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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the radio plus mobile app, and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: This updates brought to you by American Arbitration Association, International

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Speaker 1: Trade or Business Dispute Resolve Faster with the International Center

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Speaker 1: for Dispute Resolution, the leader, and Alternative Dispute Resolution around

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Speaker 1: the world i c d R dot org. Target posting

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Speaker 1: holiday sales growth at top analysts estimates boost to buy

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Speaker 1: a surgeon online order, so the retailer's heavy reliance on

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Speaker 1: discounts took a toll on profit during the season. Shares

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Speaker 1: are up seven tenths percent in early trading. Treasury Secretary

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Speaker 1: Jack lu says the US wants a more serious commitment

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Speaker 1: from other G twenty countries to use monetary policy, fiscal measures,

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Speaker 1: and structural reforms to stoke demand. Lou made the comments

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Speaker 1: in an interview this morning on Bloomberg Radio and television.

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Speaker 1: Countries that are big economies, regions that have big economies,

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Speaker 1: they need to use policy tools. So you know, when

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Speaker 1: China looks at what can it do, it has to

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Speaker 1: look at how does it stimulate consumer demand? When Europe

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Speaker 1: looks at its tools, it looks beyond monetary policy, what

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Speaker 1: it asks, what can it do with fiscal policy as well?

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Speaker 1: And LuSE said when group of twenty financi chiefs meet

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Speaker 1: this weekend China, the US will be pushing for a

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Speaker 1: firmer commitment by nations and not to try to boost

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Speaker 1: their economies by depreciating their currencies. S and p eveny

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Speaker 1: futures are down seventeen points this morning. Dowie Many futures

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Speaker 1: down a hundred fifty three NAS Docuum many futures down

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Speaker 1: fifty The decks in Germany's down two point four percent

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Speaker 1: ten Your treasury up ten thirty seconds, the yield one

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Speaker 1: point six eight percent. Nimex screwed oil down three percent

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Speaker 1: or ninety seven cents to thirty dollars eighty eight cents

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Speaker 1: of barrel comes. Gold up one point nine percent or

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Speaker 1: twenty two dollars sixty cents at twenty announced. The euro

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Speaker 1: dollar oh nine nine five, the British pound a dollar

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Speaker 1: thirty nine twenty nine, the en one eleven point seven four.

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Speaker 1: That's a bloomberg business flash. Tom and Mike Jerre Moscow,

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Speaker 1: thank you so much. It is folks, eighty nine on

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Speaker 1: Wall Street. The following Bloomberg View opinions and commentary from

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Speaker 1: Bloomberg columnists. I'm Megan mccartell, a columnist from Bloomberg View.

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Speaker 1: Bernie Sanders is something new. A Democratic candidate who's not

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Speaker 1: pretending to represent the party of fiscal responsibility and balanced

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Speaker 1: budgets that's always been more hyped than reality. Obamast consistently

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Speaker 1: run bigger deficits than Bush even after the financial crisis ended,

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Speaker 1: but Sanders has dropped even the act. His policy proposals

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Speaker 1: are full of the sorts of frankly unbelievable numbers that

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Speaker 1: would make a conman blush, from doubling the growth rate

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Speaker 1: to cutting healthcare costs while making coverage more generous. Four

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Speaker 1: former members of the Council of Economic Advisors under Democratic

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Speaker 1: administrations recently penned as scathing open letter about the Sanders

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Speaker 1: fairytale promises. They lamented that this would undermine their efforts

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Speaker 1: to make the Democrats the party of evidence based policy. Unfortunately,

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Speaker 1: the only people who seemed to have read it are

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Speaker 1: other wonks. The idea of Democrats is the party of technocrats.

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Speaker 1: Came in with Clinton, and it looks likely to go

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Speaker 1: out with his wife. Technocratic projection is fine from modest proposals,

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Speaker 1: but it fails in the face of revolutionary promises. The

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Speaker 1: younger generation of Democrats, the future of the party, isn't

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Speaker 1: looking to be told that they can do four point

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Speaker 1: to seven six percent better under a Democrat than under

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Speaker 1: a Republican. They're looking for the kind of transformational change

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Speaker 1: that Sanders promises, and they're bound to be impatient with

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Speaker 1: wonks who demand that they provide a detailed analysis of

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Speaker 1: the future that doesn't yet exist outside of their dreams.

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Speaker 1: I'm Megan mccartell. For more of you, please go to

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Speaker 1: Bloomberview dot com or view go on the Bloomberg terminal.

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Speaker 1: This has been Bloomberg View and Bloomberview Commenterry's can be

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Speaker 1: heard hourly weekdays on Bloomberg Radio. Some stability to the

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Speaker 1: market off of rocking this two hours ago Futures Negative seventeen.

