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Speaker 1: Broadcasting live to New York, Bloomberg eleventh, Ryo to Washington,

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Speaker 1: d C, Bloomberg to Boston, Bluemberg, Well under It to

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Speaker 1: San Francisco, Bloomberg to the countries. Joe is exam General

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Speaker 1: one nine and around the globe the Bloomberg Radio stap

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Speaker 1: and Bloomberg got gone. This is taking Stock coming up

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Speaker 1: on taking stock. Who would lend their money to the

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Speaker 1: US government for ten years at a rate of one

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Speaker 1: point five seven percent while some investors did. This morning,

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Speaker 1: we're gonna be talking about negative bond yields and US

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Speaker 1: tenure bond yields falling to a near record load. That's

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Speaker 1: coming up. Larry McDonald, he covers the bond market very

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Speaker 1: very closely. We're gonna find out if he's worried or

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Speaker 1: happy about this gigantic bond rally. Well, I know what

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Speaker 1: I am now, I'm happy. Going to Charlie pell news room,

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Speaker 1: Boobermberg Business Flash, and I thank you very much, Kathleen

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Speaker 1: Anky him, the DAL, the SMP nezdak all declining twenty

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Speaker 1: nine minutes to go ahead of the close on this Tuesday,

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Speaker 1: And we're brought to you by Sector Spider E. T F.

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Speaker 1: S why buy a single stock when you can invest

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Speaker 1: F stocks are on track for their longest losing streaks

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Speaker 1: in February, amid growing uncertainty about the UK's future in

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Speaker 1: the European Union. Also, investors are awaiting tomorrow's Federal Reserve announcements.

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Speaker 1: Special coverage here on Bloomberg Radio. Investors seeking safety boosting

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Speaker 1: the dollar dragging down raw material and energy prices crewed,

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Speaker 1: falling to the lowest in more than a week. West

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Speaker 1: Texas Intermediate crewed now at forty eight fifty six, down

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Speaker 1: seven tenths of one, down thirty two cents. Bloomberg's Heavier

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Speaker 1: Blast in London says oil has room to fall further,

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Speaker 1: and that is because of Brexit. Tell me we are

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Speaker 1: not gonna go down to twenty six a borrower, but

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Speaker 1: can we go another five dollars down in the worst

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Speaker 1: case scenario of abrexit. Jest Probably supply and Demana is improving,

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Speaker 1: The market is getting more balance, but obviously there's a

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Speaker 1: big race off scenario. And I've seen that five dollars

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Speaker 1: down if the United Kingdom decides to leave the Judoban Union,

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Speaker 1: and today France's largest ensure a warrant that there is

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Speaker 1: quote an extremely high probability that the UK will vote

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Speaker 1: to leave the European Union. SMP five index down five

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Speaker 1: to two thousand, seventy three, a drop of three tenths

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Speaker 1: of one percent gold or right now up a dollar

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Speaker 1: seventy up by point one percent. And now let's take

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Speaker 1: a look at some of the other stories making news.

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Speaker 1: Thank you Charlie from the Bloomberg Newsroom. I'm Oliver Rennick.

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Speaker 1: This news Upstate is brought to you by the Jeep

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Speaker 1: Grand Cherokee, the most awarded suv ever. The Grand Cherokee

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Speaker 1: continues to raise the bar with its luxurious interior in

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Speaker 1: legendary four by four capability driving at your local Jeep dealer. Today,

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Speaker 1: President Obama says anti Muslim rhetoric from Donald Trump does

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Speaker 1: not represent the America we want. Obama is arguing that

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Speaker 1: treating Muslim Americans differently won't make the US safer. He

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Speaker 1: says it will make the country less safe by fueling

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Speaker 1: the notion among followers of Islamic state that the West

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Speaker 1: hates Muslims. The President spoke after meeting with his national

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Speaker 1: security advisors on the threat posed by extremists. We currently

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Speaker 1: do not have any information to indicate that a foreign

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Speaker 1: terrorist group directed the attack in Orlando. It is increasingly clear, however,

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Speaker 1: that the killer took in extremist information and propaganda over

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Speaker 1: the Internet. He appears to have been an angry, disturbed,

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Speaker 1: unstable young man who became radicalized. Former President Clinton sat

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Speaker 1: down with Bloomberg's David Weston for an exclusive interview from

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Speaker 1: the Clinton Global Initiative America meeting in Atlanta. We need

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Speaker 1: it's more help the WODN tell this work with federal

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Speaker 1: and local law enforcement, with people who may be lone wolves.

