tv Whatd You Miss Bloomberg July 17, 2015 4:00pm-4:31pm EDT
. you are looking at stocks closing now. ,he nasdaq at a record high nine out of 10 as of the sectors lower, not really keeping track with the nasdaq. joe: the question is "what'd you miss?". is the housing market getting mojo back? new home construction at second highest level. alix: one of biggest oil companies shifts course in gulf of mexico. what that move means? joe: china's government unleashes half $1 trillion to bolster stock market. alix: beginning with the markets. today was about tech. led by googlecord and tech shares.
as in here, energy tanking. are i think you underselling the google thing. s&p, energy tanking. joe: jaw-dropping day for google. 465: market cap is billion, trailing apple by $280 billion. huge move, but really apple the winter. joe: right, apple gigantic. at who deep dive to look cares about greece. china. look at this. reserves falling over
the last quarter. time, china's holding of u.s. treasuries increasing by $47 billion. this looks like a strategic asset allocation into u.s. treasuries at the expense of year old denominated assets. buy in u.s., sell in year old= year old. joe: they didn't do themselves in any favors trying to givens euros.to hold you a chart of gold going back to 2000. -- chinahe chart having a market meltdown.
the fed delayed on when it will raise rates. it's at its lowest level in sad., so ugly, sol alix: three words here, real interest rates. 1.8%, nominal rates minus inflation still lower, and that is the fundamental reason why you want to own gold. $900.hould be at before the financial crisis, that is where we were. china bought over 600 tons over the last six years. joe: less than brokers expected. data came in lesson expected. that driver not living up. -- data came in last than expected. -- less than expected. alix: we want to bring in our
guest. we are talking about housing. michelle meyer joining us. housing data killing it. better gdp. thanks for being here. >> thank you. joe: how about those strong numbers? permit highest levels since crisis. what do you attribute strong results to? have seen a notable pickup and housing activity. it's not just housing starts and permits. mortgage purchase applications have picked up. the past few months favorable for housing. alix: the multifamily boom stood out to me.
that is because of renters. if you take a look at the cpi number, rent prices grind higher. increased 3.5% year on year. at what point does this level out? >> that is an important point. lot you look at the guts, a is driven by multifamily apartment construction. that makes sense. we still have a broken aspect of the housing market, credit is tight. not everybody wants to be a homeowner now. big pickup in rental the man -- demand. hence inflation in rental market . joe: the american dream. homeownership is dead. , there is a movement.
has there been a secular shift? >> home ownership is not dead in terms of an aspiration, we're just achieving it at a later stage in life. homee past, your starter is now a starter rental. you will rent. more flexibility, mobility, less financial commitment. is desire for home ownership as high as ever. alix: it's more cyclical and structural? >> part of it is people can't access home ownership type credit, but i think there is a secular component. people are achieving it later. that could be a function of later marriage, you have children later. , the fact that home prices
don't increase indefinitely. the fact that home prices don't increase indefinitely. joe: what about the housing deficit? so many years of depression. how many homes do we need to catch up? >> that's a good way of thinking about it, where has demanded been trending. the first principle for housing supplies should be a function of population growth. how many people are forming households? demolition right, and second home sales. it's based off that type of estimate. million asalf normalized, but were running at 1.1 million. but as a broken market,
you believe we have the population growth, housing prices will recover. you will have to build to accommodate the increase in population. alix: another area where people are spending money is cars. auto sales and home sales track each other, but they have diverged. why? what does that say to you? >> that is a good way of summarizing it. auto sales have been strong, but home sales have been less. the broken credit mechanism for the mortgage market, but open credit market for automobiles. easily for financing autos, but not for mortgages. joe: why is that? >> that is a long conversation. how much time do we have?
i give you 60 seconds. the heart of the crisis was in the mortgage market. that is where we have to reform. the new rules of the game are not out yet. joe: thank you for joining us. alix: still ahead, german chancellor angela merkel feeling the heat from her party as a surprising number vote against her. those numbers after the break. ♪
break ranks and vote against angela merkel. joe: let's get to the headlines. greece getting a different bailout. france sending planes to fight fires. the blaze forced evacuation of villages. 200 people trapped word rescued. high wins spanned the flames -- fanned the flames. fanned the flames. for tesla,rous mode zero to 60 in 2.8 seconds. ludicrous speed is a reference to the movies baseball's. space balls. oil,three tank cars league
homes evacuated, no injuries. we hear a lot about oil trains derailing. important because calls for retrofitting tankers could cost up to $2 million, and new designs more expensive, adding $.40 to a barrel of crude oil. it's a problem. it's a lot of money. joe: we've seen a lot of these stories, major problem. alix: something you may have missed. conoco phillips. take a look at this today chart. line that decline itserday due to the termination of a deepwater drilling contract in the gulf of mexico. they are paying $400 million to terminate. they would rather pay $400 million than pay for the cost of exploring and producing oil from that deepwater in the gulf of
mexico. that is a staggering number for me. joe: something to watch for as earnings seasons? around?ons come in deepwater, one well is $350 million plus, and that kind of money is hard to sing in right now. especially when you look at the forward curve of oil. you are relatively weak. joe: this is a huge commitment ahead. another story people may have missed is the british pound. we talked about the euro and dollar last year, even the new zealand dollar. here is a chart of year old against british pound. the euro is falling sharply. they had a really strong wage
growth number. that's the kind of number that will get a central bank nervous. wage growth is the kind of thing that causes a central bank to think about hiking. england, mark carney, hinted that maybe the first rate hike will come sooner than the market expect. that is rocket feel for currency. in 2014, he also talked about that and gave us a warning, and then that fizzled out. factors forllish the pounder, but we have been down this road before. people expecting a rate hike. we will see what happens. alix: everyone is always talking about the dollar and janet yellen. the bank of england has half a percent as their target great. joe: there is perception of an asset bubble for london real estate prices.
