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tv   Bloomberg Surveillance  Bloomberg  December 4, 2020 6:00am-7:00am EST

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13,000 seconds for the nasdaq 100. there is new renminbi strength. brent crude nears $100 a barrel. it is jobs day. the trend in unemployment. it is not your friend. lastresident of the administration will administer a rally in support of two georgia senators. mr. trump requests a signature verification match to quickly when georgia. roubiniund, nouriel will be with us in moments and i continue our discussion on bitcoin. jobs day. balance of power with us later. none of it matters. all that matters is fishing north in the path of the sea coast to get scottish fish?
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did i do that ok? francine: a minus for that. it is about fisheries, but it is also about brussels. there is one train. there is one train a day that departs london to go to brussels. looking at the train timetable. he has missed this train. what does that mean? we are really uncertain. people say we could get a deal by sunday. watch and see. tom: the train to brussels is called maria tadeo on the oriental express. let's get to dr. roubini. here is ritika gupta. ritika: joe biden says he will ask all americans to wear a mask the first 100 days of his administration. cnn hesident-elect told will issue a standing order requiring face coverings in
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federal buildings and interstate transportation. he says that will leave to a significant drop in coronavirus cases. on capitol hill, the chances are on a stimuluseal package by year end. the basis of negotiation is getting more interest from the republicans. is spending $908 billion, less than what democrats are calling for, but they say it is a starting point. opec and its allies have found a compromise on output cuts. agreed to generally easy into reducing production next year. saudi arabia's energy minister called the process tiring and excruciating. global news 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. tom: we are doing one statistic
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in our data check today, and that is bitcoin. everybody criticizes me because they know i am not a fan of bitcoin. there is only one price in our data check. francine: criticize? tom: they tear me to shreds. bitcoin, 19,000 on its way to 20,000. good morning, matthew miller. francine: i feel like i missed the boat. i missed the train. i want to talk about jobs and brexit. -- let'st focused on just focus on crypto. that was it. tom: that is ok. my fault. i am all fired up. we are going to discuss cryptocurrency and bitcoin in our next section. first, we must look at the changing of the guard in washington. nouriel roubini is exceptionally qualified, his public service to america within the clinton
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administration. what do you expect from the biden economic team? can they do policy given washington gridlock? i think the choices he has made for the economic team are excellent. janet yellen was my boss when she was the head of the council of economic advisers. she is as wise as anybody can be. what they can do depends on what is going to happen with the georgia runoffs on january 5. do not have ats majority in the senate, they will be constrained on what they can do with legislation. certainly, the increase in inome taxes for the wealthy capital gains and corporate occur if thet democrats have divided government.
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also, part of the economic stimulus. we will see if we reach a deal during the lame-duck. quarter,kness in this spending up to $1 trillion on infrastructure and lots of money on the green economy. there is divided government. tom: i am fascinated in our discussion of economics at this paragraph after paragraph, i see little on dollar dynamics. should we be concerned of dollar weakness? is there surprise out there that public officials do not see coming? my expectation is that the dollar is going to keep on weakening because the value is extremely dovish. we are running twin current
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account deficits while in europe and japan you have current account surpluses. we are going to stay within accommodative policies for longer. if democrats cannot achieve growth as much with fiscal willy, the central bank have to do more of the job of lifting the economy to the target of growth, employment, and inflation. we are going to have qe for longer. there are a bunch of other factors as well, the use of the dollar against inflation. areia and china and others diversifying away from dollar. i see dollar weakness continuing gradually. i do not expect a collapse in the value of the dollar. i expect dollar weakness next year. that is going to greater problem for the ecb and boj.
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inflation is well below their targets and falling towards zero if not negative. longer-term, if there is a general trend of weakness for the dollar, what does it mean for other asset classes? let's look longer-term. how will that dynamic change? nouriel: if the dollar is weakening in part because we are in risk on and global economic underperforming, and if you invest into dollar assets with the dollar weakening, you could have potential capital loss in your own local currency. the weakness of the dollar globally implies the dollar price of commodities is going to be higher. that is good for oil, industrial metal, and precious metals.
