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tv   Whatd You Miss  Bloomberg  December 8, 2016 3:30pm-5:01pm EST

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des moines, iowa for his postelection victory celebration. he's holding rallies in baton rouge, louisiana and grand rapids, michigan. are plain tonators block the confirmation of the epa nominee. corporateto leverage concerns about climate change and pressure moderate republicans to oppose oklahoma attorney general scott pruitt who has been a fierce critic of the agency he now plans to lead. more americans are optimistic about their finances and about the u.s. stock market. growing optimism about the u.s. economy following the election of donald trump. of stocks next year, 38 percent say they expect a better financial year and the same amount anticipate higher household incomes.
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the time the question was asked in 2010. hassyrian government authorized aid shipments to eastern aleppo for the first time. efforts to evacuate hundreds of wounded people after a deadly attack on a russian military hospital. global needs 24 hours a day by 2600 journalists in more than 120 countries. this is bloomberg. >> live from bloomberg headquarters, i'm scarlet fu. it joe: 30 minutes from the close of trading.
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scarlett: fluctuating out of their best day since the presidential election. joe: what did you miss? banke european central extended the stimulus program at a reduced volume. the dow closed to topping 20,000 for the first time. will take a trip down memory lane inside bloomberg. author michael lewis on his book, the undoing project is a story about psychologists and the way that we look at decision-making. a rise of behavioral economics this hour. a look at where the major indexes stand. abigail has more on those highs. abigail: before we take a look at the majors, we wanted to point out the shares of biotech giant popping higher here of the true highs. of more than 1% on news that the
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trial results were posted and investors seem to like this. we will be following up on this story for sure tomorrow. we are once again looking at record highs for the dow, s&p 500, nasdaq, and record highs out of the dow jones transportation average. it could mean that more momentum is ahead. as for the momentum, it may be strong but not what we had back in 1999. take a look at 3815. green arrow, the dow climbs 1000 points in 35 days for an average daily rate of return. we have this year next to the green arrow, the dow climb above.
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the average rate of return is close to .2%. each increment of 1000 points gained. that rate is 35 day. or are we had, some sort of pull back ahead. on the bottom, we have the relative strength index.
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at the highest level in 20 years. the dow climbs significantly higher. arts enough this is a true cell signal or maybe just a little bit of a cautionary signal out there. scarlet: we will keep an eye on that one. joe: we've had some big antiestablishment votes across the globe. markets have been totally complacent. let's talk to george magnus, an associate and economic advisor. i feel like the cruelest thing which way in advance
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these votes are going to go because he would've just made all the wrong decisions. they expected volatility. >> if you known these things, you would've gone to the hills. it did not happen either. >> it lasted about six hours. >> if you look the political -- below the political noise.
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the global economy is not in great shape. it looks like a number of the , regardless of the political problems, it will be corrosive. they are basically from an investor point of view, i think they are being swamped by decent economic news. >> it is still full on qe or versions of it.
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>> bank of japan is switching its targets. the federal reserve stopped doing qe a long time ago. interest rates might stop rising a little bit more. that, the economy seems to be ok. ?> where does this ago more votes are coming in europe, the netherlands, france, germany . what is the endgame? eu thateurozone or an is different in some meaningful way? ongoing dissolution?
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>> the can't really discount and they can't really allow for the events that may come to pass. if they were to win the presidency in 2017, they end up holding elections this year. movement which is brazenly anti-euro. some of these political risks which we worry about and we don't like he indications of them. with we would be faced something that we have no idea how to price. what happens if the euro disintegrates? i'm sorry to interrupt but that's kind of the scenario
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bloomberg has laid out in the guide to 2017. we talk about the different possibilities. joe: these are sort of like tail risks, what an ugly 2017 could potentially look like for the investors. even if this doesn't happen. ,ive-star doesn't come to power it seems that there are these underlying forces that are not going away. upset.ep asked, this globalization, immigration, the state of the economy in the eurozone. how do these things get resolved even if we don't have these dramatic political events? worst came to happen, it doesn't mean the problem is solved.
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and the political parties will not go away. the countries find it difficult. it may be a surprise and nothing really changes. the whole argument about the integration of europe and if it backwards,ward or go they will get public votes and referendums.
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until such time that we return to normal in terms of weirations of rising growth wish we could switch it on. scarlet: and we can make structural reform a priority. do we see evidence of that? >> there are elements of structural reforms. not just in europe, but throughout the western world.
