of entrepreneur nurse in. i do think this will continue. there is the sort of wellspring of momentum for these parties and i think we will see more and more of it. >> cliff, joining us from eurasia group. >> let's do a recap. >> by the way, they came up with the politics of europe as a separate thing to mend that is what we have seen play out. >> bob nardelli, let's -- you
were talking in the break about what this means. and you talked about how people reacted after 9/11. >> home depot became a sanctuary. people got very concerned. we talk about this being a lone wolf. i think this is a definite strategy. just as cliff said, these are small skirmishes and unfortunately a lot of people perish in these things. but it is not a singular massive movements like the trade center was, so you will not get a global intervention to stop i think they thought about this -- a global intervention. i think they thought about this and is a well played strategy. >> you saw business up after september 11 because people were fortifying their homes. >> i think people will be contained in their homes. they will be concerned and not go to public gathering places for some it will be a distraction for a while. >> it will be a distraction in the euro zone where consumer prices dropped 2/10 of 1% last month. >> and the journal is calling it
ah, got it. these wifi hotspots we get with our xfinity internet service are all over the place. hey you can stop looking. i found one. see? what do you think a wifi hotspot smells like? i'm thinking roast beef. want to get lunch? get the fastest wifi hotspots and more coverage on the go than any other provider. xfinity, the future of awesome. >> good morning, everyone. breaking news in paris a terrorist attack with 12 killed so far and very likely more. the president of france will meet within the hour and think to the nation, we are told, in about 32 million -- 32 minutes.
they were -- a journalist at charlie hebdo told see -- told cnn we want to lack of extremists. that captures that this is not the united states. >> and it shows that comity is brave. they did not -- that comedy is brave. they did not give up. >> caroline, women look at this and we move away from the moment in paris -- when we look at this and we move away from the moment in paris, how will display across a frustrated and improv first -- impoverished france those two are not participating in the economy? how will this terrorist attack play? >> think everybody is shocked in france. this will not help the extreme party of the national front, but
of course, it's all about this fear that we have with the islamic state this international fear of islam is -- islamists taking over in different parts of society. if you look at the core of the national front in france, you deal -- you do feel there is anger with the people in the margins of society who might be attracted to the extremes. this is not going to help that atmosphere. even though we have to remember this whole affair was sparked by the book coming out this week in france, based in fiction. and this is what the media here are trying to remind the french people. >> thank you for the comment.
and this is not the most recent incident of islamist violence. in the last couple of weeks there were incidents of men yelling a lakhdar --allah akbar before running into groups of people or a man in london stabbing people. with that is right, there have been three incidents in france just before christmas. you had to policeman injured in the face -- two policeman injured in the face with a knife price will also claiming to be part -- by people also claiming to be part of the islamic state. and then you had a driver driving into a crowd in a christmas market, and one of them die. and this happened just before christmas thomas sparking a wave of criticism and indignation --
just before christmas, sparking a wave of criticism and indignation and shock in france. >> caroline, thank you so much. we will have continuing coverage from paris as we speak to many across europe. brendan greeley, i believe in the miracle of cameron in the face of this. this changes all for the leaders. >> the two of them were taking a walk today in the british museum and eight came up and whispered it -- aides came up and whispered in her ears. this changed markedly what they were going to address. looking at the twitter feed they said the cartoonist for charlie hebdo that has produced many of the satirical cartoons just produce this week that said
"always again, attacks in france" and a cartoon of a ridiculous man carrying a kalashnikov. >> this is another damper. if i'm a corporate officer, my head is spinning, because of the events we have talked about over the last number of weeks, and now this. quite we have talked about the dysfunctionality here in the u.s., primarily -- >> we have talked about the dysfunctionality here in the u.s., primarily in washington. >> and the two police officers in new york, the city is still reeling from that, and then additional officers in the last two days wounded. >> and then all of this between the commissioner and the mayor and so forth, it's very unsettling to a city that is known nationally. >> francois hollande will be holding an emergency cabinet meeting in about 20 to 30
minutes. sarkozy will be holding a meeting, or making a statement in about an hour. and francois hollande will be speaking to the public at 2 p.m. new york time. the futures are higher right now. this is bloomberg surveillance. i'm scarlet fu here with tom keene and brendan greeley. >> we are going to take a look at more breaking news. the president left d.c. today to get out of the events that had overtaken with republican congress, but events follow you to michigan when you go to detroit. phil mattingly is with the president in detroit. do we have any sense of what the president's reaction to this will be? >> not yet. i've been talking to administration officials and they are very aware of what happened. how it will play out is like this, the president likely has already been briefed. we will your about that. what the u.s. is going to do is kind of late out on a pattern.
