willem: there really is not one. politically palatable is sort of anything that stimulates demand, -- rate cuts are dim in us are dim minimus. balance sheet expansion does not get to the real economy anymore. really out policy is of oomph. and we have to raise the fiscal policy for the discovery of animal spirits, which is not too likely. forget monetary policy. it has had its day. guy: so donald trump is on the right track when he talked about some sort of a new deal? willem: i do not know about donald trump. i do think we need fiscal stimulus, preferably one that is monetized because that could not impair the future stability of the country, engaging and fiscal stimulus. real rates being as low as they are, even non-monetized fiscal stimulus would be desirable. tom: professor, we were growing to do the single best chart. -- we are going to do the single best chart. normalized balance sheets, the fed, the ecb in blue. do you assume their balance sheets expanded in perpetuity? is that the only way out? willem: most l

willem buiter is with us. all the textbooks of all these people we speak of, including what you taught. if we are zero bound, how do we get off of it? willem: with helicopter money. that is the only guarantee. infrastructure investment in the u.s., finance -- tom: but that comes from washington, from capitol hill, not from the fed, right? willem: absolutely. it has to be a combined fiscal policy action. vonnie: you are saying that we need congress? not shooting ourselves in the foot by raising rates too soon, yes. tom: everyone i know, such as willem buiter, needs infrastructure. your history can lean on that, right? tobias: there are parts of infrastructure that the industry -- tom: at the end of the day with mr. bernanke trotting out his new book, it is about the model of the art criticism being the old model, the phillips curve model, in the basement, a physical model that a w phillips came up with -- that a w phillips came up with. does that model still work? do you believe in the phillips curve? the phill

willem: absolutely. brendan: the other trend is the move away from theory and the move toward a data sets. this is one of the things that seems so attractive about stanford, that they have access to people who understand data and program and algorithmic thinking. it is a different kind of economics. that the datation is a west coast invention -- that has been going on for a number of years now. an enormous promise, but as long as you have wi-fi you can do it -- that is the case in calcutta. tom: for the parents listening this morning, and for many of the students who listen to us worldwide, you get through it, knocks -- you get to economic 101, is it economic history? what is the next desk course? willem: there are three. , economicmics history, and accounting. the one thing economists do not learn at a phd level is to distinguish debit from credit. a fast learning process to get a proper job. it is like the -- we have much more coming up. michael mckee is just off the set. he is wired and looking at his

do you agree, willem buiter? willem: yes. it has to make sure that what is a nasty shock, a self-inflicted wound, does not become a financial crisis. thether, the lines between ecb and the fed have to make sure that liquidity in all necessary currencies -- willem: i hope the helicopter money does not hit the big ferris wheel in parliament as well. willem buiter of citigroup and seth masters from bernstein. as we look at the jobs report, the former chairman of the president's council on economic advisers, alan krueger. this is "bloomberg surveillance." from new york and london, this is bloomberg. ♪ tom: "bloomberg surveillance." francine in london, i am tom keene in new york. we are going to rip up the script in a big way. "rk gilbert wrote a brilliant bloomberg view" column today. here is mark gilbert. thank you for mentioning me. i guess that would help the gray vote. tom: willem buiter with us with citigroup. this is not stanley fischer, this is irving fisher. james tobin of el and milton friedman in chicago all loved the

willem: they cannot file for chapter 9. it also cannot call the imf to come in and provide them with funds. it is the worst of all possible worlds. tom: bring up the chart here. i do not -- madame lagarde is not going to come to the rescue here. this is just one of their bonds from 100, down to 40. they cannot call on madame lagarde or president obama. who do they call on? michelle: they call on their citizens. their citizens will have to endure less public services and pay more in taxes and fees. they will have to learn to live with -- tom: don't they have the limitation of a minimum wage structure? issues where their hands are behind their back tied, because of washington? washington will not bail them out. what is the outcome now that we are finally at this point? michelle: the outcome is that they are going to have to -- they are going to have to start some austerity measures, cut spending even more, and maybe something can come out of washington in terms of -- you mentioned the jones act. maybe that can be changed. cha

that is sort of a willem buiter willem: itsn't it? is a slow decline in the growth rate of employment, yes. not a sign of strength. the u.s. economy i think is -- say, a global growth recession. to find that for our audience, please. willem: a growth recession is is below capacity and the growth rate of output is also below capacity. the fact that the momentum is slowing is important, but it still equates to about a 1% fall in the unemployment rate, even 2% year-over-year. but the question is what happens when we get to the point of labor shortage? tom: 4.9% is not 5%, is it? willem: no, but it really matters a lot, whether any unemployment comes out of jobs or through declining participation. did you see how professor buiter just lectured me there? he says do not ask me stupid questions like that. francine: if you look at wage growth, why is wage growth in the u.s. so difficult to achieve? willem: well, there may well be long-term structural factors that in the past combination of globalization and technological pressure onecular the

