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tv   Bloomberg Markets Americas  Bloomberg  February 22, 2017 12:00pm-3:31pm EST

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vonnie: from bloomberg world headquarters in new york, we will take you from washington dc to san francisco in the next hour. here are the top stories around the world that we are following. in markets, stocks are taking a .reather ahead of fed minutes u.s. major averages high. treasuries gaining. another question on investors mines. what will the fed do with a $2.5 trillion federal -- treasuries. there is little to fear and we explain why. i was speaking to pain capital founding partner and. his views on trip -- president trump's tax reform plan and much more. we are halfway into the trading day and abigail doolittle is
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back with details on what is going on with the lazy markets. >> they are lazy markets. oh -- major averages largely unchanged but we're looking at small declines. the dow is between small declines and gains. it is worth noting the s&p 500 and the nasdaq down just marginally less than .2%. the action has been so bullish that the small declines are the worst declines of february. it will be interest to see how the day shapes up. broad based pull off. we see a lot of red. earlier, it had been already. now, mainly red. energy is the worst sector being dragged down today by oil.
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today, oil is trading lower. along with oil related stocks, we have oil down more than 1.5%. mobil alongit exxon with kinder morgan and high point company. it is a broad-based selloff within energy and the complex. we had back and we take a look at 6152, i will change this myself here. oil is a great chart of relative to the opec cut along with supplies. trading lessil was than $30 per barrel. it has almost doubled. initially, what could have helped oil trade higher are the supplies trading lower.
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what is helping now appears to be opec cuts which seem to be cutting in there. aiming for 100% compliance helping oil recovery continue. vonnie: i am looking at the euro as well. we have seen a reversal for the euro. willesidential candidate access the offer. in this euro trading type of session and now, we are where we start at 10552, below one of 5, 1 of 494. we will keep an eye on the headlines. president trump, long-awaited tax plan soon. key questions linger about what the plan will look like and when republicans will pass them.
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ed is a founding partner where he worked closely with mitt romney. also wrote two books on the economy. marie -- most recently, how good intentions undermined the middle-class. speaking with paul ryan a couple of weeks ago about tactics, what are the republican party's tax -- tactics? they need $3 trillion of revenue increases or cost reduction. for lay out a plan achieving that. one train dollars for repealing obamacare and then moving essentially a border adjusted tax. little liket it a saying proof, one train dollars? at the moment, they are not finding that.
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affecte is a dynamic cutting taxes or reconfiguring because they are probably the most inefficient form of taxes, particularly the way the u.s. does it. corporations keeping money offshore, heavy taxes we are trying to collect essentially unable to collect. inefficient form of taxation. personal income tax is a little straightforward. vonnie: assuming there can be some benefits with some corporate tax change, what will get past congress? what will people agree on if donald trump want to -- wants to bring it down. >> it is hard to know. the house and the senate have to
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pass something and it all occurs when they get to reconcile the two. both need to step forward and pass something. i think the house plan is brilliant and i think people will come gradually around. domesticem is companies like walmart paying 25%, very little impact. then you have got apples paying almost no taxes. they will keep the intellectual property offshore. you have to get into the 20% range to have an initial effect. >> it still takes time. take a quarter or two. does that have any impact? i think the adjustability is critical -- critical.
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the entire world does the adjustment to the back tax. the united states is the only country that taxes corporations taxed bythey get read the company where they shifted their exports to as opposed to most companies where it gets states.into the united we eliminate the double tax if we want to make exports as competitive as they are. >> what about shifting things over borders three and four and five times? >> i think the tax simplifies that because we will ignore things coming offshore as part of the tax base and simply tax the piece consumed in the united states.
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they pay almost no u.s. taxes as a result. >> they are not together fully on this. >> the thin needle can be threaded but there is a lot of thinking going into how we thread the needle. i think you fell optimistic that once you understand the machinations of what you need to get onto implements implement sequential tax reform and not just small and -- small at the margin. come to seewill that point of view. repealve to first obamacare which they can appeal through reconciliation before they pass a tax bill and then
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to replace obamacare pair there is a three-step process that needs to take place probably through the end of the summer to accomplish this. if they are able to accomplish a substantial change, it will have a significant impact on the united days. debt repeal of obamacare and at what point do we see a replacement? >> i think it will take a lot more work to replace opec care. but once it isit repealed, you will see the democrats come to the negotiating table to hammer out a new bill. it will take more votes so you will need the democrats come along. i do not think they come along until it is repealed. newie: we make it a whole
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executive order. the idea that immigrants contribute to the economy is picking up steam. >> we should differentiate between high skilled and low skilled immigrants. it is an enormous contribution with high skilled immigrants. they have paid more taxes. if you have constrained and people think of zero edge straight but if you think of properly trained talent which supervised unskilled labor as a constrained resource and today passes economy, as you flood the market with more immigrants, you will see slower wage growth. vonnie: you are saying there are not enough high skilled workers? that would argue for more immigration.
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>> that will be a place where i disagree strongly with the president. should open the doors to ultra high skilled immigration as probably the only path to grow the economy to pay for the baby boomers who will --sume gdp >> are we in economic trouble? >> there there over the last couple of decades because the labor is there. when you take away the labor, people -- the question is, the labor is expensive and you grow the crops somewhere else because you might not be able to afford them here. you have to face them in slowly over time here a lot will be severely affected. vonnie: have you thought of a forecast for the year? slightly higher
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than it was last year. a little more than 2%. vonnie: if some productions come true, it might be different looking through the end of the year at that point. thanks for joining us. now let's check in on the first word news. mark crumpton is in our newsroom. mark: the plan to round up millions of undocumented is likely to trigger a flood of lawsuits. groups are promising to challenge the proposal. the u.s. will try to swiftly is likely to trigger a flood of lawsuits. deport more people without swift hearings. crimess charged with thought to be dangerous and not just convicts. a protest camp nearly dakota access pipeline construction state -- site in north dakota and a close this afternoon. a travelicials set up
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assistance to encourage protesters to cooperate with law enforcement officials say they expect some protesters will not leave without being arrested. the protest camp has been around since august and has housed thousands of people at times. france's presidential candidate taken into custody. they will be questioned by whether they improperly used money to pay for their salaries. france's independent presidential candidate has accepted centrist politician france while's alliance offer according to a report. malaysian police have released more details about the two women since acted of killing a half brother of kim jong un. they were trained to code their hands with toxic chemicals and then wasted on his face. the embassy has ridiculed the
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claims and said the women are innocent. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. this is bloomberg. vonnie: thank you. part of our exclusive interview thoughts on the iran nuclear deal president trump has threatened to dismantle. to sign a major deal with international -- of international sanctions. this is bloomberg. ♪
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♪ it is a little cool but beautiful as always in midtown manhattan. i am vonnie quinn. time now for our latest bloomberg business flash. group investments founder is optimistic about energy in the real estate market under the trumpet missed ration. >> i think energy is the big winner. i think real estate is a positive winner. maybe not in the house market but in the commercial real estate market. vonnie: in anticipation of continued construction of the north dakota oil pipeline. morgan stanley says don't be surprised to see were in buffet take over an airline. berkshire hathaway has taken --
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and a full scale acquisition would not be out of the question. that is your update. president trump has said one of his first priorities in office is to look at the disasters deal with iran. at a confirmation hearing, he said the u.s. should stick with the iranian nuclear deal. a positive development according to the ceo of the largest company in iran. it in exclusive interview with in chief,erg editor he weighed in. >> i have been encouraged by the statements. i think he is willing to work with him.
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we will move on with investments. a public company, obeyed the international laws. it is also our business to be board. >> have you talked to the administration about that? let's i spoke to the previous one. the state department is fully aware. we're in new york as well. we are free to invest in what is good for our companies and shareholders. haveve a long history and an able -- we are willing to move forward. we have to listen to what the u.s. administration will decide. listening is very important.
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him.t congratulated not since his state department. >> do you think this is an area of risk or opportunity >> if we bring back a to dialogue between russia and the u.s. and russia and europe, it is good for everyone. we are facing plenty of uncertainties. what is the most complex issue for the world? good if we had more stability. elected. president when which was the case for george w. bush and president obama and donald trump, is willing to have a dialogue with russia, we have a lot of investments in russia.
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i think it is more important for the world -- >> have you changed at all your investment strategy with the u.s. trump, onou look at climate change, how has he altered that? >> the policy is good for the u.s. business. i'm willing to come here. initially, we can liquefied natural gas. number two and number three, a company and energy business. and we announce projects, we create jobs there.
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agreement, policy would be maintained and it is very important. chief: that was the executive officer and an exclusive interview. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." fed minutes out in about an hour and a half. also in investors minds, what will be done with treasuries? we're joined now. trillion. but let's just take us to a half trillion dollars. massiveed represents a buying base, though they have
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been done with quantitative easing for a long time, over the is notw years, that hundred $50 billion of demand just for the fed. any sense the market will pull back on this, the question is how much will raise yields throughout the market. vonnie: you see the big difference in federal holds between japan and china. thenpan is a bigger holder china, these are -- there.will be janet yellen said they are not going to sell. >> right. the question will be if they reduce the investments, how much will this reinvest the market? the move basically can be equivalent to one rate hike and
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some say as much as to rate hikes. the market is watching for any clues about how they will implement this. the question is also going to be on timing. be a 2019t could even event. patient and slow. vonnie: check out his stories. coming up, managing director of fisher and company. fannie and freddie and the outlook. ♪ with x1 you get the best of the oscars.
