The yen keeps strengthening. The yield on the japanese fiveyear fell to a record low. The yield on the 10 year rose. Oil sprintedof past another milestone today. West texas intermediate fell below 55 per barrel for the first time in five years. Brent crude fell below 60. Oil is now down 45 this year. It may fall further. Opec should not be expected to cut output while other producers cut more. Pump more. Policymakers at the Federal Reserve a twoday meeting. The Feds Open Market Committee is seeking a way out of the loosest Monetary Policy in a century. It is another commodity in challenge. How about orange juice . It is still the most popular fruit beverage in america. We just nondrinking at the way anita bryant told us to. Tropicana has lost a third of its sales in the last decade. Stunning. The popularity of diet sports drinks diet soda, sports drinks, and guinness. [laughter] ok. Orange juice. We are going to do an extended data check. Stay with us on Bloomberg Television and radio. U. S. Equities are resilient. Futures are up eight. We have seen that fading day after day. Euro turns. Nymex is stunning. On to the next screen. 20. 42 vix, 20. 42. Yields are lower, note prices are higher. 69. 01 honorable. When they ago, applied makeup to me, i did not think we would see that. There it is. Brendan greeley, help me out here. Back to 2012, here is a normal 10 year. This is the mother of all flights. Curve, nice tension, down we go once, down we go twice, there is the low. This has not caused panic in germany the way it would in any other country. Why not . See flight to quality, they are proud that they have the quality that one can flee to. J hear germans going ja, a, ja all the way down. [laughter] is rosetta stone. [laughter] what do you see, richard haas . It is stunning. It is lower oil prices, geopolitics, loss of confidence across the board and it has come together in a most interesting question. What does russia do . Lets look at a trend based chart. This is the russian ruble weaker. This is elegant. Here is the russian bank coming in. The little white line goes right on the moving average almost perfectly. This is the failure that scarlet mentioned. This is the weaker wrubel. Rubel. We need to go to moscow. We need to go to berlin. Expect the unexpected. Expect the massive intervention. That is never unexpected. Todimir putin intervened protect the ruble. The people of russia will suffer. The oligarchs will survive. They will pick up and move. Berlin. Nichols forget about the kremlin, forget about the oligarchs, what is it mean to the people . There is a sense of panic. Outside ofe queues exchange booths. For most people, this brings back memories of 1998, when you had huge devaluations and default on russias debt. They dont see the policy actually doing anything about it. This is very sensitive and they dont want to put you in an uncomfortable position. What about the fragility and future of the russian banks . Can you give us any reporting on what they are doing right now as they respond to a 17 yield . Sectoran, the banking has been experiencing difficulties for some time now. This is one of the things that people were predicting. Risking things in the banking sector. It is a bit early to say what the impact of that rate hike will be. If you talk about the economy as a whole, it is going to push the economy even deeper into recession next year. Constant calls, hans nichols, what are germans thinking about this morning . Are they thinking about the loss of the russian market or geopolitically . Pmi disappointed. It is down a little bit. Perhaps more importantly, the zoo survey came in much higher than expected. It was expected to come in around 20. It came in around 34. This is a forwardlooking survey. Pmi is more real time. I see two stories in germany right now. When is the actual data, which is soft. But there is a bit of optimism starting to inject into the economy and im not sure from where that springs. This is important. This is Governor Carney trying to maintain. He is strong linkages in the core of the Financial System and inis a very different place 1998. I believe the governor of the bank of england is supposed to say that. You have Central Banks in the emerging markets with a lot more currency reserves than they did in 1998. What kind of comfort is the russian leadership offering their people . What is the level of rhetoric taking place right now . The government has basically said that they are taking all the measures to halt the ruble declines. Putin attacked speculators for driving the ruble down. He is going to beginning his annual press conference in. Odays time we expect more words of reassurance from him. I feel a kiam in the movie casablanca. 101 . Is out of haas what is he doing . Does he think about playing the geopolitical card to read he could try to do the wag the dog scenario and a kind of distraction. Will he signal some reasonableness and buildup expectation that sanctions might be eased. You begin to run out of things to do domestically. You said russia no longer represents anyone anything that appeals to anyone except ethnic russians. This putin realize this . Slightlyk he has a grandiose version of what russia is and what it can do. But we are not heading for a new cold war. Russia can be a spoiler. T can be a spoiler in europe they can make things difficult in iran and north korea. A country that is shrinking. Pakistan has 50 million or 60 million more people than russia. This is not a great power, this is not a cold war redux. Aboutry meyer, we talk this being divorced from reality. Is that something that the russian people see through . Are they aware of what is happening . They basically for the moment except his version of events. As aes the whole situation result of outside interference. He thinks the u. S. And its outside allies are deliberately targeting him and this has nothing to do with ukraine and the ultimate objective is to overthrow him. You will find that a lot of people in russia