willem: absolutely. to the extent that the market fears a funding crunch, you have a proven track record with the european central bank as a lender of last resort. there is no question of self-fulfilling fear driven collapses. it is not part of the picture. tom: bring up the "morning must-read" right now. it would be inappropriate for me uiterk professor b about this. tom: michael moore, do you see any indication in bloomberg reporting that merges will occur? michael: not in the near term. i think the tone from regulators is shifting. you are seeing regulars so focused on banks building up capital over the last few years, and now they seem more open to consolidation in the banking sector, and some mergers happening. the problem is, banks are catching up to those capital rules, and no one feels so comfortable in their capital positions and their profitability picture that they want to take on a major merger, which is often possibly especially upfront, and can drag on for a long time. every bank is working

willem: we will see. today's payroll is going to be important if we get something probably -- means it is a lagging indicator, and the first quarter was terrible, and you cannot blame it on the , as if -- because historically mild winters affect gdp growth. policy uncertainty has been up so much. tom: we have to go to break here. it is a most interesting jobs day. michelle meyer is with us from bank of america merrill lynch, and professor buiter from citigroup. 's chairman of the president's council on economic advisers. will we see a lower unemployment rate, and 8:30? this is "bloomberg surveillance." ♪ francine: i am francine lacqua in london. tom keene is in new york. this is what i picked for our morning must-read. --s is david focus landau david full kurtz landau -- he says -- francine: willem buiter from citigroup is still with us. his main point is that basically so itb is doing too much, structural reform or encourage fiscal spending, so it is the ecb's fall. is not the ecb's fall. they have to

willem: no. i know that there are times that a flattening, a slope reversal in the yield curve has predicted near-term future recession. of course there will be a future recession at some point. some years before that flattening curve or reversing slope curve, but there is nothing in the moment that looks like there is an internally generated u.s. recession on the horizon, no. francine: thank you so much. little bit later today on bloomberg radio and tv, . combination with gary cohn that is at 9:30 a.m. in new york , 2:30 p.m. in london. ♪ ♪ "surveillance," a historic day for the brexit. francine lacqua in london. we have willem buiter leading our coverage this morning. kevin cirilli is our chief washington correspondent, and we get a pre-weekend briefing. you are exhausted, i am exhausted. i suggest the president is exhausted. will he play golf this weekend? what is the agenda for president trump to regroup? kevin: there will not be a government shutdown. until decembern 22 and president tru

willem: i think they will support. leyen?. von der willem: yes. there is opposition but it is not related. francine: thank you so much. we will get back to willem buiter of citi. more on our conversation with philip hammond, chancellor of the exchequer, talking about legally challenging any prime minister who wants to suspend parliament to get a no deal through. this is bloomberg. ♪ ♪ parliament is dead set against no deal and the european union has not changed. the position of the european union remains the same, so the challenge for the new prime minister is to try to work with the same cards that the previous prime minister had, but to play them in a different way that hopefully gets to when a great deal. we have excellent candidates in the diplomatic service and i hope through the normal processes -- i was foreign secretary for two years -- a normal process that takes place one and ambassador retires or resigns, to employ -- replace within our diplomatic service, and i hope that will happen in the case of washington. francine: that was phi

government and willem buiter stays with us. across all bloomberg platforms, we will be joined by jamie dimon global chinan's summit in beijing. this is bloomberg. ♪ kailey: this is bloomberg "surveillance." elon musk followthrough and his promise to take part in tesla's capital increase, buying $25 million in shares. he is the biggest holder with about 19%. creaseock sales in the -- increase liquidity. steep declines in the past two concerns thetoked german manufacturing -- will linger. losinga six quarter streak, aig's profit more than doubled in the first quarter, helping their overall earnings beat estimates which had not happened in a year and a half. tom: it has become an interesting soap opera, anadarko to be taken out by occidental. they will take over african on dollars.a gagilli what are you looking for today? at the ceo of chevron, but what are the next set of headlines? kelly: the thing we want to see now is how chevron will react to all ofth. anadarko has excepted occidental's bid and that gives chevron four days

willem: it is both. clearly, the refugee deal that was negotiated, even though it , is a bigally binding positive because migration is in excess special -- existential issue for the entire euro zone. italy faces a special problem of being a key member, one of the three elephants in the eurozone. proposals are so out of whack both from what brussels will accept and what markets will accept that if they get through with anything like proposal that is still officially part of the government's program, and we will have another sovereign debt exits around october or possibly -- crisis around october or possibly even sooner. it is going to be extremely contentious and difficult. francine: are we over the euro crisis, or can we go back to the existential question, whether these countries actually stick together. willem: we will never be over the euro crisis until they reform the eurozone in a way to make it if properly functioning central bank rather than a system of currency boards as it is now. problem is mos

