Skip to main content

tv   Bloomberg Markets European Close  Bloomberg  February 19, 2016 11:00am-12:01pm EST

11:00 am
brendan: we are going to take you from new york to london to be very busy brussels in the next hour. here is what we are watching. running into a roadblock. prime minister david cameron faces resistance as he tries to work out a deal to keep the u.k. in the european union. the brakes onts lending. some banks will have to put away or reserve because they made loans to fast. a fast lane. in we will look at the next big thing in collectible cars. it is not all ferrari's and lamborghinis. we are half an hour away from the close of trade in europe. mark, tell us about today's market action. mark: before i do, we have breaking news. you want to tell us? brendan: christine lagarde has
11:01 am
as the managing director of the imf for another term. , firstturmoil field term. she has the confidence of global leaders. that is something that we have known for some time. i think we are going to get tom keene on in just a second to talk about the legacy and the future of christine lagarde. for the time being, let's go back to you to talk about what is happening in markets in europe today. expectedyou say, much news on christine lagarde. here is what is happening in european equity markets. the stock 600 is down by 1.5%. one industry group is rising. real estate. i want to show you banks, one of the worst performing groups. the news today from the banking sector was binary. the ecb said that five lenders under its supervision missed a key capital right and 2016 -- 2013.
11:02 am
it also is that it would curtail its own demands on individual lenders winning some reprieve from regular tears -- regulators post crisis to pile on capital requirements. 1.76%.own by for the week, we are up. the best week since october of last year. -- doesn't look like my chart is going to work. i want to bring up some other chart. the curse of modern technology. what i can tell you, brendan, to beginners. europe's biggest insurer missed estimates for fourth-quarter profits because it claimed a natural catastrophe. gucci reported revenue for the fourth quarter that beats estimates. the gucci brand as showing some signs of a turnaround. -- mixed fortunes. brendan: 90 minutes into the trading day in the u.s.. adding to the markets desk, julie hyman has the latest. julie: hopefully, technology
11:03 am
will not fail me today. it is not failing in the stock market. technology shares do well today. that is where the nasdaq is little change while the other indices are faring worse today. oil providing pressure. let's look at the imap, sectors on the move. energy is leading bosses, down by 2%. materials also losing day -- today, down by 1%. tech and consumer staples are little changed and helping lead my games there are. speaking of those gains, let's look at the big tech movers. they are contributing the most to any gains or mitigating losses that we are seeing in the s&p 500. applied materials out with a forecast ahead of estimates. this is a maker of chip equipment, chipmaking equipment. indicator of demand for chips, or can be. though shares rising. alphabet and facebook catching a little bit today. a look at stocks on the week, even though we are the s&p down day today,
11:04 am
500 is setting up for a positive week of 2.4% on the week thanks to that rally that we saw at the beginning of the week. oil, let's come back to it. is there a four? -- is there a floor? julie: there is not a for today because it keeps going down. down by 5%. building on the earlier losses that we saw. we see this correlation back today, at least, for oil and the s&p 500. if you look at them years to date, the correlation. even the magnitude wide, oil is down by 21%. smp is off by 7%. on the flip side of all of that, the 10 year where we are seeing the other side of the correlation, the yield has gone down as people have been buying treasuries, selling oil and stocks. brendan: thank you, julie. taking a look at bloomberg first word news. vonnie quinn has more from the news desk. vonnie: thank you so much. justice antonin scalia is a flag draped casket is at the supreme
11:05 am
court. family members and former law clerks gathered to pay their respects. the court will be open to the public until 8:00 p.m. scalia's casket is resting on a platform first used for abraham lincoln's funeral. you're watching live pictures of justice scalia in repose there. libya became the latest in the fight against the islamic state. american warplanes chopped multiple targets including annapurna and islamic state -- including an apparent islamic state training camp and a senior leader. they did not identify the leader nor were in libya the airstrikes took place. president obama directed his national security team to bolster counterterrorism efforts there. running into is resistance as he tries for a deal on the u.k. membership in the european union. the british prime minister is beginning a second day of negotiations in brussels. he wants an agreement he can put up for a vote in june. eastern european leaders do not like cameron's demand for welfare curves on non-british citizens.