they will all be asleep express -- they will obviously express condemnation and the president will call francois hollande and express support. but the bigger issue is how the u.s. will interact with the french internationally from a law enforcement and intelligence perspective. when you talk to the law enforcement and intelligence protectors -- professionals that have been tracking terrorist in recent years the biggest concern is what happen in france, small attacks. not large-scale attacks, but small attacks taking place. i think people will be very caught visit of what happened in france and be very aware of what is going on in the u.s. >> and that amazing moment after september 11 when the french prime minister came to new york and laid a wreath. and the cover of "le monde" said "we are all americans to."
until this year there was an arab-american festival. there are very successful arab-american -- arab americans not far from her you are standing. do we do it better in the u.s. than in europe? quest that is a good question. i am about it -- >> that is a good question. i'm about an hour away from dearborn. when 9/11 occurred, the overwhelming negative reaction -- the overwhelming reaction in dearborn was one of support. the u.s. provides somewhat of a model when you look at what is going on with the immigration issue in europe right now. >> what happened with the french elections, whether the party gains prominence or will be a coalition partner, and whether
this is a theme across europe -- what is the white house's take on working with the current leadership versus reaching out to some of the french parties? >> i think the white house is very careful when it comes to other countries political situations. they had had their disagreements with francois hollande and other governments over the years. but they are extremely allied napoli's which is on foreign policy. the french -- not the least of which is on foreign policy. the french are very involved. they will always defer to the current administration. >> i will buy that, but we witnessed yesterday our wing of a party go after there's eager of the house. -- they are speaker of the house. how surprised are you -- i am
not informed enough to go after the other, but am i right in saying there was audacity in going after the establishment? >> that was the way things were handled by leadership republican and democrats. when you had insurgents particularly backbencher insurgents in congress, they got punished. they were relegated to the sidelines. john boehner, when he took over the speakership in 2011, he wanted to be inclusive. what you are seeing right now and he tried it last congress, too, is him saying, ok, that is not going to work. if you are going to act out, i'm going to take control. his only way to govern. -- it is the only way to govern. that is the only perspective right now. >> you worked for years with this perspective. being an american in paris, jim hertling is the best perspective
breaking news, a terrorist attack in paris, france. scarlett, give us the calendar in the next number of hours with the president and former president of france. >> at least 11, perhaps 12 were killed at the offices of charlie hebdo. we do know the president has called an emergency cap netmeeting beginning in about 15 minutes from now. and sarkozy, the former president -- a cabinet meeting in about 15 minutes from now. and sarkozy, the former president, will be making a statement as well as francois hollande making a statement to the public. >> our guest joins us from our london news bureau, jim hertling, who knows more about being an american in france than anyone i know. how does this play differently than an -- that an attack in new york or miami?
>> that is a great question, and it remains to be seen. because the early reports are that we know it was a terrorist attack, at least president hollande said so. right now, french television is reporting that the alleged attackers chanted or yelled out "the profit has been avenged" -- " the prophet has been avenged" as they ran out. >> frame for us the difference between the mistake islamists in france and the more international relations we look at today. are they closely linked? or is the french experience with muslims so different from the news flow of the last six months? >> well, france has grown incredibly concerned because there is a large number of
muslims in france and throughout europe who have gone to syria to join the fact -- the fight there. and there is tremendous concern among authorities in france and elsewhere in europe about those trained fighters cycling back to europe and bring their heightened ideology and their heightened fighting skills back to europe. >> jim hertling, let me bring in scarlet fu. you have known each other for a few years. >> we certainly have. charlie hebdo, the satirical magazine that has been the focal point of the attack, have they ever been -- have there ever been other places that have been a focal point like that you did you feel unsafe when you worked at bloomberg in paris? >> no, i certainly didn't. but charlie hebdo went out of its way to ruffle feathers.
you will remember the cartoon of a few years ago that ruffled feathers, the cartoon of mohammed. fred told its freedom of press dearly, much as we do in the u.s. and president hollande said himself that charlie hebdo offices were under heightened protection, even before this attack. quite -- >> jim hertling will be joining us from london with more on this breaking news. ♪
>> good morning from new york city. a terrorist attack in paris. this is "bloomberg surveillance." we welcome your perspective through the day on television and radio. >> we know that at least 11, as many as 12 people have been killed, 10 wounded as gunmen in paris attacked the offices of the satirical newspaper in paris, eastern paris. this is being called a terrorist attack. the gunmen are still at large and on the run. that is according to french
president francois hollande. he has called a cabinet meeting that will begin in about 12 minutes. in about 40 minutes nicholas sarkozy, the former president will be making a statement. and it out 2:00 p.m. -- about 2:00 p.m. new york time, the french president will make a statement. >> this is from the satirical newspaper, charlie hebdo where the attack took place. he writes, we get threat all the time over e-mail. you get used to them. we don't take them seriously. but more recently, we sensed a little bit more minutes and -- more maenace and we don't feel like this is done. with -- >> this was in response possibly to a book that was released today, depicting a future in france that has france
led by a muslim party and president. >> the sense that he has is that they are submitting to this menace that they can do nothing about. >> this is a reported shot of the two gunmen. am i right scarlet, that the report is that they are still at large? >> the report is that too black hooded men -- two black hooded men enter the building with kalashnikov rifles and there were shots heard and then they were seen fleeing. >> what is so disgusting is they know exactly how we, the media will react. this is an act of media. we cannot not cover this. it is extraordinary. it is brutal. but we are doing what they want us to do looking at images of them getting out of a car dressed in black. >> and as anthony romans mentioned earlier, there is the idea of sydney one week and then
paris the next week. and you wonder if this is the new ad hoc nature of this as we go month-to-month, quarter to quarter. >> ad hoc is a good way to dig about this. al qaeda, as these we knew it exists. now we cannot figure out whether these are people returning from syria, or just people inspired by what is going on. >> we continue with jim hertling in intended -- in london. for years, you have been a leader on economic coverage city to city in your travels for bloomberg in europe. is there a biggest into between the cultural adaptation to terrorism city to city? >> in the cities that i've been to people, residents except heightened security when they have to deal with it. they accept it willingly and politely when police have to close off streets, with security cameras are there.