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it will bite you on the backside. that reason alone, we will go leveraging the government balance sheets. europe is going to much more .lowly the economic advisor to the university of oxford. this is bloomberg. ♪
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joe: what did you miss?
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casino stocks are diving after the south china morning post reported that china is imploding a 50% cut. with the advisor to the china center at oxford university who remains with us. we got this news about china limiting atm withdraws in macau to tighten the ability of people to take cash out of the chinese economy. the chinese government about outflows, it hasn't been as big of a deal. but not since then. is this going to be a story which reemerges as something that is potentially destabilizing? >> it is a big story. december and january was a peak outflow time. then they leveled off.
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the last three or four months, they've been averaging about 60 to $70 billion a month. it's basically getting bigger. so far, they've been trying to on thegs like crackdown smuggling of money across the border. fake invoicing on imports. buying insurance policies from hong kong-based companies. in the last few days, there been some really big announcements about crackdowns and outflows. over $10 billion and over $1 billion if it's not a core business. be $50 million for
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full documentation and scrutiny. it is being cut back all the way to 5 million. and local currency lending by companies to their foreign affiliates is going to be brought under much closer control. they are pretty seriously worried about the pace of outflows now. are worried they about consumers and companies moving money offshore. what is the distinction between the corporate capital outflows? what is more damaging? >> corporations can move a lot of money quickly and in larger volumes. there is a restriction for households. it is the maximum you can export. currency overseas. and chinese families and chinese
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consumers, they do find ways of invading controls. the really big outflows are coming through corporate activity. china's capital flows are pretty porous even though they are controlled which is why the latest bout of controls on companies is particularly worrying. these are going to be subject to credit restrictions. it will certainly be very worried about the drift of policymaking at the moment. >> notable things have happened on that front. the phone call with the president of taiwan and the news that the ambassador china would be a longtime friend of the governor of iowa.
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what is your read on what the relationship will look like under the new administration? >> i think it is a lot about the opinions of most of what the president-elect is saying. you don't really know which way the wind is blowing. you can be half right all the hee if you take everything says it face value. it looks like a pretty smart move and one that is geared toward the personal relationship. we have heard a lot about tariffs and the likelihood the new administration will move quickly to label china a currency manipulator. which is kind of a cheap way of getting or making a point. it triggers investigations which could end up as tariffs.
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wheredifficult to know the bias in the relationship will go. as red,rumps statements you will think that the u.s. administration will take a pretty tough line with china. it particularly on matters of trade. behink they will certainly sector by sector. beember they can't afford to seen to be losing his grip on china's most important external relationship ahead of this very important 19th congress of the communist party at the end of next year. to authoritarian and very strong-willed men might be able to reach agreements about the really important things.
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we are getting into adversarial relationships. tensions will be running high. associate at the china center of oxford university. appreciate you coming on. scarlet: some of wall street's will seeinvestors, we what happens with equity shorts. this is bloomberg. ♪
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scarlet: sears reported yet another quarterly loss. $748 million. it brings a cumulative damage to $9.4 billion. this really highlights it. the biggest loss in years. in the quarter most recently ended.
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the architect behind the sears kmart merger. they help generate cash. $1.5 billion to make it through 2017 comfortably. nevertheless, if you look at sears shares today, it moved higher. the company assured the market that it is fully committed to being profitable again. we are exploring all different angles and at a lot of analyst scratching their heads. it feels like it's been going on for a long time. they have money to play with. joe: seen as wall street's savviest and smartest investors,
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strategies have not done so well since the election. this chart on the bloomberg at the cta macro strategy exposure to equities. as you can see down there at the red line, there was not much exposure to u.s. equities. by what has transpired, everyone has been caught by the selection. they have been racing to increase their exposure. just another category of investor. scarlet: institutional investors are leading that drive. the wells fargo private bank, he said -- >> that would be the right call.
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the market close is next. record highs for the dow jones industrial average. the s&p gaining more than four. or almost four. this is bloomberg. ♪
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anchor: we are moments away from the closing bell. "what'd you miss?"
