After this hour dan is going to be breaking down how we behave, what we did. You end up not feeling very good. Dan now im selfconscious. Vonnie good morning. France preparing to extend the state of emergency that was declared after last fridays terror attacks. The French Parliament begins voting on the measure today that allows the government to ban public demonstrations and carry out searches without warrants. Statevideo, islamic threatens to attack times square. Police say there is no specific threat. Since the attacks in paris, new york has employed extra Police Across the city. When it comes to who has a better temperament to be president , republicans pick ben carson over donald trump hadbut ,when asked to can get something done, can fix immigration and manage the economy. Those responses were from the latest Bloomberg PoliticsNational Poll trump was the first choice of 24 of republican survey. Marco rubio third with 12 . You can get more on these and other breaking stories 24 hours a day at bloomberg. Com. Upt take a look at features across the board after the fed minutes show that the Federal Reserve feels the u. S. Economy is Strong Enough to handle a rate increase. Mini futures up 7 points. If you look over at europe, if you look at asia overnight, it is just green across the screen. On the world equity index function, you can see that literally every single index on that top page is green. Take a look at something really interesting i think is that some of the things we look at normally with the 10year, for example, to see that the fed is going to raise rates and while europe is expanding q. E. , normally you would see a lot of buying of dollars. , looksu see, the 10year like investors are starting to pile into that. Yields are down. The dollar has shown a lot of weakness. This is because investors feel ok about the fact that the fed is going to raise rates at a measured, slow pace. So, there is no reason to pile into the dollar and take advantage of Rising Interest Rates here. Stephanie we got to dig in to this pfizer deal. Valuing the botox maker as high as 150 billion. This should be the drugs industrys largest deal ever. One of the reasons i spoke this deal made so much sense for tax purposes. The Treasury Department is starting to look at this. Is it going to block it . Tried to do this deal last year when he tried to buy astrazeneca. He said, he does not see a way for a government to stop them from doing this. Pfizer is a multinational business. They make tens of billions of dollars overseas. They cannot bring back unless they want to pay u. S. Taxes. This gets them out of the u. S. , gives them access to a ton of profits. Lowers their tax rate. Theyre willing to pay some serious penalties even taking a little bit of heat from the treasury in order to do that. Has been a major goal of the ceo. Stephanie lets talk about the heat. Tax inversions are legal but more and more they are considered socially unacceptable, dare i say, unethical. Wheres the responsibility of a corporate . It is a deepink question because what youre really asking is what do we value . Do we value shareholder value . Do we value some things about society . Really, kind of an experiment in which we got people to be in charge the manager for a bank. They could do all kinds of measures that are revenue enhancement in the industry but you could call them screwing up your customers. The manager of a virtual bank has a choice of which of those measures to use. In one case, w there only obligation was to maximize shareholder value. The other one we said, youre running the bank. The moment you add the statement, maximize value, all the sudden people find ways to use these unethical measures. The thing is that its often selfserving. So, if you make a ceo get paid based on stock options, they find a way to do these things for shareholder value, but in fact for their return, right . So, there is a really complex situation. If you give people a reason to do it for selfish reasons, and you give them a way to do in a way that they can morally justified it. They use the justification of shareholder value to justify what is good for them personally. I would like to see a more objective company and say, what would happen if they were not compensated . Would they still find it moral . David dan talked about the forces at play. How big is it at this point . U. S. Corporate tax rate is 35 . Profit you make in the u. S. Will be taxed at that rate minus whatever youre able to do. Pfizer gets down to 25 globally. Taxes abroad are much, much lower. Allergan are based in ireland and they pay 15 . When youre talking about shaving 10 percentage point off a company that brings in 55 billion in revenue every year. Its a massive amount of money for pfizer. It is a huge boost and advantage for a company that lives in a lower tax i think weve seen numbers tossed around billion in tax in tax synergies. We have seen these companies, not just pfizer. A ton of companies have moved into these european tax domiciles. A trend we have seen going on in the pharama industry. This one would be the biggest one of all time but it is far from the first. Stephanie are you surprised by the pricing . He thought the deal would come between 325 and 350. Maybe a year from now when the dust settles, you could truly realize the value. Maybe 375. Here we are talking 380. Drew it is not out of reach for pfizer. Tax allergan is this situation. The way these rules work to get out of the u. S. , you have to buy a target that is a large enough size to pass muster with treasury. So, there are not many of those things available to have the flexibility to do a deal. One of the things went pfizer tried to buy us to seneca, they ran into a ton of political problems. Eca,r zeneca, astra zenca the u. K. Government was worried that pfizer would fire all these british scientist. Allergan has technically run out of ireland, but their offices are in new jersey. There are t very few companies of that size that did not present the obstacles you have on a nationalistic front. That is an extremely viable asset. Allerganpfizer is not the only news. Square race 1 3 less than sought. 