It is the draghi induced bounce in the equity market. 39 crude once again. Tom nine days away from the fed dating, and commodities are the back story that could become a atnt story very quickly look what iron or did over the jonathan tom keene with us for the next two hours. Obama says the San Bernardino massacre enters a new phase in the terrorism fight. To these fears cause by the randomness of the california in paris attacks, and declared allies,reased help from we will defeat the Islamic State. Our military will continue to hunt down terrorist plotters. Have rampedallies up their contributions to our military campaign, which will help us accelerate our effort to destroy isil. California, government offices that have been closed since the incident will reopen. The man accused of stabbing two people at a subway stop your the incident prompted stepped up security, and police described it as an act of terrorism. The 29yearold is charged with attempted murder. Wellan threatened others shouting this is for syria. Analysts think the paris attacks are giving a boost to the countrys far right political party. President Francois Hollande was among those voting and the they are pushing an antiimmigration and antieuropean agenda. A second round of balloting will be held next week. Venezuelans are demanding a dramatic reversal for their country. The Opposition Party took control of the legislature for the first time in 16 years. The news sparked celebrations in the capital. A big economicin crisis, stricken with product shortages and the highest inflation. It is december 7, what Franklin Roosevelt called the date that will forever live in infamy. Japan attacked pearl harbor and brought the United States into world war ii. You can get more on these and other breaking stories 24 hours a day. Tom somebody told me the other day that movies have never done it justice. I just watched a couple with the kids, and the basic idea, the movies have never captured the terror. Remy it is such a somber, tragic moment in our history but we are still looking forward to that, as it leads oil. Tom if you have never been hawaii for a trip the site of the arizona. It is a quiet week always after american jobs. Futures up six, and a lot of challenges on the screen. Nymex, 39. 48 and brent crude comes in as well. The vix, 14. 81 showing good equity. Brent crude well under 42, that is a huge deal. The dialogue would change in two year yield cannot get to 1 . Jon ferro demanded i do this chart. Ruble andle, a weaker mr. Putin wakes up through the 70 level. Credit squeeze demanding this is a richly priced ruble and the ruble has got to get up here somewhere. One of the thermometers if you will of the hydrocarbon market. Jonathan i think the fascinating thing about that chart is if you overlay brent with dollar ruble, it has just been basically trading what happens with the brent crews price brent crude price. I am looking at the fx market this morning. The mario draghi on friday in new york a little bit different from the mario draghi on thursday. Of friday draghi punching, talking about doing more, no limits to action. Reconcile that with the mario draghi of thursday. Very much the mario draghi that we saw of 2012 when he said, i will do whatever it takes. The real challenge of European Central banking is it recognizes that ultralow interest rates, negative rates in terms of the ecb lending to the corresponding banks and the euro land, is not sufficient to get the economy moving. We need to see structural reforms. Elsewhere in europe, we just do not have enough growth. Jonathan trying to work out what on earth when on in the governing council on thursday, and this may be at. 2016, theinto epicenter of almost every single investment pieces is a weak euro, long european at cuties. Equities. James i am looking for eurodollar parity so that is a big move. I believe that is in part Dollar Strength as opposed to euro weakness. It is very hard to see where these people want to be long the euro but if someone were to say what is going on, a lot of the lead indicators are much more optimistic. Tom we are going to talk to other people about these Regional Elections. I was under a concrete bridge in paris yesterday and you see all the political signs and democracy in action. What does that democratic process mean for the market . I refuse to believe they are two separate issues. James we have never had democracy cloaked with a level of structural change required in the eurozone. I am very surprised the great people have been putting up with the amount of pain that has been meted out. I would also expect the people of spain to become much more aggressive than i have in terms of political passion and conviction. It has been a relatively supportive Political Climate for slow change. Tom if the public asks for the thats to clear markets, the Balance Sheet adjustments, debt restructuring, or both . James i have to believe that ultimately we need to have debt restructuring. It has just been put off and put off because of the capacity to roll the debt over. It is extraordinarily low, onceinalifetime. And france, it would be disingenuous to put down the National Front victory solely from the tragic events of november 13. What i would say is it has been a sea change in politics across europe, not just on the periphery but in the core. You,i want to know from going into 2016 and 2017, when do i start to see the flames, the bite of the political . James democracy has been at risk in europe because of the ultimate challenge that the single currency means for the electorates of europe. I think it can move in one of two ways. We can end up with a splintering of europe as people become less and less prepared to put up with the constraints of the eurozone, where there is a move toward a different agenda. The single Fiscal Authority is ultimately the regal legal currency. Tom a stronger dollar versus a weaker euro, tell me about the russian ruble. It is about the third time up for mr. Putin. What will be those ramifications . James russia is an economy in trouble but equally the russian people have demonstrated an extraordinary capacity to put up with pain, and have been able to do so for years. I am not sure the ramifications are terribly significant, since especially for western markets. I think the challenge of the low price, which is part in parcel of the ruble weakness, is a huge challenge. 