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the oscars, live sunday, february 26th 7eâ4p on abc. ♪ live from bloomberg world headquarters, i'm vonnie quinn this is bloomberg markets. let's get to the headlines. the yuan envoy for syria
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says he is not expecting a breakthrough when peace talks resume. he says he sees the meeting as the beginning of a series of rounds that will allow negotiators to date deep into the important issues. he called off the last round of talks in april after a surge in fighting. senator elizabeth warren once anthony scarcity investigated over possible ties to russia. askedr warren has secretary-treasurer steve -- the offer was withdrawn after he sold his firm to a chinese conglomerate. british retailers facing a tax
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hike in april while get much help in next month's budget. the chancellor philip hammond won't be able to offer significant concessions for taxes on commercial copies are being revalue. they are determined by the rental body rather than sales. the firm that owns the sat college entrance exam is boosting security around the world following cheating in recent years. the college board tells the associated press it is reducing the number of international to four.ays from six reduce opportunities for test content to be stolen. powered by more than 2600 journalists and analysts in over 120 countries.
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on u.s.a quick check stocks. not much movement. the dow is still higher by about 10%. the s&p down by a 10th of a percent created as well as the nasdaq. that comeeneath service, we have lots of movers. we have to earnings rivers. first, garman is on pace for its best day since july last year. they beat sales estimates by nearly 9%. they also announced a pact with bmw. like self driving tech is on the rise. --elatively high storage there are certainly some bears out there. dupont to dow stocks,
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trading higher. dupont is hitting a record high. the first in nearly 20 years. eu is close to approving a deal between these two. it would be the first of three megamergers that could be ahead. finally, bristol-myers squibb's and egg pop up about 3%. on pace for its best day in -- inthree weeks for it about three weeks. vonnie: thank you for that. the -- afterdra falling to a three-month low. share.
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to capture billions of dollars generated by fannie and freddie after their bailouts. take,g us now with his director at graham fisher. the hedge fund story just a small part. >> i think most of the headlines are misreading what is happening. essentially what they said is there are several roles that the conservator or regulator had. they acted within their authority and by contracting with the treasury to allow treasury to take that money. steps intoe fah a the role of the board of fannie mae and freddie mac and those violatedy may have their contract or obligations to
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those shareholders. a some sense, i view that as positive. the problem is the regulator as the board of directors seems to have potentially violated both. vonnie: the reason we are even talking about it because 2012 a change made where investors instead of a dividend would get all of the profits instead of taxpayers? >> exactly. -- the more pressing question what happens to the administration? >> if you read the words that ,teve mnuchin has made public
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he has made it clear. continue to serve a vital role. that can take several forms. now, that i think is something that is not in the top three of what steve mnuchin has to deal is now, but i think it is a curse. vonnie: you have been an analyst the actual how much reform has taken place. >> i agree with that and i've so that for years. essentially, if you go back before the crisis was generally understood, congress passed the first act to fix fannie and freddie.
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unfortunately, that was passed into law before they were put into conservatorship. almost out of it could be put into conservatorship. it created a new regulator with capital authorities. it allowed them to pay significant standards. what senator shelby and others had called for the prior 10 years. authorities, deeming language essentially that says you cannot go into new business lines without approval. most of what needed to be fixed was, in fact, fixed, but it was too late for them to be saved from conservatorship. the conservatorship has done a pretty good job of implemented those reforms so i would say fannie and freddie at this point really are largely fixed. vonnie: that is good news. what about housing development
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under ben carson? theaw a sore today about difficulty of getting a mortgage for a lot of people. has a gotten any better? >> no it hasn't. frankly, that is not something for ben carson at hud or mel watt at fha. bankss a disincentive for unless they were short they could sell them to fannie freddie or s&h jennings. when you have average pico scores of 763 through the system we have a problem. ownershipave home rate among black households at 42% and weiss -- white households at 72%, that is problem. gap, thatave a wealth is a large problem.
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i do think this administrations focus is how to week reached main street and the pockets of main street to provide for through theousing private markets rather than the government's balance sheet? i think there will be a fha.king role for vonnie: who is going to step in? -- let's say you fix fannie and freddie and re-privatize them. you can have private market players, the banks, choose to hold more loans if you and up addressing some of the regulatory problems with doing so. that is all private market function. vonnie: with interest rates
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privately too? >> correct. 2003,ack and render, in really 2005, fha was really -- essentially a dying government program because all of it was going to capital market players, banks into private-label securities into fannie and freddie. that was the bulk of the market. i think the goal is to get us back there with increased safety. vonnie: you sound optimistic. josh: i am optimistic. vonnie: your hearing good things? everyonehink broadly were is an understanding made this more complex than it needs to be over the last eight years and there are easier solutions. vonnie: thanks for joining. coming up, tesla is set to release earnings after the bell.
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we will tell you what investors are looking for. this is bloomberg.
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♪ vonnie: this is bloomberg markets. on vonnie quinn. tesla shares of 1%. this will be the first courtly report since the $2 billion deal in december. cash for how to actually predict the company. joining us now, dana. what is new? tesla result seem to be par for the course for this company. >> i think the big question is
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how is solarcity being introduced with tesla? nobody really knows yet. vonnie: if you are trying to gauge the company, they can say anything in and ernie thing -- in an earnings report. >> i think tesla investors are with elon musk in the long haul. i think they want to know is how the integration going and what is the timing of the model three? are they still going to get the car out this year? vonnie: i would imagine great , great from elon musk numbers of getting cards out the door. how much can we rely on that? >> i think if the timeline slips, it won't be a huge deal. it just depends on whether they are holding firm on 2017. they say boy production will
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begin in july so i think investors want some assurance time was -- vonnie: if analysts are finding it difficult to value tesla, how are they were -- how are they putting out reports? >> some analysts have not included solarcity in the result at all. brian markley has said investors don't really care. vonnie: it is evenly balanced. -- nonetheless, they are still positive even though they had no idea. get claritye will
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on the call. the deal closed in late november so you have about a month of results incorporated into the report. how they break it out will be interesting. there will be a lot of questions -- there will be a lot of questions. take -- has tesla taken an actual slide? >> to have. shares fell in aftermarket trading. typically, the shares do well in an after earnings report. vonnie: we have a great chart. one of the stories about tesla's high being a new low because analysts say $48. thatmade be the first time has happened. certainly a record low for expectations. >> i think a lot of analysts feeling the stock is overvalued.
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obviously, since the election, elon musk has had a lot of meetings with donald trump. people are excited about the model three. a lot of investors want to hold onto the stock. vonnie: it is not seem to matter what analysts say. it is a wild stock. it is not trade like typical stocks. it is very much about the the company.ion of vonnie: what do you think will be to first question out of analysts mouth? short of saying what does solarcity me to your company, what hard data do they want? -- means your company, what hard data do they want? people will be digging
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through the analysts note and when the call happens it depends on what they say. they could say anything. people are going to ask about driving,, autonomous the possibility of a capital raise, cash flow, how the integration is going. what the synergies are, progress .n the giga factory whether the factory in fremont is ready, the model three timeline, the guidance for how many cars they will sell this year. it is all over the place. elon the semi-busout and all the new projects. about -- some of
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his ideas on immigration and policy it is that he might have? >> i think most investors feel that musk has a seat at the table. a lot will change with the administration. what trump actually plans to do in terms of carbon emissions and cafe regulations, hasn't really been spelled out so i think people are waiting to see if that policy.y does vonnie: thank you. we will be watching closely for the earnings report and as i 5:30 eastern time you will get that call. learn more at 5:00 p.m. remember, bloomberg also live streaming on twitter.
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breaking news out of president trump's budget discussion. it was being held over lunch in the roosevelt room with many of the top heads in terms of economics on his team. trump congratulating the new omb kushner,well as jared gary cohn. trump also saying we must do a lot more with less when it comes to the fed. now, playback of the meeting. waited a long time. he is going to be absolutely great director. known him for a long time. he loves those budgets. unfortunately, the budget we are .nheriting is a mess the finances of our country are a mess, but we are going to clean them up. things we have been doing, including negotiating deals on
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, otheres, military items things. we have saved a lot. we have enormous work to do as the national debt doubled over the last eight years. our debt has doubled over a short. of time. i want the american people to know that our budget will reflect their priorities. we will be directing all of our departments and agencies to protect as a last american and every last tax dollar. no more wasted money. we are going to be spending money in a very careful manner. our moral duty to the taxpayer requires us to make our government leaner and more accountable. we must do a lot more with less and we must stop the improper ,ayments and the abuses
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negotiate better prices, and look for every last daughter -- dollar of savings. we had imposed hiring freezes on nonessential government workers and part of our commitment is to continue to do that for the american taxpayer. we have appointed a cabinet that knows how to manage dollars wisely. i've known many of the folks for a long time. they have been tremendous winners. whether it has been steve or kerry or another steve right here. that is why i will direct them country's dollars very wisely. we won't let your money be wasted anymore. we will run government smoothly and efficiently and on behalf of -- behalf of the taxpayers. i will hold everyone accountable for that.