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the dow closing at new records. small-cap stocks surging for a fifth rate session. straight session. joe: you can watch our closing bell coverage everyday from 4:00 to 5:00 p.m. eastern. scarlet: we begin with our market minutes. another record high for the dow and s&p. thing during right was the ecb. on the: this is imap go bloomberg. in terms of sectors, you have eight of the 11 factors rising. financials up 0.9%, leading the advance. the group is higher by 19% since election day. been big winners on
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expectations that they will benefit from donald trump's infrastructure spending plan. staples, telecoms, those are your bond proxies not doing as well, which has been a consistent theme since the election. lenders,of individual lululemon heads into the holiday shopping season. advanced micro devices seeing a rare double upgrade which means bank of america, merrill lynch upgraded it from underperform to buy. the company says it is the only one that can challenge nvidia in gaining in graphics. express scripts down. the short seller tweeted that the company is the culprit behind the pharmaceutical price gouging. that is one name to watch. now, we do want to mention the casino stocks are obsessed with this.
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all tumbling in afternoon trading. china is cutting in half the amount of cash that union cardholders can pay. joe: let us talk about government bond markets. it yields higher across the board, particularly at the long end. really, the long end of the curve today was dominated by what the ecb did, indicating it would be holding rates shorter. it was a pause i taper and quasi-bench in, but ultimately, the markets determined in the near term that this would be more stimulus or inflation down the road, but shorter in the near term. the german at ten-year. that really tells the story. when we got the first ecb announcement, you saw long-term rates spike up more than they did and people thought this was the taper, and then there was
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more parsing of the details and ultimately, you yields ended a bit lower -- ultimately, yields ended a bit lower. scarlet: a lot of drama. you see that reflected in the euro-dollar as well. it closed down 1.3%. mario draghi said when it comes to tapering, this has not been discussed. it is not even on the table. looking at the euro versus other majors, they are down across the board. we've seen some of those industrial metals taking a hit today. some of those companies not doing so well. iron ore has been red, falling over 5%. zinc down 2%. in crude, back over $50 a barrel. scarlet: let's take a deep dive into the bloomberg.
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you can find our charts using the function at the bottom of the screen. my chart is a great overview of how much of a game changer donald trump's election was to stocks and bonds. it can call it the great deflationary rotation trade. global equities -- you can call it the great deflationary rotation trade. that is roughly the size of the loss in the broadest global bond index, the bloomberg/barclays index. pretty incredible. we were talking to a man yesterday who bought futures on election night. we spoke to him yesterday on whether he is just as bullish now a couple weeks after the election. he says he's not going to run out and buy stocks because he thinks it has run ahead of itself. joe: it is a breathtaking rally. i want to talk about the ecb and aftermath. this chart represents every day on this index2008
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and as you can see, today's move at the very right and of the chart is the biggest jump in the spread since 2008. it really sort of speaks to how investors have interpreted this move, which means higher rates more growthterm for and inflation and stuff like that, but not nearly as high in the short-term as this stimulus is going to continue. taperlly the thought was and then people reinterpreted that move and actually, it looks like a lot more bond buying for on for aould got while. lower rates in the short term. scarlet: "what'd you miss?" european central bank will add money to its bond buying program and extended to the end of next year. mario draghi stressed these measures are intended to maintain the ecb's accommodative presence in the market with draghi repeating that it is not tapering.
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andrew said that the ecb's reduction of asset purchases is a hawkish move. >> it is a stealth rate cut. they are cutting rates without actually cutting rates. they are cutting rates because they are expanding the eligible universe for bonds and down into the one year area, and giving themselves the option to buy bonds and interest rate below the deposit facility rate. scarlet: it was a dovish move. that is what he meant. englander from citigroup joins us now. watching the reaction to the ecb this morning, there were so many interpretations. the first one was surprised taper, and then it got reinterpreted. this looks like an expansion. break us down how you read what the ecb did today. steven: i think first, once again, the ecb copper market off guard because my sense and i am guilty of this as everyone, was
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looking at this as a one-dimensional problem. did they do 80, 70? 80's ok, 70's hawkish. what the ecb advantage convinced the market was that even the they were going to cut their purchases that this was not a taper. they defined taper as saying we are going to have a steady step function going down we have not decided that. we could do 60 forever if conditions decided we were going to do that. one more thing that is important. at the short end, the market participants know they will not be raising rates before they are done, you know, while they are buying bonds, so they said they are going to buy nine more months. you know, that gives us three more months than we thought. they probably will continue for a long time and they can bid the yield down. at the short end, they looked at it as being dovish. why that step in the
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first place? what is that all about? steven: i think internally, the germans want them and the hawks want them to taper. they did not want to use the word but basically, they want to get out of the bond buying business, so i think that the compromise was that we established the principle that we are not going to stay at 80 forever. nineose can say 60 times is 540 billion, bigger than 80 times six which is 480 billion. scarlet: why is it that the euro has it stayed fairly resilient? we kept hearing about calls for parity but it is getting farther away from that. euro-dollar parity seems to be knocked in the offing for the next three or four months. we think itknow, will come sooner rather than later. in fact, we published or 2017 outlook. scarlet: go ahead.
