Markets go down. The s p, the dow, and the nasdaq all down today. And it unexpected build in inventory, and it is down by about three point 4 . The declines we are seeing in oil today that we have seen recently mean that the twyear performance in oil is particularly notable. You can see a decline of nearly 63 . That is a record twoyear decline for oil prices. Haveow that commodities been one of the big stories of the year, and i mentioned that inventory. If you take a look at the terminal, i show you this throughout the year because it is a remarkable one. Barrel a 100 million gap, so when you talk about supply putting pressure on oil prices, the chart tells the story. And the other thing i went to tell you about is the 10year note. We are seeing it little changed and Goldman Sachs has a yield that climbs to 3 . With the increase in rates from the federal reserve, that is what were going to see happen. Finally, taking a look at the basket ofrsus the currencies, that is about a quarter of 1 . That does not help oil prices either. David that is julie hyman at the markets desk. Lets check in with raymond. Raymond bill cosby has been charged with Sexual Assault. Said that he drugged and a salted or in philadelphia, the alleged attack happening in 2000 four. They decline to charge him then, and several women have come forward with similar accusations. Afghanistan, security is shaky, and they may ask for more soldiers, and the general says he will keep as many troops as possible through 2016 and will ask president obama to slow the withdrawal of soldiers. He says they are needed to counter a resurgence by the town the band. And in turkey, police say they have foiled a possible new years eve suicide attack. They have arrested some islamic , and militants in ankara there were also suicide vests that included bombs. Issues betweeng north and south korea, there was one man killed in a car accident, a diplomat, and it is raising suspicions in the south. Areh korean officials investigating. David . David there are plenty of headwinds from overseas, including the second largest, allowing it to grow. Massive losses on domestic stock prices, and the former Morgan Stanley ceo remains bullish on china. Here is what he said this morning on bloomberg. What is going to happen in other emerging markets . My view is if you have not been to china recently, go there. It has slowed down, but longterm, it is a growth engine. A chief am joined economist. It is great to talk to you again. Lets start with growth. Looking at the outlook for 2016, lets start with emerging markets and what kind of growth you see in the new year. To be ank it is going difficult time for emerging markets and developed economies. We saw the imf coming out and saying it is likely to be a very disappointing year in 2016 from a growth standpoint, and i think many of the lingering themes that will be in overhang, the convergence of central bank policy, a very strong u. S. Dollar, and domestically, we continue to face ample regulation and inventory overhang, and all of this is unlikely to change in the next 12 to 24 months, so we are anticipating a very disappointing 2016. David yes, Christine Lagarde writing about that. Julie hyman just talking about the strength of the u. S. Dollar. Do you see that persisting . I do. Especially when we think about the divergence. A risingmbarking on environment, while we see other Central Banks thinking about adding potential stimulus, and so as we see that divert and sketching you to grow with the fed presumably hiking may be two or three times route the new year, i do expect the dollar to maintain the strength. You. let me ask was this something you were in favor of . We have been in the 2016 cap. Camp. To justify the increase. Certainly, it was widely expected by the market. Goingwas a probability into that, but the rate increase was affected by the very dovish statement. At aconomy is just moderate growth space with neither of the fed will mandates yet met. Dual mandates yet met. U. S. Economy still muddling along at 2 . I think the fed would have been on the sided to err of caution to see it come to fruition in the numbers rather than based the lift off on expectation. David Janet Yellen Yellen addressed that head on. Did she do a good job of explaining that . She did a goodnk job explaining the rate increase. Waiting too long could force them to tighten down the road, which could eventually lead to recession, and then why would the fed ever be forced to too aggressively tighten, so there was a little bit of double talk there. But i do think the fed did a very good job in expressing the. Ventual pathway for rates she said time and time again this is going to be very gradual, barry slow, buried tepid. Ears like itng the f. Ould be a 2004 style she said it could be years before we get back to a new normal. They are expressing expectation for the longerterm pathway. David what about this playing out in 2016 when it comes to the pace of these hikes . I think were going to see an increase quite soon. After all, the fed does not want to be seen as one and done. I think we will see another 25 as march, andy they are basing this on expectations and not actual improvement, and i do expect a total of maybe two or three the route the next 12month period, and they expect further improvement. Two or three throughout the next 12 month period. David we got some new data on housing, sales declining, and here we are talking about contracts. How worrying is that . Well, it is a big concern to get we saw existing home sales fall in the latest report, but the National Association of realtors came out and said it was a oneoff, a matter of changing regulation, that as we see that perpetual decline, that does suggest further weakness coming down the pipeline, independent of that change in regulation. Now, of course, if demand is already faltering, we now embark on a raisingrate environment, which will make it more difficult for the average american to afford a largeticket purchase, like a home, so we do expect this to be, at the very least, under pressure. David is this spending in the new year . Consumers are out spending. We have seen some positive sales as we round out to the new year, but that was coming off the drop of several months of very minimal spending. This is around 3. 