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no doubt this group will do a fantastic job. i want to congratulate steve mnuchin, secretary of the treasury. he will be outstanding. he has a tremendous track record. i have great confidence in him. and --going to continue i can't take too much of the blame for what has happened. it is absolutely out of control and we are going to be tremendous over the years. we have to take care of our military. it needs work. it is very depleted. we have to take care of a lot of things. health care is moving along nicely. it is being put into final form. before we do the tax, we can't summit it until the health sector tour or otherwise.
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again, moving along well. march we willarly be submitting something that i think people will be very impressed by. with that, i think the press knows all of the people at the table. thank you very much. >> all right, thank you very much. that was present donald trump a few moments ago before his budget meeting with his top economic advisers. you heard him say the budget discussion is going to be a serious one. we won't let your money be blessed. he said our budget will reflect your priorities. also, trump saying he will submit a health care plan by mid-march, mid to early march.
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congratulated the new head of the omb. investors looking for hence towards normalization. let's bring in san moss from ashington dc -- washington, d.c . see thell probably discussion focused on economy achievingery close to many goals. inflation is heading back to 2%. is -- disinflation scare is abating. we won't see a sense of panic that they have to act precipitously. vonnie: what we see -- hear anything about securities?
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a secondary part of the discussion. janet yellen indicated that was something for later in the year and the minutes may reflect that scheduling. vonnie: we will look to you for guidance. that is bloomberg's executive executor for global economics. you can catch all of our interviews on the bloomberg. just enter tv so you can see what happens. you can also find breaking news, charts, and functionality discussed on the programs. you have all of the breaking news you just encounter. this is bloomberg.
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6:0000 p.m. in new york, p.m. -- welcome to bloomberg markets. policyg on politics and
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in donald trump's first 100 days in office. doing what he said he would do. the department of homeland security has laid out how they will implement donald trump's sweeping policies. we are still waiting to see his thated order on countries sponsor terrorism. waiting for the details. businesses and markets have been eagerly waiting for details on the president's plan to reform taxes and we have just learned when we will hear. it will be march 13 create what is likely to be part of his plan . and waiting on the fed. we preview what experts are looking for. ♪ president trump had a
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white house budget lunch with a number of staff, including steve bannon, director mick mulvaney, steve mnuchin, and his son-in-law, jared kushner. for more on what they are discussing, our chief washington correspondent joins us. i think they are still meeting? yes. moments ago, president trump himself saying he will be able thatntinue to get back on lunch with top budget officials. this comes just one day before he will meet with the top ceos in the country to continue discussions not only in the budget, but regulatory policies. he also said he is going to announce his plans to repeal parts of the affordable care act in mid-march, just a couple of weeks away.
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forof this lengthy way monday's joint address to congress which the president will be in capital kill capitol hill on. on.n capitol hill -- march 13 around the same time, set to release his health care plan. also the same time we are to hit the march 13 around debt ceilint limit. showdown inad to a washington regarding government funding. steve mnuchin is -- it is one of his first tests. all that said, at the current meeting, you have some diverse opinion within the conservative movement. people like steve bannon and jared kushner are not necessarily on the same political playbook as people as the budget director mick
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mulvaney. someone that has advocated for spending,nment someone who is advocated to rein in the government spending that they are so concerned about. going on behind the scenes and how they are able to get on the same page remains to be seen. david: you mentioned the debt ceiling. that was a big issue when we had republican conservatives going against a democratic president. is it conceivable that a republican house and rebuilding and senate would give a republican president problems? >> i can tell you that jerry cohen and steve mnuchin don't want that to happen. during secretary mnuchin's confirmation hearing, he said he would work to do everything in his power to make sure the u.s. not only makes good on its debt, but also they not get to the
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break for it again, this is where the policy fighting in the republican party gets interesting. people like maldini are much more conservative from the tea party movement and have fought for years against some of the same policy initiatives that people like speaker ryan, as well as his white house has advocated for. it is worth noting that senator john mccain voted against director mulvaney for his nomination process for thus -- just those reasons. david: one thing they will have to find the budget for is 10,000 new border agents. is there any question the president will get support for that? >> i think there will be opposition from democrats, but the numbers are not there for them. we have seen that in the nomination fights that have played out. what is interesting is that privatize prison groups are actually supporting this measure
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because they feel these new -- ngs david: thank you so much. reporting from the white house. on trump's immigration crackdown, we are joined by seattle mayor, ed murray. the mayor wants to hear more of the details for what is on store -- in store for cities like his. for his part, president trump has said he will cut off funds for sanctuary cities. thanks for being with us. >> thanks for having me on. david: let's start with what you know about these new dhs guidelines. what has been communicated to you and fellow officials on what to expect? >> very little has been communicated. again, under current law, our
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police department will not be cooperating. it is not what we are going to do as a welcoming city. david: what will you be asking for from the illustration, if anything? a series ofent freedom of information acts and we are asking various departments including homeland security for information that relates to these requests. what are they going to do to century city's? how are they going to determine who to take and not to take? who area love family scared. some who are citizens and others with questionable documentation. we have to help our citizens and the people who live in the city. david: we all agreed that the federal government has the first line of responsibility for the borders. why did you feel it is important to fight this? >> the courts have any clear that to be undocumented is not a
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crime and people cannot be detained. the more important reason is when i go to our public schools, i'd be kids who have been here them -- their whole lives who are undocumented. their parents are working jobs that most won't do. our we going to rip families apart? are we going to build a bunch of detention centers to detain these people? this is what happened during the second world war to the japanese community. this is not going in a good direction. david: you mentioned paying taxes. have you had people pencil in seattle.mic effect on undocumentedif all
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workers left the city. >> i think it would have a negative impact on us and undocumented workers left the city. >> business throughout the west. i don't think we would be able to produce the apples we do in california, oregon, and washington without some of the individuals here. neverct that we have dealt with sensible immigration form is the real issue here. david: the president has spoken in the past fairly strongly centuryw he would treat cities. he says he will cut off federal funds. have you taken that into account? >> we have. again, going to the constitution itself. you cannot use funding as a punitive measure. tohas to be measured something you're trying to do. not transportation. you will not affirmatively work to try to
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help the federal government on the their guidelines, other hand, you will not resist their efforts to enforce the law? >> absolutely. we are only going to act under law. we are not required to use our police force to assist them. we also have no legal right to prevent them from enforcing federal law. tried tove you persuade them to change the regulation and make it somewhat more palatable to you? >> we basically had radio silence from this new administration. mayor, as you go forward, is it conceivable you could bring a lawsuit against the federal government? is that in the cards? >> absolutely. if we don't get the information we are asking for, we will consider legal action. as you know, cities across the country are in conversations about suing the federal government.
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so much.ank you that is seattle mayor, ed murray. now let's get a check where the markets stand. abigail: not a lot of action for major averages here. the dow, s&p 500, and nasdaq trading in mixed affection -- fashion. a small gain from the doubt, it puts the index on pace for another record close. here's a great chart that shows how bullish the situation is. we hop into the bloomberg. in white, on top we have the dow. if all, we have the dow the socks were trading at their 52 week high. as for the top performers since
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the eggnog duration, we are looking at apple, cisco, app -- dupont. huge gains here, apple and cisco. put up great earnings, investors are cheering that. .e also have boeing finally, dupont today hitting a record high as it said the eu is closing -- close to approving a merger. bit of a reversal from the love, coming from the highs. earlier, this reversal did happen. a little bit of a reversal, but choppy action overall against the dollar. david: coming up, we will hear against -- about
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the immigration issue. he tells us what bothers him about the trump administration and what he agrees with. also, sean spicer holding his daily press briefing. he says we should have a budget proposal by march 13. you can watch now on tv . this is bloomberg.
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♪ this is bloomberg markets. sounds first 100 days. check and on the bloomberg first word news. mark crumpton has more from our
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newsroom. mark: capitol hill republicans said the white house is planning to submit president trump budget plan to congress in mid-march. republican eight say the plan is due march 18. expect the blueprint to contain the budgetls since director was just approved last week. newly installed environmental protection agency misread her scott pruitt closely coordinated with oil and gas companies and groups wait to the koch brothers. that is according to thousands which showedmails -- in europe, metropolitan police have appointed its first commissioner.
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the former assistant commissioner led the security operation for the 2012 london forpics, but true criticism the bombing of london in which an innocent brazilian man was killed. china's move to deflate a housing puzzle -- bubble appear to be taking affect. china has expanded curves on home purchases and heightened restrictions on property. news power 24 today in over one is 20 countries -- in over 120 countries. david: sam zell is one of the best-known and most successful --estors in the country with he is also an author of a forthcoming book.
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it discusses his stance on immigration. bloombergus today on daybreak. think it would be very bad policy to discourage immigration . having said that, we also live in a country where there is a their are parts of the world where there is no rule of law. the difference is extraordinary. a, how do we deal with feeling of supporting immigration as something positive for a country and at the same time, maintain our rules and standards? we got ourselves in the pickle we are in now because we had previous administrations who have -- had refused to enforce the law.