--willem buiter. worry about populism taking over, leading to an anti- euro sentiment coming from italy? willem: there is some risk of that. we should not overestimate the result of elections. populists get the a majority. the real power lies with the heads of state. that you see a majority of populists taking over. yes, the european parliamentary elections are a concern but it is not as significant as some would argue. professor i can green talked about the immediacy of europe getting its house in , given the migration immigration debate. how do countries deal with this? what does the netherlands do? willem: one needs to things. a common policy for the external border. funding of programs in the countries of origin to reduce the flow and attention paid to the integration of migrants into those countries. they have gone easy on that in europe. tom: conrad adenauer would not want the lazy man's out. the lazyey get beyond man out? willem: they have to start spending on integrating new migrants in the ec

willem: i don't think so. this is the manifestation of the learning process, central banks -- theye to relearn the have to undertaken on a daily basis this will be a daily event. francine: let's go to wendy schiller from brown university, chair of political science. when you look at the world and the uncertainty because of geopolitics, trades, korea, brexit, now there is iran. which is the one that markets misunderstand or are too complacent about. nobody likes uncertainty. business does not like uncertainty, but politicians do not like uncertainty either because it makes voters nervous. that is a big concern for everybody, at least in washington these days, how will voters perceive it? right now the republicans are holding firm. they still believe in trump there they are not unduly affected by the trade situation. by the tradected situation. they are still not abandoning the republicans. as long as that partisan filter holds, the republicans do not feel as nervous or at however, it seems to be cracking overal

professor willem bauder -- professor william bauder. -- willem buiter. the conversation on gold coming up. this is bloomberg. ♪ francine: this is bloomberg "surveillance." we just had breaking news out of spain, opposition parties voted to block the prime minister's budget bill. the approval was blocked by 191 votes out of 350 cast. we were talking about the possibility of a snap election. if you cast yourself back to the protests over the weekend, protesters in the heart of the spanish capital are demanding an election under accusing the prime minister of being soft in alans of talks with cat separatists. tom: what else do we have? francine: let's stick with spanish banks, santander reminded investors the juicy bonds can come with nasty surprises. they rattled the 81 bond market by saying they will skip an option to call 1.5 billion euros of notes next week. the bank cited the need to balance the interests of all investors. joining us is jonathan tice. first of all, thank you. this seems like an important decision for santander, which could reprice in

willem: we will see. data is -- ment way, there is a concern if the under indicators -- if the other indicators are more forward-looking. that thehere is risk u.s. economy is softening. i do not think i have heard the word "recession" quite yet for the u.s., but there is a risk of a slowdown that seems to be underway, not just driven by external demand and distractions. it is domestically driven through excessive corporate leverage and capex. tom: i want to go back to caroline hyde. can you reaffirm the likelihood of global recession? recessionll, a global -- it is a global growth recession. we are close to that. of 2015, ifquarter you correct the chinese data for the obvious factor that is in there, you get about 2% global growth. -- ihat is well below think that is as close to the recession as you can get. tom: caroline, in the econometrics undergrad course at factor, the fudge factor is one of the detestable ideas. pick it up, please. caroline: talking more about the dollars -- we have seen some dollar

willem: it is not financial repression. tom: o, come on. willem: it's unpleasant for retirees. it's an equilibrium out,. there is investment weakness. this is part of the secular picture of the low to negative risk-free rate for years to come. that's not going to change unless you get much faster growth and much higher investment rates. tom: this is a huge deal for savers and retirees in america. i am off my podium here. hear the you can helicopters circling above us. we are less than half a mile from downing street. , it is herjaguar jaguar. we expect her to go see her majesty the queen and we're expecting the prime minister to tell her majesty she can form a government. robin: yes. i think it will be a relief to the country if she can do it. people would rather work with the uncertainty around theresa may than the uncertainty without her. there has been enough chaos in the united kingdom. francine: how long can she last? more legitimacy. she got the opposite. roland: she can last, but in a different way. she has to embrace the reality of the new parliament and be much more ac

willem: it is extremely difficult. neutralelieve that the real rate, the risk-reveal rate for employment and the inflation target is 2%, then we are way behind the curve. we should be at 3.5%. if you believe the rate is zero to negative, then we are only a little bit behind the curve. i think, yes, we are behind the curve even with a dual mandate. tom: we will continue with professor buiter from citigroup. we will do that on radio. francine, congratulations on the dimon interview. i thought he was remarkably political about e.u. banking. francine: he was. tom: jamie, here is an exclusive. tom keene and jamie dimon agree. francine lacqua, wrong again. have a great weekend, america. coming up, william gross of janus capital will make us brighter after the jobs report. phil about her again -- willem buiter on bloomberg radio. this is bloomberg. ♪ jon: friday, a blowout adp report sets the stage for higher expectations ahead of the monthly jobs number. the market shapes up for a rate hike later this month. a commodity ra

she has allowed willem bauder to attend -- willem buiter to attend as well. we are thrilled with what is going on in trade. we will talk about that later as well. in the transfer of the writing that you people do for michael center to me, the tendency is 3.4% global gdp. let me begin with a guy who wrote the last note, is that a global recession? willem: by no means. this is pretty robust global growth. the center projection is definitely not for recession, it's the risk around it, slightly more on the downside then they were a few months ago. tom: what is your geographic tendency to focus on? you are going to generate a new global outlook, is there a certain geography dr. mann is looking at? catherine: i am looking at deploying a more micro data analysis approach. tom: you are bringing paris to new york? catherine: i did bring some croissants and it is difficult to make that move. approachesata understand -- in order to get a picture of what is happening at the macro level and citi has a great wealth of macro data and i think we will be able to get a picture