by that. , they situations worsens will start understanding that the situation is more homegrown. Thank you so much. Hans nichols, we will speak to you in our next hour. Henry mentioned that Vladimir Putin will be holding a state of the nation address in the next two days. Can we expect any kind of movement before then . His instincts are to hang tough. Was recently in brisbane, he went to the g 20 meeting and supposedly he was stunned by how isolated he was. This guy lives in a cocoon. Approval is so important to him. Expression shoot the messenger in russia is not just an expression. I think he is really isolated. Tenure,eadership, his his whatever you want to call it , is that threatened by these Financial Moves . At the moment, no. His numbers are stunningly high. He is still up in the 80s. Does this begin to take its toll. We have not seen that yet. Beginning tore embrace reality and a small way. Shopkeepers are denominated in purchases in nominal units, which is a euphemism for the dollar. They are starting to adjust. It is going to cause massive inflation. It will make it impossible for them to raise money. This will have its toll, gradually. When does putin begin to adjust . We look at some putin market data. The oil blowing through 66 dollars, 60 seven dollars. The ramifications are stunning. U. S. Futures are higher. Coming up, boeing is the latest company to put cash on its markets. What does it say about the health of the underlying Airline Business . We will discuss on bloomberg surveillance. We are on Bloomberg Television. We welcome all of you worldwide amid the global turmoil. It is a good day to speak to howard marks. Look for that at 10 00 a. M. This morning on market makers. This is bloomberg surveillance. Im tom keene. Major market moves on the ruble. Oil is to reckless tying into the American Transportation business. In the but all is well United States. After yesterdays close, boeing announced plans to buy back 12. 5 billion of shares over the next few years. They raise dividends more than what analysts anticipated. To hess trying investors after stocks fell 11 this year. Appease investors after stocks fell 11 this year. Boeing, time and again during the recovery new airbus and boeing are perfect bellwethers for what we are trying to figure out with the Global Economy. The price of oil dropping is a good thing. It affects the way people think about the future. Boeing, does boeings , boeingr Foreign Policy is the iconic american exporter. It is one of them along with caterpillar and a few others and the question is how they will be affected by a higher dollar and by reality. And a new mediocre. I think we get the wrong idea sometimes when we look at how difficult it is to get a plane ticket in the United States. U. S. , go outside of the there is a lot of competition in Southeast Asia between lowcost carriers and the legacy carriers. You are seeing a lot more price pressures on airlines. Both manufacturers spend time developing huge, widebody jumbo jets. There are only a few carriers that are willing to sustain them and think they can make money on them, emirates is one. There is a market plan for it that is not quite there. There is a concern about cash outlet for a company like boeing. They delivered record margins, but they need to move it accounting wise from liability to an actual asset. That takes time. These airlines take a lot of cash to manufacture. Toms busy manipulating the bloomberg to figure out what is going on with the ruble. As we speak. I want to know why Business Class is so expensive. That is how they make money. Bepeople are going to squeezed to 11 seats per row. It is so hard to look at the Airline Industry and not see airline inequality. I just did it. I drew that metaphor. Have you been on first class where the seats completely wreak klein completely recline . That is the only way haas travels. I work for a nonprofit. So that would be a no. [laughter] you wonder whether we will get under 2 in the coming days . Forward toly looking the next segment. The twitter question of the day. It is an open question. Mindis on Janet Yellens today . I would love to be a fly on the wall at this. We are not looking at global events. Mindis on Janet Yellens today . Futures are up six. We welcome all of you worldwide. Breaking news on russia. Level, 70n historic on dollarruble. It is a threeday chart. We have seen 1, 2, 3, and now for failures. 4 failures. We have blown through my target 10 minutes ago. This forications of the russian Financial System can barely be measured. Vladimir putin aged seven years in the last 10 minutes. Does he impose capital controls . It makes me wonder whether the move by the russian central bank, if it had the opposite of its intended effect, it signals panic. The knock it goes to the Global Economy. Have western democracies lost their self confidence in their ability to deliver a better life for their citizens . Are america and europe in and living onrd past glories . He was working off a speech saying that the only models that work are the russian and chinese models. You are seeing of something of what he is talking about. You are seeing rightwing parties to incredibly good. Look at england. Outside, angry, antiestablishment parties. There is something of a crisis of governments. He closes his piece with a question. What do western democracies do to prove that they are a battle monitor model than a managed economy . We are beginning to see some signs of it in this country. We are seeing first increases in wages. We are going to have to think really hard about lifelong education. Globalization. We need a new fashion definition of a safety net. This is according to dmitry medvedev. Bloombergeyer, our moscow chief just told us, Vladimir Putin is scheduled to give a state of the nation address in two days to speak to the nation. Now, the government will hold a meeting on financial issues. They will announce that the country speculators will be shot. [laughter] that is not funny. They will go after anybody. Which institutions help russia . Which institutions helped them . This is not the job of the imf. To be theot going imf. I dont have a good answer to your question. This is such a concentrated economy. It is not clear what institution is prepared to help them. That is richard hoss. Coming up next, the single best chart. The tone at the very top. Good morning, everyone. Breaking news. Continuing linkages in the market. Red box and up we go through the 70 level. What is different now is the u. S. 10 year just gave away 2. 