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i think it is something that has to be delivered. i don't have enough knowledge or not atanding and probably big fan of the concept of deportation. on the other hand, if it was limited to people with a criminal background, i have a hard time disagreeing with that. this has been a festering problem. i remember when george bush was elected and he was going to solve the immigration problem. -- eightad subsequent years of a relaxed administration approach to it. i think it is something that disturbs america. disturbs what our own basic concept of fairness. my parents came to this country for months before i was born. they came here legally. they went through all of the
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hooves and difficulties in order to be here legally. i'm not sure that is a bad standard. david: as you suggest, there are the ideas and the alternatives. if he were to take 8 million of , it would really do damage to the economy. is there a way to incorporate them legally into the economy? i'm not talking about criminals, i'm talking about hard-working people. know there is a route that is currently in place. the more important question is, should there be a route? i don't have any problem with the idea that there should be a route, as long as we don't create a mess. when you see undocumented
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children unaccompanied by parents being put on trains across the u.s. border because we have a policy that does not make a lot of sense, that the servers me a lot. david: that was sam zell, investment equities. still ahead, president trump's crackdown on illegal aliens -- -- what it could mean for housing. this is bloomberg. ♪
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♪ this is bloomberg markets. trump's first 100 days. president donald trumps plan to the port millions of undocumented workers could have
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afects in all the commerce our engagement. at one of those is the real estate market. many of these people are now abandoning their home buying plans. it is not just the truly undocumented may be affected. here is bloomberg's real estate reporter who joins us from boston. thank you -- great to have your. >> great to be here. david: let's start with truly undocumented workers. how many are there and how much of an effect could have on the housing market? have been 11 million undocumented workers. issues relatedf to undocumented workers, the data is a little sketchy sometimes. one study says a third of undocumented workers live in or occupy homes.
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you have dreamers in addition. these are the folks with children who are undocumented. they are a subset of that group. it is easier for them. companies that offer those loans. david: what kind of dollars are we talking about? is a third of 11 million, what kind of dollars are you taking out of the market? >> i don't know exactly in dollar terms, but it can be significant in markets for you have heavy concentrations of immigrants. so, a lot of the big cities that you think about. new york and los angeles, miami and chicago, places like that. david: what about the other people you refer to in your piece were not actually
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undocumented at all. how does this affect them? why don't they say i'm not in trouble? >> for all of us when you make a decision to buy house, there's a certain amount of risk. when there is a lot of change happening and a lot of change happening in related to the weight immigrants are treated that adds even more risk for these people. visa, you an h-1b one start to wonder about the security of your job and whether it is time to take a risk like that. david: what about the risk from the lender side? lender whowith one trump starts getting
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tough on these issues, they are worried about some of the loans they have put out there recently and whether they may be at risk if it goes into default. david: it only makes good sense. thank you very much for joining us from boston. up next, moving beyond the residential housing market. we turn to a new study saying that president trump's planted -- could have some profound effects on gdp overall in the country. that is coming up next and this is bloomberg.
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david: this is "bloomberg markets." we are focusing every afternoon on politics and policy during president trump's first 100 days in office. let's get started with the
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headlines. mark crumpton has them for us from the newsroom. matt: paul ryan is visiting the rio grande valley for a firsthand look at the u.s. mexico border. the tour comes as the trump administration steps up immigration enforcement and prepares to ask congress to pay for a border wall. it is the first time the wisconsin republican has been is that the border -- has visited the border. mediated peace talks between syrian government representatives and the opposition in 10 months are scheduled to begin on thursday. the u.n. special envoy for syria spoke to reporters today in geneva. >> am i expecting a breakthrough? no, i am not expecting a breakthrough, but i'm expecting and determined for keeping a very proactive momentum. mark: he warned of unspecified
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spoilers who could try to block his efforts to end the conflict that has left hundreds of thousands dead. he said reasonable medic efforts -- recent efforts by russia helped support the political process. independent candidate agreed to does boosting his run for president of france after a difficult week. cron has expected the offer of a deal to avoid splitting the moderate vote. sides teaming up against marine le pen.
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in turn of events for the man who once led hong kong. the city's former chief executive has been sentenced to 20 months in prison. he was convicted of misconduct in a conflict of interest case involving a luxury apartment. his wife says he plans to appeal. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. david: turning to immigration, president trump's sweeping crackdown on a not committed immigrants could strain an already tight u.s. job market. yesterday's adjusts removing all of them would cost the economy $5 trillion over 10 years. we are joined by the co-author associatedy from an professor of economics at queens college in new york city. good to have you here. take us through your analysis. how did you come up with the
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overall number of people who would be taken out of the workforce? >> in the study, we used recent details, data about the workflow in the u.s. this allows us to estimate to the best of the ability of the are likelyworkers we to be undocumented. we used this data come by did with other economic models we use -- combined with other economic models we use and once used the data, we see 7 million undocumented workers in the u.s.. when we put in those data into the model and we think about the removing those
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workers, we learned that gdp could fall by 2-3%. that is not a small number. that amounts to the economic contribution of the whole state of massachusetts. it doesn't distribute evenly across all sectors. some sectors would be hit hard, led by the leisure industry. leisure and hospitality right at the top. that is 1.3 million potentially in america. construction is number two. some sectors would be particularly hard hit. >> that's right. in some sectors, the concentration of undocumented workers is pretty high. one thing we learned in this study when we look at the data carefully was that undocumented workers are spread throughout the economy in many sectors. david: it is a large, large number. as a practical matter, the full
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7-8 million would not be taken out of the economy at any given time. even with the new guidelines, it starts with people who committed a crime or suspected of a crime. million you take out, how much do we lose? something to the order of -- i'm doing the math in my head. midmaybe $30 billion a year. david: we will put this quote up here where donald trump -- we are going to get the people who have criminal records, gang members, drug , probably 2,000,000-3,000,000 people. we are getting them out of the country and we will incarcerate, get them out of our country.
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calculations,is that could have a real effect on the economy. >> it's important to distinguish whether those two were 3 million -- two or 3 million is referring to overall workers or the conduct minute population. -- the undocumented population. that could be close to half of the estimates that we find. >> in fairness, we do need to say how your study was funded. it was funded by the center for american progress, which is typically identified with the democratic party. not to say that your study itself is partisan, but we should review what the origins are. what the white house has said in response, you're not taking into account the enormous cost of having an document it people in the country. -- undocumented people in the country. have you taken a look at those
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sorts of numbers? >> the fiscal impact is not something that is at the center of our analysis. focused ons is the labor market. there are a number of studies that have looked at these things in iraq for to those for what the fiscal impact may be. david: a fascinating study. i refer to those for what the fiscal impact may be. david: we hear from george mitchell with his views on the challenges to president trump getting his cabinet in place. this is bloomberg. ♪
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david: this is "bloomberg markets." let's get a check on where markets stand with abigail doolittle. action fort a lot of u.s. stocks ahead of the fomc minutes to be released at 2:00 p.m. the dow trading slightly higher. with this slight gain for the a little over .1%, we do have the dow on pace for yet another record close, hitting another intraday record high, very small declines for the s&p 500 and the nasdaq. investors trading water -- treading water. when we hop into the bloomberg this chart,ook at we are looking at the smallest trading range for the s&p 500, a range of 6.8 points since the beginning of january.
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it will be interesting to see if that changes after 2:00 p.m. nero have stocks at order -- at or near all-time highs. goldman sachs believes financial market reconciliation may be ahead. we have a terrific chart that exemplifies what they are talking about. in orange, we have revisions to , taken7 earnings outlook down by 1% by analysts on the street. in white, we have the s&p 500. a 10% gain for the s&p 500 since the election but the earnings for the 2017 year have been taken down 1%. nickel back at head for the s&p 500. ahead for theack s&p 500. -- dowk and dow chemical chemical gaining on the news that said the eu is close to
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approving a deal between dow and dupont. drag asbil the biggest oil is down 1% on the session in anticipation that u.s. stockpiles have climbed. david: we are one month into the trump administration. so far, the president has 14 cabinet members approved. well behind the pace of prior presidents. mckee recently spoke with senator george mitchell. he asked senator mitchell about the trump administration's confirmation roadblocks. it is a mitchell: disadvantage. to me, not one that cannot be overcome. once the administration can settle down and stabilize and did not feel the need to rush not feelg out -- and
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the need to rush everything out, they will settle down and i'm hopeful secretary of state tillerson and secretary of defense mattis are able to bring some degree of continuity and stability into our foreign policy. i personally don't think the president will have to much to h difficulty with domestic issues. the economy is pretty strong. unemployment is less than 5%. growth is projected at about 2.5% this year. i cannot see any real problems. i think the repeal of obamacare would be a problem down the road. it is in foreign policy that i think the real dangers lie for our country. it's very important that the president get up to speed and establish some degree of stability and continuity there.
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mike: how much is u.s. foreign policy greater in a sense than any one man or administration? the world is nervous about donald trump. policy ofnstitutional the united states overcome that? how much damage could be done and how quickly would it have to be repaired? one of thell: interesting aspects of traveling around the world is to gain an appreciation of just how important the united states is in the lives of people everywhere. the interest in our elections sometimes exceeds that in our own country. the extent to which people listen to and are influenced by the words and actions of the president are truly extra narrow -- extraordinary. united states is by far the dominant power. by far the largest and strongest economy.
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our currency is the world's reserve currency without a doubt the most powerful military force ever assembled on the face of the earth. il this talk about russia -- cite one simple fact. california's economy is twice the size of russia's. is twice as big as russia in economic activity. is no one comes close to the united states in influencing defense. not that we can control them, but we can influence defense. that require strong and consistent and effective leadership by the united states, beginning with the president. mike: governor brown is not getting along with the ministration right now. israelis, the president this week meeting with netanyahu suggesting he was willing to give up on the two state solution.