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Speaker 1: A New York City police officers severely wounded in a

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Speaker 1: brazen daylight hatchet attack as receiving the NYPD's highest honor.

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Speaker 1: Officer Kenneth Healy and three other officers were patrolling a

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Speaker 1: bustling Queen's Commercial District last fall when a man charged

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Speaker 1: him with an eighteen inch hatchet. Global News twenty four

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Speaker 1: hours a day, powered by our journalists in more than

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Speaker 1: a hundred fifty news bureaus around the world. From the

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Speaker 1: Bloomberg Newsroom, I'm Ulverneck Charlie, and we thank you and

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Speaker 1: again recapping stocks or Laura SMP five hundred indecks now

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Speaker 1: down by three points to two thousand seventy five, a

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Speaker 1: drop of two tenths of one percent. I'm Charlie Pellett

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Speaker 1: and that's a Bloomberg Business flash. This is taking Stock

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Speaker 1: with Kathleen Hayes and Pimpbox on Bloomberg Radio. The yield

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Speaker 1: on the benchmark US government note fell to a near

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Speaker 1: record low today, as the yield on Germany's ten year

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Speaker 1: debt fell low zero for the first time on record.

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Speaker 1: Here to tell us more about the bond market is

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Speaker 1: Larry McDonald. He is Managing Director ahead of Global macro

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Speaker 1: Strategy at a CG Analytics, and he is also the

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Speaker 1: author of the book A Colossal Failure of Common Sense,

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Speaker 1: The inside story of the Collapse of Lehman Brothers. And

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Speaker 1: he is also the editor of The Bear Trap. Larry McDonald,

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Speaker 1: thank you very much for being with us, wondering if

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Speaker 1: you could just tell us your thoughts about the record

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Speaker 1: low yields. What are the implications for this near negative

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Speaker 1: rate on many sovereign bonds? Well, thanks very much, FIM.

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Speaker 1: I think we are within a few days of a

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Speaker 1: classic blow off top in bonds. What's happening around the

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Speaker 1: world is is pure evil. This is pure We're literally

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Speaker 1: witnessing pure evil. Central bankers are putting forcing capital into

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Speaker 1: places it just shouldn't be. We've gone from one trillion

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Speaker 1: of of negative yielding bonds a year ago to probably

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Speaker 1: over eleven trillion today. And the thirst for yield, the reach,

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Speaker 1: the reach, reach, reach for yield is creating a so

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Speaker 1: much systemic risk globally, uh that I think the near

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Speaker 1: term run Uh, it will will end here sometime in

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Speaker 1: the next hours. Why the next forty hours. It's been

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Speaker 1: going on for months. Well, we saw this last thanks Kathleen.

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Speaker 1: We saw this last We saw this on Sebruary eleventh,

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Speaker 1: We saw this last April, and we also witnessed this

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Speaker 1: on October four in two thousand fourteen. And Uh, when

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Speaker 1: you have a rush into bonds like we've seen that's

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Speaker 1: so far and so fast and so violent, uh, you

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Speaker 1: it gets overdone and it's too many people are on

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Speaker 1: one side of the boat, Kathleen. The bottom line is

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Speaker 1: the central bankers have kept interest rates so low that

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Speaker 1: there's hundreds and hundreds of hedge funds, acid managers thirsting

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Speaker 1: for some type of alpha, thirsting for it, so that

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Speaker 1: the student body goes left, the student body goes right,

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Speaker 1: and and then what's happening is too many people are

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Speaker 1: on one side of the boat chasing this yield, and

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Speaker 1: they're gonna get whipside back out as they as we

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Speaker 1: witnessed on October fourteenth, two thousand fourteen, as we witnessed

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Speaker 1: on February and leventh of this year. It's just too

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Speaker 1: many people on one side of the boat and it's

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Speaker 1: not going to take much to get to to really

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Speaker 1: capsize the vessel. Alright, what if you could comment on inflation?