11:06 am
france is opposed to plans that would protect london's financial industry. meanwhile, eu leaders are fighting again over refugee policy. greece is doing too little to secure its borders. slovenia is accused of being too much. the eu expects one million more refugees this year. germany takes and the bulk of them. harper lee has died according to the new york times. writer of to kill a mockingbird was 89 years old. stories about racial injustice sold 10 million copies. it became one of the most told works of fiction ever told -- ever written by an american. it was her first novel and won the pulitzer prize. last year, a sequel appeared. once again, harper lee is dead at the age of 89. power by 2400 journalists and more than 150 news euros a running world, vonnie quinn. as we go to break, more
11:07 am
breaking news washington from the imf. lifetine lagarde, a picture of her speaking. another term as managing director of the imf. she took on the role of -- in 2011. she had the curse to leave in interesting times. she is the author of the phrase the new mediocre. she will be charged with the job of attempting to convince nations around the world to engage in more fiscal stimulus and structural reform. you can go watch the full event at live go on bloomberg.
11:08 am
11:09 am
♪ mark: live from london and new
11:10 am
york, this is the european close. i mark barton with brendan greeley. 4:09 in london. fellow eu leaders are grinding entree second day with no breakthrough insight. the so-called brexit deal, talks carried on through last night. they may stretch their tonight as perhaps the weekend, as well. >> i was here until 5:00 this morning working through this. we made some progress. there is still no deal. as i said, i would only do a deal if we get leopard needs. we are going to get back in there, do more work. i will do everything i can. ryan chilcote is in brussels with the latest are and where is cameron running into resistance? ryan: all over the place. first, it was the eastern europeans. they weren't happy with the idea of caps on migrant benefits. then it was the french unhappy with the idea of the u.k. getting out of the eurozone
11:11 am
financial regulation. then it was the belgians about the language, moving away from the idea of an ever closer union. now, according to one member of the european parliament we spoke with, it is the greeks. the greeks upset that some of their neighbors to the north have been stealing off their greece to dealg with the refugee crisis on their own. according to the european parliamentarian we spoke with, the greeks have threatened the deal. the problem is the greeks are starting to threaten migration with this issue. >> what is the probability of a deal on the u.k.? >> if the greeks stick to that veto, it is finished today. we have to come back in two weeks time. if the greeks don't do it then, the deal is impossible.
11:12 am
ryan: the greek delegation has denied that. they say they are not threatening a veto. all the same, the dinner has been delayed. ed happened for three hours from now. that is one talks will resume. meanwhile, all of the 28 countries have been told to make sure they have hotel rooms for tonight because the talks very well may continue into tomorrow. i have to disclose here, i have to say i love you got a quote. in 1994, i was an intern from the european parliament and he was my boss. at the time, he was known as a reliable back channel. he is the way to get to the cdu. what is merkel's stance on this? whereas germany? ryan: germany wants this to be over. the big issue is the refugee crisis and the fact that germany , with the exception of greece and italy, has been left to its own devices to deal with this. it is not getting any help from
11:13 am
the other eu countries and terms of taking in these refugees. ever since the german chancellor arrived in brussels, her story has been very simple. let's do everything david cameron needs. to go back home, announce this referendum, and keep the u.k., the european union. we have more important's nest to attend to, namely this refugee crisis. brendan: thanks a lot. bloomberg's ryan chilcote will no doubt continue to stay in brussels as long as it takes. let's continue to explore what the impact of a brexit would be with jacqueline gold, the chief executive the british retailers which has nearly 140 stores across the u.k.. how much of a blow would it be to your business if the u.k. wasn't part of the eu? can you give us a sense of the numbers? me, i am very supportive of staying in. the fact that we've got access to 500 million potential customers without the barriers.
