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tv   Bloomberg Markets Americas  Bloomberg  July 20, 2017 10:00am-11:00am EDT

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nejra. welcome to bloomberg markets. vonnie: here are the top stories from the bloomberg and around the world. is keeping the door open for further euro area stimulus. doesn't it make good news for investors? and united states, president donald trump to revise his plan to reveal and -- repeal and replace obamacare. we are seeing concerns about the u.s. reaching the debt ceiling this fall. and bondholders are heading back to court to recover money from puerto rico's bank rep c. -- bankruptcy. we are 30 minutes into the u.s. trading day and we had a mixed
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session. julie hyman is here with us. julie: very little change after all of the averages. a recordtoday will be close for major averages if they get one out. we are seeing the volatility, one of the things we have been talking about that has presented a challenge, for example, the morgan stanley's and jpmorgan's of the world, although morgan stanley did do better than peers. you are looking at a quarterly basis. lowest averagehe vix going back to 2006 and we have hit another milestone in terms of volatility. volatility under 10 per by straight sessions for the first time ever. it is not just a typical summer, it is an unusually low volatility summer, even by the usual summer standards. this trend we will continue to
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implies onhat it the ability for stocks to rally. the volatility tends to mean stocks are not going up. there is volatility and it comes to individual stocks. one is sears. that company is surging. it announced plans to sell its kenmore appliances on amazon. sears has been battered by a lot of concerns about its business and viability, but the stock is up by 19% today. some of the other appliance sellers are lower. sears used to be the largest seller of appliances and has given up that title to competitors. and best buyowe's, are trading lower today. i want to take a look at oil prices on the bloomberg because oil is up for seven of the past eight sessions. if you are looking at brent, it is above $50 a barrel. it you are looking at the beauty
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a, it is the highest since june 6. this surge -- at wti, it is the highest since june 6. nejra: let's have a look at where european equities are trading 90 minutes to the close. you are seeing gains, not just in western europe but in parts of periphery, portugal up, the ftse 100 up .8, stoxx 600 higher for a second day. the fx space, uighurs sterling for a fourth day, down .4. the euro up .5. i will talk about that in a second. mario draghi's press conference in the peripheries, when you look at fixed income, you are seeing 10 year yields move lower. spain, we are down about eight basis points.
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the 10-year bund yield down by about one basis points area speaking of euro, this is the intraday chart on euro-dollar. we are up .5. we have seen it spiked higher and initially move lower after the decision but moved higher during mario draghi's press conference. i wanted to look at the euro-yen because i was watching this this morning in terms of a key technical level, the 200 weekly moving average, questions on whether the euro-yen would cross that. it does not look like it has done it. vonnie: thank you for that. the euro climbing as ecb president mario draghi sets the bank needs to be persistent, patient and prudent. here's what he told reporters in frankfurt. ofa very substantial degree monetary accommodation is needed for underlying inflation
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pressures to gradually build up in support headline inflation development in the medium term. vonnie: for more analysis, let's bring in richard jones, fx and break strategist for bloomberg markets live. the euro reacted, but what did we hear that we were not expecting? richard: it is a bit of a tale of two markets if you look at the periphery and the core yields. yields are lower because mario draghi emphasized haitians, prudence and they will -- patients, prudence, but i think the currency is rushing higher because in the queue end a session, he was asked about euro currency strengthen and he did not push back that figure a story. he talked about financial conditions, so there was a slight push back but it was not vigorous. as a result, that is why we see this grind higher in the euro. we are not pushing into new
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territory there were we have not 1.16 in are just below euro-dollar, so we are not racing holler but the grind higher -- bracing higher, but the grind higher is because he did not pushback vigorously. vonnie: we were just looking at the spain-germany spread and talking about yields and rates. it is that a multiyear low at this point, richard. richard: that 100 basis points level was a psychological level that we pierced through intraday on tuesday and closed above it. we are trading at about 95 basis points now. that is worth watching. if there was real concern in the market amongst investors the ecb was going to be aggressive in tapering back qe, i do not think spreads it be tightening like they are. on the fixed income side, the continuity message is putting downward pressure and the periphery is benefiting even more than the core.