5 , which is still positive, but down from a 4. 5 ace at this time last year, so we continue to see a theme of a loss of momentum with the Second Derivative decline. Still, consumers will be more willing to spend other than businesses, as businesses are still very much sidelined by security and rising healthcare costs, just to name a few. David a chief economist joining us from minnesota. Coming up on Bloomberg Television, a developing story. Says it will default on some of its bond payments due by january wide. And then after bill gross left, how is the Pimco Total Return Fund doing today . And filing for bankruptcy, the latest on the saga with shkrelis, coming up. David welcome to Bloomberg Markets your quote i am david gurua. Boys has 800 locations in more than 30 states. And a chief economist and i were just discussing contracts to why u. S. Homes unexpectedly fell last month, showing the interesting situation. Index fells, the 9 10 of 1 following a revised gain of 4 10 the previous month following an increase of 7 10. Apple has agreed to pay millions to settle a tax fraud case in italy. That is according to a person familiar with the matter. Apple was accused of evading taxes through an irish subsidiary. Apple denied any wrongdoing and said it does not use, quote, tax gimmicks. And shares have increased since Oprah Winfrey joined the watchers,or weight and it had a video that renewed optimism, hoping that she can turn around the longstruggling company. And a big turnaround at the box Jurassic Park and Star Wars Clone this beats the record set in 2013, and i will have more on that story. And that was your Bloomberg Business flash. And pimco after bill gross left. David welcome back to Bloomberg Markets. I am david gura. Says it will be defaulting on bonds due january 1. I am now joined by laura. On the scale of bad news, approaching this deadline, how bad is this news . Laura i do not think it is that bad. I think they knew there were going to be some payments they did not make an did some tactless to figure out about the payments not made, and more likely than not where it would be, so i do not know that it is that surprising. David you mentioned the town kilis, and it has been torturous, trying to figure out whom to pay, what to pay, and what not to his point, people asking about, wait a minute. Bonuses toing these the government employees. How do you not have the 35 million to pay the bondholders . And in some perspective, you can have some differences of opinion. They are saying these were mandated by law, as well, so all of these are mandated. The job is to go through and say which ones have the biggest priority, which ones to a have to met, because it is clear i cannot make them all. They had been very clear that they will try and try to make that. After that, there were other payments, and there was a disagreement on what the priority would be afterwards. Every Revenue Streams were dedicated to different kinds of bonds. This is why you go back to this idea of wouldnt it be better to have a control board or a chapter 92 force and have a judge or some kind of authority to say this is who we must pay first legally and not just a politician. David what about the other . Laura there are the Public Finance bonds, and this is part of it. It is what is called the infrastructure agency. David the governor was not shy about blaming this on congress for not getting something into the spending bill. We have the democratic counterpart saying they want to have a hearing on this situation as soon as they get back on the fifth of january. Laura there has been a lot of lobbying. He has been in front of different committees to present what he feels is right, and there have also been to print hedge funds and mutual funds who have gone through and leaned on their contracts contacts in congress to do that. You have this mass of people trying to influence congress, and they say they are going to address this, but i think how quickly is the question, and we exactly. S is not when that will actually transpire, i think that will really be the issue. Lore, thank you. She covers distressed debt for us here at bloomberg laura, thank you. Muddy from the Pimco Total Return Fund, and even though pimco was the biggest loser in terms of withdrawals, it has actually outperformed over 80 of its peers, beating the benchmark index for the past months. Funds from los angeles, john, it is good to talk to you again. Today,te of this fund house apprising is it that it is doing as well as it is . Ahn it is hard to do this at time when people are pulling out money, because it kind of limits your options. What happened with the highyield funds that ran into trouble is that they had high redemptions, and they ended up with like the worst product, and so they entered this death spiral. Now, pimco total return is much more investment grade. Same issueshave the as the troubled bond funds, but the parallel is it is harder to go up when people are pulling money out. David how measurably different is this fund . When you look at the composition of it, has it changed radically since he left . John well, the Management Team is pretty much the same. Easel her and mark mark. A steady teamare and that they are keeping the boat running the same way. They also rely heavily with the outlook that pimco has for years, so they will argue that they are going