11:14 am
this up is difficult internationally. it is complex. we do it and we do it well. mark: you can set up deals individually. it would take time, but still, it can be done, cap it? jacqueline: it can be done. for us to exit the eu, i think it would be very challenging for our business. walk awaywe want to from those opportunities and deals being struck? the uncertainty would be very worrying for business. the whole of people, the paperwork that would go with it. the likely cost. me, it would be a big concern from a business perspective. when you talk to a lease in europe, business leaders, political leaders, they tend to be pro-europe.
11:15 am
makes me wonder, you make such a convincing argument. miss in the u.k. that is leading to the fact that the david cameron had to promise that he would hold a referendum? >> i am sorry, brendan, i didn't hear the last part of that question. brendan: business and political fores have been pro-europe a long time in the u k and in the eu. missed? when you make such a convincing argument to stay in, what did elites miss in the u.k. that is causing david cameron to have to hold this referendum which she clearly doesn't want to have to hold? jacqueline: it is because we live in a democratic society and he knows that the people will vote for the best decision. my concern, when you read the headlines at the moment is there is a great emphasis on migrants. the whole business issue is often lost. it is so critical.
11:16 am
when you look at trade opportunities, growth opportunities, jobs, how important that is attracting to the u.k.. isn't it best with tires off to china -- someone said we shouldn't tie ourselves to europe because economically we are a stronger nation. why should we tie ourselves to a nation, the second-biggest economy in the world, where the future lies? jacqueline: in all honesty, the eu has the greater polar -- power to negotiate as a union for countries like china, india. it adds so much more weight. mark: part of being in a club gives you have to be at what about red tape? that david cameron will get a deal so that the eu takes action to cut red tape. it has been promised before to mixed results.
11:17 am
you do business, not only here in the u.k.. how cumbersome his red tape within the eu? want to seewe all red tape reduced. the signs are that this deal is to make a commitment to reducing this burden on businesses. of course, there is always red tape and everything we do. to come out of the union, who it is to say that will go away? i am not convinced that is what will happen. these changes won't go away overnight. the uncertainty will continue for many years. how much of that is passed on to consumer confidence which i think will also have an impact? i think you have to be careful what you wish for. george osborne says it hasn't been effective. where we have seen an impact as the currency, the pound against a number of currencies which have fallen.
11:18 am
volatility gauges are jumping to multiyear highs. at what juncture will visit us -- will business investment suffer? jaclyn: i think it is impacted now. uncertainty is impacted. mark: are you sensing in your business? jacqueline: definitely. the sooner we make a decision, the better. u.k. inlling it to the the best possible way or not? u.k.u were to front to the camp, how would you sell it to the u.k.? jacqueline: i cap of myself in that position. as a country, we have to decide what it is we want for britain. do we want britain to go backwards? spiller,t to be an closed, or do we want to be open, forward thinking, engaging, and confident in our role in the world? that is where i see the future. that is where i see the future. how global, in your
11:19 am
outlook are you right now? we have to remember that up and down the country, businesses .f all sizes and summers was a small business at one point. we are ambitious and growing. we want every opportunity to grow our business through the best deals that the eu can provide. whether that be in the eu or what we are doing in the u.s.. we also have partnerships. we want all of that to be as easy as possible and barrier free. chief executive of british retailer ann summers. still ahead on bloomberg television. after advance is a form smaller lenders in january, the people's bank of january will raise reserve rates for the banks that don't need -- the banks that don't make criteria will prevent a credit blowout. that conversation is up next on bloomberg. stay with us.