willem: exactly. looking at which countries we have stabilization or improvement of the balances, countries with inflation coming down. china,e out with brazil, and tunisia on top, i would say. tom: in the equity markets today, we will look at domestic multi-cap nationals. do you buy shares today? do you wait it out? the normal reaction is to buy the big stuff. yes, i would say more quality and resilience. thes interesting to see shares that have been doing well. price -- when we had inflation over the last few months, the shares have been doing well are a cyclical, quality stocks. when you have a correction, more worries, the message is reinforced. tom: i want to go to break. there are any charts to show the fragility. this is the global litmus paper. this is the japanese yen. we are breaking down over the next hour and a half. the yen still holding onto support. we will see as the morning continues. stay with us. this is bloomberg. ♪ ♪ >> this is numbered surveillance. you are looking at live pi

willem: i doubt it. at least not anything like the intensity of the rhetoric on trade where he was talking about 45% ericsson chinese goods. as far asration shipping 11 million people back to mexico. there will be some protectionism, but it will be measured. ofs not going to be a policy openness and diversity. francine: does it need to start with the cabinet? does he need democrats in there? people that think independently and are well-informed and it may have just read with them in the past. tom: we are getting perspective this morning. the markets are on the move. it's a subtle market. the bond market is closed. there are some serious currency moves at the bottom. that's all you need to know. , 2112 onncies crushed mexico. that's extraordinary. stay with us. this is bloomberg. ♪ we aim to please. the capital and the drama yesterday of president-elect donald trump on the balcony with his wife. the library of congress in the background. more importantly for the democrats on the hill, in the foreground

willem: it is the most anticipated event. you have to think about it that recognition that china appears to be slowing down. they are the most commodity intensive producing country in the world. is a supplye factor. i would not pay massive attention. commodities as a whole should continue from a leisured global growth. tom: that is a good way to wake up to commodities. us.em buiter will stay with this is the news flow. extraordinary. kevin cirilli will join us. francine in paris. we will have jean-claude trichet , the former head of the european central bank. really looking forward to speaking to jean-claude trichet about his france. , would you need to know, oil with a bid. worldwide, this is bloomberg. ♪ ♪ this morning, finally a slippery bid. the oil ampligen is halted. the commodity plunge signals tightening from china and chair yellen. thanks, james buchanan. one of the many moderate republicans in the senate. will they cave in and cause the death of obama care? francine is in paris. good morning, everyone. this is "

willem: i do not know about that. nobody knows the details of how he got here, but along the way there will be somebody who was not a pleasant character. tom: who represents him? a normal basal agent? who is the guy who will be 40 in july with the yankees? brendan: do not look to me. tom: jeter is gone. does he have a normal agent? willem: a handful of these agents work with cuban players and the allegation is -- some of them face prosecution. tom: some are represented by the cuban government? willem: no, it is smugglers who work with them, and then the smugglers try to demand a cut when these players sign. tom: the smugglers out of haiti or the other nations working with cuba as well. amazing. what did you observe in cuba this time around? is it changed? wil il don't know. e we willm see: tomorrow these diplomats coming up from cuba. they will continue the conversations with officials. one of the main focuses is going to be on opening the embassies, and the logistics of that, getting supplies. they want the american

willem: yes. i think we stay in the 2.5% range year on year, which means there is no dramatic pickup. with unemployment entering into the three plus region, we are going to see upward pressure on wage growth and even somewhat less on u.s. labor cost growth, particularly picking up as the late stage of the cycle and more has taken place. show a chart. we are doing this to impress willem buiter how we do logs on surveillance. this is off of stan fischer's important speech. it is the fed funds target rate distorted because we are showing percentage change. the point is we are finally away from altered accommodative. aren't we? where a. is the fed begin to impinge normally -- where up here does the fed begin to impinge normally? -- the shortld say run at least 50 basis points. in the slightly longer run if you were to stay on the current with underlying recovery going on the way it is, it would be at least 100. tom: that's a lot of math. that's right here. so there are the two lines. on bloomberg radi

tom: willem buiter with us from citigroup. this is bloomberg. ♪ tom: from london and new >> getting -- getting ready for your weekend rating as well. nejra: area workers will help we've the block off of stimulus. sayingraghi this morning an issue keeping brexit down is e lack owage growth. a big change underway after funding the economy coming the stimulus that has brought down unemployment. we are well under inflation expectations. shouldect of inflation not be persistent. as the labor market tightens, the relationship between slack and rate -- wage growth should be read inserting itself. we have to remain patient. taylor: a panel of dealers and investors several but the debts payment delayed by venezuela and a state owned oil company triggered a payout. there were billions of dollars in the credit derivatives, after a court ruled that they had to pay. association,an announced $1.3 billion tied to venezuela, and $250 million otherwise. there is pressure from a military generals for the highest figure to resign, according to