when back need to be checked. it is part of the background now. >> given your experience having lived in paris for so many years, coming from new york, and now in london, how is the terrorist alert going on right now different in paris versus london or new york? are there security checks everywhere you go? >> in paris, definitely. you will see cops in riot gear at major metro stations outside hotels, outside museums. there will be a very visible presence. very often they will be cops checking your bags. >> brendan greeley, on the minority parties and their resurgence, if you will, all across france, how are they different from the minority parties in the united states? >> the biggest minority party in france is not such a minority party anymore. they have scored very high in
the european parliamentary elections in the spring. in germany, on the other hand, which has a very different history the minority, the anti-euro party as it frames itself, can barely get off the ground. and now there are demonstrations as well. >> i like what you said. fold that into greece where we have had amazing cycles of news. >> i think greece is slightly different. there are varying degrees of anti-euro sentiment and anti- greek sentiment falls up and all of these parties sort of fold together. if you look at greece, it is very strongly anti-europe but not as much anti-good -- anti-immigrant. very briefly from le monde, they are saying according to indirect sources from police, two people were killed, the one that actually wrote these hysterical cartoonist made fun of mohammed
along with another illustrator. these are indirect sources that i am indirectly translating from le monde. >> we think of september 11 and the shock of the evening and the days following, what will be the moods in the homes of the french this evening? tell me how the french will react in the intimacy of their homes to what we are observing right now? -- right now. >> the reaction will reflect the incredible divide in the french society. in some areas you will find shock and repulsion and discuss -- discussedgust. his other areas you may find similar shock and revulsion, but also a bit of a support. >> a bit of support. the cabinet will be holding an emergency session meeting. what will you look for in response from the french government to this?
as we mentioned earlier, this is not an isolated event. these events have been ratcheting up a little bit here. >> i daresay, the most important reaction we will not see. it is probably going to be a real ramping up of intelligence and counterespionage and all of the stuff we see tv shows about but as journalists we don't really get front-row seat to. >> jim hertling. >> thank you so much. we greatly appreciate the economic coverage from london. >> you know, if it is indeed the illustrator and the man who runs charlie hebdo who have been killed like you keep thinking of the first issue of the onion imprint, that came out after september 11. i just read an article in a yahoo! looking at the onion and its writers, and how they handle
it. everybody said they thought it would be the last issue in print. when staffers went into the office the next day on september 26, it was overflowing with comments all of them positive. comity is important, and dangerous. it is the worst thing you can do --comedy is important and dangerous. it is the worst thing you can do to an islamist. and it has a role. >> the cartoon editor of "the new yorker," robert minkoff, saying that the only culture is -- cultural and religiously politically correct cartoon is an effective one. you are always offending someone. criticism is part of it. the cultural clash is part of it. >> what i -- i think what we are
seeing here, if i can offer perspective, these are not ad hoc. they are well courtney did. they are individuals, but there is a bigger strategy to create -- they are well coordinated. they are individuals, but there is a bigger strategy to create global unrest. they are publicizing what they are trying to do. we need to understand the mission and purpose of this group. >> quickly, what do we need to hear from the president today when he comments on this from detroit? class i think he will extensively. he will offer help in any way he can, but i do not think it is a big enough event unfortunately for the u.s. to get involved. and that is fundamental to the strategy that we are seeing unfold. >> thank you for -- thank you. >> to recap, as many as 12 have died. and there are others on the
on the offices of a french magazine. 22 witnesses. two people burst into the paris headquarters of the magazine and opened fire. at least 11 people were gunned down and killed. the magazine's cover story this week is an article about france being run by a muslim president who will not let women work. the magazine was firebombed before three years ago after a special edition featured the prophet mohammed as a guest editor. speaking about the attack at 2:00 p.m. eastern today. we will also hear shortly from the former french resident -- president in less than a half-hour on the shootings. reaction around the world was with every country, major allies condemning what they heard. tweeting out moments after the shooting, "