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Speaker 1: Broadcasting live to New York Bloomberg eleven three hours to

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Speaker 1: Washington d C Bloomberg nine one, to Boston Bloomberg twelve

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Speaker 1: one to San Francisco Bloomberg nine six, to the Country

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Speaker 1: Series ex and General one nineteen and around the Glow

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Speaker 1: to the Bloomberg Radio Plus Happened boomer dot com. This

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Speaker 1: is Homework, Surveillance and Good Morning. I'm Karen Moscow along

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Speaker 1: with Tom Keene and Michael McKee and the opening Vale

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Speaker 1: brought to you by s C i Imagine, a global

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Speaker 1: operating platform designed to deliver a differentiated and technologically rich

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Speaker 1: investor experience. Find out how se I can help you

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Speaker 1: succeed at se i C dot com slash Imagine. Stocks

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Speaker 1: are lower at the open the SNP five hundred down

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Speaker 1: three tenths per cent or six points to nineteen thirty

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Speaker 1: nine down Jones Industrial Average down two tens per cent

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Speaker 1: or forty four points to sixteen thousand, five hundred seventy five.

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Speaker 1: Then ASDACS down half per cent or twenty one points

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Speaker 1: to forty forty nine. Ten year Treasury down fourteen thirty seconds,

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Speaker 1: the yield one point eight zero percent, and the yield

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Speaker 1: in the two year point seven seven percent. Nine X

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Speaker 1: scrude oil is down one percent or sixty cents to

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Speaker 1: thirty seventies seven a barrel. COMEX gold up nine ten

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Speaker 1: percent or ten dollars fifty cents to twelve ounce. The

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Speaker 1: euros at a dollar ten o four the N one

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Speaker 1: twelve point three six, Tom and Mike Carabaska, thank you

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Speaker 1: very much. It feels like a serial. When we last

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Speaker 1: left the people of Argentina, they were in a dispute

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Speaker 1: with Paul Singer and other hedge fund managers over bonds

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Speaker 1: that had not been paid. Now we are moving towards

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Speaker 1: a settlement and for some people it may be a

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Speaker 1: good deal, and for some people it may not. And

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Speaker 1: that's why we bring in our referee Towsky to explain

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Speaker 1: where we are. I want to get an update on

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Speaker 1: where we are in terms of the settlement with the

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Speaker 1: holdouts and the Argentine bond deal, and then who's the

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Speaker 1: winner and who's the loser. Absolutely so where we are

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Speaker 1: is probably closer to a settlement and putting this all

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Speaker 1: behind us than we've ever been before so we can

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Speaker 1: all move on with our lives. It's been fifteen years. Um,

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Speaker 1: anything to do, I'll retire Um. The Argentina made a proposal,

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Speaker 1: a formal proposal on February five. UH it extended to

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Speaker 1: various types of bond holders and and exactly what they've

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Speaker 1: done so far in their legal steps, UH, they had

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Speaker 1: depending on what you've done in the court, you have

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Speaker 1: different options that pertain to you. The holdouts like Elliott

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Speaker 1: Um and run by Paul Singer Aurelius Management aren't very

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Speaker 1: happy with the deal because the because of what the

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Speaker 1: steps that they've taken and the kind of bonds that

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Speaker 1: they hold, they feel that this deal offers a better

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Speaker 1: resolution to to others like for example, Kenneth dart Um

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Speaker 1: the foam cup magnet. UH he got basically a hundred

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Speaker 1: percent of his claim off of this deal, and Elliott

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Speaker 1: would be getting seventy two point five percent of their claims.

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Speaker 1: So they're not happy. But things are going in the

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Speaker 1: direction in the favor of the Argentines because they've shown

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Speaker 1: this goodwill under President Maki that former President Kirshner simply

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Speaker 1: did not do. They just basically Macari coming back and saying, look,

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Speaker 1: let's get this over with and what do we need

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Speaker 1: to do to settle it exactly? And that attitude has

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Speaker 1: been monumental and changing the opinion in the mind of

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Speaker 1: the judge that's been presiding over this case for for many,

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Speaker 1: many years. He says, this attitude change is the game

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Speaker 1: changer that I needed to see. And as a result,

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Speaker 1: so far, he's been kind of making these decisions that

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Speaker 1: have really gone against Elliott and turned the tables on them.