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Speaker 1: Michael dans Fucus with us. She is the founder chief

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Speaker 1: cook at Bottle Washer uh DS Economics Illinois in Chicago.

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Speaker 1: Where have you had a winter? Almost not as bad

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Speaker 1: as as it's left to snow today, So we'll have

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Speaker 1: it been today. If the day it comes back, and

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Speaker 1: then it leads again. If there's no winter in Cargo,

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Speaker 1: then there's no winter anywhere. And that that is you

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Speaker 1: had Storm Jonah at the East coast. You guys, well,

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Speaker 1: first of all, on this program, we do not buy

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Speaker 1: into the Weather Channel's self promotion efforts. We just call

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Speaker 1: it the storm. We don't give anything. But it lasted

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Speaker 1: twenty four hours and it's fifty degrees in raining here today.

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Speaker 1: But my point is is the last two years we

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Speaker 1: have had to downgrade GDP forecast because the first quarter

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Speaker 1: weather was so terrible, and now it's it was actually yeah,

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Speaker 1: and so you know, um, we're looking at a first

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Speaker 1: quarter that is going to be not just stronger, but

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Speaker 1: it looks like much stronger than people had anticipated. Um,

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Speaker 1: we're looking at well, we're looking a little north at

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Speaker 1: two percent. Some people are a little stronger than that.

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Speaker 1: We think the consumer is certainly out their opponents might

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Speaker 1: even with discounts. They are savvy consumers. I think, you know,

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Speaker 1: one thing I want to go back to is that

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Speaker 1: the US economy, we have a consumer that is in

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Speaker 1: better shape than it was and that's helping the economy's

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Speaker 1: immune system not to be affected by the ills that

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Speaker 1: are UM infecting Wall Street. So Main Street is a

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Speaker 1: little stronger with a better immune system now, and I

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Speaker 1: think that's very important. But going back to the fedomen,

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Speaker 1: it's something that that Tom said, and that's it. You know,

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Speaker 1: I don't believe in this, all this soft stuff and

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Speaker 1: all this touchy feely stuff. Let's let's face it. Central

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Speaker 1: banks are only as good as their perception in the

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Speaker 1: market and their credibility UM. What they can really do.

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Speaker 1: Most of their impact is on the announcement effect UM,

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Speaker 1: not on what they actually can do in the market

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Speaker 1: all the time. And I think, especially when you're so

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Speaker 1: close to zero and you've got so little wiggle room,

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Speaker 1: credibility really matters. And I'm really concerned that the fed's

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Speaker 1: communications need to reset button. I really think the FED

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Speaker 1: has given up on things like forward guidance, which I

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Speaker 1: think are important. And you might be surprised at this

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Speaker 1: is even though I think the FED will only raise

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Speaker 1: rates twice this year in June and December, UM, and

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Speaker 1: I think that's all that's necessary. I think inflation that

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Speaker 1: we saw the recent heating up of employe should I

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Speaker 1: actually think we we have an argument as long as

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Speaker 1: we avoid recession. That we will see a little hotter

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Speaker 1: than an inflation on the core level than many people expect,

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Speaker 1: because we've got wages accelerating and no productivity growth, and

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Speaker 1: that's tender for a little bit of inflation. We could

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Speaker 1: use it. It's okay, but I think those things are

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Speaker 1: all important to keep in context. But the FEDS communications

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Speaker 1: really do matter, and they're not getting it. What do

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Speaker 1: they say? How they change it? They keep changing it. Yeah,

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Speaker 1: that's the problem. They keep testing the waters and you know, um,

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Speaker 1: you know forward. Okay, it's an experimental process. But what

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Speaker 1: in theory the FED is trying to do now is

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Speaker 1: they want to say, in theory nothing is predetermined. We

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Speaker 1: want to reinsert uncertainty into the market. We want to

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Speaker 1: say that we don't know our predetermined paths. At the

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Speaker 1: same time they're saying that at the beginning of the year,

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Speaker 1: they're saying, but we're also saying, it looks like every

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Speaker 1: other meeting, How is that not that we're going to

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Speaker 1: raise rates? How is that not poorer guidance? It is,

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Speaker 1: So they need to come to terms with what are

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Speaker 1: they going to say now? In their minutes it looks

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Speaker 1: like they're starting to talk about and I'm not sure

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Speaker 1: this helps because I think more information is actually t

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Speaker 1: M I UM and we're sort of we've seen too

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Speaker 1: much of the kitchen, the back of up before the

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Speaker 1: food comes out, all pretty enough, but they're talking about

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Speaker 1: talking about ranges of UM, how they're going to think

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Speaker 1: about the first gundry, so may go negative. I don't

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Speaker 1: think that's going to help. I need to simplify. And

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Speaker 1: Diane Swark stands a smart guy derivatives. He likes us

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Speaker 1: to keep his name private, but he writes sharp notes.