willem: we see a little bit of strength. when we compose a bond portfolio for our clients, you automatically end up in the u.s. dollar space. you do not end up in the euro space because it is too low. the consumers -- i think that is what the picture will show. the consumer might have picked a little bit in terms of sentiment, -- might have peaked a little bit in terms of sentiment, but it is still weaker. tom: i want to go to getting to january 15. one of the things the pros do is ignore the holiday and get onto the beginning of the year. sels, what is the to do list as we frame for january 15? in 2020,e think that the u.s. will remain our favorite market. we are positioned in really the growth sectors and in technology and in the longer-term trends, because again, from a cyclical perspective, it is difficult -- you need to weigh the relatively low growth outlook against a potential bottoming. it is both a level and the direction that are important. so people still -- i think in 2020 people will feel much more comfortable w

we are back with willem buiter of city. tomorrow, bloomberg television will be speaking to the italian finance minister about the future of italy, telling banks about the future of the european union. trying to get bankers to move away from london. look for that interview at 5:00 a.m. in london and 12:00 p.m. in hong kong. this is bloomberg. ♪ tom: on this historic day in london, francine lacqua with willem buiter. i am tom keene in new york. there is so much to talk to about in this moment. why don't you go to the majesty of what we are seeing in london? francine: what i am focused on is the perception. wrongly, there is still a kind of divide between people who think the u.k. economically will do better because they voted for brexit and the divide amongst people who wanted to remain. that it is the end of the world for the u.k. >> it is neither. it is not the end of the world from the economic perspective. it simply will be a cyclical blow for the u.k. and for ever after, a slightly weaker path. in some way it is the en

willem: this goes back to the 1960's. they were defeated, their leadership which had been in place for hundreds of years, suddenly they were treated as second-class citizens. since 2004 and 2000 five they have been very critical of the central government. we have seen that continuing to this point. they now control large segments of the country. brendan: i want to read you something from bloomberg view. completely ahead on every link out of the pentagon. the saudi arabian-led intervention. "the u.s. had only a brief warning that saudi airpower was about to be unleashed." what does it mean that saudi arabia is building coalitions and making decisions on its own. willem: they gave about an hour's notice to central command. there have been discussions among the gulf groups over the last few months. the fact that they are able to operate this kind of operation on their own they are getting a bit of oversight in terms of logistics and in terms of intelligence on the ground from the air from the americans. the idea that this co

davide serra and willem sels with us. nextnet sour, -- in the hour, a to break -- a debate about immigration. this is bloomberg. ♪ ♪ >> the conference will start with issues on housing. francine: a news conference with opec has started, a continues briefing the press following the meetings understanding there will be more cuts coming. iran trying to find ways to export oil with sanctions from the u.s. we spoke to the oil minister of inn earlier indiana -- vienna. >> it has a negative impact on our economy. we do not resist against this sanctions not legal against iran from the united states. are finding ways to turn the sanction and export our oil. >> reports you are still selling to china and even europe, you cannot name names i know but can you confirm you are still selling to some customers? >> i cannot say anything more. >> the oil market wants to know how much if at all iranian oil is leaving iran. some statistics are out there. >> it is the right of the customers and producers to know the figures. manipulated by

if it was a missile attack and happened so quickly, willem marx, any remarks? >> they have the ability to figure out an acoustic footprint. they can decide what kind of strike it was, whether was a bomb or missile. we have heard from the u.s. government it was indeed a missile strike, but it may be up for to get a better sense of timing -- a be able to get a better sense of timing and it's impact on the aircraft. >> there's no risk it could have destroyed the black box? >> aviation expert saying today these things are really, really indestructible. we have seen it time and again with other aviation crashes. >> and earning season. >> there are markets out there and copies -- this is our earnings edge brought to you. on monday, we have chipotle, netflix and texas instruments. >> i will be trying one of those this weekend -- >> which one? >> chipotle. >> we will be right back will stop this is "bloomberg surveillance." ♪ >> good morning, "bloomberg surveillance." i am tom keene with scarlet fu and adam johnson. the conversation with steve miller, one of the most

theory.has been a we will continue with willem buiter. you so much, thank in berlin this morning with the marketing -- with the markets moving dramatically. in the next hour, the former chief executive officer who literally came up with the word "exclusive." look for that on "bloomberg surveillance." dow futures -67. it is "bloomberg surveillance." good morning. ♪ >> good morning, everyone. "bloomberg surveillance." for the morning must read, here is brendan greeley. >> mario draghi spoke on the 27th. this was in helsinki. he said to ensure countries are better off being in the monetary unit when the shock hits them than outside, we need other ways to move them across the less -- the more public risksharing we want, the more private risksharing we need. is the integrated consumer banking union the fix? unit andthe banking the capital markets union. that is private risksharing. getting there slowly with the banking union, with the capital market union we are miles away from home. at least for retailers. >> was his diagnosis correct, that