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Speaker 1: Uh and and in a way removed a lot of

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Speaker 1: the leverage that they had in this whole uh in

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Speaker 1: this whole saga. So we could be seeing a pressure

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Speaker 1: on them to settle sooner rather than later in a

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Speaker 1: way that we hadn't seen before. Do we have a

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Speaker 1: time frame for signing the documents? I would love a

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Speaker 1: triumpan that I knew could be true. They the Argentines

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Speaker 1: have basically presented a settlement that they would everybody to

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Speaker 1: get involved in by February twenty nine. Um. Yes, so

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Speaker 1: it's soon, but that doesn't necessarily mean that Elliott will

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Speaker 1: will get involved by February. This go on longer they

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Speaker 1: can try. This is the thing with this case is

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Speaker 1: that everybody has a very striking incentive to end it

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Speaker 1: as soon as possible. Everyone wants to get this over with.

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Speaker 1: As soon as possible. The thing with Elliott and and

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Speaker 1: what's happening now in the courts is the if you remember,

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Speaker 1: there's this injunction UM, which made everything far more complicated.

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Speaker 1: There's an injunction that basically prevents Argentina from paying its

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Speaker 1: restructured debt until it pays Elliott. That the judge that

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Speaker 1: that design that injunction said, because of all this good

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Speaker 1: faith that I've seen from Argentina in the last couple

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Speaker 1: of weeks, I'm going to remove that injunction even if

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Speaker 1: Elliott isn't paid yet. That has been this this huge

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Speaker 1: turning of the table events that we've seen and UM

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Speaker 1: as a result, uh that that may put pressure on

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Speaker 1: Elliott to settle sooner rather than later because their leverage

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Speaker 1: is now gone. Well that's good news because it means

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Speaker 1: Catchy will come back in a week or so, maybe

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Speaker 1: next Monday, and explain how we've gotten through all this. Catchup, Zakonski,

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Speaker 1: thanks for updating us on the This was a big

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Speaker 1: deal some months ago. The world was going to come

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Speaker 1: to an end because of the Argentina situation. And see

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Speaker 1: if they made nice Tom Tricy Halloway with us Ulloway

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Speaker 1: so quickly forgotten. It's amazing in the back and forth

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Speaker 1: of surveillance today, we've been whipsite by all sorts of

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Speaker 1: interesting interviews. Is the idea of top of market. I

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Speaker 1: am thunderstruck by your note on Morgan Stanley and commercial

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Speaker 1: real estate. Well, they have just flat out adjusted. So

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Speaker 1: I wish this is one of those times when I

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Speaker 1: wish maybe we weren't doing radio and I could actually

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Speaker 1: show you the chart, because if you look at a

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Speaker 1: chart of commercial real estate prices, they have loan past

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Speaker 1: their two thousand seven peak. And obviously residential housing has

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Speaker 1: recovered as well, but by no means has it grown

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Speaker 1: to the extent that commercial real estate has. And so

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Speaker 1: we have this big debate about froth in the market.

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Speaker 1: And now we have Morgan Stanley analysts who have led

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Speaker 1: by Richard Hill, who's a veteran of the commercial real

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Speaker 1: estate industry, saying they see flat growth for the year.

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Speaker 1: And what's more is they're talking about potentially very barished

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Speaker 1: dynamic where investors, because they're not getting the sort of

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Speaker 1: leveraged returns that they're used to, start demanding more income

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Speaker 1: from commercial properties that potentially companies just won't be able

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Speaker 1: to come up with. Remember we're talking about an earnings

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Speaker 1: recession in the US, it seems unlikely you're suddenly going

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Speaker 1: to get a big uptick in income from commercial properties.

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Speaker 1: At the same time, the idea of commercial properties speaks

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Speaker 1: to the FED. Is the linkage that the FED has

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Speaker 1: provided a unique monetary milieu which is allowed for to occur. Um. Well,

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Speaker 1: it's hard to argue otherwise when you see that commercial

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Speaker 1: real estate, I mean something like eighteen percent above its

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Speaker 1: two thousand seven peak. That's pretty amazing. And it's not

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Speaker 1: like anyone in two thousand seven was saying that commercial

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Speaker 1: real estate was undervalued and we're now eighteen percent above it.