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is that a good idea? sen. mitchell: no, i don't think it is. your viewersne of to pull up a speech given by president george w. bush in january of 2008 in jerusalem when he spoke to israeli leaders. he made the case for the american policy that supports two states living side by side in peace and quite israelis should be vested in a palestinian state. that is what is needed to solve this conflict and to contribute to a resolution of conflicts in surrounding areas. it's not the only issue and it cannot be viewed in isolation. solution.o one state that is an illusion. that will lead to the kind of conflict, internal disagreement that originally created this
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demand for partition. route of go down the trying to come up with a one state solution come it will confront the people of israel with a hugely difficult choice. they cannot accommodate a palestinian majority. they will have to either deny palestinians their democratic be a minority jewish society. mike: prime minister netanyahu knows that. sen. mitchell: yes, but he also knows that will not happen anytime soon. that is down the road. for most people, dealing with issues right now is the problem. i've spent a lot of time with netanyahu. they are better off making a deal with palestinians as they made a deal with egyptians and
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refinance -- jordanians and keeping those agreements enforced is a very important part of israeli policy to the state. the same would be true of a palestinian state. thatrimate is to argues the prime minister argues come if that state feels come we are left with how much control in the heart of israel? isestinian state failing greater in the absence of an agreement than with one. if they don't do something, that will fail and there will be hamas in the heart of israel. david: that was mike mckee wi senator george mitchell. just minutes from now, we will get the minutes from the fomc's latest meeting. that is next. this is bloomberg. ♪
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david: this is "bloomberg markets." fed minutes are scheduled to be released in just moments. the cleveland fed president said the fed does not want to surprise the market on policy. she spoke in an interview earlier today with heidi in singapore. >> in my view, we're basically at full employment. moving uphas been toward our 2% goal. we are not there yet, but my forecast is that we will continue moving that up gradually over time. i'm comfortable with interest rates moving up. david: for more, let's bring in carl riccadonna. presidentom the fed saying we are really close but not quite there yet.
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most of the moderate hawks on the committee are repeatedly indicating the fed is not behind the curtain. the hawks definitely want to continue normalizing monetary policy but the fed is not being caught flat-footed at the right. the economy is growing at less than 2%. core inflation running below 2%. this does give policymakers luxury to move in a very slow and deliberate fashion. fragile the fed does not want to surprise the markets with unexpected rate increases. the fed is trying to make for a boring meeting schedule over the course of 2017. david: we have a piece on the bloomberg about federal reserve governors -- fed not behind the curve.
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carl: absolutely. fed officials have been repeating that mantra. which is critical because if the market senses that policymakers are getting behind the curve, interest rates can start backing up in a deleterious fashion that would be unwelcome to policymakers and for an economy that is growing below 2%. david: all we have heard from the fed, including chair yellen, what is there left to communicate in these minutes? carl: if we look at the meeting statements compared to what was released in mid december the characterization of the economy was very much consistent. policymakers view some economic statementsoutlook not evolving. we know some sort of fiscal policy is coming down the pike. also, given the big rally in
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household and business sentiment , they took a stance of we will wait to see if it actually shows up in the hard economic data. the key focal point will be evaluating the early stages of policymakers' discussions regarding the balance sheet. david: there's a lot of talk going on about the balance sheet all of a sudden. carl: we don't know how advanced the discussions are. how much they are in agreement over what the policy will look like. ending wean investment or some sort of modulated controlled unwind of the balance sheet? at what level are they ready to actually initiate the program? it will be close to twitter percent fed funds rate. that's a 2% fed funds rate. he hasben bernanke already written he thinks they should get the interest rate up before they start paying down the balance sheet. carl: policymakers want to have the proper of interest rates.
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if we are just approaching 1%, that doesn't give them much room offset should there be an undesirable reaction in the markets. we saw that with the taper tantrum. if they don't play their cards right, you would have an even more severe market tightening. ford: wirp, 32% right now march. will that number be higher after the minutes? carl: i don't think it will move significantly. all of these hawks saying we are not behind the curve to me means policymakers want to wait for a firmer sense of what economic policy is going to look like under president trump. the next rate increase comes in the second quarter. june, may could be in play. even though the french elections are around that time? carl: absolutely.
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geopolitics certainly on the radar. david: we are expecting fed minutes at the top of the next hour. you can catch that and all of our interviews on the bloomberg with tv . send us an instant bloomberg. let's get a quick check on where the major averages stand as we are minutes away from the fed minutes. the dow jones is up just a bit. that is a new record. s&p and nasdaq up. the euro had dropped off, came up on news out of france. this is bloomberg. ♪
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scarlet: we are moments away from the release of minutes from the fomc meeting. let's take a look at stocks ahead of the minutes released.
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the markets down for most of the day. we are pretty much unchanged as the s&p is down six basis points. dow jones in the green as we are up about 20 basis points there. we also saw some reversal -- we're just getting headlines right here. let's go to chris at the federal reserve in washington with those minutes. here, therem line is no new sense of urgency from these minutes that the fomc is on the verge of a rate hike in march. the committee did acknowledge that the slowly growing pressure for a rate hike -- many participants expressed the view that it might be appropriate to raise the federal funds rate fairly soon if incoming information on the labor market and inflation was in line with expectations. that was soon after followed in the minutes by this. many members continued to see
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only a modest risk of a scenario in which the unemployment rate would substantially undershoot its longer run normal level and inflation pressures would increase significantly. the top is that they acknowledged they are getting closer. rate increases will be coming fairly soon. notn't get the message that hiking in march would constitute a policy error in the minds of many members of this committee. there was a lot of back-and-forth between hawks and doves, consumer spending and knowledge to be quite strong in 2017. the jobs market quite healthy, shortages developing in more areas of the labor market. the inflation data to the extent that it is improving seems not to be changing the outlook for members but rather supporting their existing expectations that
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inflation is headed slowly back to their 2% goal. there are upside risks acknowledged here. namely expansionary fiscal policy possibly being on the horizon. downside risks, namely the possibility of further strengthening in the dollar and still, the fed funds rate proximity to the zero lower bound. back to fiscal policy my think it is worth mentioning the committee spent quite a bit of time talking about the uncertainty of not just fiscal policy but the whole policy package we might see under a trump administration. it is a reference to trade and immigration policies. oliver: a good wrap up there as we get the minutes from the federal reserve. for more insight and analysis, let's bring in scott brown. ,e is in st. petersburg florida.
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we did not expect anything to gangbusters but this was a fed meeting three weeks away. does that look a little more like a date in which the fed can move? scott: every fed meeting from here on out will be a live meeting where they will discuss raising interest rates. this point, they are waiting a while longer to get more data. you have a lot of seasonal noise as you work through january and february. and february. as we get into spring, it will be clearer what the underlying strengths of the economy are. they appear to be close to their goals in terms of getting near full employment. they are more confident in their expectation that inflation is going to move up to the 2% goal. it's a question of when they will raise rates. if the be curious
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mid-march meeting whether the fed will signal whether they will start doing press conferences at every fed policy meeting rather than every other policy meeting. that would put may in play. if you look at the fed funds futures suggesting it is pretty much a coin flip about whether or not they will go by early may. amanda: you mentioned the dual mandates. we get what looks like full employment. no real worries here. e's onlys like ther a moderate risk of inflation. we are still coin tossing on march. this all points to serious hikes in the next year. scott: they will be very, very gradual. it is a case of two or three rate hikes over the course of this year. maybe two or three next year.
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they don't seem to be in any hurry. the best analogy here is they are not really hitting the brakes so much as just taking the foot off the gas pedal at a very gradual pace. oliver: many members saying we see a modest risk of the unemployment rate substantially undershooting its longer run normal level and inflation pressures would increasing the family. languagen line with that seems pertinent to newer data numbers that we've seen with signs of which growth and inflation and all the expectation come of the optimism that we are announcing reported -- that we are now seeing reported from companies? do they have to take that into account? scott: they have looked at the postelection environment and you have seen gains in optimism for consumers and businesses.
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consumers don't spend optimism, they spend income. -- the bigspend drivers are jobs, which growth. that's wage growth. we expect those to remain solid. slowed realower has wage growth for the typical consumer. that is a bit of a constraint. the fed is not in any real rush here. lowemployment rate is very -- the on implement rate is very low. -- the unemployment rate is very low. there's this believe that is just demographics. and secular changes and not unlikely that we will see a reversal of that. with economists expect full participation rate to gradually decrease over time reflecting the aging population. upnda: one thing that showed in the minutes as the fed said they would start to debate the
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balance sheet in the coming meetings. where does that take us in terms of lightning the balance sheet, beginning with reinvesting maturing securities? scott: if you remember the fed come of theher reinvestment policy was the first to go under tightening. they are talking about the timing. we don't expect that to happen anytime soon. perhaps by the end of the year. by all indications, the size of the balance sheet will decay naturally over time. as securities mature, the fed will let them run up the balance sheet. it gets tricky in terms of managing the security across the scale. the fed will be buying and selling securities as it decreases the size of the balance sheet. that is several months away. oliver: scott brown, thank you for joining us.