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gradual weakness of the u.s. dollar is good because we are running huge current account deficits. in the u.s. 2.6%. at least 40% of the earnings of the s&p come from foreign operations. weaker dollar helps the stock market in addition to improving the trade imbalance. trade want to reduce tensions between the u.s. and china and europe, that implies the weekend dollar should compensate for the bilateral imbalance. at the beginning of the pandemic, you were worried about the long-term consequences, talking about a decade of misery. since we are close to vaccines, how much easier will that misery be? my concern longer-term is about other things that are
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going to be negative. we have a world in which private and public debt has gone from 365%.f gdp to that is going to emerge in the public sector and private sector in many parts of the world. monetize fiscal deficits will do so. monetization of large fiscal deficits eventually could be on theonary, and horizon, i can see inflation rearing its head because we will have other phenomena like decoupling with the u.s. and china, protection. those medium-term concerns are going to emerge and create havoc in the global economy. on theu and i sat
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balcony of your hotel, and we noticed a regression from the securitiesivative and synthetics on synthetics. what are the new synthetics? what does big banking not see right now? massive entries in corporate debt in the united states. that corporate debt is partially backed up by the fed, but only for fallen angels and high-grade. of instruments were traded in the capital markets. people say the problem has been backstopped by the fed. continues not going to backstopping the corporate debt market for much longer. they are not going to be backstopping the very low grade part of the high-yield we have
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seen the amount of debt increase this year. an economy that is not going to be v-shaped. it is going to be u-shaped. that implies the risks of bankruptcies and default and pressure on the high-yield is going to be something to worry about. tom: we have got to come back. up,hew in berlin says shut tom, and ask about bitcoin. we will do that in a moment. we will speak about bitcoin and the underlying value of bitcoin. after the jobs report, lawrence kudlow from the white house. this is bloomberg. ♪
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>> bitcoin might be a good investment of opportunity. i have no view of that. i am not providing investment advice. you want to see currencies being stable. stability has to be underpinned by policy. policy has to be underpinned by politics. coeure on a separate matter, which is how banking will look at digital transfers, digital currencies. is not looking at banking transfers. he is looking at the underlying value of bitcoin. ist of the operation here
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who is the who of bitcoin? bitcoin holds value, or if the denominator expands, and we see a devaluation of bitcoin, who is that who that will the fact that? i agree, it is not a currency. it is not a means of payment. it is not a means of account. it is not a stable store of value. it is not a currency. it is not even an asset. an asset has to have income for users. real estate provides you housing or storage services. utility.income as a in the case of bitcoin, it does not have any income. it does not have any use as a means of payment or unit of account.
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its potential to give you capital gain or capital loss is based on no intrinsic value. usually you have some income, some rent, something, some means of payment. bitcoin has none of those characteristics. it is not even an asset. it is like a ponzi scheme where the value goes up. it does not have intrinsic value. year a book of the number of years ago was an incredibly courageous the curse of cash. he talked about cashless society, and he circled back to the criminal activity of bitcoin. is bitcoin supported by crime? nouriel: it is supported by manipulation. there are academic studies that
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show that. it has been issued by shady organizations that are under criminal organization in the u.s. law enforcement prefers to crackdown on crime when it is done via bitcoin and cryptocurrency because it is easy to see who is behind the public key. from a law enforcement point of view, it is easier to go after the dark web. they claim they are anonymous, but they are not anonymous. the argument is that we are going to have a central bank digital currency that is going to dominate any private payment system, including cryptocurrencies because it will be safe, instantaneous, cheap, and effective.
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central bank digital currency is not going to be based on blockchain because blockchain is supposed to be public. blockchain is supposed to be permission less. trustless.sed to be these systems will be based on a few central banks and commercial banks. people get excited when central banks are talking about digital currency. it is not going to be crypto. it is going to have nothing to do with blockchain. it is good to be based on trust and authority, not a bunch of shady miners in jurisdictions where there is no rule of law. is of all crypto mining occurring in china, russia, belarus, and other jurisdictions.
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this is becoming a national security issue for the united states. the mining of cryptocurrencies is occurring in a centralized way and a lot of jurisdictions with no rule of law. francine: you are deathly fired up about this. you are always fired up, but when it comes to these cryptocurrencies, what will these digital currencies look like that central banks are working on? who is the right entity to make sure that they are using the right thing? in the current system, banks have an account with the central bank. every business could have an account. we do not have to use venmo or alipay to make payments.
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fore will be another system payments, instantaneously safe and cheap. it is not going to be done by the central banks, but anybody with a bank account is tied, can have an account with the central bank. to get to the financial system the job of ensuring within countries or across countries. finance is not going to be crypto. it is going to be fintech, where there is an evolution in payment systems, insurance, asset management. fintech is based on ai, big data, and digital. the future of money and finance is not decentralized. it is not blockchain.