0hile match group raised 40 million. You have been following square. Erik this is what many people thought was going to happen to square. Square had been taking down the targeted range for a deal for a while already, but this is in the doomsdays scenario for a company that is trying to go public. The company that had raised money at a rich valuation. A 6 billion valuation. Jack dorsey also the ceo. Tough market. There is no question for the market environment is very challenging. But to have the momentum and the optimism surrounding your company, which was very strong a year ago, all of a sudden evaporate at the wrong moment up pricingou end your shares below the very bottom of what you thought you could raise. Stephanie why did they dont they wait . Ventures of their vc wants to cash out. There is so little momentum, they are losing money. The competition is intensifying. Better to get the cash out now, than to wait for the possibility of might be worth less. Sten, we areiete running out of business. There is too much competition. Do you want to buy . David we are losing money. Erik the criticism here isnt necessarily directed at the investors who are willing to pay 9. 00 a share, which is what it sold it last night. Its the private investors who decided it was worth 6 billion a share in the last romp of the craziness as around the valuations in the private finance. Stephanie the final round of private investing is a classic fear of missing out. I would love to just be speak to the psychology behind us that people are racing because they think that these are unbelievable businesses and not looking at the numbers. Dan the fear of missing out is everywhere. Facebook is giving us lots of its about two things. Stephanie now facebook the company. The way people use facebook. An it is about creating different reality that you can compare yourself to. So, if there is a great party and you do not know about it, no issue. But if there is a great party and you can find out about it, what do you have . I dont want to get into a statea in which i say to myself i could have done that. We compare cells to an imaginary state we compare ourselves to an imaginary state. Imagine missing a flight by two hours or two minutes. More painful. S is not because of being stuck at ohare with bad food. Because you can imagine the reality. You compare yourself to that reality. That reality you cannot easily imagine comparing yourself to. There is a beautiful study asking who is the happiest . People who win the silver medal or bronze . What they show is the bronze people are happier. Why . Stephanie happy to be there. Dan what are the civil people saying . Years for four i could have been there. A lot of things about information create the possibility for creating for comparing ourselves. We fear that something will happen. We keep on checking. I do want to say one more thing about square. Theres a principle called the pain of paying. So, imagine you go out to dinner tonight and you pay with cash or credit cards. They feel differently. One is you see the money going out. Imagine owing the restaurant and people eat 50 bites and pay 50. 00. I will give you a discount, half a dollar per bite. The bit you dont eat, you dont pay. I mark down every bite. People hate it. It is a cheap meal. When i teach people about the psychology of money. I bring pizza and i charge them 25 cents per bite. They eat huge bites. But the return now, square has the capacity to create very low pain of paying. You see money going away. You take a bite and say, there is money going on. What worries me about this technology is as long as we had physical money, we are constrained by it. Now that we have digital money, there are ways to make additional money feel more or l ess pain of paying. We can get people to be more thoughtful. You can get people to be less thoughtful. Are going in the direction of getting people to be less thoughtful. People do not register the amount of money. How good will that be for society longterm . It is gooduber now, for them to get money out of people without them understanding what money is going out. Do we want to create Electronic Payments that get people to spend a lot without thinking about it . Where is our future if that is the reality . Erik you are running a business. David the pain of paying. Drew armstrong, thanks for joining us. Two interviews coming up on bloomberg today. Latth Group Chairman greg balt joins us h ere. And jack dorsey at 10 15. From the New York Stock Exchange after the Company Begins trading. Now it is time for global. We head to japan where the central bank kept its policy pledge unchanged. It is not increasing stimulus. This comes days after reports showing the country fell back into recession. Jodi joins us from tokyo. Increasedid they not the stimulus because they did not think they needed it . Or because they did not think it would work . Well, two things. First, there is a lot of thinking that the economy in the Fourth Quarter is picking up. Recession as a result of contraction in the second and third quarters. There is a lot of thinking that inventory is one of the drivers of the weak gdp number. Inventories went down is a good sign that Companies May be needing to produce more. This is a massive amount of stimulus that the boj has undertaken over the last two years. Its unprecedented. And one economist told us they have done so much easing, and a bit more is not going to have an impact. Said this in his press conference, they believe that they are on a path to the inflation target. David explain that a bit. Because they are showing actual recession numbers. What makes them feel so optimistic about inflation Going Forward . Jodi that is a very good question. And a lot of people in japan are asking that. Prices fell in august and september again. But the governor said why this consistently. Last month when he made his comments after they did not make any change in policy and again today. Oil,thinking is,well, low when you discount