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nejra: was the market looking at the wrong date in terms of when we were to get signals because we were talking about september, should the market have been thinking about october? all he got out of draghi today was autumn. richard: we will be getting the updated forecast in september, inwe could get something september but perhaps they wait until october to make an announcement. the key thing to remember is that if the ecb changes qe, it will not be massive. it will be incremental probably, so we have gone from 80 billion a month to 60 billion a month. we met go down to 40 billion -- we might go down to 40 billion, but perhaps, if they do keep it up 40 billion a month in 2018, that still a pretty big amount. through the reading notes before we had the ecb decision and citigroup pointed out the root cause of the ecb should is the technical need to
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terminate ecb qe lying in 28 -- buying in 2018 and draghi did very much focus on that inflation outlook. there was somebody saying it was about immigration, inflation, inflation. richard: for the ecb, they have a single mandate, all about inflation. in this inflation gets some sort of upward traction, they are going to want to carry on. they are going to have to do are because there constraints. until inflation picks up, and it has not so far in durable ways during the qe era, the ecb has a problem. they need to continue its policy but the technical impediments are there. nejra: do you think we'll have draw their -- do you think we will have draghi say anything more? richard: there has been anticipation. it could be that is the continuation of the incremental
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approach that they seem to be taking towards edging to some sort of announcement. you would think he would take that opportunity to say something, but after today, i think it is not as nailed on in terms of market expectations as it was before he spoke today. ,onnie: the bank of japan richard, that is pushing back its inflation goal once again, the sixth time now. how many more times do you anticipate they will do this? richard: that is an impossible question to answer because it could be a long time. it must be a source of great frustration for policymakers in japan. it is not just japan dealing with this problem of too low inflation. even in the u.s., you look at core pce, and there's no durable uptick and that is the key inflation measure for the fed. it has not been at 2% over five years. this is a global problem and the bank of japan is facing it, ecb
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is facing it, but the fed is also facing it and there does not look to be a solution anytime soon. fora: richard jones bloomberg markets live, so great to have you invest this in london. hopefully not for the last time because you are moving next week , but we have you today. you can follow richard's commentary on the bloomberg. deutsche bank ceo telling employees to prepare for a hard brexit in this videotape message. he said that in awful lot of detail needs to be ironed out and agreed pending know what the rules and regulations turn out to be. we will try to minimize disruption for our clients and our own people. joining us from our bureau is elisa.sson nitze -- is tell us what we learned from john cryan. the movee learned that
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we reported ourselves about the week ago, it is a sickly what we are seeing is that big banks are theyg decisions, assuming will move rights from britain into the eu and they are looking at their trading businesses and deciding that they will have to have parts of those in the eu to be operative in the market after brexit. john cryan is telling us they are preparing for a hard brexit scenario, and that would entail new rules and moving a large chunk of the trading business into frankfurt. -- we: i love this quote will assume a reasonable worst outcome, the worst is likely to be worse than people can imagine. what does he mean? does he mean by these moving? elisa: i think he means that this juncture, without any signs of a movement, you have to assume the worst outcome being
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there will be a possible thing from the u.k. that would mean not been able to trade with clients from march 2019. banks to not want that and they have to prepare for that scenario. hopefully, there will be more clarity. it is possible that from what we are picking up, some plants could be reversed, should this be a traditionary days. nejra: it looks like it is frankfurt emerging as a winner among a lot of the banks. elisa: it does. largest regulator, the european central some of mind, only, bear in have operations in frankfurt, so it is easier to bolster those. having said that, quite a few structural constraints are to frankfurt if we were talking about thousands of rules as opposed to hundreds, as we are
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now, ranging from real estate to schooling for families of those that would have to set up shop there. it is early days, but symbolically, that is where the focus is. martinuzzi, thank you so much. bloombergk in on the first word news. vonnie: emma chandra is here with more. official government says jeff sessions does not plan to quit, despite criticism from president trump. the president tells the new york times he never would have appointed jeff sessions if he knew he would recruit -- he would recuse himself from the russian investigation. a newss is holding conference now on cybercrime. president trump accused robert mueller of running an office in the conflict of interest. the senate may take another shot
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at getting a health care bill passed. president trump urged republicans to stay in washington until the repealed obamacare. they met last night with white house officials. mitch mcconnell still wants to hold a procedural vote on a health bill next week. senator john mccain and his family are reviewing treatment options after he was diagnosed with brain cancer. doctors make the discovery while the moving a blood clot above his left eye. candidateresidential and spent more than five years in a prison camp after being shot down during the vietnam war. in brussels, the second round of brexit talks have ended with disagreements. the two sides cannot agree about the role of the european course of justice, the money the eu must pay the u.k., and the borderline between northern ireland. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.