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intraday --at the the 10 year down three basis points after the minutes. not a giant market reaction. amanda: let's get market reaction with abigail doolittle. reactionnot a lot of from the major averages here in the u.s. andre looking at mixed unchanged trading action for the dow, s&p 500 and the nasdaq. the dow is higher, has paired its small gains in a minute way. on pace for another record close and the s&p 500 and nasdaq almost down .2%. the fed basically sing many participants would like to raise rates soon if the economy warrants it appropriate. there is no sense of urgency. we are seeing market reaction with the 10 year yield. it had been up to hype it three basis points, now down about two
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basis points. -- it had been up 2-3 basis points. now down about two basis points. we're also seeing the bloomberg dollar index fall. the tenure isat trading down, we see dramatic trading action for the bloomberg dollar index. is good reason for investors to think that that may be on hold relative to markets. chart -- in white are the world interest rate probability going into the december 26 in rate hike. the second in a decade. it had been 20% probability. closer to the actual meeting, 100%. investors were very certain. about 38% going into march.
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oliver: let's get a check on the first word news this afternoon. a government official says trump administration will revoke guidelines that's a transgender students should be allowed to use bathrooms and locker rooms matching their chosen gender identity. a decision will be a reversal of an obama era directive issued in may. it requires public schools to grant bathroom access even if student records differ or others are uncomfortable. president trump believes the issue is for the states to decide without federal involvement. following a police interrogation, french presidential candidate marine le pen sa has been charged with receiving misappropriated funds. was taken into
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custody today. astronomers have discovered seven earth sized planets orbiting a nearby star. these new worlds could hold life. nasa who announced the discovery, this cluster of planets is less than 40 light-years away. the planets circle tightly a torstar barely the size of jupiter. star barely the size of jupiter. the others are right on the doorstep. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. amanda: still ahead, we will hear from south africa's finance minister after delivering his country's budget.
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his decisions have been at odds with jacob zuma. this is bloomberg. ♪
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amanda: this is "bloomberg markets." oliver: time for the bloomberg business flash. r trying to complete a 60 $6 billion takeover of monsanto by the and of the year -- $66 billion takeover. the conglomerate is in good shape and expressed confidence in the acquisition overcoming regulatory obstacles. anand pharma, we have operation that has been growing
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above market for the last few years. we continue to see market growth in 2017 and we've profiled the next wave of new products that will enrich markets in the next years to come. the short as we answer to your question that we are not in need of an acquisition. yer will only seek approval for the deal next quarter after regulators requested more information. is that the cut is similar to last year's reduction. 7% because of job cuts and a hiring freeze last year. the reduction affects senior traders. the pool for junior employees increased in a bid to retain talent. for more on the barclays and its
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cut -- looks like some of the big boys are getting the cuts. the new folks, not so much. they are in the clear. >> this has been a theme for so many years now. since the crisis, really. european banks followed a little later than u.s. banks. the last two years, they've seen more job cuts as well as bonus cuts. what theys showed have closed down certain positions in certain products. they are shrinking certain markets. that means fewer people and fewer bonuses. amanda: this will not be happy news to the employees affected but it doesn't go as far as some other banks. deutsche bank killing all bonuses for 2016. compare and contrast the banks
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taking different approaches. >> it is a great example -- deutsche bank was so much harsher. the news that they are not paying any bonuses to anyone this year. that sounds scary. is beyond even other european banks. they have still not reduced headcount. barclays, credit suisse, ubs, they have all been cutting headcount over the last 3-4 years. they are at a better place. they pulled up capital better and faster and they can handle the lower revenue going on in those firms. deutsche bank is way behind. amanda: u.s. banks got out in front of this. how do they compare now? the death toll has not stopped. it is not over.
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there is still reduction. it has slowed down a lot. , theirn last year numbers were even up. were those bank tellers or actual bankers on the trading side? it is hard to tell. most likely, some of the european -- u.s. banks that are doing stronger, they ar have stopped firing people. been getting market share in fixed income, equities, everything. the troubles aren't as bad, yet, we still have not seen the end of wall street job cuts. oliver: thank you so much. tomorrow, the european open, barclays ceo will be the guest to talk about the bank's
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earnings report. amanda: south africa finance minister pravin gordhan presented the country's budget today. he's both to bloomberg after the budget presentation comics winning his allocation process and addressing detractors. pravin: there were finance ministers before me and there will be finance ministers after me. it is the policy that matters. i think we will keep everybody happy. particularly south africans happy that their finances are in good hands at the end of the day. people come and go. we don't do things on our own.
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places.all the right -- choices. despite the difficulties we have. oliver: still ahead, from south africa to washington where president trump is also preparing a budget blueprint. we are live at the white house with the latest from the president's team. this is bloomberg. ♪
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oliver: this is "bloomberg markets." amanda: earlier today them a president trump discussed the federal budget with a team that included steve mnuchin and mick mulvaney. for more, we go to kevin cirilli at the white house. in terms of what we learned coming out of that meeting come any surprises? said heresident trump
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is going to announce his budget basel at around the time of march 13. does budget proposal. does not pass a continuing resolution or a partial government spending bill by april 28, congress would trigger a partial government shutdown. that is something this republican-controlled congress with a republican-controlled white house wants to avoid. it was very much unpopular when it happened during the split congress back in the obama administration. they are trying to figure out what will happen with the budget. do we know who will be the point person on this? we've been talking about the economic might tease and surrounding himself with, but this will be about politics and what can be done within the halls of washington. kevin: when it comes to specific policy areas, president trump has said there are different areas that will have lots of different people.
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the tax reform bill and the tax policy will be left to steve mnuchin. in terms of things like manufacturing and infrastructure spending come of will be left to people like steve bannon and gary cohn. in terms of the budget, this is where the tea party wing of the republican party is looking to people like mick mulvaney. back when he was a congressman in the house of representatives, he was someone who was very much aligned with folks in the house freedom caucus who are part of the more ultraconservative tea party wing of the public and party. -- the republican party. amanda: was there any news on obamacare? did get a development about the timing of when we could see this white house release a proposal for the alternative. president trump: we're doing the health care, moving along very
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well. sometime during the month of march, maybe. mid to early march. we will be submitting something that i think people will be very impressed by. while congress is in recess this week, it's looking like march will be a key time for when this administration starts to finally reveal some of these policy details. president trump will address a joint session of congress on tuesday of next week. oliver: waiting on the health care plan and the budget plan, how many plans to we have to wait on? we are still waiting on the executive order for the seven predominately muslim nations. ofterday, we received word the administration's policy in order to embolden what they are -- that has launched a
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new series of attacks from the left and from immigration rights activists. amanda: great to have you with us. -- it has beenhs three months since tesla acquired solarcity. the electric car earnings after the bell today. gordonwe will hear from johnson. he will tell us where the industry stands. this is bloomberg. ♪
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amanda: this is "bloomberg markets." oliver: the founder and chairman of equity group investment is one of the best-known and successful investors in the country. bloombergjoined
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daybreak. the crash and at the price of oil, what you really saw was saudi arabia showing the rest of the oil-producing world what life could be like with an uncontrolled product price. the effectuated a significant amount of pain, which led to the recent pullback agreement. that is positive for oil producers and oil investments all over the world. it's unlikely that the other producers are going to cheat as prolifically as they did in the past. of saudif the fear doing that again. >> do you want to buy an asset in the permian or will you put it to bet on midstream assets? do you want to go to the other areas like eagle furred and
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bakkan?- eagleford and maybe the oil thing in your at those prices come i don't think there was much of a deal for anybody. what is going on is positive for the u.s. energy business i disagree with him my think shale is capable of bringing on supply much more rapidly than he suggests. the number of wells that have been drilled over the last few years that are laying there is enormous compared to the historic levels. shale could add supply much more rapidly than most people understand. >> on the one hand, you have an
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administration that is pro-energy and prodevelopment and pro production and then you talk about the need to control price is there a danger that this new approach in the united states will overproduce and drive the price right back down again? >> i don't think so. the natural limitations that exist on distribution on mid-level pipelines and all this other stuff limit how fast the united states can go. six or eight pipeline putosals currently being forward. that puts a limit on how rapidly oil can affect flow. i don't think the u.s. represent a risk to oversupply. the way saudi arabia does. >> how much cash are you sitting
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on right now? >> a lot. >> what would it take to put it to work? >> i'm an entrepreneur. i've always been optimistic. you don't get to where i am by being a pessimist. we are constantly looking for opportunities to better invest our capital. particularly in an environment like this where the alternative meaning fixed rate debt is horrific. ofad a conversation with one the major banks recently complaining about the fact that we have $200 million and they were paying us 18 basis points. i said that is crazy. he said, word you want me to spend it? we are doing you a favorite 18 basis points. that doesn't change the fact rich. intend to get
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let's check the headlines on the first word news this hour. foreignssia's ministers has mock scow is open --a dialogue with washington says moscow is open to a dialogue with washington. said he had briefly discussed the issue with rex tillerson last week in germany. -- the u.n.ump has envoy for serious as he is not expecting a breakthrough in peace talks. he spoke today in geneva on the eve of planned talks between assad and the opposition. he says he sees the meetings as "the beginning of a series of rounds that will allow negotiators today deep into the
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important issues." one person has been burned in fires set by protesters at a long-standing and cabin near the the code access oil pipeline -- the code access oil pipeline. -- dakota access oil pipeline. the extent of the injuries were not known. two hundred-300 protesters who remained maimed at the encampment walked out around 1:00 p.m. local time. -- most of the 200-300 protesters. police have released more details about the two women suspected of killing the half-brother of kim jong un. they say the women were trained to coat their hands with toxic chemicals and then wipe them on his face. r --korea's embassy has
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north korea's embassy has ridiculed the claims. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. tesla is set to raise its first earnings report since it closed its $2 billion deal .or solarcity picke this leads wall street at a loss. despite the lack of earnings clarity regarding solarcity, up 50%lders of tesla since december 1. the stock has driven into market cap closer to gm and ford. tesla is the white line now holding a $40 billion market cap that implies a $627 million
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valuation for every car sold in the last four quarters. analysts are not as positive. $48 below target was tesla's stock price last week. pessimisticmost view we pat from wall street since tesla became a publicly traded company. few analysts believe elon musk will hit is forecast to produce between 100,000-200,000 model 3's in the second half of this year. to reachds the model 3 its 2020 goal of one million total deliveries. the company loses money every year as it builds infrastructure it needs for this type of growth. especially when you add in the giga factory that will soon be the world's largest battery factory. one analyst expects the merger "o make earnings results "noisy
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until tesla's new products have the opportunity to themselves. we will be tracking the results from the release after today's u.s. closing bell. oliver: for more, we are joined johnson. article on the bloomberg. you have been shunned in the past and have been very bearish. the stock right now. how is this combination of these two entities going to work? is it going to provide much-needed buoyancy to tesla? >> we don't think the acquisition made sense when it was announced. we were amongst the most vocal bears on tesla acquiring solarcity.