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it will reachnk parity. scarlet: what will be the catalyst? steven: european politics and growth are not going much of anywhere. they will get hit with slow growth in the u.k. we think they will be relatively dovish in the course of next year, plus, everything going on in the u.s.. you know, if they do half of what they promised they are going to do, i think we will see a very significant dollar component to this euro-dollar move. is on mean the dollar quite an impressive rally, but you see more in the future? steven: i think so. when we asked our clients what they expect in terms of fiscal policy, still pretty moderates. maybe a quarter percent next year, half percent in 2017. joe: added to gdp? steven: yeah, and half percent
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in 2018. that is much less than what they are saying. if we actually get that kind of stimulus, and one of the issues we raised in the outlook is basically this. it is like you are driving from new york to los angeles. we are looking at fiscal and saying, how fast is the car going, and what direction? that we have no idea whether we are in kansas or nevada because we don't know how close we are to full capacity, and that risk that even modest fiscal policy takes is over that gap and puts us beyond full employment and full capacity territory. i think it is manifest that it is not been priced that way. scarlet: i want to talk about that handoff. mario draghi acknowledged that political uncertainty is out there and the role central banks can play in that is to keep a steady hand. after years of what felt like setting the terms, central banks
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, it seems like, might be playing more of a supporting role. how do you foresee their leadership role in 2017? steven: we talked about politics , central banks stepping back. most central banks in the world would prefer if they could hibernate for the next year and a half. [laughter] steven: basically take the weight of the world off their shoulders. and we are already seeing some issues. the fact that bank stocks have rallied and we are debating whether credit extension will increase because banks will be more willing to -- versus the standard view which is that lower rates create demand, i think that is part of that. central banks really have no good handle on what that trade-off is, so i think they would prefer fiscal. joe: steven englander, at citigroup. we will talk more about dollar strength and the consequences for markets, the economy, global
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trade, all of that, next. this is bloomberg. ♪
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>> let's get to bloomberg first word news this afternoon. john glenn has died. he had been hospitalized in ohio for more than a week. he was the third u.s. astronaut not in phase and the first to orbit the earth. in the senate,rs representing ohio. he returned to space in 1998 at the age of 77. john glenn was 95 years old. president-elect donald trump intends to pick fast food executive andy as labor
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secretary according to bloomberg's bma. an outspoken critic of the obama administration policies. the person who heads parties and burger king says he opposes the department overtime payrolls. chuck schumer says the nomination would favorite alien heirs, not workers -- favor billionaires, not workers. president obama and george w. of americans0% approved of trump's cabinet appointments. in 2008, 70 1% approved of obama's cabinet appointments. in 2001, 50 8% approved of -- 58% approved of bush's appointments. i'm courtney collins, this is bloomberg.
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much,t: thank you so courtney. as the dollar rose versus the euro or had been, gained spread amongst other g 10 peers, causing the dollar index to reverse. you know what? this is the one week chart and it is not loading properly. steven englander is still with us. we talk about the dollar strength, we thought hit trade and corporate profits -- we saw it hits corporate profits. do we think the same thing will happen this time? steven: i think so, but if we are talking about the rally that began in 2014, i think the market and even the fed was very pessimistic about the impact and it turned out to be much less dramatic than they expected, so i think there was a fear factor because at one point, i think the dollar rally was the
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strongest over an eight-month period that had been in 70 years or something so they were really nervous, but the damage in terms of real be doesn't look that bad. that said, adding ahead we have rates higher, and the -- looking ahead, we have the rates higher in the dollar higher, but the wealth offense has not been a strong driver of activity. it would give them more room to use a measured pace of hikes or maybe even pull back a little of thecase this backing dollar and rates does short-term damage. the impact of stimulus may be bigger than people think. i mean, you could make the argument that it will not be a big deal. one trillion over 10 years,
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fiscal stimulus often takes a long time to get out the door. as you point out, if we are close to full employment, it could have a significant inflationary effect. where do you assess full employment and why does this question of the marginal impact of stimulus such a tough one to assess? steven: every assessment has to come with a health warning. i used to do this when i was at the fed sometime ago. it was embarrassing to see what the standard error was of anyone's estimate of full employment. but we have begun to see, you know, the fed indexes, which is picking up, not just the high-end avoided, but the low end of wages, picking up. upward drift in pc. my guess is that -- in pce. my guess is that we have a full employment level close to five, but which going below it has a very slow effect. 4.6 unemployment.