2016ieve some point in they will try to get the oil price to move up honestly. A breachtalking about of 45 a barrel, but a move to 45 a barrel is likely to be in the agenda. Tom jon ferro with us this morning. Shepherdson. Ll ian not only about the u. S. Economy but on the linkages of the International Economy as we move to december 16. Stay with us in new york and. Ndon, surveillance tom good morning, everyone. Surveillance. Lets get to our business flash. General electric is abandoning plans to sell its appliance business to electrolux. The deal was estimated at 3. 3 billion, and it comes amid a legal ballot. Battle. German Industrial Production rose less than economists predicted in october amid a slump in energy output. Adjusted output create increased 2 10 of 1 . Economists expected a gain of 8 10 of 1 . It has been a record year for mergers and acquisitions that europe has been slow to join the parade. European targets accounted for the smallest share of global acquisitions in 17 years. Suitors agreed to spend more than 763 billion for european of the threet 22 and a half trillion dollars total. Ofy have been the subject about 57 of takeovers. That is the Bloomberg Business flash. On thank you very much it was friday, december 4. Was it the moment that hotel opec ceased to be a cartel . Hobby air blasts inhouse javier blas inhouse. We have talked about the differences, the chaotic nature from friday. Javier i have never seen opec coming out on a press conference and not saying how much the cartel is going to produce. There was not a single number and it was a big to bait a big debate inside. Iraqi oil minister said we are going to produce whatever we want. That is not really an organization that is restricting production. We really enjoyed december in vienna but they are not really doing much. Jon going into next year javier they do not even like each other. Jon going into next year you wonder what is going to happen because even if they had a target, have exceeded their target over the past 10. Iran is the variable to have to think about, how does that influence the thinking . Javier they are refusing to cut production. They are going to put into the market next year so you have the two more actors most important actors of opec. We will see how that hands out into next year. That the barrels are piling up, not being consumed, and just accumulating in inventory. We are going to start to worry, can we run out of inventory . Jon Storage Capacity is a huge issue. B. P. Trading lower throughout the morning. You go into 2016. Any chances production cuts are out the window. These are Companies Whose incremental return for new projects is distinctly poor. This is a bad place to be consigning capital. The number that gets everybodys attention is 20 crude. You have reached Storage Capacity and you make this move down to what a lot of people consider the marginal cost of production. Did that thesis just get some fuel on friday . Likely it makes it more at some point in 2016 we may see oil prices, can we go to 20 . I do not know. We can see the oil industry having to go to levels of pain that force production being curtailed. And russia,tates but it is not going to be in opec for sure tom . Of what is the distinction the state of opec great now, particularly with regard to saudi arabia . What did you learn in vienna . Javier clearly, the saudis are not willing to cut. They think that over the long term they will win so certainly what we have not seen is that saudi arabia is more committed that through low prices they will at the end when the war. Tom is there anyone within the cartel that can push back against three odd . Javier the only one that can push back is the wrong and tehran wouldn, and be trying to draft down the iran is talking about bringing more production in 2016 so there is no one that can really force saudi arabia to do anything. The two traditional enemies within opec next year ironically are going to be working together. Tom thank you so much. Bloomberg, terry duffy, cme Group Chairman in the 8 00 hour. Futures up for. , 39. 49 on crude. Printest texas give a 38 sometime today . Stay with us. Jon hello and welcome back. This is bloomberg surveillance, tom keene in new york. Tom keene has the morning mustread. Tom driving in from Newark Airport last night, the Empire State Building in new york jets green as the jets beat the giants. Let me look at a morning mustread from michael r bloomberg. Principal founder and majority owner of bloomberg lp, this is mike writing on the meeting that i attended in paris. Not effectively allocate capital without whichle information about and to what extent companies are exposed to the shifts in what we do about Climate Change. I was really taken aback at the paris meetings over the granularity, the micro economics and to do it this of these principles. It was much less than i expected and much more like robert effort about what can we do. Jon what interests me is this is not just on the politicians radar. It is an economic reality for investors and for some of you with james, he manages money on behalf of the church of england. Want to be out the arctic and what i really want to emphasize the economic reality is not something five or 10 years down the road, it is now for investors. James Climate Change is a huge issue and if we cannot get temperature change back two degrees to the limit of temperature increase we have a very material problem. We should expect regulation and carbon pricing. Challenge thee rest