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the real impetus for the acquisition was solarcity was very close to having to file for bankruptcy. that would have tarnished elon musk's reputation. his interpretation of solid execution and a lot of what is musk'sa's stock is elon reputation. the real take out of this company was to circumvent solarcity from having to file for bankruptcy. tesla will run down the business significantly to get away from the losses that solarcity was realizing. they know their shoulders are ok with it. felt there was valuable assets inside solarcity. why does the combination make sense? or what is the argument elon musk might make? gordon: that there was a great marrying of battery technology in solar technology.
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it makes a great long-term technology. if you can have solar technology can store into the night, you create an energy revolution. the cost of that technology from tesla right now is multiples higher than traditional electricity. we don't think there is real value in solarcity with the tesla acquisition. he did it to circumvent having to file backup state. oliver: you are still following solarcity. we talk about these companies you arek's where maybe not profitable to the point that investors want you to be or even at all -- at the end of the day, when you are making a promise, stock can go up without being profitable for a long time. in?does that factor gordon: tesla has not been profitable any single year. they were profitable last quarter but there were three quarters they recognized in that
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to boost their profitability. the expectation from the analysts on the street is that profitability will come down this order. day, teslaof the will have to execute on selling a lot of cars and there's a lot of new competition coming into the markets. will the competition like the volt hurt them and will they be able to hit their targets? if you dive inside the terminal here with -- not a lot of logic to how the market response to tesla. you get an increase and when there is a surprise, you get an 8% decline. people are playing momentum in the stock heading into the earnings and then selling once the numbers surface. gordon: they have not proven
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like they are agm company. -- a g.m. like company. is that the reality is there's a lot of new cars coming into the market. aid he would sell 200,000 model 3's. you look at solar space in general and you run down your list -- your bearish on the entire industry. some of that stems from the new presidential and ministration. -- presidential administration. elon musk has the ear of the president. has artfully inserted himself into the conversation. has donald trump made energy and
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solar and credits and stuff like that a priority? at this point, we don't know exact what donald trump is going to do. what he said on the campaign trail was very negative for electric car manufacturers. that tesla needs those in a big way, elon musk has no choice but to play ball with the president. it will be the competitive dynamic, the competitive backdrop, you have 18 purely n w electrical new cars coming into the market. that will be the dynamic that determines the stock. thank you to gordon johnson. the nation's biggest
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banks are coming for you. we have a look at what they're doing to compete with the money sharing app. this is bloomberg. ♪
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oliver: this is "bloomberg markets." amanda: time for a check on the market abigail doolittle. abigail: we are looking at a largely indecisive and unchanged day for the u.s. major averages. the dow is the one average that happens to be higher. opened ever so slightly lower. managed to climb higher. another all-time intraday record high, dropping a bit after the fomc minutes but ever so slightly higher as investors seem to be on hold here,
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digesting the recent gains. another day of record highs. where we get to bigger reaction --the fomc minutes the 10 year yield dropping from being up two basis points into the meeting into the release of those minutes now down about two basis points. haven bonds are rallying. the bloomberg dollar index also fell on the release of those minutes, rising rates tend to support the currency. to ofou look at a 10 day the bloomberg dollar index, this is the first multi-day winning streak for the bloomberg dollar index all year. have reversed its gains from earlier today but still higher over the last 10 days. as for some stocks trading at record highs, helping to explain the dow, apple help to explain the dow. amazon earlier did put in a new
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intraday high. the stock of note, facebook trading up about 2%. impressive trading action on and unchanged day for u.s. stocks. oliver: the nation's biggest banks are declaring war on payment app venmo. startks have teamed up to a website and app that will let users send and request money. i thought venmo was invincible. it seems like it has serious cup titian coming. >> maybe it has too much of a head start. -- serious competition coming. will basically a word -- i venmo you. everyone knows what you mean. the banks are trying to broaden the audience to a more mainstream audience. get theirrying to
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customers to use it and they have some advantages. amanda: they already have the bank accounts. there is not the middle man. but they each have their own apps and they each have their own direct relationships already. >> it is a huge technological hurdle that they have to get over to just launched this network. 19 different banks. they are phasing it in. if you have a bank of america app and you update it, you will be able to see that you can send the request and split a bill with people. they will phase in the zelle brand name and then sometime later this year launch a standalone app. oliver: presumably, it is right now that you can have all these
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banks and link them up to your venmo. which bank will be running the operation? will it be a separate company? or are they just try to say do whatever we've got to do to stop people from using venmo exclusively? >> it is a company called clear exchange, set up by the banks have set up this effort. banks can charge under the rules of this new network. they will have difficulty doing so. is when iage of zelle send you money, it will go directly from my account to your account. venmo is counteracting by saying let's improve our system so that they make it much easier for you to cash out of their account. they will be launching that in the first half of this year.
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much.: thank you so some competition for venmo heard many fed officials think a rate hike would be appropriate fairly soon. a look at what else they discussed including the downside risks of the strong u.s. dollar. this is bloomberg. ♪
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oliver: this is "bloomberg markets." aanda: many fed officials see rate hike fairly soon if the economy remains on track. edged higher. the dollar fell on the news. what did you think? joe: i'm always impressed by the degree to which this federal reserve avoids rocking markets too much. excellent at communication. we see a bit of a move. oo much thatt
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caught people by surprise. a bit of discussion about the eventual balance sheet drawdown. predictable concerns about how fiscal stimulus might affect things. i don't think anything was that dramatic. oliver: they now have another goal post they can put on the horizon. clarity from the administration. at bayhat keep them longer than they need to? joe: if there was a situation which it did not look like anything was going to be coming at all and they go back and look at they did and go we are not , no particular reason to think there will be a jolt out of ec that will change the degree of the economy --
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amanda: they do talk about the risks of the strong dollar. strong dollar universally expected and rising rates will only exacerbate that. how do you interpret the commentary? joe: there's nothing they can do about the fact that the dollar is on an upward trajectory. if the dollar is going up for the right reasons. not a flight to safety per se but because the u.s. economy is received as being the strong as the world. world.strongest in the it would signal that the u.s. could withstand summary hikes. -- some rate hikes. are only up to about 370 basis points higher than we were at election. we have erased quite a bit of the rally. joe: it is remarkable the degree of consensus around the dollar.
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it becauseople liked policy divergence from fiscal stimulus, all this stuff and then trade policy changes made people really not like foreign currencies, particularly em currencies. amanda: we will see you back here in half an hour. theill be speaking to redfin chief economist. coming up my financials have been on a tear this year. the party could be over for banks. we will discuss why. this is bloomberg. ♪
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>> it is 3:00 p.m. in new york. i am oliver renick. amanda: welcome to bloomberg markets.
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oliver: we will cover stories in washington and paris. in markets, stocks are waiving this afternoon. the economy, the fomc released minutes from its last members real -- most have rate hikes fairly soon. in politics, president trump's crackdown on undocumented aliens might affect more than just those deported. these potential buyers disappear from the market. on theet a check markets. what is going on? >> not a lot of action for a u.s. stock. action, the dow trading
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slightly higher, another day of record highs. gain and will be interesting to see whether the dow will hold on into the close while we have the dow, the s&p 500, and the nasdaq slightly lower -- slightly lower. of nasdaq in the month february. the s&p 500 may be down slightly -- we happened to the bloomberg and , the bottom or schlein is a 1% down. we are on day 51 of the holding pattern where investors are the s&p 500king higher but very slow steady gains.
