Speaker 1: This is Bloomberg Surveillance. The markets are very dysfunctional here,
Speaker 1: and let's basically due to all this enormous corporate bond issuance.
Speaker 1: We're getting even more confirmation at the global economy matters
Speaker 1: more and more to the Fed, more than it ever has.
Speaker 1: When you hold down rates, when you reduce rates by quie,
Speaker 1: whatever it is you're doing in that direction, you're drawing
Speaker 1: capital into the markets, and that's a good thing. Bloomberg
Speaker 1: Surveillance your link to the world of economics, finance, and
Speaker 1: investment on Bloomberg Radio. Good morning everyone, Bloomberg Surveillance, Michael
Speaker 1: McKee and Tom Keenan. Is a perfect day in New
Speaker 1: York right now, though, Michael, let's get you know, I mean,
Speaker 1: bring in bringing Rob here, because what's so great about
Speaker 1: Rob in December is the lack of hysteria, and then
Speaker 1: in January there's a little more, and Rob gets exhausted
Speaker 1: by March. So do you think, Rob, what do you think, Michael,
Speaker 1: what's the level that you could be? Sunday is the
Speaker 1: first day of spring and Rob Carolin has to come
Speaker 1: on and tell everybody it's going to snow. Um, you know,
Speaker 1: I'm sure that doesn't make you particularly popular. No, and
Speaker 1: it's not doesn't mean I like doing it either. I
Speaker 1: mean I gotta shovel my driveway to guys, So if
Speaker 1: I don't have to do it, that's a positive. And
Speaker 1: you know, looking at the date of this morning, I
Speaker 1: can tell you that the models have started to shift
Speaker 1: further east with the system. The U S model has
Speaker 1: been the most consistent saying this is a light with
Speaker 1: most moderate storm for the Tri State area in Boston.
Speaker 1: The European went crazy on Wednesday and now it's backing
Speaker 1: away from that heavy snowfall forecast more towards a lighter
Speaker 1: or moderate snowfall. So that's good news. The trend is
Speaker 1: our friend. It's in the right direction. But we think
Speaker 1: if the storm does develop as the models have, that
Speaker 1: snow is going to arrive in the Tri State area
Speaker 1: early Sunday morning, right around sunrise, it'll end early Monday morning.
Speaker 1: Three to six inches of a slushy snow could fall Boston.
Speaker 1: It develops in the afternoon on Sunday and ends Monday morning.
Speaker 1: Right now, Boston could end up with as much as
Speaker 1: four to eight inches, but again the numbers right now
Speaker 1: are fluid. If the models continue in their trend of
Speaker 1: shifting further eastern. We look Rob carollin, thank you very much. Well,
Speaker 1: keep an eye on the story. Just the fact, I
Speaker 1: don't care if it's only three inches. It's still supposed
Speaker 1: to be spring, not winter. When you grow up in
Speaker 1: the tundra of the north. This is what's called normal.
Speaker 1: I've seen it's snow in May up in the scene.
Speaker 1: Can doesn't mean it exactly, I guess that would be
Speaker 1: one way of putting it. It is nine o'clock. That
Speaker 1: means we have to do our four X brief, of course,
Speaker 1: always brought you by Interactive Broker's winner of FX Weeks
Speaker 1: two thousand and fifteen award for the best Retail for
Speaker 1: X training platform visit ib at ib kr dot com
Speaker 1: slash four X. All you need to know yen stronger
Speaker 1: over the week with a little bit of a pullback
Speaker 1: today one eleven fifty three on Yeah and real movements
Speaker 1: in for and Exchange Sterling almost everything stronger a US,
Speaker 1: a weaker dollar and d X y point nine two.
Speaker 1: Even renmn by strength was seen as well. That's enough
Speaker 1: on for and Exchange our equity report before we go
Speaker 1: to an important re guard comment. What do you have
Speaker 1: divid Wilson, Well, let's talk about Bank of America. To start,
Speaker 1: These shares are up one and a half percent in
Speaker 1: early trading. The bank will buy back as much as
Speaker 1: eight hundred million dollars in stock to off set act
Speaker 1: when he grants to executives. That's on top of four
Speaker 1: billion dollars in repurchases that Bank of America announced a
Speaker 1: year ago. Now the bank is joining JP Morgan Chase
Speaker 1: and Capital One Financial in expanding buyback programs. On the
Speaker 1: deal front, Star Wars Hotels and Resorts up four and
Speaker 1: a half percent. Company agreed to takeover by China's on
Speaker 1: Bang Insurance for seventy eight dollars a share or thirteen
Speaker 1: point one billion dollars. The prices two dollars a share
Speaker 1: higher than a Bang's initial bid, which was disclosed on Monday.