11:20 am
11:21 am
11:22 am
♪ brendan: live from new york city and london, you are watching the european close. i'm brendan greeley with mark barton. china says some banks will be forced to lock away reserves, a move that may maintain credit growth after smaller lenders jumped in january. director of asian equities stopped by bloomberg early today to give us context. >> what you have had in china, particularly in recent months is a huge surge in lending for it in january, you saw new loan issuance at a record high. $460 billion. brendan: i have a chartered here. >> it is a huge number. that is occurring at a time when the chinese economy is slowing. there is a growing concern that what is already one of the indebted countries in the world becomes increasingly indebted and that debt pile is ultimately not repayable. nonperforming
11:23 am
loans. nonperforming loans are loans that have been lent out and the borrower is no longer paying interest and cannot repay the principal. the official number for that in china stands at 1.7% at the end of 2000 seven p recomment to this debate about numbers in china and growth rate. that is the official number. we had done extensive analysis on a bottom-up number to figure out where that number my stand looking at listed companies and because of the state of their balance sheet and businesses, unlikely to be able to repay their debt. our belief is the true number in china at the end of 2015 was not 1.7%. we believe it was close to 8%. economy isay the progressing, given the way lending is progressing in china, our belief is that number could reach 11% by the end of 2016. that is a big problem. to have significant deleveraging that has to take place in china. how that happens without a massive deflationary and act on
11:24 am
the rest of the world is a good question. brendan: i want to make sure we are clear on this. this is something we did ourselves. an 8%esearch comes at nonperforming now. quite possibly heading to 11%. simon: by the end of the year given our predictions of economic growth at around six with 5% and the lending that we are still seeing banks doing. this is a reason they want to curtail lending. when they boosted lending in 2009, that help boost, for a short time, shanghai, the stock market, and the economy for a short moment. >> i would like to know to what extent are the reserves that china has which at one point reached $4 trillion -- some of that is gone. that is a cushion, isn't it? simon: it is a cushion, but the question is if the nonperforming loans within the chinese banking system are far more serious than everybody thinks, you're facing a recapitalization risk for the banks. at worst, they banks become a
11:25 am
restraint on growth because they cannot lend anymore. maybe they have to cut their dividends be a lot of investors have in looking at the chinese banks as a good source of yield. on the phase of expectations at the moment, they are paying 5%, 6% yield. you see those banks cut back dividend payments to preserve capital. for certain banks, they will have to raise new capital. how do they raise new capital? but someissue equity, have specific constraints that they can't issue new equity if shares are trading under book value, which they are. what do you do? you have to use foreign reserves to recapitalize the banks. brendan: that was simon mail speaking with bloomberg this one. mark, what do we have? we are heading into the close. mark: about five minutes away from today's close. stocks finish the friday session lower. it is a different story over the week. let's start with the day, first. the stoxx 600. among the worst performing industry groups on the banks. they are the headline figures.
11:26 am
by .66%.%, down the cac 40 down by 8/10 of 1%. the big story when it comes to thendustry group basis is banking industry is the worst performing industry group, the ecb saying five lenders under its supervision missed the capital rates in 2014. it also said it would curtail demand on individual lenders. have a look at the other gauges i am looking at today here. over thehe stoxx 600 week. different story. best weekly performance since october, 2015. the european close. stay with us.
