Spaceship. It disintegrated after a device to slow the spacecraft deployed prematurely. Pilot error is a possibility. The copilot was killed. The pilot was seriously injured. Known thatalways commercial space travel is an incredibly hard project. We have been undertaking a comprehensive test program for many years. Safety has always been our number one priority. We do understand the risk involved. We will not push on blindly. To do so would be an insult to all those affected by this tragedy. To takeon hopes passengers above earth. A big takeover in the advertising business. The worlds thirdlargest ad company has agreed to buy sapient. Moving on the new york city marathon. 50,000 runners had to deal with wind. 30 Miles Per Hour with the up to 50. The mens surge was won by a kenyan. The womens was won by another kenyan. It was freezing. It was cold. It was legitimately called. Cold. You did not see a lot of pain and agony in central park. Cold is better than hot, is my basic take. I trained this year. I was going to. There was a whisper of a moment, a glimmer where i considered it. [laughter] one marathoni ran in the cold and i would qualify for boston if i was 75. Thats good. [laughter] lets do an extended data check. Futures up a little bit today. The 10 year yield is turning. Churning. It is in the currency market. On to the next screen. The vix showing massive complacency in rally on friday. The tao, reacclimating. The yen dow, reacclimating. Weaker. Dramatically charts, if i can bring them up with my puny brain. Gold is breaking down. Gold at 1200. That is major, major support, that gold has broken through and is soggy this morning. The first backtoback monthly decline. This is the yield. We are better. We are higheryielding relative to japan. You can see they are grinding lower. This is the attention in europe, as well. As germany rolls over. Diverging monetary paths. There it is. Lets focus on that right now. We have two phenomenal guests for you this morning. The dollar surges. Gold cannot find a bid under 1200. Oil, 80. 00. Call it one big distortion. Carl weinberg joins us. William lee joins us. We are thrilled to have lee and weinberg with us. We will talk japan in a minute. Why is it taking so long to readjust . The market readjusting on friday. Will we really just further today . I think it is a oneshot pop in japan. The Biggest Pension Fund and the company said they were increasing their allocation to 12. 5 of their 1. 5 trillion portfolio. Lets hold both of you into the conversation. Gives draghiapan cover to go to the bundesbank. We have been saying that we need more stimulus. Monetary policy can only do so much. It buys time. It buys time for structural policies. There is nothing left to do. Care what thelly ecb does right now. Tool. Ry policy is not the they need fiscal and structural changes, they need to recapitalize the banks. Amen. The twomy slow clap for of you. You cannot fix it with Monetary Policy. [laughter] effect of is not the Monetary Policy. I see longterm decline based on assumptions about lack of investment, lack of stimulus. Melees. Tural malays it is slow growth. We cannot get rid of it because it takes something much more fundamental. When you see oil done to a low 80. 00, is that reinforcing . That is a reflection of the lack of demand. You look at this, the president meets with janet yellen this morning. What perfect timing. The first oneonone meeting. What is that about . Monetary policy is supposed to be independent. What is sad about this is that we have not coordinated fiscal policy to support Monetary Policy. Yes, but we are in better shape. Great shape compared to europe. Are we removed from these debates in europe and japan . We think that the u. S. Economy is more than Strong Enough to continue to grow despite the headwinds from europe and japan. The drop in oil prices and domestic gasoline prices adds more to the u. S. Economy. Thember, europe is not whole world, and neither is japan. There were much bigger economies out there, like china, which at 18 million new cars per year, new demand for oil. It is hard to be bearish on oil prices for more than the very short term. Energy, int oil, china, it is big, big, big. 18 million cars per year is more than japan makes, more than we wake make. We think that every 10 per barrel off of oil takes adds one or 2 10 of a percent to u. S. Gdp. Those are the same numbers we come up with. Can we get them off set, they both agree with each other . [laughter] our imports are a contribution to spending. About a quarter of a percent. s Monetary Policy ever divorced from actual politics . No. Right now, we need to make dont start financing governments with Monetary Policy. That is a big nono. Is the game theory changed with the bank of japan . Janet yellen has fewer degrees of freedom to play with because of this historic action. Think bank of japan is really on a track by itself and i analyze them completely independently from the other two Central Banks of the world. Their job is to keep the yield flat. I think they are increasing quantitative easing to offset a change in strategy by the government pension fund, the largest investor. They are reducing holdings of bonds and the amount that the bank of japan increased is to keep the yields where they are. This is very much politics in line. Weinberg and lee to get you started. We will look a geopolitics in our next hour. 7 00remmer, the entire hour. Our twitter question of the day. What is the biggest geopolitical risk to Financial Markets . That is the question to get your november going. Stay with us. Our election coverage tomorrow. It is bloomberg surveillance. Good morning. Elections are upon us. There is the beautiful capital. Some assembly required. Which state are you most focused on . From iowa to louisiana, there are a number of them. We want to check in with our white house correspondent, who checks in with us about our most watched races. The momentum seems to go in the republican favor. Republicans are on the verge of a route. Is that the deal . I do think