Speaker 1: Star Wars board found the offer superior to an earlier
Speaker 1: proposal from Marriott International. Columbia Pipeline Group the most active
Speaker 1: stock and early trading up six and a half percent.
Speaker 1: The natural gas pipeline on Them agreed to a ten
Speaker 1: point two billion dollar takeover from trans Canada. The deal
Speaker 1: followed the rejection of Kuran's Canada's proposed Keystone Xcel pipeline
Speaker 1: by President Barack Obama in November, and Trans Canada shares
Speaker 1: down three and a half percent in US trading. Couple
Speaker 1: more earnings, A Delbe Systems up seven percent, the graphics
Speaker 1: software maker's fiscal first quarter earnings and revenue beating alas
Speaker 1: average estimates of the Bloomberg survey. ALB benefited from growing
Speaker 1: demand for its Internet based services, and Tiffany basically a
Speaker 1: little change at this point. The luxury jewelry retailer said
Speaker 1: fiscal first quarter earnings per share may drop at least
Speaker 1: fifteen percent. Is a sluggish global economy, herd sales and
Speaker 1: so I expected a seven percent decline on average. And
Speaker 1: David Wilson thanks so much. I want to bring in
Speaker 1: this uh sound from Christine Legarde. This really sets up
Speaker 1: Phil Verliger on global oil very well. Leguard, as I
Speaker 1: am a managing director. This is in Ho Chi Min
Speaker 1: City speaking with our Bloomberg Vietnam Bureau chief K one.
Speaker 1: Here is Madame Lego. What I think I can tell
Speaker 1: you is that if we had not had those negative rates,
Speaker 1: we would be in a much worse place today with
Speaker 1: inflation probably lower than where it is, with growth probably
Speaker 1: lower than where we have it. So it's only count
Speaker 1: of factuals, of course, but it was a good thing
Speaker 1: to actually implement those negative rates. And Madame m Guarde
Speaker 1: in Vietnam with our Bloomberg Vietnam Bureau Chief Phil Verligher
Speaker 1: listened carefully. He's heard this before from policymakers, and I
Speaker 1: love Phil the idea of the counter factual. The ultimate
Speaker 1: counter factual is oil went from a hundred to forty.
Speaker 1: What would have happened if that hadn't occurred, Well, if
Speaker 1: oil hadn't gone uh to forty one, we would still
Speaker 1: be drilling, uh, wells in production would be high, fire
Speaker 1: inventories would be much higher. We'd be swimming in it. Uh.
Speaker 1: The economy would be somewhat slower, although the impact is
Speaker 1: less than we used to say, because so many people
Speaker 1: would still have jobs in North Dakota, Texas, uh and
Speaker 1: in Europe making manufacturing goods for people people in Asia.
Speaker 1: But what we would be doing is developing this incredible
Speaker 1: surplus that someday had to be consumed and eventually, Tom,
Speaker 1: we'll be using your bathtup to store oil. It's just yeah, Uh,
Speaker 1: we let prices stay high much too long. Uh and uh,
Speaker 1: and it's created a bubble, and it created a bubbles burst.
Speaker 1: I want to ask you about a fascinating story in
Speaker 1: the Wall Street Journal today. Maybe the surplus isn't as
Speaker 1: big as we think it is. Uh. They suggest that
Speaker 1: there's eight hundred thousand barrels UH of oil missing because
Speaker 1: the i e. A. Estimates how much oil is going
Speaker 1: to be produced, and then they actually add up the
Speaker 1: oil that is in storage and in transit. It doesn't
Speaker 1: come anywhere near what they thought was going to be produced.
Speaker 1: So maybe we aren't producing as much. Well that's a
Speaker 1: great wine. And Andy Hall is and who has asked
Speaker 1: him back to keep sending these emails around pushing this point.
Speaker 1: My question is, I look at the market man, why
Speaker 1: are people renting ships? I mean last week this week
Speaker 1: Glencore reported chartering a ship that will hold about two
Speaker 1: and a half million barrels of oil. Now, the interesting
Speaker 1: thing is the number I've been using as a buck
Speaker 1: fifty amongst the store of the oil. They've charted it
Speaker 1: for two years for fifty cents of barrel uh. The
Speaker 1: U S numbers showed this high level of inventories and
Speaker 1: and E I A has got problems. But we are
Speaker 1: approaching the record level of inventories previously set in nineteen
Speaker 1: twenty nine comments before you were born, and I was born,
Speaker 1: And it was set when everybody was trying to produce
Speaker 1: the oil under their ground, before the neighbor did. We
Speaker 1: didn't have the rule of capture. We are literally a
Speaker 1: hundred million, maybe two hundred million barrels above in the
Speaker 1: US normal range and the rest of the world inventories
Speaker 1: are high. That the tanks are full in Amsterdam where
Speaker 1: they measure them. So there may be some discrepancy. There's
Speaker 1: always some discrepancy. But and you know, if you if
Speaker 1: you want to be a barrel accountant, you're gonna lose.