11:27 am
11:28 am
11:29 am
♪ stocks finishing the day in european trading. you are watching the european close live from london and new york. i am mark barton with brendan
11:30 am
greeley. let's take you through all of the market action today. it looks like stocks will finish the friday session lower. they were a partially earlier in the day. is how interesting to me the stoxx 600, the european gauge has fared over the week. at one stage today when the gauge was higher, we were on for our test weekly advance since 2011. we then were at our best weekly advance in a year, now we are at the best weekly advance since october of last year. for the week, the stoxx 600 is up by 4.2%. a couple of big movers, europe's biggest insurer missed analyst estimates for fourth-quarter profits because it claims from natural catastrophes. shares down by 1.7%. grappling industry with stricter regulatory requirements, low interest rates that hurt their investment income, and subdue prices in some other markets. this is the owner of gucci .5%.hing lower, down by
11:31 am
it reported fourth-quarter sales that beat estimates by 8%. the gucci brand showing signs of life sales for gucci rising 4.8%, the strongest in three years. gucci, interestingly, accounts for two thirds of profits. the company has been trying to boost its magic on to the creative director. .e has been in his position and looks like his magic is beginning to show. there was no magic in a share price today. shares bite -- shares down by .5%. brendan: you have to look into the state of the uk's government finances to what does that mean for george osborne and his red briefcase? mark: not everyone's cup of tea. for someone like our next guest, this is what we love to know about. britain posted its biggest budget surplus for any january since 2008. willietters -- chancellor meet his full-year forecast?"
11:32 am
right now, the budget deficit in the first 10 months of the year is $66.5 billion and is to come in at 7 billion and the remaining two months to hit his target of 73.5 billion borrowing with more than twice that in the same period a year ago. it matters to the credibility. it matters because the budget is upcoming on march the 16th. it is coming at midst a deteriorating economic better appeared don't forget that osborne wants to eliminate the deficit by the end of this parliament. it looks like his target for looking hit ors miss. i will be kind to the chancellor. he has other things on his mind as his prime minister is in brussels. brendan: thank you, mark. negative rates ever since the corona surprise announcement at the bank of japan. that is something we're all talking about. something banks are allowed to do now. new poll from bloomberg shows negative rates have worked well
11:33 am
in denmark and have not helped in japan. i turned, as i always do, to jeff black in frankfurt it was part of that pulled to help us understand what came out of it and walk me through it. what is the difference in how negative rates are working for small, open economies and larger economies? >> you put your finger on it. it helps if you are trying to manage your currency if you are one of those small, open economies. in the danish case, they have an explicit currency. in the swiss case, they are trying to do something similar. it has been working well enough for them. the danish at a 90% approval rating from the economists we polled. the ecb and doj are must let's -- are much less favorable and certain they will work. brendan: this has been amazing for the last week. every time someone from the fed appears in public, they are asked what would you do about negative rates?
11:34 am
what can the us-led learn from the experiences of these other countries?> jeff: in the central bank and community right now, negative rates are the new fashionable thing to talk about. especially at a time when central banks look like they are running out of conventional ammunition to stoke inflation or boost growth. looking from the experience of europe and japan, there is very little confidence that this is going to succeed. maybe that tells the federal reserve that they shouldn't jump into lightly. brendan: even there -- littlerk: even if there is confidence it will succeed in japan. it won't deter mario draghi or mr. jordan at the smb. it want to turn the swedish central bank. -- it won't deter them. jeff: they can't abandon the path they have set for themselves. they have to defend their
11:35 am
credibility. we heard something interesting from the vice president of the ecb who mentioned if they have to go down that road in march, they will be looking at ways to mitigate the impact on the region's banks. that tells us they are thinking seriously about this and are not ready to give that path of hearing mark: thank you for joining us. jeff black. great piece on the bloomberg. catch that. let's branch out this debate on negative rates and other drivers of the global economy. rob carnell is here. thumbs up or thumbs down for negative interest rates? rob: double handed thumbs down for negative interest rates. mark: for all of the reasons jeff said? roth: and more. it is bizarre we are talking about it for the united states. there is nice inflation data out there. what is this exactly supposed to do? it is about driving your currency weaker. inc. about that in a global context. we can't have a weaker currency. really, time for this experiment