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it is centralized. this has been fabulous to see the delicacy of benoit coeure and then dr. roubini with us. thank you for joining us. i know twitter is on fire over this conversation. this is what we love to do. this is very special. allen's that there of morgan zetner of- ellen morgan stanley to join us. futures up 12. this is bloomberg. ♪ is is bloomberg. ♪
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tom: "bloomberg surveillance." it is jobs day in america. lots of other news as well. we are watching for any news on the pandemic and hospitalizations across america and the world. on the data front, lift to the market. the 30000 and futures up 119. the vix 21.07. it will be amazing to see a 19 or 18 handle on the vix. .93% on the 10 year yield. dollar weaker, hints of dollar weakness. i will let francine go brexit on you. the nimby strong this morning.
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strong thisnbi morning. wereine: the british crying foul as brexit negotiations hit a last-minute snag. 12 hours after, and we are none the wiser about what happened. we saw a whipsaw when it came to cable. we know michel barnier is still in london. we do not know if we will have a deal. we could have something by the end of the weekend. coming up on bloomberg markets, stewart butterfield. whatwill talk about happened this week with salesforce. this is bloomberg. ♪ . this is bloomberg. ♪ it's down to the wire,
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the team's been working around the clock. we've had to rethink our whole approach. we're going to give togetherness. logistically, it's been a nightmare. i'm not sure it's going to work. it'll work.
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i didn't know you were listening. - hey. - [narrator] she takes two prescriptions. kate's son jack, takes one too. kate works hard, and thought she had good insurance. but she still pays too much. that's no good. so kate downloaded the goodrx app. now she can compare prescription prices, to find the best discounts. she even beats her insurance price. good for you kate, good for you. goodrx, stop paying too much for your prescriptions. download the free app today. >> i think they are getting very close. i want it to happen. i believe that they are getting very close to a deal.
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i will. i will absolutely. ask me that in a number of weeks from now. they should be looking at all of this fraud. this is not civil. this is criminal stuff. this is very bad criminal stuff. tom: the president of the united states, his important trip to georgia tomorrow in support of two senators. we have had a wonderful show, benoit coeure, nouriel roubini. definitive on the finances of the trump administration and mr. manafort. before i get to mr. manafort, stephanie baker, i have to ask about mr. barr. a pardon.going to get is he going to get a love note saying you are not invited to the christmas party? >> he was asked if he has confident in mr. barr, he said
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ask me in a couple weeks, keeping us guessing. it is unclear whether or not he will move to fire him. it certainly looks like he is using that as a tool to continue his narrative that the election has been stolen from him. barr is not doing his job by not looking at alleged election fraud. he said he has seen no problems so far. tom: aaron blake in the washington post writes today that if you pardon your family or close people, it could be litigated. mr. manafort is a convicted felon. pardoning flynn or manafort versus the family? >> i have long expected trump to pardon manafort, and i am surprised he has not done so so far given how close they were
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and given all of manafort's actions, which seemed to be looking for a pardon. as you say, pardoning his family members, the ivanka trump, jared , rudyr, his sons giuliani, that is another case. rudy giuliani, of course, has been investigated by federal prosecutors for his role with the ukraine impeachment inquiry, well iska trump as being investigated. i think this would be potentially litigated afterwards , particularly if his sons were pretty pardon. -- were pre-pardoned. we are a new territory here. for pardons usually do not go that far.
