From thelso hear former ecb president. Europes Economic Performance under the microscope. Looking at how costly of brexit could be for investors. And the latest on from versus clinton. Lets started off with the rush into Government Bonds winding no reversing today. Where we are with prominent investors and where we might be going. Was here, which brings the question if we are with heading into negative territory in the u. S. . We are seeing record lows, as. Ou say to fea everybody is buying bonds. If everybody is in the same trade, the potential for disaster decides to get bigger and bigger. Bad job report, you buy treasuries. Find a safe place to park your cash until you know what is going to happen. Moving intorybody the bond market, short term paper is becoming more expensive and harder to get. Investors are being pushed out the yield curve. We have the impact on longerterm bonds. The citibank macro risk indicator, how concerned people are about where things are going short but thely longerterm, investors are concerned. It is like a supernova, a star that is about to explode. We look ahead to next week where we do get the fed meeting here at no expectation of any movement next week, but what is the market waiting for to take the risk off trade out of the picture . The market is waiting for good news. Ritzr the news that the are not leaving the eu, or that the u. S. Economy is doing better. It would only take a small move in bond yields for people to feel a lot of pain. Expect the fed to wait until we get better news. Thank you. Bears are growling in europe and stock investors are going to run for the exit if u. K. Voters decide to leave the european union. Lets get more from anna edwards and london. Riske report by the Bottling Company working out a simulation of what could happen. They say we could see stocks lose a quarter of their value. That is partly because we have not seen the stock market reacting in the way we have seen the pound for pound volatility in perl regular reacting in the runup. The story. Tly stocks have been protected by the weakness we have seen in the pound and rebounding commodities, because we have so many commodity related Mining Companies in london. It is just one report, but it has a fairly stunning h eadline. I want you to tell us about the debate that occurred last night, less yesterday about this. We have had a series of tv debates about this in the run up to june 23 on u. K. Tv. We saw the most recognizable face the former mayor of london, we saw his motivation been called into question. Is he more interested in getting of thee as the leader conservative party and the next Prime Minister in u. K. . That is the allegation, and for his part he was defending what he sees as the prospects today side to leave the eu. The authority im inclined to trust is our Prime Minister, david cameron, who only a few months ago before the whole project kicked in, was very. Lear we have a great future. Under anyare india doubt, the german finance minister was giving a interview. Oday thank you very much. Now the latest on the race for the white house. Lets bring in our Washington Bureau chief with the very latest. It looks like they may be getting hillary together with Bernie Sanders. Hillary picked up two big endorsements yesterday. But the one that may mean more significant is Elizabeth Warren. The senator from massachusetts who cannot out and said to get in this race. Outside of Bernie Sanders, Elizabeth Warren is the face of economic populism in america. Targeting the banks, reducing income inequality. To can help Hillary Clinton those people who gravitated to Bernie Sanders and a more grueling campaign. Been part of the strategy. This could be a counter punch her. Hillary is really helping her game. Right after the endorsement, had a mostp retreated tweet. Dynamic social media in play. How is the money reason coming . Raising coming . This is one that shows how fundamentally disruptive 2016 is. In an interview earlier this need to raiseot 500 million for making edition do it on the cheap to get elected president. That is a real big shift most people the money that will be 1. 1d to win this campaign billion. We will find out in 2016, can he win the white house on the cheap . T now regarded julie hyman for a look at the markets. Of course we have the dynamics of Central Banks in place today. We have a risk off scenario. Even more magnitude than yesterday. Germany plunging by 2 . Cautious are feeling ahead of Central Banks next week. The vote. You get this trepidation going into the weekend. That goes today. 10677 for the buying of japanese yen. The pound, once again has been volatile. Bond yields fall across the people are buying sovereign debt as they are going out of equities. We are seeing the continuing selloff there this morning. Here,sides all of this the russian yield is falling in the currency as volatile as well. That is because the Russian Central Bank account Interest Rates today going to 11 . This is a hotly debated move. It was something they thought would happen. The country had been on a rate reduction path last summer. Then the collapse in Commodity Prices confident. Seeing the drop off in the ruble after that happened. Lets get an update of what is making headlines outside the world of business. Heres bloomberg first word news. Ramy first we had to the South Pacific and teams hunting for that Malaysian Airlines are. The discoveries suggests that the wreckage may be spread out over 6200 miles. Oft would be the first part the plane found east of the main search zone in the southern indian ocean. It disappeared more than two years ago. The u. S. House has passed a bipartisan bill aimed at changing their debt crisis. It still has to be passed by the senate. The islands government has said it does not have that money. 