11:36 am
to stop. draghi -- like the japanese did? rob: i don't think he can. what would happen if he were to say -- let's suppose we run the clock forward six months. oil prices tick up a little bit or having got worse. will happen to inflation rate in these countries? they are going up, at least at the headline level. in the eurozone where they have used that is the single biggest argument for doing the policies they have done, inflation is picking appeared the only region are you have optics, credit growth is looking more and more positive. you get to this point, middle or letter half of this year where everything is looking great and there is no deflation risk. he has to come out and say, what, hey, everybody, everything has been more successful than we anticipated. massive selloffs in the bond market. euros go through the roof. overshooting --
11:37 am
overshooting inflation in the ecb? is that wishful thinking? rob: that was interesting, as well. the bank of japan has played a similar game. there 2% inflation target, not getting a million miles close to it. it is priced targeting by another name. if we undershoot for so long. you need to allow for a period of overshooting. you need activity to rise to make inflation happen. you can't keep depreciating your currency to make that happen. it is fake. we are seeing through. markets are seeing through it. the stock market sees threat. time to finish with this madness. anotherdan: let's take numbers in the u.s.. what does this mean for the labor market in the u.s.? rob: i think if you look at the federal reserve's own measure of slack and cumulate them from before the crisis to where we are now, there is very little
11:38 am
slack. probably a little slack, but the aal question is would you, as central bank, wait until you have eliminated all of the slack before you start moving policy back to more normal rates? i always thought they were behind a game on this. it is interesting now -- we see wages look a little firmer, a little bit of inflation. these are lacking elements of the economy. the wages is the most lighting element, of the -- of the labor market. and wey are going up wondered we go down the negative rate route. it all seems as if policy at the moment is exacerbating what little of the business cycle is left rather than try to knock rough corners off it which is what i think central banks should be focusing on. let's play the game. how many hikes should they take and how many hikes will they take? rob: that is the main question. should depends on how the data runs out. economist, i --
11:39 am
know how dangers that is. i actually think they probably shouldn't do anymore. i am forecasting one more, but waiting for a little bit for more data to come through before i whipped that one out. it is looking more and more like one and done at the moment. mark: what about the u.k. economy? is the next move in u.k. roads up or down? forecasting -- you know how it works -- we are forecasting one more rate hike a little ahead of the market. mark: this year rate hike? economists are in that camp. in the fourth quarter back into 2017. rob: the governor seems to be suggesting the market, which isn't pricing that income hasn't got a quite right. economists have missed the mark. in the end, central banks are all looking at things like what is happening to the currency. if they do this, what they undermine? what fragile growth they have. the u.k. economy still looks good.
11:40 am
we haven't mentioned the brexit. i don't know how that will go. if we vote to leave, all bets are off. mark: it is playing off of the currency market. is it too early to say -- to: i would say it is hard say it isn't. there is definitely a chance this is weighing on investment right now. people are waiting to see what happens before they start committing large amounts of capital. there could be pent-up demand if we get the deal that we want. let's try not to be too normative. we get the deal to stay in, that people will vote for. we could see things bouncing quite strongly to the year end. mark: rob carnell, chief economist at aig. topdan: back to news at the of the hour. christine lagarde has won a second term as managing director at the imf. christine our chief lagarde correspondent, tom keene. she is in a strange position right now because she enjoys the confidence of global leaders. there was never any doubt this
11:41 am
term would be written. yet, they are not doing what she asks. how does she get them to do what she says them to do which is you need structural reform? tom: a lot of it is offense make your tenure. -- is offense make your tenure. term to four lagarde will be defined by the events. she enters theoretical he strong because nobody came up with a better phrase. nowand i five years from won't be talking about the new mediocre. she hopes to define the animals that forward. -- defined that and mold that forward. there are two things the imf does. one, they are responsible for hectoring governments into more responsible actions. the other thing is they have to wade income will roll up their sleeves, and work on the details.