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they would be challenged after the fact. francine: what is the game plan of president trump after january? if he is running for reelection, or in georgia, he is focusing all of his efforts for january, do pardons matter? face, theyfor his would welcome a pardon for rudy giuliani because they view the system as rigged. i do not think it would matter for his hard court supporters. -- hard-core supporters. he has raised over $200 million. that gives him sway as a kingmaker in the republican party. ist is what he is focused on dangling the possibility of him blockingn 2024, several republicans who had
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hoped for the presidency in the next cycle from gaining momentum. to push thisinue theory that the election has been stolen from him. georgia, that does seem to be backfiring on him. it could suppress turnout of republican voters and hurt the chances of the republican party holding control of the senate. it is a delicate balancing act. in georgia, where he is due to visit this weekend, it is all about turnout. it is a game about turnout. if republicans think the system rigged, they may not show up to vote. francine: it is pretty impressive the amount of funding president trump has been able to do since the election. is that because people believe the election was rigged? >> he has been pushing this
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narrative as a fundraising strategy. he can float these legal challenges, all most all of which he has lost. i have lost count of how many he has lodged and lost. he can encourage people to continue to donate to his pac. he can control about 70% of that for his own purposes. this is partly a moneymaking strategy for him. he continues to push this narrative that he had the election stolen from him. tom: stephanie, thank you so much for joining us today. you are pardoned. stephanie baker with us from bloomberg news. with us, ritika gupta. ritika: president-elect joe of thelans to the spread coronavirus from day one of his
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administration. on cnn, he said he would ask americans to wear masks for the first 100 days he is in office. he asked anthony fauci to stay on as the government's top infectious diseases expert. threateningump is to veto a defense spending bill unless congress also strips social media platforms of a legal shield. both parties have agreed on the bill, which includes military pay raises. the measure is expected to pass despite the presence veto threat. despite the'-- president's veto threat. he will order lockdowns on a regional basis. fastestia has the increasing infections since the pandemic began. brexit negotiations have snagged.
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talks that were on the verge of breakthrough descended into a fight between the u.k. and france. the european union turned up with a new set of demands, and they are not saying what those demands are. global news 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. francine: we are just getting breaking news. ecb officials are set to open a 12 month bond buying extension. we will have a look at what the ecb will decide. this is something different. this is one of the big things that will change the banking sector or not. coming up, we will continue tracking covid-19. .r. andrew pekosz that is coming up shortly. this is bloomberg. ♪ ♪
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ritika: this is "bloomberg surveillance." coming up later today, an exclusive interview with george zach barth. this is bloomberg. ♪ "bloomberg surveillance." good morning, everyone. francine lacqua in london. tom keene in new york. jobs day, single best chart. bigger, broader. inequality, the path of wages, and the path of two americas. the employed as compared to the population of the nation. employeeexpansion of to population over decades and 2000the rollover beginning and into the crisis, and then the pandemic lunch and rebound. nge and rebound.
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carl riccadonna, i look at the charts. can where you sit, policymakers precisely give aid to the part of america hurting so badly? carl: monetary policy makers and the fed in particular are not able to specifically target their policies. running the economy hot and that type of approach to monetary policy certainly does help those demographic groups. fiscal authorities, which will have a more important role going forward, have much more specific ability to target certain groups and sectors of the economy through tax policy and redistribution efforts. tom: the november report will be pretty good mathematics. it is assumed 30 days from now,
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in the early days of 2021, there will be much more difficult mathematics. do you agree? carl: absolutely. i hate to be glib in such a critical moment with so much suffering and loss of life, but for the economy, it is a little bit of that wiley coyote moment. we have gone over the cliff, but we have not looked down yet. that is the case for november. we had a spike in case counts and lockdown measures. that happened in the later of the month. it was the first and second week of the month when the jobs report was tallied. those measures came too late to impact this report. november should still be fairly robust. probably continuing that deceleration we have seen. december, however, will be a very different story. francine: what will we see in
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december? carl: in december, the possibility is there that we could see a negative cable print. all of this recovery and robust , the health the second half of the year is not going to -ive up -- the house young - halcyon second half of the year is not going to hold up. we are going to see high-frequency indicators starting to reflect that tightening of the vice grips on economic activity. i should add to that, as goes december will go january february, and march. periodheading into a that will look like it did last year.
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it is just understood in modern economics, we can never have true wage deflation, the unitedreal, like kingdom in the first season of the ground. is that coming, outright wage deflation? carl: i don't think it is surprising to see that type of wage deflation. recession, great janet yellen highlighted that we did not see more wage deflation. this time around, i think we are going to see more of that become such a severe shock. fastecession was a record and deep recession. as we think about wage pressures, we have to look no further than the unemployment rate.