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Speaker 1: He links fed action the Diane Swarnk world simply to

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Speaker 1: where oil is going? Is there any framework of adjustment

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Speaker 1: or expectations if oil finds a new level modestly below

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Speaker 1: where it's been on West Texas thirty eight seven cents?

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Speaker 1: If oil gets to a twenty nine fifties stasis, have

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Speaker 1: we adjusted for that? You know? It's well, I think

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Speaker 1: we've over adjusted. But um, that's an issue. It's interesting

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Speaker 1: oil prices falling in a global economy that is a

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Speaker 1: net consumer of oil used to be a positive thing.

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Speaker 1: Thunder Naki actually had a very good blog on UM

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Speaker 1: looking at oil prices and this weird correlation we have

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Speaker 1: that falling oil prices are now bad and why is that?

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Speaker 1: Because people are using oil prices as a proxy for

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Speaker 1: global economic growth, and we know this is at the

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Speaker 1: same time that we know some of the reason oil

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Speaker 1: prices are so lowest because we have a lot, a

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Speaker 1: lot of production in the world, more production than we

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Speaker 1: ever had, including in the United States. In fact, even

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Speaker 1: though we've cut investment dramatically, shale production has actually fallen

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Speaker 1: very little, so we're still producing a lot of oil.

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Speaker 1: So there's a supply glut that's exacerbating these perception issues.

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Speaker 1: And I think it's the wrong way. I think people

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Speaker 1: are not are entangling too many things. I think there's

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Speaker 1: a lot going on with oil. I think one of

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Speaker 1: the reasons you've not seen more consumer spending from the

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Speaker 1: falling oil prices, we have actually seen some food services

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Speaker 1: and accommodation the most discretionary thing you can spend out there,

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Speaker 1: the strongest year since two thousand. You can't tell me

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Speaker 1: that wasn't oil related. On the flip side of it,

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Speaker 1: we don't have the accelerant we once did. For reason,

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Speaker 1: credit is not the accelerant to falling oil prices, nor

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Speaker 1: the mitigator to rising oil prices that it once did.

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Speaker 1: Access to consumer credit is much lower than it was

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Speaker 1: in the past for good reason. Credit card usage in

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Speaker 1: this country is down as a share of GDP levels.

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Speaker 1: That is unwinding all of the expansion and credit card

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Speaker 1: of the nineties. So we don't have some of the

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Speaker 1: relationships with oil that we once did. And I think

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Speaker 1: people simplify the oil story far too much, but of

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Speaker 1: course that's how markets think. They're thinking in black and white,

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Speaker 1: and here we're trying to paint a color story. So

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Speaker 1: bottom line, and we've been asking this question. Jack Louse says,

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Speaker 1: there's no crisis. Is there is there a crisis? There's

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Speaker 1: no crisis yet, and we don't want it to become

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Speaker 1: a self fulfilling prophecy. In part of doing that is

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Speaker 1: the SED communicating better and also looking to main Street

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Speaker 1: because we're now shifting a baton. Wall Street has carried

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Speaker 1: this economy for sometime. It's time to broaden it out

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Speaker 1: and shift a a ton and hand it to main Street.

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Speaker 1: And I think they can carry it now. They're um

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Speaker 1: not super fast runners on main Street yet, and we're

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Speaker 1: still recovering. Bet our immune system is better and we're

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Speaker 1: up there and we're moving again, and I think that's

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Speaker 1: critically important to understanding the economy in dancecomics. Thank you

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Speaker 1: for hopefully. I hope they don't get too much snow

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Speaker 1: there I've been. You know, it's a little reassuring if

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Speaker 1: they are actually gonna have a little weaker I think

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Speaker 1: it's our whole Michigan background, or maybe it's that white

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Speaker 1: Sox Cubs whackiness out of Chicago. But she has a

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Speaker 1: beautiful way of finding the middle ground between the polarities

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Speaker 1: of conversation, which I greatly respect. I think it's harder.

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Speaker 1: It's easy to take an angle or a belief one way,

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Speaker 1: it's harder to find the nuances in between. She does

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Speaker 1: that very very well. Sterling does it well off of

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Speaker 1: a horrific European in London Morning One, I believe is

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Speaker 1: where we got to stronger Sterling. In the last hour

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Speaker 1: one thirty nine thirty eight US future stasis here negative sixteen,

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Speaker 1: down futures negative one forty four, No stasis here, We're dynamic.

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Speaker 1: Another hour of Bloomberg's surveillance