0773. We are beginning to see linkages. The fed will be watching this. We have a single best chart. Today is day one of the feds today meeting. Two day meeting. We take a look at the Business Survey that offers anecdotal information across the feds many districts. There is a negative spin slow down. It has fallen to only 55 times in the last beige book report. This is the best tone we have seen since 2005. Proceed withfed bringing down Inflation Expectations . Amateurs watch the press conference. The pros read the beige book. It is incredibly interesting. It shows a resilient American Economy. We steal ourselves from all of these global tensions . That is the hope, right . That is the hope. Even though the United States is less of a Global Economy than many others, we are less of a come a weremy also not in. Youre going to be buffeted with the energy situation. Russia will have an effect. Just in general, the slowing in germany, japan, china. The fed took enormous action in response to russian prices. It is around . Message of the argument domestically, the argument with it. Would be, hold how the fed balances the domestic argument versus the international argument. Timeshave said 1990 83 since the cameras turned on the three times since cameras turned on. Are we looking at that . Dothe real question is, what the russians do to regain control . They are losing control. Says this goes back to m. I. T. The pendulum swings and it is swinging right now and you have to take financial losses sponsored by the government. Putin has to come in and begin to bailout the Financial System in order to stabilize. Hold on. Think abouting to this as if russia is a normal country. If it were brazil, you could say things like that. A countryds to be that does not invade other countries and the state does not own the major industries. Correction, it is not a major economy normal economy. What does putin do and how does he respond . Does capital controls work . I dont know if they work, but very quickly, we will find out. I want to bring you back to the elephant in the room is that futures are up three. They came down a little bit. Before the day is over, they cannot sustain it there is this rationalization of fear and an economy that borders on disney. A bad disney movie. One of the disney hall or movies. Horror movies. Comparisons are not apt to 1998. Russia has larger reserves, but we have not talked about venezuela, nigeria. There are a lot of countries that dont have the reserves and are so dependent on oil prices. One or another things could set things off. We are seeing weakness in the rupiah as well. This country is supposed to be a net winner. They are supposed to be doing everything right, but they are seeing trouble. This is from the royal bank of scotland saying the ruble contagion may have started in ee. We will speak to eric nielsen in our next hour. We will see what he says about the knock to the ruble. I wonder if congress is paying attention at all . Nothing in the Washington Post. They are talking about immigration and there are articles about federal budget. They are patting themselves on the back for having passed something. The treatment of derivatives is the Big Conversation in washington. Do the events we have seen in the last few days change the haass 2015 outlook . Its a fundamental for where you will be in march or july . It was already a crowded inbox. What we are beginning to see with falling oil prices, russia will be talking about this we already mentioned venezuela, china is slowing. There is a beginning sense of contagion. Ruble is 72. We had 73, pre. There is no way to change the script. Saudi arabia does not want to lose market share and they want to keep the pressure on iran. Said, look,om petri these are sunk costs. The midwest will continue to drill, north dakota will continue to drill, just as the english continue to drill in the north sea decades ago because they have already spent the money on the wells, they might as well keep on going. This is what we are seeing. We just saw the oil minister of the uae say theyre going to keep producing as long as others keep producing of course they are talking about the american west. There is this hope we have that america is going to be fine. We are feeling the hope. Sure, but again the idea that we can remain economically aloof from all of these issues is too good to be true. Will have our full coverage of the fed meeting tomorrow. Is there a press conference . I dont even know. We have to find out. It will be the usual fed tomorrow. We will expend a considerable period. I will be going to read the beige book. You do what you want. [laughter] i have never read the beige book. Why would you . Mike mckee read the beige book. [laughter] still to come, angela stent will be joining us. This is as we look at the russian ruble collapse to a new record low. 72 31. Breaking news, german yields. Here is the red box we had earlier on the ruble. Weaker ruble. A spike up. Scarlet demands i move the box up. A 75. S we are not there. We are getting there. Worldwide, as well. We are bouncing around the world. With us. Ichard haass he runs the world. He runs around the world. He has just returned from china. They are adjusting to a new economic reality. They follow the new norm. Not the new normal. The new norm. I dont know if it is a translation problem. It is the euphemism for slower growth. Even their numbers are artificial. They give massive infusions