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Speaker 1: Do you believe that it is already with us? Well,

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Speaker 1: we're I think I think we're in a we're obviously

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Speaker 1: in a global deflation deflationary cycle that is starting to

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Speaker 1: reverse itself here in the United States a little bit.

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Speaker 1: But we globally were in disinflation. Uh. Evidence of real

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Speaker 1: inflation in the United States is very suspect. And uh,

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Speaker 1: there's just too many people because of these developed markets

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Speaker 1: have aging populations, right number one? Uh they two number

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Speaker 1: two democracies, Republican republic democracies have promised so many goodies

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Speaker 1: to so many different people that the amount of people

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Speaker 1: that are sitting at home not working in the developed

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Speaker 1: markets is our proportions that we've never seen our lifetime.

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Speaker 1: And so we have young people to fifty the most

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Speaker 1: in thirty years in the United States that are not

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Speaker 1: working that they're just sitting at home. God knows what

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Speaker 1: they're doing, but they're not working. And that's that's not creating.

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Speaker 1: That's not creating. I think that hilaria is that so

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Speaker 1: many people are saying with the central banks have done

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Speaker 1: wrong is take all the way to the world on

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Speaker 1: their shoulders, and we need physical action and the government's

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Speaker 1: giving both people money to stay home, and that's that

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Speaker 1: is not working either, is what you're saying. Now. Are

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Speaker 1: when you said that this will be over, this this

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Speaker 1: super nova of a bondmark rally in four eight hours,

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Speaker 1: do you just mean a little crack back up and

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Speaker 1: we'll see the tenure German buon back above in positive

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Speaker 1: territory for a while and maybe the tenure known in

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Speaker 1: the US s to one seventy or so, and then

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Speaker 1: the rally continues. Well, many people are saying, you know,

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Speaker 1: one fifties easy, one point to five on the US

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Speaker 1: ten years entirely possible. We'll keep in mind you're on

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Speaker 1: the phone with one of the biggest bond bulls on

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Speaker 1: Wall Street that's been around for the last I've been

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Speaker 1: one of the biggest bond bulls. It's two years ago.

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Speaker 1: People were laughing at me when we were calling for

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Speaker 1: one forty on the tenure. So the entire street told

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Speaker 1: us two years ago that we would be at three

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Speaker 1: and a half on the tenure. The entire street of

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Speaker 1: the street told us two years ago we would be

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Speaker 1: at three to three and a half. We have to

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Speaker 1: get we have to get ready for life after lift off.

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Speaker 1: They lectured us hours and on end it was they

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Speaker 1: were all the wrong. The entire street has been wrong.

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Speaker 1: So I think to your point, yes, I think it's

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Speaker 1: going to be a vicious sell off, but once again,

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Speaker 1: it probably lasts a month or two. And I don't

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Speaker 1: think it's the coupe data in the moment of the

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Speaker 1: great reversal in the bond market. That's probably six to

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Speaker 1: nine months away. But I don't think it's happening next month. Well,

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Speaker 1: you know what also is about maybe six months away,

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Speaker 1: is a new president in the United States. Do you

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Speaker 1: think that politics is playing a role in this. Well,

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Speaker 1: that's the thing exactly, tim is is that we talked.

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Speaker 1: We talked about this on our Bear Traps report, on

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Speaker 1: on Twitter, our handles at Convert Bond, and we we

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Speaker 1: just did a report last week with our team in

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Speaker 1: Washington and it was very well received by You're right,

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Speaker 1: the deficit spending Reagan type programs are coming out of

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Speaker 1: Trump in terms of stimulus, and that's going to increase

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Speaker 1: the depth sit and that's when you're get to get

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Speaker 1: a reversal in bond. Derry McDonald had a global macro

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Speaker 1: strategy at a CG Analytics. He's editor of the Bear

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Speaker 1: Transfer for report, and you may recall that he's the

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Speaker 1: author of a colossal failure of common sense. This is

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Speaker 1: Bloomberg Radio. Coming up on taking Stock. We're gonna be

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Speaker 1: speaking with Larry Rosenthaal. He helps manage more than six

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Speaker 1: hundred million dollars at Rosenthaw Wealth Management Group. What's he

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Speaker 1: telling his clients to do with their money? That's next