profit. is the paper joe: i would take it. alix: later. china is delivering another shot to its equity markets. corp.securities finance is able to access $483 billion that includes central bank and commercial lenders. that is the latest as the government is trying to stop a selloff that caused the market to lose more than one third of its by you. look at that time line in just one month. is catherine, a strategist. when you see that, what you think? >> i think it is an enormous contradiction. a short-term play to prop up the stock. liberalize market
policy, so an enormous contradiction. why? to maintain credibility and believe. this is a ministry his regime trying to liberalize itself. it needs the backing of its own people. deceleration, so you have equity markets increasing. that makes people feel wealthier and improves consumption. what is most important here is they have not reach the target. and dropped 38% in the past month or so. we are still 500 parts from the theet -- points from target. there is more to come. this particular initiative is direct purchases of equities and mutual funds. joe: we had former ubs economist george magnus on. let's take a listen. >> we are going back to where we
came from. the shanghai composite is going i don't2500-2800, but really have a strong sense as to whether that will happen next week, next month, or the next half year or so. joe: how does that matchup with where you see the market? >> the government fostered this bubble. they pushed chinese to get into the equity market. they need to save face. if the chinese prop up the market while accelerating this liberalization of financial and economic reform, then they could be ok. we have seen a clear floor, and my contention is that the policy initiative is correct in the sense that it is moving away from capital spending and infrastructure spending towards harnessing the powerful dynamic in china, which is consumption
and the migration of people to the cities, who are investing, consuming, spending. joe: we have this story on bloomberg today that blew my mind about online. two. vendors. they offer people the chance to loan money to other people. how confident are you that this is not going to keep rippling and crashing down. towe were talking institutional clients saying let it wash out. where you want to be positioned isplay this volatile story in the consumption exposed etf's. investment vehicles with a bigger exposure to the , retail, to
harnessing that component rather than the bigger funds focused on the banking system. alix: we talk a lot of a china, greece, what is the crisis we are missing? >> it will not be the fed. we have seen this coming. i'm not expecting a taper tantrum. you are a big oil expert. goes down, it has a deflationary force on u.s. inflation, which could be a liquidity trap. what were not talking about was the dynamic of the entitlement system. we still have not resolve that. out with ae cbo came long-term budget outlook for the u.s., and it is not pretty. that is where we need to focus. ourome to a conclusion with spending. joe: how do you see that manifesting itself? >> it is a long-term thing.
you have the crowding out effect. you have the fact that once consumesnt spending the majority or all of revenues, then the additional funding has to be financed. your debt goes up. -- even though we are the safest, most liquid bond market in the world -- requires a higher premium because the economy looks worse. that is how i would see this developing. it wouldn't be the next 2-3 5-10 years maybe. alix: thank you so much. great to see you. up next, who made the scathing remark about a recent "what'd you miss?" guest. we will tell you who said it
alix: i am alix steel. joe: i am joe weisenthal. "what'd you miss?" alix: we showed you a quote that picked apart paul krugman's comment. saidin an interview, he that krugman is a prominent economist who won a prize for his trait theory, but has no idea about the architecture and foundation of the eu. all 19 members of the eurozone must come to an agreement. it appears mr. krugman is unaware of that. i'm sure paul krugman gets that. i think he was being unfair
there. that is a clever jack pointing out his expertise and trade economy. alix: absolutely. fair point. don't miss this on monday. halliburton earnings coming out. this is an oil services company in the united states worth about $34 billion we are looking at sales that could decline by 28%. inke their money the united states, exposed to shale. joe: it is a nice clean read on the current state of the oil market. alix: if market pressure hasn't abated, i'm excited. joe: greek banks reopening. that will be interesting. there aren't many examples of banks being close this long and then reopening. we don't know how that will be. people get nervous, want to pull their money out. that will be an interesting test of how the use of capital
controls work. alix: how many days? joe: a couple of days. alix: this should be good. joe: this is a big one. that is all for "what'd you miss?". thank you for watching. ali mom has always been one of those people who needs to keep busy. if she's not working in her garden, she's probably on one of her long walks with bailey. she was recently diagnosed with a heart condition. i know she's okay, but it concerned me she's alone so often. so i encouraged her to get a medical alert button. philips lifeline offers the best options to keep her doing the things she loves in the home she loves. if she ever falls, or needs help, i know we can get to her quickly, and with her condition that can be critical. and even though she doesn't typically go far from home, the button always goes with her. these days, she's still as busy as ever. just the way she likes it. innovation and you. philips lifeline. lifeline is america's #1 medical alert service.
visit philipslifeline.com/caregiver today or call this number for your free brochure and ask about free activation. emily: epic rally at google beating apple's intraday records s. it was their best weekly rally ever. coming up, ebay and paypal prepare to split. secret weapon, youtube and i will be visited