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i'm curious. do you think there is a chance we could see unemployment fall below 4%? andle.t: rih --rehandle. steven: yes. joe: that could be enough? steven: if you do have to percent for two years, that is 1%, and where do you think the unemployment rate is going to go? scarlet: i want to remind us all that we have the fed meeting next week and they are going to come out with data dot plot. this is the most recent one from september. the fomc, a median of where they see interest-rate headed. the blue line is the market expectation. how does the fed go about assessing the impact of what donald trump is proposing? every single analyst knows that we read has lots of disclaimers about this is what we think and there is a lot of uncertainty. steven: i think politically, it
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is very hard for the fed in the absence of a plan and of a legislative proposal to slap something to the forecast and say we think we are going to be basing monetary policy on that, so i think they will say wait and see. once they do present something, that will factor in, and in the is going tose, that matter. we have no idea what they will do yet. joe: another striking aspect of the chart scarlet just showed is that the market expectations for hikes next year in that blue line has converged with the fed nextts for the year. we have been used to seeing every time they update the dots that the fed drifts lower. if we assume a hike is a done deal for this december meeting, all of the expectations will be on the dots. steven: i think it is probably
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going to be similar to what it was last time. they are going to be very careful and i think, if they try to say, look, we think we have a median of three, but not because of trump, but because the economy is going well and the employment rate is dropping, in terms of the impact on the market, that will be even more striking because the market will for while the launching pad whatever stimulus he does, the fed is already telling us that the economy is tight and, you know, even absent trump, they would have to go faster. i think they are going to avoid that and 62. scarlet: -- stick to two. scarlet: we'll talk about emerging markets, next. this is bloomberg. ♪
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joe: "what'd you miss?" it's that time of year where people are making predictions for last year. nomura are warning about things that are unlikely but could be impactful. one of those is the theoretical floating of the chinese yuan. we are back with steven englander. is this in the cards? steven: no. i think they would like to currency to depreciate, but part of the deal they have at the chinese people is that they will keep stability and financial markets and, you know, just opening it up and making it there would be viewed as a tremendous setback for them in terms of what they are trying to look on list. scarlet: a big -- trying to accomplish. scarlet: a big part of that is a chinese leadership change. to makeng has incentive
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sure things are as stable as possible. what will the new front of capital controls look like heading into that leadership change? steven: you know, i think that they actually like what has happened it now because they have been able to depreciate against the dollar without looking as if they are doing the depreciation. they are moving with the basket. my expectation is that if -- the emerging market rallied, it would depreciate against everyone else. of, you know,ort keep the basket when the dollar is falling, depreciate against the basket, keep the basket when the dollar is rising, it depreciate against the basket when the dollar is falling, i think they will continue to do that. joe: we have a chart of the msci emerging market currently indexed. at #down is after the election.
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sharp line down is after the election. arguably, that makes assets less compelling and also an element of fears about trade war and less integration general. if trump really sort of follows through on some of his anti-trade rhetoric, what does that do to global currency markets? steven: i think it would be very negative for e.m.. it would be a negative for u.s. asset markets because the u.s. depends on the supply trade. they are looking at tariffs and those measures as a last resort. what they want to do is try to fix some of the things they see as wrong with trade right now. to go in and slap, you know, countries with big ta riffs, are you going to do it
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with korea and bangladesh as well? i think it is more for talk but also to induce them to change their behavior. scarlet: 30 seconds left. which are merging markets have good prospects in 2017? moderatef they do fiscal, we'll see places like brazil bounce back. the high-yield will still be attractive. of ank we could get some rally in some of the high-yielders. joe: steven englander, great to have you back on the show. steven: always a pleasure. scarlet: coming up, the nfl has seen its ratings dip. the business might never be the same again. we will discuss the outlook for 2017. this is bloomberg. ♪
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>> i'm courtney collins. let's get to bloomberg's first word news this afternoon. the house has passed a stopgap spending the bill. a major sticking point is said to be health benefits for minors. lawmakers may have to pass a temporary one to avoid a government shutdown. the measure would keep the government funded until april. senior military official for the first time said the u.s. led coalition has killed 50,000 islamic state militants in the last two years in iraq and syria. the official said the conservative estimate, but it is more than what others previously
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estimated. the u.k. supreme court has wrapped a full day hearing to decide which had the power to brexit, parliament or -- u.k. attorney general jeremy wright led the dissent for the appeal. >> look, we don't decide which cases are brought. the claimant thing that case, which they did. when we believe that judges were not right and the judgment they reached in the divisional court, the right thing to do is appeal that. we wait to see what the supreme court says on the matter. a clearys there is expectation that the outcome of the referendum will be honored. a ruling is due in january. powerful magnitude 7.7 earthquake struck near the pacific islands, opting authorities to issue a tsunami warning for several nearby island nations. the quake had about 120 miles
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southeast of the capital of the solomon islands. officials facing on the waves -- fate tsunami waves -- say tsunami waves are possible near papua new guinea. i'm courtney collins, this is bloomberg. ae: all right, let's get recap of today's market action. green across the board. we can see the major indices here. the nasdaq up 0.44%. it has not done as well as the election.he it yields on the long end of the curve, higher after that action, which was seen as expansionary. scarlet: "what'd you miss?" 2016 might be the inflection point when the changing media landscape caught up to sports.