along in the same direction, and, in being nots like reliant on one strong personality. It is a team that is running it now. Great quote was a during your piece. Clearly, it feels like they have turned a corner. Like they have turned a corner, and they also feel like the opportunities have turned a corner. As far as the opportunities, a in seeing opportunities energy, emerging markets, sectors that have been beaten down a lot, so now prices are attractive in some of those areas. As far as turning around the ship, that is something that takes a long time. Well panic and pulled a lot of money out fast because of bill gross leaving. So they were under a lot of pressure to do a good performance and show that they could keep the ship going in the right direction in terms of getting returns for investors, investorselieve that will return. You, all right, thank john, covering this for us from los angeles. Coming up, the rise and fall of the socalled ad boy of pharma. That is next. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. David live from bloombergs World Headquarters in midtown manhattan, you are watching Bloomberg Television. I am david gura. We have more from our news desk. Cosby, theill comedian charged with sexual the firstom 2004, criminal charge in 2004. He was once considered americas favorite the dad, but the comedian has been talked by allegations of Sexual Assault. Those charges were listed today. Take a listen. The charge we are proceeding on today involves one victim, involves a victim that went to mr. Cosbys home, a felony of the first degree. The 70 eightyearold comedian had previously said he had consensual Sexual Assault employee. Emple and the fight against Islamic State intensifies, and mr. Biden is joining turkey. The u. S. Is pressing turkey to do more to fight the terror group and tighten its border with syria. The u. S. Is accused of launching is accusing a country of firing rockets near ships firing through the strait of hormuz. Someone fired less than one mile away from a aircraft carrier. And a family of 12yearold tamir rice is suing the city of cleveland. And the two white officers are involved in the shooting are facing a departmental probe, which could involve termination. Meanwhile, they are trying to get cleveland native lebron james to join the protest by sitting out on his basketball games. Local news 24 hours a day powered by our 150 news bureaus and more than 2400 reporters. David julie . Julie a dramatic impact. Lets look at oil prices. Exhilarated throughout the day. 10 30 this morning, we got the Weekly Oil Inventory numbers from the u. S. Government, the energy administration, and we saw the unexpected build in crude inventory last week, and that put more pressure on crude oil prices. There is one etf here in europe see itacks, and you can is down 2 as well today, so that is what is going on with oil prices, and russia is quite dependent on oil for its economy. Take a look at the etf, as well, which is interesting because it is only down not even half of 1 , even as crude oil has fallen. More dramatic, however, is the fall of the russian ruble, and there we see underperformance. Here it is on and intraday basis. We have seen about a 19 , 20 increase of the dollar versus the ruble, and on a closing basis, it has been trading near a record low, the ruble versus the u. S. Dollar. David that is julie hyman at our Bloomberg Markets desk. Taking over and trying to rehabilitate, a company now filing for bankruptcy. David live from suburban World Headquarters in manhattan, you are watching Bloomberg Television. Ura. David g was on Bloomberg Markets on november 25, just days after buying a company, and he told us why he thought it was a good investment. Potentialere is a drug for leukemia, and we are really excited to see that. Hopefully, the patients who have this really awful, terrible disease will get better, and maybe in q1 or q2 if our trial works. They have been struggling for a while, and there are many different ways did could invest, and why you go about this in this specific way . Martin we could not get the calls back, and we needed cash, and we see that a lot in corporate america. There is a lot of irresponsibility, especially in Management Teams, so we named ourselves the new management of the company, and now be company has the cash to do this trial for this lifesaving drug. But one thatgs, was given away for 1 million and then sold for 20 billion just a handful of years later. I think it is a promising drug, but we still have to do the trial to find out. Operate thisant to as a separate company. Any offers down the road . Istin three year survival 20 . Most people do not have a good shot. David i want to bring in drew armstrong. He was there then and is here now. Compressedsed by how this timeline is. It was only weeks ago that he bought this company. Yes, drew the stop was on its way to never being heard from again, and it closed at about 39. 50. To beingrom nothing worth millions just because he stepped in. And now we are looking at bankruptcy. It was gone, it is here, and now it looks like it is gone again. There are some remaining assets. They do not go away. But, yes, that was a wild ride. David he was talking but the inefficiency of the stock market. What is the latest on that . Drew we saw efiling today. It is a way of preserving the company, because they will say that this company does still have assets. Ofs see they win the appeal being delisted. That is a good thing. They have two drug candidates that had some potential and pipeline possibilities for treating some very hard to treat, aggressive forms of blood cancer. It is not that there are no assets. However, this company was Martin Shkreli. He took it out of obscurity and turned it into a hunch Million Dollars of possibility. Gone now as well as two directors on the