willem buiter joining us with his work with citigroup. then we turn to a different style of macroeconomics. has been a careful student of the domestic economy with some controversies i might say, writing for the new york times as well as academic services over the last number of years. here on the present state of america is paul krugman. paul: we are in big trouble. back about a month and a half ago, i was laying out the bad scenario. it was clear we were going to have a couple good months of recovery. there was a lot of pent-up demand for people weren't allowed to do. the bad scenario was that we would have a spike in covid-19 cases that would lead us to have toinstall -- lead us to have stall and backtrack. we are going to get a jobs report on thursday, which is going to look good but it is going to be in the rearview mirror. it is going to be a dead cat bounce, and it is clear that the high-frequency data and everything we are seeing says we just hit a wall because of the spike in cases. >> let's stipulate for a second that in order t

joining us right now is bloomberg's willem marx. what is going on at the dam? you told us it was a key part of infrastructure. what is going on right now? >> i am now a few miles further down the road from where i was an hour ago. we were turned back by forces from going down to the site of the dam. journalists other got through their earlier today, but they are saying it is not very safe at the moment, and working through some of the explosives that were left behind by the fighters. we are actually a few miles away right now. what are you hearing from local people about security there, as you were on the ground, speaking with locals, observing everything around you -- what are they telling you? >> well, right now, the village we are in is at the base of a mountain about 16 kilometers to the south of here, the islamic state fighters are still base, i should say. the locals here are incredibly -- 7000 inhabitants normally. the majority of them are in the turkish border region. some are trying to seek asylum elsewhere. there are currently about 100 men here. no w

with us willem marx of bloomberg news. indira lakshmanan. >> i have heard from sources that the president is possibly going to address the nation from the white house before he even travels to new york. the white house has not come from that, but we do believe that some sort of statement will come out explaining what they are doing, and this is something that willem and i were discussing before. in the course of the attacks against isis in syria, very interestingly the united states has also done a number of attacks against a group that we basically never heard of before -- >> they have snuck in there and attacked them eight times, led al qaeda veteran who at $7 million on his head. they consider a major threat to western interests, a group comprising yemenis, pakistanis, afghans -- >> when i think organizers of the islamic state, what is the difference between them and isis? operate in syria where they can pick up western recruits. >> one important thing about this is the idea that as far as we know, isis has not presente

willem marx is in sao paulo. he joins us with more. good morning. it was really a very unexpected result. the incumbent walked away with around 42 percent of the country's votes. in went to aecio neves, third place over the last month. maria silva, 21%. later thisthat month, in three weeks' time, october twice six, we will have a runoff. the top two will be competing each other. anduch a big run out brazilian stocks because everyone was hopeful that maria silva, the opposition to rousseff, was more pro-business. here is someone who is even more pro-business. talk about what the two remaining candidates are promising. one of the challenges that dilma rousseff is facing is controlling inflation. it is about targets. this is something that neves last night said he was going to focus on. the government under this president has been able to try as many options as have been available to it to control inflation. according to neves, it has not done a good job. there are issues over the central bank, the question of monetary policy. something that dilma rous

willem: jobs will have to change. over the last 200 years has been a lot of innovation and jobs have been destroyed but new jobs have been created. i think people will have to adapt. clearly, anything that has to do with the human touch, with human contact really counts so jobs will be lost but jobs will be created. francine: what does that mean for stockpicking? willem: there is this contact -- this idea not just in technology but it across sectors, there are what that will explore technology has to offer to their dented. anderms of productivity others will be left behind. those superstar firms are the better,t can pay people and continue to create jobs. francine: you come out with their global investment outlook today and i guess you are looking at very similar things. to try and look at the trends of the future, so what are the big questions we should be asking ourselves? is it going to be carmakers or technology companies at the forefront? will be aechnology very important driver going forward. right now what we a

willem: there is certainly the possibility of opening a private company with foreign ownership. not a public listed one. security is a concern. also real estate. if you are trying to invest in a real estate company, you will run into difficulties. in terms of further easing restrictions, these are hurdles here. people do see this changing two or three years down the line potentially. but that is speculation. brendan: thank you. you were just in riyadh, martin. one of the purposes of opening a stock market is to improve competitiveness. can that happen? martin: it is something they are keen to do. the plan is the biggest there of its kind of facility around the world. they are making big efforts, but there is this tension or sort of paradoxes that they want to open it up and maintain control. for security reasons -- not this similar to the chinese. brendan: will this improve governance? martin: ultimately it will. i think large institutions will overtime. brendan: coming up, we are going to berlin. we have hans-werner sinn arguing loudly and frequently for a greek exit. we will g

willem marx is on the ground in erbil. does it time with what you have heard from people there about the behavior? good morning, scarlet. west of here around the most old am, villagers i've met are terrified of this group. the only chance they have given that this group all praise and four by fours is to get up to the mountains. we have seen that with a lot of yazidi groups. i had a chance to get to trucker -- to get to a frontline city against i.s.i.s. they do worry that when these areas get overrun, all the rumors and circulating are about their brutality. >> a lot of brutality and the flight to safety, we have seen what that has done. from what you have seen some of who you are talking to, is anyone there benefiting from all of this chaos you are describing and all of this violence? >> one of the things i was looking at yesterday, scarlet, was oil and refinery capacity in particular. the major oil refinery here has been shut down, i.s.i.s. has taken over that territory. kurkik, when the capacity comes back online, this