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as long as we have elevated unemployment, that will put downward pressure on wages and inflation. there will be hot spots of wage dominatingbut the factor will be the wage trend. unemployment right now is artificially low because so many have dropped out of the labor force. and we get to vaccination real opening the economy, we are going to see much more employment in the economy, and that is going to keep a lid on inflation and wage inflation for 2021 and beyond. once we have vaccines, what sector will pick up in terms of hiring and possible wage growth given what you just said? carl: it is a case of first out
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and first in accounting for the labor market. we see the types of jobs that tend to be lower skilled, less benefit jobs, retail workers, restaurant workers, bar workers, hospitality. they tend to be quick to lay off workers and quick to bring them back. there is more elasticity in that sector of the labor market compared to high skill jobs where it is expensive to lay off and rehire workers. we have seen layoffs across the economy in the first half of this year, but it has been most concentrated in the service sector and lower skilled, lower wage portions of the service sector. we have to be mindful as we get into that economic recovery, we will hear those refrains we heard in 2010 and 2011 that we are only creating low-quality
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jobs, but those were the jobs that were lost. francine: as always, carl riccadonna, bloomberg u.s. chief economic advisor. larry kudlow will be talking to jonathan ferro. this is bloomberg. ♪ this is bloomberg. ♪
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ritika: this is "bloomberg surveillance." i am ritika gupta. reportedk, carmakers their lowest november sales in 12 years. registration plunged 27% from a year ago. caseser of coronavirus soared. the administration is accusing facebook of discriminating against american workers. the justice department said the social network designated thousands of positions for foreign workers with h-1b visas.
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shares of china's third-largest oil company fell to its biggest weekly lost since the oil crash in march. the pentagon added the company to a blacklist that exposes firms to heightened scrutiny and intentional u.s. sanctions. the move is likely due to companies drilling for oil in the south china sea. francine: thank you so much. we continue to track the virus. bloomberg -- vaccine with the u.k. earlier this week. there were questions from dr.
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fauci in the u.s. as to whether they had been too quick. your thoughts on that? >> the data that was submitted to the u.k. and the united states fda are the same sets of data. there is one mitigating factor. the fda wanted to hear the u.s. s recommendations for high-priority groups for vaccinations. that is scheduled for this week. the fda was waiting for that. cdc, they are looking at the same data as the u.k. not that i have a crystal ball, but i imagine we will see the same recommendation of the vaccine going through. francine: how quickly could we see approval in the u.s.?
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does a couple of weeks difference matter? the logistics of vaccinations are the critical things. everyone is set to receive the first batches of the vaccines. the trucks are loaded up and waiting for the approval to happen. you imagine the u.s., there will be shipments of vaccines to centralized areas that will begin vaccination programs in those high priority groups. those groups have already been prepared for this. most of them are medical centers that are used to vaccinating their workers. plans have been put in place for the logistics of rolling out who gets the vaccine and when. doses versus the booster doses. four weeks from now, we will have twice as many people lining up for vaccines because we will have people lining up for their initial doses and the booster.
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that takes a lot of organization. francine: we need to talk about the self-isolation. the guidelines have changed. we have shortened the amount of time. is that because there is new information, or is it just to counter quarantine or isolation fatigue? andrew: hopefully it accomplishes both. toot of the data has pointed the first seven days after exposure as being the most critical time that you can spread the virus. if you are not showing symptoms, if you have a negative test during that time, it does not seem like 14 days buys us much more protection from transmission. the guidelines are taking into account, do you have a negative test? are you showing any symptoms? if you have a negative test, or you are not showing symptoms, the isolation goes down to 10 days.
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one hopes that will help relieve some of this pandemic fatigue. one also hopes it will increase compliance. with a shorter time that you can self-isolate, people may be more likely to do that, which minimizes transmission well also minimizing the burden people have in terms of their self-isolation. francine: what can you tell us about how long the vaccines work? the latest information was that the moderna vaccine protects you for at least four months. andrew: that was exciting news that came out yesterday. out of looked for months the group that was in their phase one chemical trial. strong amountsve of antibodies in their blood four months out. when they compared it to a group
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that was infected during the same time, the vaccine group had higher amounts of antibodies. this is the first real study that has been released. it is great news. one hopes the follow-ups with other vaccines will show the same. things are working out nicely as efficacy and duration of protection. francine: thank you very much. andrew pekosz of johns hopkins. you can tune into these conversations. coming up next, a lot more on the markets. don't forget that u.s. jobs report later. this is bloomberg. ♪ this is bloomberg. ♪ are you frustrated with your weight and health?
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yield. the world is desperate for income. >> with a vaccine inside, there is much hope. >> we are in the beginning of a new economic market cycle. >> by the end of this month, the market will be very overbought. the breadth will start to narrow. >> we have a lot of bad news to get through over the next quarter or so. >> for this board is going to be needed going forward. >> we should not be worrying about $100 billion here or 100 billion there. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york and london for our audience worldwide, good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. on this payrolls friday, 90 minutes away from a stale november payrolls report. for this market, it doesn't matter. tom: i've never heard carl


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