low oil prices, we are moving towards the inflation target. No one in our survey think they are going to make their inflation target, which they have moved now to a year forward. But the central bank continues to make that statement. Stephanie thank you so much for joining us today. Out of japan. Now, we have got to talk about what is happening here. The market moving news out of the fed. Members of the fomc waved her magic wand yesterday. A quick quote. The sense that while no decision has been made, it may well become appropriate to initiate the normalization process at the next meeting. We bring in our economist. That quote kills me. Where are we already . We are at the point where there are very few things that can stand in the way. We have the november jobs report december. In few Economic Data releases that could really jeopardize that. So, Market Expectations are about 2 3 to 70 likelihood of a rate increase. We have had a lot of fed speak since that jobs report. All systems go for december left off. The minutes did not add much new information to that because we have heard so many speakers. Whats new in the minutes is this discussion of the real Interest Rate, the neutral real Interest Rate for the economy. The minutes said that staff is suggesting it is potentially zero. We are at zero now. You have ice chair fis vice chair saying we have an accommodative policy. This is a Big Communications snafu. Stephanie but is also too much communication. Dan, when do we get flooded with content that we can no longer make rational decisions a cousin or is so much information coming longerat us can no make rational decisions because there is so much information coming at us . How you go to men and say, worried are you about Prostate Cancer . No so worried. Would you like to get a biopsy . People say, not really. I am not worried. Then, we take another group and we do a psa test. It is a terrible test. The data you get is terrible. It is ambiguous. You give people the test back and you say, we dont know. We measured you and now we know you do not know. Now they really want the biopsy. So, what happened is that there is a state of uncertainty if you do not know you had im not that worried. The moment you know there is a number and you dont know it, it starts getting worse. Stephanie this is making investors crazy. You hear from janet yellen. Two days later, you hear from Seven Members of the fed. It was easier when you knew less. David more information does not make you better informed. The other point i noted in the minutes is they said, quite explicitly, if we raise sooner, we may be able to keep it more shallow. The sooner we get started, the easier it is going to be. This is the way of building a grand coalition among the policymakers. The hawks want to raise rates. Since march and june of this year. The doves are willing to acquiesce to a december left off, because that means the fed will be able to go a lot slower. Beenously, the fed have telling you we will raise rates at 100 basis points per year for the next several years. What we are going to see in december is the fed neutralizing the impact of the rate increase by signaling a much slower pace of increases in 2016. Stephanie i want to share a quick thought we got from wilbur ross. P. R. That has the preceded it, you would think it was the end of the world, 25 basis points. If that is all that has kept the economy going, we have nothing going on. Stephanie p. R. People need to start making decisions. The fed acknowledged as much of the minutes where they said that raising rates in december would be a vote of confidence for the economy. And really a declaration of success or victory over the financial crisis. Stephanie you get to take december off. I dont think so. I think we will watch closely to that jobs report. Dan in general, you give more uncertainty, people hate it. There is one exception. Notes. S love if you get a love note from somebody and you dont know who it is fro that makes people much happier. We imagine a lot of things. Interest rates, we imagine stephanie we are going to save love notes for the commercial break. Dan, you are staying with us. Youre watching bloomberg. Stephanie you are watching bloomberg. Breaking news. Activist investor is urging yahoo to drop a plan to spin off its alibaba stake. Erik, you have got a lot of. Erik a few things to add. Star board value activist investors shifting course, urging yahoo to sell its core search and display business. And instead retain the alibaba and yahoo japan stakes it wanted to spend off. Spin off. It is threatening a proxy battle. We will look to make significant changes to the board if you continue to make decisions that destroy shareholder value. The proxy battle always in the background with star board. Writing. In a direct threat to Marissa Mayer, the ceo of yahoo it is only going to heat up. Stephanie stay with us. We have got more breaking news. I just had a horrible nightmare. My companys entire network went down, and i was home in bed, unaware. But that would never happen. Comcast business monitors my Companys Network 24 hours a day and calls and emails me if something, like this scary storm, takes it offline. So i can rest easy. What. You dont have a desk bed . Dont be left in the dark. Get proactive alerts 24 7. Comcast business. Built for business. David welcome to bloomberg. Thank you for being here. Lets get you some first word news. Obama isresident doubting the russian optimism that they can reach an agreement with france and germany to fight the Islamic State. The fries president has agreed to full cooperation and president obama wants to see proof that Russian Forces are focusing on the Islamic State in his concern to russia is more interested in propping up assad. France is trying to maintain security. About 80 heads of state will gather in paris at the end the month for the United Nations summit on global warming. A protest march is already been canceled. The more than 1100 caret dimon has been discovered in africa. Andcan get more and these in other stories at bloomberg. Com. St