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falling daytime ratings. broadcasters spend billions of dollars to air the most-watched shows on tv. coo ofn is the former nascar. great to see you. thank you for joining us. ratings drop is blamed on a lot of things. too many games, the exciting presidential race, colin kaepernick taking the knee and concerns about that and what it says about the politics of players. week and uncompelling -- weak and uncompelling matchups. george: i think it is a little early to draw conclusions. i did research for the network resident. when you look at the key viewing times, the winning percentages 50.teams last year was 6 i think that is one factor, but
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of course, we had an unconventional presidential election and after that, you saw the ratings creep back up again. it is a little early to draw conclusions. one last point, the thanksgiving day game, cowboys and redskins, game in the-watched history of sports. we need more data to draw a conclusion. scarlet: we have seen ratings for upcoming college football games in general, off a little bit as well. the 2016 title game espn ratings were down 22% from last year. the streaming audience was higher. is espn going to regret paying $7 billion for that package? george: i'm going to be a little bit more optimistic. when you look at the nba finals this year, you have a 19.8 television rating. rating,d series, 25.2
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the highest rated game and 25 years. the michigan ohio state football game by 10.4 rating, the highest-rated new time telecast in the history of college football. i think it is a little early to draw conclusions, but media consumption is definitely changing. scarlet: it might be too early to draw definitive occlusions. others might be thinking, how do they did it? -- they pivot? george: millennial's and younger are not consuming media the way i did. in many cases, they are not turning on the tv. at thee to be intersection of digital media if you are a sports property. scarlet: let us bring and what the ceo of walt disney company has said about espn. he is knowledge to slowing growth and the is him talking back with an audience. >> you have to conclude it is a great business for the company, a large business for the company, and it does have growth
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ahead of it, but it is not going to grow at the rate we have been used to. scarlet: it has also gotten massive subscriber losses. what does that tell us about the current economics? george: i think it will remain valuable we are talking about the delivery and distribution channel here it is a going to change and are there going to be economic winners and losers? i think the answer to that is yes. million espn had 100 subscribers paying seven dollars per month. today, it is somewhere between 86 and 89 million subscribers and that is a big difference. that is going to have an impact. scarlet: we thought disney -- a stake in bam tech. george: i'm a believer in what you are saying. we invest in a company much like bam. theym a strong believer
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are changing consumption is going to change and there are real opportunity to build businesses around that, so i believe in what i am telling you today. scarlet: is the content going to change? george: absolutely. we had 46 camera angles for the match and we put up data, graphics, you contract the player, you can check the ball. it is interactive, a merciless, and you can pick the camera angles as a consumer. it you will see more consumer-driven viewing experiences, not to mention when we get virtual reality. it is going to change. there will be economic changes. i think sports will be quite valuable. scarlet: there are a lot of people getting excited about the opportunities that creates. let us talk about how athletes relate to their fans. we have a president-elect who talks straight to the populace through twitter. we saw athletes fall to the players tribune, which allows
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them to connect directly with their fans through essays, videos, and podcasts. do you think this is the new model and do you think it will be successful? george: it is a new model, not the only model, and it will be impactful. lebron james can go directly to his fan base and interact in a way that is meaningful. social media is a game changer specifically with millennials. . think it is here to stay it is valuable to brands and athletes and entertainers. athleteshow do these make sure they capitalize on this new platform when there is so much of a premium put on authenticity and the initial defensive movers think, how do i spend this the right way? george: the best content is honest and sincere. being able to expose yourself in a thoughtful but yet meaningful way is going to be the trick between people being successful
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or less successful. you cannot sell just the now ice cream at the ice cream store. we need all different flavors of ice cream at the ice cream store. scarlet: what about teams, how do they better market their is usedto a public that to authenticity and that direct connection? george: they will have to do it differently. twitter, snapchat, and they will have to engage consumers in a way that is quite different because they will have to sell tickets to events. the way tickets are sold is going to be different using social media. scarlet: your courtside ventures , talk about that because it is a fund that invests in early-stage media companies that focus is on sports. tell us what kind of businesses are emerging as we see this big shift in the media that sports is presenting. george: virtual reality, data, analytics. we are investing in entrepreneurs that are building a different technology that you' uses data and analytics and