2016 football to reach its get underway today in france. Trash that isover piling up because of a strike by garbage workers. They will try to make sure that fans can get to the transport. David tijuana. Mario draghis new Corporate Bond buying program. More messages that answers. How this is warping values. Welcome back to bloomberg. Here is a look at the futures are mirroring what is happening overseas. You can see the dow has all of these. Europe is weaker, and in some cases it is universal. It is not just one sector, it is materials, financials, energy. A risk off trading session. It has been three days since the ecb started buying Corporate Bonds. We are waiting to see what sort. N the credit markets this is abnormal behavior by a government. When we learned so far about what is happening in the market . There has been this distortion that happened way ahead of when they started buying bonds. People knew they would start to buy these bonds and there was so much speculation of research that went into what could it potentially by . The ecb have the sense that thy would keep this specific purchase quiet. Reveal sayingld we are buying and these are the general sectors, but within hours we knew a specific bond, we knew this sense, the rating. We knew everything about it. The first thing they do is an tallying an italian telephone company. And they are buying junk bonds. This is supposed to be an grade program. But they are being really aggressive they want to frontload their purchases before the summer slower month. They want to get out there in shock and all. When it is doing is creating more concern among investors. David mario draghi look at Goldman Sachs . Are they looking for altruism and the market . The goal is to make money. Saying this is what theyre going to buy, lets sell it to them. How does he expect us to end . Ell it seems like the idea is lets crowd out investors from the safer investments pretty broadly. They going to take risks, but they who love the Smaller Companies and say lets get this economy going, give money to the companies actually doing the increases in hiring. Does that really work . Is there any evidence that that has ever worked before . Look at what happened with the u. S. With u. S. Treasuries. They can borrow money to invest. That is the theory. They are trying to help corporations get access to capital more inexpensively. Why is that run . Yes, they are getting financing more cheaply, but what are they doing with that financing . They are buying back stock or increasing their dividends. You have companies that are issuing debt. Do they need more money . These investmentgrade Companies Really need a boost by half of a percentage point. When we have bill gross saying there is a supernova effect coming, you see sovereigns going down to zero. Knowing corporate going down to zero. . Hy would we transfer this was really interesting by the policy of the with history replete itself. To defend them, it has not blown up yet. It is unclear what the catalyst could be. [laughter] you say this is a something that we are waiting on since 2007, it hasnt shown up yet. [laughter] are we seeing increased Inflation Expectations . No. They showed their expectations for consumer wages, they are not. If you give patient too much blood that are, eventually it will die. That is the argument. When will we get a report card . He would say we just started, dont judge yes. We they something will start posting in july with an actual list of what they own. The question is will they buy enough . If purchases are too small, it will not have the effect that they wanted. With respect to their sovereign debt purchases, it does seem like they might be struggling to buy enough portuguese and irish debt. They have very human markets, you have markets that are not that liquid and not that big. But it makes your job so much more interesting. Thank you. Explosion. Ead, the a massive explosion of a giant star is a supernova. Coming up, or low Interest Rates destroying the modern Financial System . Youre watching bloomberg. You are watching london. St. Pauls cathedral, looking at the european stock markets, not doing so well. It is time now from bloomberg trends, the top stories leaders are you viewing on bloomberg. We are starting to see risk modeling in the event of a brexit. At what wouldding happen if european equities and , one denominated equities of the manufacturers plummets. They are not pricing it in in either direction. Leave. Of a it will be a very bad day on june 24. A lot of the percentages are that it will not happen. Want to look at where the money is. But there is a fair amount of sophisticated polling that has indicated it relatively unlikely. Lets hope so. So my trend, it is actually deutsche bank. It has more bad news. There is a whistleblower involved. They are in trouble because of not taking the losses they. Hould have the back security one issue that stocks the ks control control issues internal control issues. You have to wonder if they have really changed the culture, and it is the way they incentivized or not. It is a concern. Legal departments are working overtime. John has a tough job because if you did not have all of these writers, he has issues with his house. That, the sno theres no start. Hope he does every job. Keeping your job, how about keeping your reputation . Phil mickelson in the world of golf. We know that he has been linked ofa variety grumbling situations. Mann monday in california a was sentenced to prison for a year and a day, suspected of blundering. Laundering. This is the second one in about a month. Easy to pile on phil mickelson, but with golf, popularity eroded. Closing clubs closing. And golf fans do not like e misbehavior. Coming up, a low rate world. . C sv this is bloomberg go. Theres really just one story today, the wall of worry. Now talking about angry markets. Theres so much going on, Global Growth. The fed on hold. I want to show you a little bit of our losing picture but overseas equities