11:42 am
how has she been with the details of negotiations that have happened on her watch? tom: i would suggest she has high marks for that with one careful note. william lee of citigroup who is a first-order economist has been that theical stormtroopers aren't there anymore. when william lee was at the imf, this was an institution that went in and said excuse me, here is the way we are going to do it. as you reported in europe, you haven't done that in europe. you haven't talked to europe like they would talk to a given country in south america. it has maybe been the number one criticism. brendan: the other thing they do is they are responsible for forecast. they have been a job and looking at what they got wrong and changing their models. can we place that? tom: that is an important question. i worship the blue book,
11:43 am
the green book, the maroon book. within the mediocre, nobody is saying that about imf research. thing, the quality of the research, they are not turn to game of the market, they are trying to make people smarter. brendan: tom keene and i both vote that christine lagarde should be made president of the world. coming up on battle of the charts, u.s. consumer debt is rising, but not the conventional kind you might think about. i am going to show you what the great deleveraging looks like in the battle of the charts coming up.
11:44 am
11:45 am
♪ mark: time for our battle of the charts. we will look get the most compelling and telling chart of the day and what they mean for investors. you can access these charts by
11:46 am
running the function featured at the bottom of your screen. we are switching things around a little bit today. i will be the judge. of today's battle of the charts. joe is here. brendan is here, as well. sir.take it away, joe: earlier in the week we did battle of the charts, i talk about ppi data i thought showed insipid inflation. evidence of that from today's cpi report. two lines i want to draw your attention to an particular. this yellow line is a service of inflation x energy. why does it matter? ignore what is going on internationally. xflation up to 3.0%, also, energy. core inflation x housing. why does this matter? we know rent has been surgeon. we would like to strip that out and see if there are signs of inflation anywhere else besides rent. even that is up to its highest
11:47 am
level in multiple years. if you look through the smoke, oil, some of these other things, there are real signs of inflation pressure building. >> does this mean we should ignore -- janet yellen is telling us those gauges of inflation, expectations such as the break even, the u.s. break even, the u.s. breakeven which is close to its lowest levels since 2009? joe: if you look at these measures, they track oil. the idea is that beyond them. when you look beyond and i measures, things look bad in terms of getting to fed targets. mark: that is joe on inflation. clearly, apparent signs of it. brendan, take it away. took a victory lap on inflation he predicted yesterday. i will push back and bill dudley of the new york fed. i do that at my peril, but i will weigh in. yesterday, he gave a speech about the great deleveraging. this is the debt-service ratio
11:48 am
for households. top line is at historically low levels. that is true. whatis the percentage of people pay to service their debt as part of their total income. when you dig into the numbers, we are looking at mortgage debt. that has decreased. here is on again right here. mortgage debt, people deleveraging. they will not get caught with those second mortgages. ,owever, right around here 2012, 2013, while we find out is they are making up for what they are dropping in mortgage debt with automobile debt, student debt, and credit card debt. here's the lesson. you can only be so far. once you get here, you squeeze the toothpaste. they goes to a different part of the two. debt service ratio, toothpaste tube, watch credit card debt. mark: do we have to worry about that yellow line? how high politico? -- how high could it go? aboutn: the concern is
11:49 am
student debt, $1.3 trillion. it doesn't show any signs of abating. that is a huge political issue. ,e know that automobile debt particularly with people with bad credit ratings is increasing by becoming an issue. what i hadn't thought about before is what it looks like when it all adds up together. this battle of the charts is always about did i learn something? and i learned something from you both today. it is a time. joe: you're killing me. mark: i'm giving you a typed or both brilliant charts. absolutely darling -- brilliant. it is the first handshake we have ever had on battle of the charts. [applause] thank you brendan, thank you joe. lights in the fast lane. we take a look at the next big and collectible cars. it is not all about ferraris in their bikinis. -- and lamborghinis.