anybody is willing to go all in, but republicans have the momentum, there was a ton of pulling that came out that in just about every state they needed, they are in a great position. Harry reid had a Conference Call saying iowa is a must win if he wants to maintain the majority. A poll came out and the Des Moines Register that showed joni up, up seven points right now. That is a huge deal. As you move south at little bit, you have two seats the democrats need to pick up if they want to try to defend their majority, kentucky held by Mitch Mcconnell , georgia which is now an open seat. Both of them without his potential areas were democrats could make drug rest progress. Both polls are looking bad in both states. , there are aort lot of pathways for republicans to get the senate majority, very few for democrats to hold it. Sobering. It kind of looks like the republicans are not just going to get there, but they are found to be on 50. The most likely distribution is a 5253 seats. I think that is fair. Good harbinger to watch is new hampshire, where democrats would never thought they would have had to be dumping billions to jeanne shaheen. If is down, there is a good maybe they get to 54 is a possibility. When you look at this, the Washington Post shows that this is not unusual. I want you to tell me what happens wednesday morning. Thethrough the it elections, what kind of government will we have on wednesday morning . It is a great question. It is one the republicans are trying to figure out. That was a lot of concern if republicans hold both chambers of congress, they want to show they can govern. Everything,ght veto but they actually want to send something to his desk. It is a big open question. Ask john boehner what a dislike to have control of a chamber. It does not make things easy. It will not make things any easier because of ted cruz and rand paul. We have a couple weeks right after the election where they are going to have to pass funding bills for the government , pass a bunch of things in the lameduck. How that is operated is going to be interesting to watch. Has been miaent for a couple of key senate races. He has been showing up for the governor races. Is he moving the needle for those . He has been hitting a couple of these governor races. To getll about trying out constituencies that are still supportive of him. That is not a lot of people left. But there are people in blue states where he has been going, and connecticut, wisconsin, maine, places like that. Want to win these governors seats and they need africanamericans and hispanics to come out. That is to the president is targeting. This is one of the few areas where he feels like he can have an impact and that is why they sent him in. Thank you for giving us the lay of the land. You were talking about malays earlier. Malaise republicans are going to have a to do list. What is your to do list for them . My to do list is high structural deficit, high public debt. Processen political prevents us from forming the coalition we need from getting politics in place. Two years from now is when the problems are really going to hit. Any level ofve confidence that the broken political process can be fixed . It is a global problem. The voice of the people has gotten so loud. Politics and power cannot get it together. Do you agree with that . Are not being driven by conviction anymore. They are driven by reelection and the polls. That leads to Bad Solutions everywhere, particularly acute when it happens in the u. S. Congress. The views have been so polarized that the polls are making it difficult to form the coalitions. It omar sounds like somebody needs to leave. [laughter] imagine that. Forbid. N for bed with all due respect. Extended coverage here at the midnight hour. Look at that at the midnight hour tuesday evening. Stay with us. It is bloomberg surveillance. Good morning. Good morning, everyone. Citys one world trade center. New york continues a strong recovery, particularly Downtown Manhattan. We say congratulations to conde nast to changing the landscape of Downtown Manhattan. That is a single achievement for all of new york city. The architects, the politicians, everybody. I cant wait for that to not be a big deal. I cant wait for that to be normal. God, i am sore. You were running a marathon last night. [laughter] tom did have a late surge on sunday. [laughter] this has to do with the new mediocre. Economy is slow, individuals and businesses tend to play it safe. Her point being that there is no corporate leadership, no individual leadership, no Political Leadership because some things are getting better, other things are falling back, no one is taking risk. It period of low growth. It is easy to have amazing, fantastic ideas when everyone is in the market. I was surprised that somebody was able to described the way i dressed. It is definitely called normcore. It effectively means dressing and bland and generic clothes. When you hear this talk about no corporate, Political Leadership because times are not bad that anot so jolt anybody to any kind of impetus, does it strike as familiar . It scares us because all of these relationships we are and have areas of growth. Are we going to get the investment . Will we get the relationships we have in the past . Is there any country out there that is in a position to take a bold step . China is redefining their norm. The kind of reforms with urbanization are absolutely key. That is something that ian bremmer will speak on. Absolutely. He will join us in the next hour. Lots coming up. Here is our twitter question. What is the biggest geopolitical risk to your Financial Markets . We have been thrilled at your many responses. Futures and doubt futures are negative. Stay with us. Good morning, everyone. Bloomberg surveillance. Of the weekend. Already some sharp analysis out about putin. Publicis. They are taking over sapient. Wpp Martin Sorrell of calling at the rebound transaction. Competitor. E is a publicistail is that already gets 50 of its revenue from digital. I found it interesting that have already crossed that threshold. The second. Sir Martin Sorrell if this worlds Biggest Advertising Agency . Sapient in and field to 7 billion cash in a for 3. 