and if you take a look drilling into the if its way, its a material climb so youre seeing energy stocks. Its everywhere. Sam . Thank you ahandsa. We are about two hours away from opening bell. Investors are buying up bonds around the world sending Interest Rates tumbling to record levels. And described volatility in the British Pound Sterling as the battle of britains future batters investors. And people with knowledge of the situation say the securities and Exchanges Commission is being helped by a whistleblower in a post crisis mortgagetrading business. Eanwhile lets get news from the Obama Administration is the verge of giving military more authority. Afghan troops had been struggling in their fight against the table. And the closest election in perus history, pablo the former finance minister had a little bit more than 50 of the vote. The Election Office is expected to make that official in the next few days. And powered by our journalists in our news bureaus around the world. Thanks, ramy. Now we take a look at how george sore roses predictions played out. Tom keene joins us. As you know, he certainly went short on the world and this is piece predicting what he did in the past. His so far rose fund fund cut ts Stock Holdings by 37 and index hen the s p 500 has returned 3. 1 . Well, im not going to take shots at sore rose. You e the i like that re wearing global macroblue. Whats interesting about those bets is you bet the piece but dont know the end. The thing that they miss is all the investors understand they dont know the when. He doesnt know when he gets the when of his gloom and his caution. So take caution for example. He said im worried about china. Im going to go short on china. It hasnt gone nearly as bad as he thought. Your point is, wait. Tom just wait. Waiting is a big part of it. But we have in the bloomberg story bets, by definition if some of those dont work out, a global macrofund, what its doing is its a lot more sophisticated than the fwobal moving parts. Now he can be but the gold has gone up more. Tom its gone up some 37 . My point is he can say im cautious about u. S. Equities and take that belief and that position knowing he has got time for the win for the when to work out. That raises the attention as we Pay Attention to george soros who is a very smart man, should we be paying attention the fact that he thinks the world is going down. Are we jow reacting to what he is saying . Tom i think we are overreporting the global macrocontinuum. If all of us invested by mr. Sore rose, we would be in trouble because thats different so if he has gloom, does that mean i go to cash . Theres lots of proof that would be a dangerous game plan. And there was the bet early that he would bet often the yen. I would say oil is the toughest mathematical detail. So if you have a strongerweaker yen bet, mr. Sore rose is extremely cautious on japan. Maybe he has a weak yen bet, and as you know, its gone completely the other way. M well, its called an ty ony momics. Whether its a sophistication blunt soros or some more instrument of mr. Bass, its he went long on argentinea which is in default. Tom well you get a series of macrobets and you go in knowing you will be wrong on some and its ok to be wrong on a global macrobet. I hope i think your global macroblue is better than my global macroblue. Dave oh, no. Ours is doublebreasted. Janus capital tweeting from the fund manager bill gross. Its the lowest its been in this is a super nova that will explode one day. He managing director of and credit strategist. What is he talking about here . As i understand it you would buy a negative yield bond. Does that mean the world is a wash for people who think we are headed into a deflation narrow period here . The impact on the economy is insitous because it takes away from the what does the fed do to savers . Because savers get punished. If the problem is low growth because of low demand, they are not going to invest more just because capital is cheap. And in the event that they doing vest because theres pressure to produce. S p 500 last year came to mind, the difference in al lowe indicating not only that, in certain cases, you get paid toboro. In the long run i think thats really bad for all of us. So in this environment, whats the best investment . Thats hard to say. There are very few lowhanging fruit. Because of this environment because people are driven by fear, you see gap down and gap up, whats important is a, to have a longterm perspective and b to be able to differentiate companies that are quality companies. Ive talked about a lack of discipline and the ability to differentiate its going to give us the real task outside his multial of fear. Where does that leave high yield in terms of our relative appeal . The risk of it . I expect it to come down as well, because its going to move along with Investment Grade. E already see that low impact. When people rush into things, there will be period when there are fears in the market and youre going to see because there has been, as does a rush into spread become less relevant and he absolute number become more relevant . There is concern about the absolute number. And i think the spread is less relevant, the lower we come to zero. What is the so any kind of debt . However, there are opportunities in smaller issuers and smaller issue nts. If you break down credit indices and they provide a not so great mirror into the credit world, because once you break it down smaller issue nts and issuers are still unloved because not many people have the ability to to o it must be difficult find opportunities, where are you making money . Where have you made money in the past year . So our ability to look through smaller issuers, if anything we are graphed to see the funnelled ever fundamentals are starting to get rewarded. Its going to take time, and i think for us patience is a currency not many of us have, bu