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it will be interesting to see how it when that does and. perhaps it will end and it is possibly a bearish manner. this is a chart of the s&p 500. estimates --rnings the point to be made is while the s&p 500 is up 10% since the election, earnings estimates have an taken down by 1%. a bit of a contradiction there. the s&p 500 could give back recent gains. quickly, after the bell today, reported earnings including tesla and fit trading lower into the report. trading higher on expectations the company will be trading profit. headlines thishe
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afternoon, mark crumpton has more. mark: president trump plans to submit his budget plan to congress by mid-march. he discusses his proposal at the white house with a team that included steve mnuchin. >> we will direct all our departments and agencies to protect every last american and every last tax dollar. no more -- no more wasted money. we will spend the money in a careful manner. our moral duty to the taxpayer requires us to make the government leaner. we must do a lot more with less. white house press secretary sean spicer says the plan is around march 13. the blueprint will contain fewer details since mulvaney was only recently confirmed. the fresh faraway presidential cabinet willd of
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be charged for allegedly receiving misappropriated funds. the arrest came after police -- including a bodyguard and the former head of. the justice system should not alter the election, it says. in asia, central bankers will look for ways to rule out misconduct and a $5 trillion a day currency market. this week's he meeting in hong an effortming up with to restore trust in the world's largest financial market after a scandal that led to $10 billion in fines. forced spacexrror to delay step -- a shipment to the international space station today. less than a mile from the orbiting outpost when a problem occurred in the gps system.
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the dragon backed away. stationd neither the nor its six person crew was in any danger. news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. this is bloomberg. stocks flat today but wall street appears to be getting a bit anxious when it comes to bank stocks. the index up about 23%. evaluations getting too high. the markets reporter from bloomberg news, danny, what are analysts saying? it looks like there is a sentiment change. for these unusual analysts. in the past months, the ratio was about 1.5. they are essentially saying look
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, they are anticipating a lot here, policy outcomes, and we do not know whether we play that out now so let's pump the brakes. that iresting chart believe you have essentially looks at the treasury yields and financial stocks. there, financial stocks. you can see they happen separating as of late. it is losing a floor that allows financial stocks to go higher. a lot of people look at this and it is policyaps pushing higher and it is not actually year -- yield for the inflation story. i will pull and appear, boom, there we go. i am glad you brought the chart. separationthe
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between the banking group and rate hikes in white. hikes, it has come down, leaving a loss of footing for banks if you think that is a big part of the story. surgedbanking sector has 29% since the election, remarkable. we are in a fairly historical range right now with valuation. different sides of the same coin. we see a whole lot of enthusiasm in general for what trump policies might do for the economy. cuts, goldman indebted to right now. they say your chart is overvalued but couldn't he the policies will change the picture? other fundamental reasons for this. in the federal reserve minutes,.
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>> likewise, implied volatility is low. look at the equity it is actually below where we are right now. trump inonald raise wherefore we it will be at the year-end. you give what they think we need to be looking for? >> absolutely. they want to see where the markets are.
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in this fed minutes, it essentially says look, people are betting on deregulatory policy, some fiscal stimulus, and that has helped market anticipates be more enthusiastic about equities. aks. markets reporter for bloomberg news. up, what policies could mean for jobs and the economy and why one study says a significant loss in gross to mystic product. this is bloomberg. ♪
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amanda: this is "bloomberg markets."
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oliver: more details about the trump crackdown, specifically its plan. among the first mayors in the country to resist enforcement actions. asked the question what happens now earlier today. little has been communicated and again, under current law, our police department will not be cooperating. it is not what welcoming committees will do. will you be asking for, if anything? >> we are asking the various departments including homeland security for information that relates to these requests. what will they do to these sanctuary cities? we have a lot of kids in the city who are scared, some who are naturalized citizens and
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others who have questionable documentation. we have to help people who live in the city. >> i think we all agree the federal government has the first ite of responsibility when comes to our borders. why do you feel it is so important to fight this. >> the court has been very clear that being undocumented in of itself is not a crime. people cannot the simply detained there it maybe the more important reason, i meet kids who have been here their whole lives who are not documented and their parents are working in jobs in the city and the state most other americans will matt do. they are paying taxes. are we really going to rip families apart? this is what happened during the second world war when the -- with the japanese-american community ripped out of this community.
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this is not going in a good direction. >> taxes. pencil outd people free with the economic effects would be? >> -- let's assume the most extreme place. >> i think it would have a negative impact on us, agricultural businesses, and throughout the west, i don't think people would produce the apple and wheat and the cherry and winds that we do, without some individuals that are here. the fact that we never dealt with sensible immigration reform is really the issue here. >> the president and the past has spoken out very strongly about those who try to seek sanctuary. he says if they don't play with us, we won't play with them. have you taken that into account? >> we have. assimply cannot use funding
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a punitive measure and it has to be connected to something you are trying to do. perhaps the federal government could cut funding for police but not on transportation. he is, sanctuary of cities, ill-defined, as i understand it, you will not work to try and help the federal government to enforce guidelines. if they come into your city, you efforts?fight their under thenot required law to use our police force to assist them. >> have you tried to persuade to change it and ameliorated around the edges to make it -- >> we have basically had radio
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silence from this administration. >> if you go forward, is it conceivable? is that in the cards? >> absolutely. if we do not get the information we are asking for, we will consider legal action. in conversation with other cities about what we will do as far as suing the federal was the mayorthat amanda:le earlier today professor frank ortega co-authored a study and looked allhe economic effect at undocumented workers. he says the impact on gdp would be significant. >> when we think about what would be the effects of moving those workers, we learned that gdp could fall by 2% or 3%.
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it is not a small number. >> let's start with wide deportations could have such an economic impact? where can you feel it first? >> removing undocumented workers would have a 3% cost on gdp and would amount to about $5 trillion in the next 10 years. that is equal to removing the entire state of massachusetts to the economy. it is a sizable impact. >> overall, we talk about trump's immigration policies. we still try to get some clarity. we have to start thinking about how this believes through -- he and his colleague, what are the broader points here driving this
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conversation? >> this is particularly challenging now. employment rate is 4.8%. a lot of economists think this is very near full employment. where most undocumented workers are concentrated like construction and agriculture and farming, even restaurants and retails, these industries are already complaining of worker shortages. not long ago, we wrote a story about truck drivers receiving because they cannot find the people they need. if you remove millions of undocumented workers, obviously the problem can only get worse. >> the mayor of seattle said the same thing, that these folks are doing jobs americans do not want to do. the solution that he do not want
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jobless to just raise wages. >> the reason why things are the it is a moreis pricey product. these are jobs a lot of people do not want to do. they do not want to pick strawberries in the middle of the day. wages, that will only increase the price of the products. >> we have got to leave it there. thanks, patricia. still ahead, we take a closer look at herbalife and trading stocks, options insight is next. this is bloomberg. ♪
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always a good time to
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remind people. welcome. i'm oliver renick it amanda: timeout or options insight. abigail doolittle. abigail: joining us today is the chief strategist at bubba trading. joins us in chicago. thanks for for taking the time. this trading action on day, a lot of records and you talk about it is on hopes and prayers around tax plans and policy. it sounds like you are not a believer. notull disclosure, i have been for a while but i am fully not now. it looks like a euphoric trade. stocks they do not have money for an margins they cannot afford. to me, we are overly complacent and nothing could go wrong. even if trump gets all of these things done that he wants to, it will not happen tomorrow and what about the $19 trillion in ?ebt
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we who get really positive going forward. >> interesting. you are not alone. goldman sachs said they think there could be financial markets reconciliation in the recent gains could get back. morgan stanley talked about miss pricing risk yesterday. aboutne has been talking a possibility but what signals are you watching? marginallyching record highs. for a money in it that they do not really have. the vix is almost at low top -- all-time lows. the dust the diversions between the vex in the general markets indicates everyone believes the markets will never go down again and that this time is different. we all know it is not to the markets will eventually. i think new money at these levels would be very risky. >> would you keep old money on the table and in terms of new money, would you put it in cash
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or is there another defensive trade? >> old money, you stay in the market. an investor come you look through the trials and tribulations as long as you have done your homework. i'm not a big fan of trying to guess. looking now, there is not a lot i am looking at. some beaten-down equities, some of the mining stocks. i am to step into something like this. i am more on the sidelines looking for an opportunity to get short. >> interesting. you report tomorrow and you have a bearish trade called a broken butterfly? >> we call it a broken wing water fly and what we are doing for this week, it expires on friday. three times each, what we will the 63 call and by three. it gives us busy week -- a short call spread.
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we will buy quattro. a big credit in here about $3.5 worth of credit. we will get to keep the credit good if the stock goes up, we will lose the money, down, we get paid on the extra bit. the range and this chart, i do believe they were priced in, the onyx. it andresting stuff here very quickly going back to your thoughts on the markets, i bearish perspective, you are talking about a potential correction of a 10%, 20 percent, are you willing to put a number on it? >> i am looking for well over 20%. the longer we continue to try and push forward, i think the bigger it will bp right now, just a shade over 20%. good stuff. thank you so much, chief strategist at bubba trading. amanda, back to you.
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amanda: president trump crackdown on undocumented aliens will affect more than just those being deported. what it could mean for the housing sector as the potential buyers disappear from the market. this is bloomberg. ♪
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mark: the trump administration's's plan to round up millions of undocumented immigrants is likely to trigger a flood of lawsuits. the american civil liberties union and other groups are vowing to challenge the proposal. according to new guidelines, the u.s. will try to swiftly deport more people without court
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hearings and will also target migrants charged with crimes or thought to be dangerous. between syrian government representatives and the opposition in 10 months are scheduled to begin on thursday. the special envoy -- spoke to reporters in geneva. >> i am not expecting a breakthrough but i am expecting keeping a very proactive momentum. he want of unspecified spoilers as he called them, who would try to block his efforts to end the conflict. said recent diplomatic efforts by russia, a key supporter of president bush are all aside's government


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