7n a deal billion. I cannot say how much the bank the bank enough how of japan stunned markets with their decision. The japanese economic experiment is a failure and fridays experiment wont fix it. You are one of the great voices and it. How desperate is mr. Abe . To deliverying inflation that he cannot possibly deliver. Quantitative easing cannot change things. I look at the relationship of napanese yen to the korean yua and it breaks out to new korean strength. That is not good for hyundai, is it . No, it is not. Japanese exporters become a little but more competitive. But japan is not the biggest now. Ter right theyre using workforce, they are losing technology. They are not investing. Are we in the midst of a currency and trade war to come in asia. I think they view the cheaper yen as a solution to their problems. I think that is a failing solution. Depreciation buys you time to get things in order. But it has a temporary effect. You have the trading sector and the domestic economy that is mired in a lot of problems. Have areroblems there. E does not have the political influence to put through the reforms that he needs. Exports are going down. It is not a bifurcated economy. The whole economy is in the trashcan. We are hearing that the problems are cultural. There arephemism for not enough women in the workforce and there never will be and the japanese are not big on immigration. Theres nothing wrong with the japanese economy that immigration cant solve, im going to throw that into the quote of the day. If you do not solve immigration, the economy cannot grow. Extrapolational is that the economy is going to get worse until something breaks. This is japan versus korea. The red box is the asian crisis. Of 1997. Look at the strength of last month. Korea, china, taiwan, singapore. Goingis something that is to shift the power calculus in east asia. I want to get to your thoughts on china. You have been pushing back against larry summers, who says that china will never to the norms. He is talking about the wrong norms. China is experiencing monetization. When iteat for them happens. A small fraction of the world has actually benefited from modernization. They have to revert to a norm that is not applicable, that is just wrong. Theyre moving 20 Million People per year from the farms to the city and every times that happens productivity goes up. I want you to bring us back to the United States. U. S. , we face similar problems. We have to get productivity up, we have to reallocate resources. China is trying to shift to consumers. The u. S. Needs to shift to a smart source economy. Will hold a summit. What kind of efforts can you expect to move into modernization . China is going twice as fast as the u. S. Is right now. I dont think they have to explain a lot. They have a Reform Program in place that fits a lot of the deficiencies. They are growing at 7 . One that is disappointing, it is to pretty great by world standards. There is this word pivot. Everybody is pivoting. We are pivoting in asia. We dont really pivot. We kind of purulent. Irouette. I think you are disagreeing with larry summers, which i heartily applaud. Was that an editorial comment . [laughter] all growth eventually slows. Eventually the process does end. Im disagreeing on fundamental approach to why china is growing. They moved 20 Million People front farms to the city last year and the your before and the your before that. The pace of migration is actually picking up. You have to build 20 million housing units. 20 million dining room tables and chairs. They need other things for urban life. Urbanization is key for growth. The population is really topping out, but they have moved people in a way to work more productively. That is the key to their future. Are six entered 50 Million People on the farms. This modernization has a long peoplego 650 million on the farms. This modernization has a long way to go. It is happening every minute of every day. How china hear about is losing the one child policy . Are you going to have a child where there is not a clear sense of where career is . They do not have a market to allocate resources. I would not be having kids in china right now. A fabulous discussion right here. We will talk about this with ian bremmer in our next hour. When we return, our single best chart about education. This is bloomberg surveillance. This is bloomberg surveillance. It is time for single best chart. Higher education is one of the biggest. The haves versus the havenots. Credit to gary laneger. Through 2000 12, inflationadjusted wages increased 23 for those with a bachelors degree. Real wages fell 9 for those with no college degree. It is not a solution for the entire economy. It is no longer the union. Ard it used to be you have to be able to define the right skills. That is a scary thing, an apprenticeship in economics. We are going to take a look at a political apprenticeship. We all sit at the knee of bill clinton. , whose namee braley the obamas mispronounced when they were out there campaigning. Bill clinton knows how it is done. This is an outfit for the clintons granddaughter. Lookout thrilled he is. He is thrilled to be alive. He is thrilled to be bill clinton. I will tell you all you need to know about this election. This event was a barbecue being held in waterloo, iowa. That is what it is looking like for the democrats. Wallenda. Ik a daredevil walking a tightrope in downtown chicago. He broke two records. One for the steepest tightrope walk. This is in chicago . Yes. And the highest blindfolded walk. 700 feet above street level. There is no safety net there. Im counting down between when tom says keynesian and blindfolded. The cover of bloomberg businessweek. We are still on chicago. You kidding . He has a go pro on his head . Wouldnt you want to capture it . He is blindfolded. How does he do that . The wind was blowing 25 Miles Per Hour