of the hydrocarbons industry, which is a really important one, a tense in terms of market and economies. Tom i was in paris yesterday ,nd hearing we send alert speak is that a permanent position of institutional money . James i would say there is quite an interesting life occasion in those that worry about Climate Change into the campaign. She is all about coming out of hydrocarbons and investing in sustainable new technology. A second stress is equally important, maintaining exposure to companies that have a reasonably longterm future and engaging with them to make sure they will be able to do a better job to increase longterm value to the global economy. Tom james bevan, thank you so much. Coming up, we will look at the european elections. Stay with us. Tom good morning, everyone, from london. We welcome all of you. Its bloomberg surveillance. Lets get our first word here is raini. Sticking to reassure americans in quiet critics, president obama made a speech to discuss terrorism on sunday. He did not offer a new strategies to defeat the islamic slow domestic terrorists, but he mentioned that they must target the radicals are not muslims. They do not speak for islam. They are part of a cult of death. They account for a tiny fraction of more than a billion muslims around the world. If were to succeed in defeating terrorism, we must enlist muslim communities as our strongest allies. Rather than push them away through suspicion and hate. That speech was only the third he has delivered from the oval office. The far right party in france scores its biggest election gains ever. Francois hollande was among those voting in the first round of regional balloting. Was leadingtionale and is pushing antiimmigration policy. Analysts think it is winning new support because the paris attacks. Although voters in venezuela called for a powershift, the opposition scored a landslide victory until took control of the legislature for the first time in 16 years. It signals a lack of faith in the ruling socialist abilities to solve the economic crisis. And the startling enough so from jimmy carter. During Church Services yesterday in georgia, he told parishioners he is cancer free. He revealed four months ago that melanoma had spread to his brain. Since then, he has received radiation and chemotherapy. The treatment did little to slow the activities. More at bloomberg. Com. Over to you. Tomguy thank you. One of the top headlines this morning, terror, dominating the headlines. President obama described shootings in california as an act of terrorism. Joining us now is bloombergs International Correspondent hans nichols. You cover the white house for a number ofover to you. Tomguy thank you. Years. I want to point out the significance of the oval office from significant lack of news. Can you put together for me . Hans it could have just been circumstance. He doesnt like using the oval office. Most of the other rooms at this time of year are decked out in christmas decorations, seleka have been their only option. If you look at what he said, he did warn of the continuing threat, a threat that is a more complex, but because it is a more complex, it may be difficult to detect. The threat from terrorism is real, but we will overcome it. And anydestroy isil other organization that t ries to harm us. They wont involve abandoning our values are giving in to fear. That is what they are hoping for. Hans but there was very little new in terms of substance, but it is, an effort to review the strategy announced to the public that he is concerned about this an act of terrorism. But there was never any signaling or telegraphing that president obama would fundamentally alter his approach to the Islamic State. In some ways, im surprised by the criticism. There have been no hinting leading up to this that there would be any sort of shift. The elephant in the room couple weeks ago was russia. A significant lack of conversation about russia and the role they play with any coalition in the middle east. Where are we in terms of the u. S. s stance on that . Hans it seems like the most definitive we have is the last time they got together, early last week on the sidelines of the Climate Change summit. We had these diverging tales. The russian said they made quite a bit of progress, and u. S. Officials saying they were quite far away. Until we see russia focus their bombing on Islamic State, that is the key distinction. Tom hans, i found it quite sobering that three soldiers yesterday guns is america going to become like europe, where we have a lot of security 20 47 marching around with machine guns in hand . Hans well if you look at the domestic threat, the is or would probably be no. Numbers very, but there are potentially 5000 homegrown terrorists in france. The state has this new report out, a big Counterterrorism Center there, were numbers are considerably lower. You dont have the same domestic threat but you have to take president obama at his word, that it will be much were difficult to detect these threats. I cant answer that question in part because i am not in a situation looking at the threat in aces, nor iam i position to look at all the intelligence across his desk. This one would not have come through because there simply wasnt any indication other than a pledge of loyalty. Jonathan on stickles, thank you very much. Olfangoto bring in w piccolo. One of your roles is to manage Political Risk. You wake up this morning, the National Front in france. A determined president obama in the middle east. What do you take . Mr. Piccolo that not much has changed. Shock to the system in france. We knew it was coming, but not with the numbers that we have seen. In terms of the impact on policy of the impact on policy at the national level, it will be limited. Even if the front nationale wins, the regions power is limited. It is something to monitor. It is a change in the political landscape. Have three established parties but no Immediate Re