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brings content to consumers in new and innovative ways. scarlet: are they to people that have found a platform? george: tech people. technology,at at but also equally great at understanding what sports fans want so it is understanding both that i think are critical components to being successful. scarlet: do they bolster what we already have out there, or are they, could they possibly replace what we have? george: i think it could be cannibalization, but it is also another extension that probably increases the interest overall, and if you want to reach consumers, you cannot ignore that young fan base, so you are either going to be left behind or you can leave. i think a business that wants to grow has to leave. scarlet: there is a possibility of an upset. your best protection for next year is the greatest sports upset? george: i don't know.
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terrific if the dallas cowboys could be in the super bowl. thelet: dallas cowboys in 2017 super bowl. you have it there from george . joe: coming up, we are staying on sports as a lens into the u.s. economy. three agencies in full swing. some players are inspecting big paychecks, depending on the growth of the overall economy. what the free agency market can be used as an indicator. next. this is bloomberg. ♪
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joe: i'm joe weisenthal. "what'd you miss?" how does the major league baseball agency markets serve as
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an indicator of the economy? many players have the option to become free agents in 2018. if the economy is doing well, many will be looking for a huge paycheck. joining us now is bloomberg view columnist conor sen. thank you so much for joining us. it seems, from the outside, that sports salaries are always gigantic whether it is a recession or boom. they always seem to be going up. what do they tell us about where we are in the cycle? conor: baseball this year is looking at total revenues in excess of $10 billion for the first time, so pro sports are actually a huge part of the leisure and services and entertainment part of the economy. it is kind of a bellwether. when you get into it, a lot depends on overall revenues and revenue growth, which impacts psychology and sentiment like it does in financial markets. when you have teams flush with cash, and they are in a spending
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mood, and you have players and agents looking to maximize a when thoseation, horses is a line, you have a chance for a blowoff peak in salaries for the short term. scarlet: one thing you did so well in the column is you compare baseball players to heldtly -- privately -- alex rodriguez, formally of the rangers, is axas great example of someone timed it perfectly twice. the record-breaking deals after the 2000 season coincided boom -- the boom. from a market standpoint, it it is probably the best in baseball history. joe: what did we see in 2008-2009? agency was in
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the economy? conor: sure. revenues did not plunge because rise.orts generally there was a lot of uncertainty. had his ownowner divorce and financial troubles pall sort of cast a over the whole sport. people were feeling uncertain. they were unwilling to log in low contract with very little money. joe: do all-pro athletes try to time it this way or are there athletes you might sort of make the cut relation like, look, things are pretty good right now. revenue for the lead over 10 billion, let us locked in something pretty good instead of something enormous? conor: some players are very
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happy and willing to login ing-term contract -- lock long-term contracts, but they like to set the benchmark because if you have a high salary for the top players, everyone else gets rising tide with the situation. scarlet: you are looking ahead to 2018 and how it could be the biggest year for free agency since 2000. we know major league baseball and the players union resolved their collective bargaining agreement last week to read what does that clear the decks for? conor: the contract they signed was very owner friendly. the tax is -- it is probably not going to lead it is larger break the bank because the uncertainty is out of the way so now young players who typically only have one chance to sign a big contract are saying, it is time for me to go out there and get my big money before any kind of recession or downturn in the broader economy. scarlet: 2015 and it on a high
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for the team and for the cubs. do you see players choosing to stay with the team like the cubs or the indians because of that possibility of being part of making history rather than seeking the best economic interests? conor: the cubs closer just signed a big contract for the yankees today, so with the money in sports, it is like a hedge fund. people are chasing the highest paycheck, for the most part. joe: conor sen, bloomberg view columnist. thank you for the story. i appreciate you coming on. scarlet: we go from baseball to moneyball. author michael lewis is out with a new book that explores the rise of behavioral economics. we get thoughts on his book as well as president-elect donald trump. this is bloomberg. ♪