willem marx was there. the first time she was elected, the question was how much like the president who handpicked or was she going to be. ? whatwas the question this time >> can she get anything done this time? there's a scandal at the state oil company, and a lot of members of congress are likely implicated in the scandal. newspapers are saying as many 30 -- as 30 congressmen may be named, and that may make it increasingly difficult for her to pass new tax regimes, which many people there are saying are necessary for the economy. >> it's particularly bad for her. her whole platform, the last time around, was that she was clean and not corrupt. >> she was chairman of the board of petra brass in 2003, she denied any wrongdoing. but her party is going to be implicated in this. a lot of the larger companies in brazil have been involved in these alleged kickback schemes. a lot of their work is public works programs. that scene is important to economic revival. if they are implicated, if work stops on these mas

do you lean toward william bauder and -- toward willem buiter and rogoff? is this ammunition to wait? richard: absolutely not. i completely disagree with that. my gut is that had we not acted we would certainly be in deflation, not a deflation spiral. if deflation occurs after inflation, they are costly because credit markets are nominally based. going from 2% to minus one in that transition is a killer, but once you get to minus one it is not necessarily the end of the world. i think that is the key. deflating after inflation is in or mostly costly. francine: richard and james, what is the probability of a fed rate cut next year? richard: next year -- oh, my goodness. i personal opinion, i would say 20%. maybe 15%. tom: james? james: i would be similar, maybe a little lower, the 10%, 5% area. tom: so we will all stay employed in the media. vonnie: janet yellin is expecting inflation to crawl its way up. james: you mean the hats -- you mean the second hike, right? you said cut. vonnie: hike, right. richard: we would like to see that. the dotsly, we think di

willem buiter is front and center on this. peter hooper is front and center on phil about her, steven wieting -- on willem buiter, steven wieting's boss. academics are suggesting negative rates under duress would be -3%, down in this this entity. several factors per number one, you get to -3%, everybody is taking money out of banks and putting it in their mattress. number two, people are getting ready to retire and are saving more, not less. they realize the return on their assets will be much below what they thought it was going to be originally. number three, just the uncertainty created by moving this far -- about, that what this is uncertainty? justn: no, it is not uncertainty. as peter mentioned, we have productivity growth at its slowest pace since the 1980's. people joining the labor force over the past year has been a bright spot. why that is happening seven years deep into a recovery suddenly when it had not their bank, that recovery -- when he had not been there, that recovery should have happened earlier. on the cha

we are joined by willem marx, it has been looking into the logistical and financial ramifications of hosting an ebola patient. any indication about how caregivers in dallas, the nurse and the second worker, might have contracted the disease? what are people saying? >> there is an ongoing investigation. a few experts in the seal in terms of contamination experts are saying that the chances are that it was something to do with the way that a protective gear was being taken off. details, a lady in australia was talking about this. you take one glove off with one hand and have to use a bare the other glove. that may have been a point of contact. up in thew case crops u.s., what preparations are being made to prepare and care for that patient? people have had time to see the worst practices and the best practices. >> you mentioned a shot seen that the cdc will be sending around the country. the effectsabout that there will be 50 different hospitals, each state will have a designated hospital. some epidemiologists saying this could be a concern. as a patient walks into hospital a and is tr

writeswith willem buiter, as well. -give me the willem buiter view about the global recession and how that folds into an ambiguity about the u.s. dollar. it is sort of a with her -- even: the only part of the world that is outperforming is the united states to some degree. and this is the first time this year that investors are confident that there is little risk that the fed move is going to be in the east, which is a market change from where they were the first seven months of the year. the rest of the world is kind of mixed. there is no deterioration. europe may be slightly better than expected, but no excitement that the mediocre is outperformance relative to where market was a couple of months ago. tom: do we want to hide in a range-bound dollars? your research is fabulous on this, what we spoke of two years ago. jump condition to a new level of dollar strength. do we stay in range or break either way on dollar weakness? steven: the market is undecided because the central banks are undecided. ecb this week will pr

willem marx is also in havana. you have already disappointed me by saying it's too soon for me to book my trip on kayak. in the meantime, what is roberta jacobs hoping to a, which on this trip? >> good morning, olivia. this is the first visit by such a senior u.s. envoy in 35 years. after 50 years of embargo, that is a big deal. she is part of a delegation that is visiting. they have a series of talks about migration issues, but this trip she will be talked -- talking about turning the embassy into a full-fledged embassy and reestablishing diplomatic protocols between the two countries. last night in the state of the union address, president obama addressed it quite forcefully. >> our shift in cuba policy has the potential to end a legacy of mistrust in our hemisphere. it removes the phony excuse for restrictions in cuba, stands up for democratic values, and dan's band of -- extends the hand of friendship to the cuban people. we should be working on ending the embargo. >> that will be a bit of a challenge, obviousl