11:50 am
11:51 am
time for a look at
11:52 am
the biggest stories in the news right now. the ceo of an investment bank is stepping down. after more than six years at the bank, they say they are looking for an outside candidate to replace him. kingly justice regular readers are holding senior executives accountable for misconduct. forming an independent committee to look at strategic alternatives. they say operating -- separating their alibaba from their business is necessary for maximizing. the core rate of inflation rose by the most in more than four years last month. consumer prices excluding food and fuel climbed .3%. that is a sign that companies may be getting pricing power. once falling energy prices are figured in, overall inflation was unchanged in january. that is your business flash for
11:53 am
this hour. weekend warriors, listen up, today's pursuit is all about collectible cars. it is a market that is going strong. upritty blue-chip index is 75% over the last three years. what if you are in the market for a new car? what are they most likely course to become collectible down the road? chris rouse her, her global editor of luxury. the only car i'm collecting right now is a 2005 volkswagen passat. how do i spot clickable cars in the future? chris: everybody knows the minute a card tries off the lot depreciate in value. that continues for a long time. we consider a car collectible once it hits its bottom value and starts climbing. a lot of cars never do that, but a lot of cars that do do it after 25 years. brendan: how do you pick the ones that will become collectible? it is like buying a bottle of wine, white?
11:54 am
chris: it is all like that. how many were made, how many are performing on the racetrack if you are getting it high and supercar. you can get special packages that make the car even more rare, and how people feel about the brands. mark: we need to know examples. our viewers are thinking, come on, tell us the cars that will be big hits in 30 years? what are the examples? in this studyy looked at cars under $100,000. they found that american cars like become arrow and mustang, both of which underwent big revamps in the past two years, will be collectible or they are unique in design, more powerful and better performing they used to be, and they look good. mark: what about the old luxury cars? is it a given that the gattisghinis and thbet of the world will increase in value? chris: you can bet that rare
11:55 am
cars will go up in value. the way you can find the especially valuable ones is the ones with special packaging and special trims. brendan: how important is nostalgia when we look at potential future value of a car? looking at the camaro we just saw, the appeal there is not just what is happening now, but the beautiful, romantic vision of what camaros looked like in the 70's. chris: a lot of intangibles go into it. i'm eric on a has a big part of it. a car becomes collectible after 25 years. a pontiac, which doesn't exist anymore, some people love the pontiac gto. that is going up in value now. we call that a thunderbird? i think so. mark: chris, brendan joked about theat, but are contemporary mainstream models that may make the grade in 30 years? chris: there are definitely the if you look back to the 1980's, cars from the 1980's, cars making money now that their parents drove, those are
11:56 am
increasing in value. on this list, there was a ford focus. if you can imagine buying a ford focus forklift ability. the top-notch models in that line, they think, will become collectible. mark: thank you for taking -- talking to us about collectible cars. you can read more about luxury cars to sue your destination for for the final things -- finer things in life including travel watches and property, bloomberg. a quick peek a european stocks. a fact for you that you didn't know last week, the best week for european stocks since january, 2015. that is it for bloomberg markets european close. have a great weekend.
11:57 am
11:58 am
choose world. choose, choose, choose. but at bedtime... ...why settle for this? enter sleep number and the ultimate sleep number event going on now. sleepiq technology tells you how well you slept and what adjustments you can make. you like the bed soft. he's more hardcore. so your sleep goes from good to great to wow!
11:59 am
only at a sleep number store, all beds on sale right now save 50% on the ultimate limited edition bed. know better sleep with sleep number. >> welcome to bloomberg markets. ♪
12:00 pm
from bloomberg world headquarters in new york, good afternoon, i am alix steel. here is what we're watching at this hour. mexico had a shock interest rate hike this week. the rallybanks say will be short-lived. can the currency survived the plunge and oil prices? be prepping the company for its sale. they say the board has formed a committee to explore its options. it will consider options from potential buyers. oil prices fall below $30 yet again. a record inventory in u.s.. talk of producers to freeze output level. from more -- for more on today's activity, right to the market desk were julie hyman has the latest. a repeat of yesterday, looking for direction. julie: looking for direction here today, we seem to have found ro

0 Views

info Stream Only

Uploaded by TV Archive on