Speaker 1: The only way to pay a understand this is to
Speaker 1: look at the market and what the market is saying.
Speaker 1: And the market is in contango, deep contango. It's been
Speaker 1: in deep contango for quite a while. People are storing
Speaker 1: oil everywhere and so uh, you know, the market tells
Speaker 1: me that the oil is there. Well, where we were
Speaker 1: over forty dollars now yesterday at one point West Texas
Speaker 1: was going for more than than brand Uh. How much
Speaker 1: farther do we go. You know, this is one of
Speaker 1: the things I've been writing is is that this is
Speaker 1: a bubble but going to be punctuated with price increases. Yeah,
Speaker 1: this is like the housing crisis. The we had this
Speaker 1: huge drop in in housing activity after the two thousand
Speaker 1: nine San Francisco prices went down, Detroit prices went down.
Speaker 1: Some prices come back up, and speculators will push prices
Speaker 1: back up. There's a lot of hot money coming in
Speaker 1: pushing prices up, creating the opportunity to hedge more oil
Speaker 1: so that we'll produce more oil later this year and
Speaker 1: next year, saving some bankruptcies of prudent firms. But you
Speaker 1: know it's gonna fluctuate, and it's it will hold up
Speaker 1: to forty until OPEC or this meeting of producers OPEC
Speaker 1: plus others gets done in April. But they have the meeting.
Speaker 1: Does it accomplish anything? No, But does it change prices?
Speaker 1: Even if it doesn't accomplish it, it doesn't attain prices temporarily,
Speaker 1: they'll go up, then they'll go back down still never
Speaker 1: enough time. We're gonna have to have you back soon
Speaker 1: because the price of oil suddenly getting back into the news.
Speaker 1: Is West Texas crushes the forty dollar barrier. Now a
Speaker 1: forty dollars and ninety one says heading for forty one.
Speaker 1: We we have been as high as forty one twenty
Speaker 1: in the electronic trading session. We'll see if we can
Speaker 1: get over that number. It's almost two percent increase for
Speaker 1: both West Texas and Brent today, Tom, Brent for all
Speaker 1: dollar dynamic, right, and I mean it's all currency related. Well, yes,
Speaker 1: except that the d X Y dollar index is a
Speaker 1: little stronger today, not completely but mostly mostly, and it's
Speaker 1: feeding into equities, you know, folks. All I know is
Speaker 1: there's consensus. As we see consents I is that the
Speaker 1: right word. We see consents I hear, and they always
Speaker 1: get run. Consents I always get destroyed. Here on Bloomberg surveillance.
Speaker 1: Let's check it with like a bar and get the
Speaker 1: latest world of national headlines. Mike, Tom, thank you very much.
Speaker 1: A long time effort to improve cybersecurity is coming to fruition.
Speaker 1: The Homeland Security Department has formerly begun sharing the tales
Speaker 1: of new digital threats with private business and other government agencies.
Speaker 1: The program is voluntary. North Korea fire to ballistic missile.
Speaker 1: Today it fell into the sea Washington State authorities say
Speaker 1: an online church scam believers out of almost eight million dollars.
Speaker 1: Authorities say the owner of the Christian Prayer Center charge
Speaker 1: people between nine and thirty five dollars for every prayer
Speaker 1: using fake religious leaders. Washington Attorney General Bob Ferguson pay
Speaker 1: to prey. That's exactly what it was, no doubt about it.
Speaker 1: Pay to prey and under deceptive circumstances. Nothing about it
Speaker 1: was real, Ferguson, says owner Benjamin and Ogilvie, who has
Speaker 1: agreed to pay back the money the thousands of customers.
Speaker 1: Global News twenty four hours a day, powered by our
Speaker 1: two d journalists and more than a hundred fifty news
Speaker 1: bureaus from around the world. Michael Barr Time and Michael,
Speaker 1: thanks so much. Coming up in our next half hour,
Speaker 1: we have a discussion on the topic of America, which
Speaker 1: is our education in our declining math abilities. It's Bloomberg
Speaker 1: Surveillance Market Drivers brought to you by Mercedes Benz. This month,
Speaker 1: your Mercedes Tri State dealers welcome Spring with limited time
Speaker 1: offers on selected models like the Sporty c l A
Speaker 1: and Versatile g l A, each engineered at price to
Speaker 1: move Visit m b usa dot com today