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Speaker 1: And of course we have seen a lot of yield

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Speaker 1: hungry investors to use the old cliche pile into the

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Speaker 1: asset class. They've been buying commercial mortgage backed bonds quite

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Speaker 1: a lot, sales of which are perhaps unsurprisingly now slowing

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Speaker 1: following the interest rate rise from the FED and also

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Speaker 1: some new rules coming in, so headwinds to that sector.

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Speaker 1: For sure. You have been touring the world. We have

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Speaker 1: barely struggled by without you. What did you learn on

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Speaker 1: your global johnt my global tour? That's Yeah. I was

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Speaker 1: in Hong Kong for a week and then Abu Dhabi

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Speaker 1: and Dubai, the oil soaked Middle East now even more

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Speaker 1: oil soaked. I think what did I learn? UM? I

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Speaker 1: had some interesting discussions with high end retail sales people

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Speaker 1: in Hong Kong. They've seen a significant slowdown. Where once

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Speaker 1: you used to have a Tiffany's on every corner of

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Speaker 1: every block, you now have one on every other corner

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Speaker 1: of every other block. Uh. In abby Dhabi, I am

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Speaker 1: reliably told there is a lot of consternation about lower

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Speaker 1: oil prices. A lot of consultants and lawyers have been

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Speaker 1: hired to talk about what UM the Emirate can do. Unfortunately,

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Speaker 1: so far it seems they're just telling the Emiratis what

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Speaker 1: they want to hear. So we'll have to see how

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Speaker 1: that plays out. Are you here tomorrow? Are you going

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Speaker 1: for another twelve weeks? Uh? Sadly, tom, I I will

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Speaker 1: be here. No, I'm thrilled to be back in the

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Speaker 1: coming days. Does a fabulous job of gleaning street research

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Speaker 1: and coming up with important insight you need on economics, finance, investment,

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Speaker 1: in occasionally alloway on international relations as well. I read

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Speaker 1: on the screen the VIX nineteen point eight zero VIS

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Speaker 1: up point three four points. Let's check in with John Tucker.

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Speaker 1: I'll get the latest world in national headlines. John Alright, Michael,

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Speaker 1: and Tom. The Pentagon plan for closing Guantanamo's detention center

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Speaker 1: and moving detainees to the US is an expander to

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Speaker 1: get a warm welcome, but it's presented to Congress today.

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Speaker 1: The administration's last ditch effort to make good on President

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Speaker 1: Obama's campaign about a closed Guantanamo may only further antagonized lawmakers.

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Speaker 1: Republican presidential candidate's took last minute appeals for support across

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Speaker 1: Nevada at a hand of today's caucuses. At one rally,

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Speaker 1: Texas citator Ted Cruis said he'd liked the thought of

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Speaker 1: Hillary Clinton behind bars. This cease fire proposal for Syria

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Speaker 1: getting support with strings today. Turkey's deputy Prime minister says

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Speaker 1: this country supports the plan. Let's suggest its military could

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Speaker 1: continue firing on Syrian Kurdish groups in Syria in response

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Speaker 1: to attacks. A migrant crisis in France reaching a peak today,

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Speaker 1: charity groups making a last days aftertitude delay implementation of

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Speaker 1: an order by French authorities that refugees must move out

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Speaker 1: of their camp in Calais by tonight. The camp of

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Speaker 1: the Port city has become a flashpoint. Authorities say the

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Speaker 1: slum like present slum like site presents sanitary and other risks.

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Speaker 1: Anywhere from eight hundred to three thousand people lived there.

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Speaker 1: Global it was twenty four hours a day, powered by

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Speaker 1: our twenty four hundred journalists, had more than one hundred

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Speaker 1: fifty news bureaus around the world. I'm John Tucker, Michael

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Speaker 1: and Tom John Tucker, thank you so much. Negative sixty,

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Speaker 1: SMP down nine points and the SMP five N one

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Speaker 1: twelve still strong, but not like earlier this morning. Michael

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Speaker 1: McKee and Tom Keane. Next on the economy, Bloomberg Surveillance.

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Speaker 1: This hour of surveillance brought you by Westchester Suburu. Visit

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Speaker 1: Westchester Subaru Daka