willem buiter joined us. -- did so well in her forecasting. jeffrey rosenberg. now we want to pull it back to what do i do over the weekend? what i am owing to do with courage and confidence monday to be in this market. good in the quite foolishness and the smarts of balancing of adjusting, of amending a portfolio. is this the time to be bold? active a time to move to management from index funds? is this a time to have courage? >> yes. i think it is a time to have courage. time to have measured courage. what i mean by that is if we didn't have a pickup in infection rate, if we didn't, right now would be a time to be maximum bullish, because you are exiting recession, entering recovery. you have a lot of slack in the economy that can be worked off and so with that in mind, you should still -- you should tilt bullish. you do have a pickup in infections and you should caution that bullishness some, but we still think you want to be overweight equities. when you think about active versus passive, look out your window. not every company is going to be ok. not everyon

on bloomberg "surveillance", from the new york school of economics, dylan bauder will be joined -- willem buiter will join us in the 6:00 hour. ♪ tom: good morning. bloomberg "surveillance." right now, and business flash with vonnie quinn. vonnie: thank you. the european commission cuts its euro area growth inflation outlook for next year because of my challenging global commissions and lower oil prices . also, a weaker euro. -- but that is down from a projection of one point 9% in may. the recovery is resting on unprecedented stimulus by the ecb who releases fresh predictions in-depth e -- fresh predictions in december. overcoming a slum in trading revenue. the bank says that ned income climbed $1.2 billion, beating estimates. michael o'leary is learning that it comes with rewards. become at least 500 million dollars richer, with a three .8% stake in ryan and, which had a 5% since the beginning of the week. he raised $1.3 billion fortune in 2015.umped that is the business flash. francine: let's talk about u.s. jobs. report but payrolls the potential of moving the tectonic plates of glo

willem buiter is still there. talking about the last eight months of the trial interrelations of this economy the need to restructure. is this the right way to diversify. the mega fund itself is not the way to diversify in terms of domestic production, right? you increase the size of the national savings that you would -- in which you would accumulate. oft happens in terms diversification and new job creation, we will have to see. the only thing i have seen since the interview is enough and that aramco is going to go more into refining and petrochemicals. but it does not create jobs. ways when this massive fund gets invested and diversify it. you get cap creation at home -- you get job creation at home. it will be a huge challenge and a major social, political, economic transformation for saudi arabia. francine: when you look at the price of oil, should they freeze all production to get the deputy crown prince -- they will only freeze all production if iran joins in the same plan. this is geopolitics. wilem: i don

buiteritically, willem says stay here, where the fed is, where the boe is, and do not raise rates until you see growth. others say make one interest rate move and say you are going to get there. david: i disagree with phil about her. to say that is fundamentally wrong. tom: should they raise the rates in december than? david: they should have raised it already. central banks make mistakes. if you go back to 1925, back with the gold standard, a huge mistake. we should not be afraid to say that central banks make mistakes. this has been a fundamental mistake. they should have gone significantly before to remove the uncertainty, to allow capex to develop. tom: when do we see dooley, folkerts-landau publishing at? francine: we need a year. david: not so soon. tom: coming up in the next hour, important conversation with someone who is part of the fabric of american politics three john taft will join us. he will speak about the investing public at this time of zero bounds. stay with us. this is "bloomberg surveillance ." good morning. ♪ tom: good tuesday morning, everyone. from london and f

tom: you need to work day in and day out with the cautious views of willem buiter on nominal gdp. when you see transactions like this, are they nothing more than the capture of nominal gdp? steven: this is the kind of sector and the kind of instrument that grows on a secular basis. this is innovation. tom: financial engineering. yes, that this is an area that is not cyclical. growing farm output around the world is not about the ups and downs of the business cycle, not about the auto industry going to 18 millionn and back to 17 million again. tom: you have been great on this. is this innovation or nothing more than the financial engineering of the modern age? >> the results will not be apparent for a while, but it seemed more like shuffling than accumulation. the combination of large companies does not seem to result in any new release of energy surrounding is this fixed invention -- business -- of businessrrounding fixed infection. i am looking at -- come on, steven wieting, getting money for free. monsanto has something in the vicinity of 17. i have a 0% cost on bayer's 20% debt

you mr.en, we give willem buiter from citigroup. tom: jonathan ferro, thank you very much. right now, professor posen, with us. sinche why can't the clear their banking institutions? german an expert on culture. what is the cultural strength of that allow them to clear? adam: what is interesting here is this is a way that germany is no different from anyone else. they tell everyone to clean up their banks, but they do not clear up their own. both of them are national champions your they do not want to give up, even though deutsche bank, their share in the domestic market is tiny at this point. it is all done mostly by the community and small banks. it is no different than the french looking after theirs or sadly the italiana looking after theirs. germany is not willing to admit that there is a problem. francine: adam, you are really straight talking. when it comes to them, they made need to do something similar to what the italians want to do. adam: yeah. of course, the italians, francine, have the threat that referendumhave this in october, probably, it could cause the gov