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scarlet: i'm solid through. "what'd you miss?" -- i'm scarlet fu. "what'd you miss?" michael lewis' newest book is "the undoing project." it is about undoing our perceptions about the decision-making process. tom keene asked michael lewis about behavioral economics. >> one of the things that was really interesting to me in doing the book was the effort people had made to keep him alive, that he made such an impression on people's minds that they do not want to lose him because there are so many
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people who knew him that when they face a problem, they ask themselves, what would amos say? it is their way of looking at the world. presence, heicals is a relic. the stuff you left behind in the world. tom: it is essentially lennon and mccartney. they were that an extra quickly linked. you have the tragedy of his death. whatever they do separately. it is a marriage, as i know, where there is all this pressure on the outside world because it is an uneven status in the marriage, and, yeah no. the relationship was for me the way in. -- there weres two such powerful minds. tom: you wrote for decades about finance, and the latest book on the frequent trading and all that, the big short.
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when you look at all of these books, it comes to the shop of our new president-elect. michael lewis' view of how america and particularly american finance will adapt and adjust to the certitude of mr. trump and i would suggest it is the certitude not in this book. these guys are the ultimate anti-certitude, weren't they? michael: yes, they were. tom: they never went like this. they never did this. michael: they also would put a pencil between their teeth like that. [laughter] michael: i tell you what, they would look at trump and be terrified, i think. isthe center of their work 18 awareness for the celibate -- for thewareness fallibility of the mind. we need to understand that we are wired to make mistakes so we can correct for them. life thinking you are infallible and your gut instinct is so great, you will
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commit horrible mistakes. you are prone to them. that is the first thing i think they would have said. they would have said this guy is dangerous because he does not even realize. he is dangerous for other reasons, too. how the financial markets get their minds around trump i think will be impossible. at the same time, he is certain about everything, he is totally unpredictable. basically the bottom of this, he's a weird dude and i don't know what he's going to do and i don't think anybody will be able to predict it, either. joe: that was michael lewis, author of the new book "the undoing project." it is time for the bloomberg business flash, a look at the biggest business stories in the news right now. time has hired banks to help field take over. that is according to a wall street journal report. more against them and bank of america will solicit interest from potential partners or buyers. the iconic publisher of time, sports illustrated, fortune, and other magazine brands reportedly made the decision after
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receiving overtures from investors. the aerospace and transportation topany bombardier plans lash more jobs. they plan to replace the head of its germany operations. the company's president of locomotives will take the a new place. scarlet: they are not on board to replace attacks with a fee on the u.s. companies sales. they want a 20% levy on imports of foreign goods and materials so exports will be tax-free. says that could be devastating to the economy. has asked thehi ecb for more time to put together the money necessary to avoid a state bailout. italy's number three under have
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asks for the deadline to be extended from the end of december to january 20 in hopes that potential investors could boost a capital increase. that is your business flash update. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪
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scarlet: "what'd you miss?" another record high in u.s. stocks. awn.s like a big johy pmi and ppi released tonight. joe: the ppi increased. i will look at che balance tomorrow and get the indication of what the plunging pound has meant for the country's trade position. scarlet: don't miss this, u.s. wholesale inventories for the month of october. that does it for "what'
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courtney: let's start with a check of your first word news. former secretary of state hillary clinton made a public appearance today on capitol hill
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, to say goodbye to retiring minority leader harry reid. ms. clinton: this is not exactly the speech at the capitol i hoped to be giving after the election, but after a few weeks of taking selfies in the woods, i thought it would be a good idea to come out. courtney: senator reid also took the senate floor to deliver his farewell address. he served in congress for 30 years and as his attorney's leader in the senate for 12. to pick amp plans fast food executive as labor secretary, i now spoken critic of the obama administration's labor policies. an outspoken critic of the obama administration's labor policies. remit has been a fierce critic of how the agency he plans to lead is suing over regulations. and new jersey governor chris christie will not be named to lead the republican national committee. the role and have allowed


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