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i am emma chandra. this is bloomberg. vonnie: thank you. coming up, gold is sliding and oil climbs. a tale of two commodities. this is bloomberg. ♪
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london, imefrom vucevic. vonnie: -- i am nejra. vonnie: i am vonnie quinn. oil is climbing for a their date rally continues to sputter. joining us is our senior market analyst ira epstein. 1240 on gold,hing
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but doesn't have any more upside momentum given what we heard from central banks this week? ira: they are admitting from the u.s. bank of -- u.s., bank of japan, that inflation remains a problem. we are not seeing wage growth in terms of money and that is the problem we are having. inhave full employment america for all purposes, so gold needs another story and that will probably come about once they can raise interest rates because of inflation, not in front of it. there is a balancing act for gold. the question is, what prices gold to cheap? oldother, what would make go up without that wage inflation? i do not see anything to make it go anywhere. it is a trading affair in gold, caught between 1200 and 1300 level for the duration of the summer. vonnie: there used to be a space
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haven and it is not bad anymore. what is the substitute for gold as a safe haven these days? ira: stock markets. vonnie: [laughter] is: it sounds crazy, but it true. every time you get a break in the stock market, it goes up. the old does not respond to north korea or the political turmoil in america, therefore, the safe haven analysis is not there because we are not looking out a stock market rolling over. therefore, no, i do not think it is a safe haven yet. vonnie: the oil market is not acting in a solid manner, either. we are seeing oil rise per barrel, even as ecuador says it will come back to the market and we are not seeing u.s. producers cut back either. to behy would you want short going into the july 24 meeting of opec? you do not. you are also hearing talk, and that put that in quotes, that the saudis might consider
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unilaterally cutting another one million barrels a day. they have aramco coming up their ipo, they need a stable market. i do not think they have their own can do anything. there is a lot of nonsense talk about the permian basin and productivity of wills falling. the simple fact is the rigs that are out there, they will not increase dramatically at this point, but each one is now drilling a lot of wells they are not using. just like we had before with oil got to the 20's and we had cap dwells that were not in production, they are drilling and getting ready. i think oil has a limited upside, maybe you can get into the mid to high 50's from wti tour to see dollars a barrel and brent over time -- $60 per barrel and brent over time, but i have a bullish buy into i would that be bearish into this opec meeting?
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they will not say something bearish coming out of it. vonnie: ira epstein with today's futures in focus. nejra: still ahead, for big banks, they are taking new aims at hedge funds. will they succeed? this is bloomberg. ♪
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nejra: this is bloomberg markets. vonnie: i am vonnie quinn. it is time now for our smart data etf segment. here is julie hyman. julie: jpmorgan filing for two new etf's. one could say they go straight after hedge funds. joining me to discuss why this is not a sure thing is our senior etf analyst at bloomberg intelligence. eric, you call this a hedge fund .tf clone army i do not know you have been
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watching too much star wars, but what does that mean? eric: yes, i have been watching too much star wars. my six-year-old has discovered it. this is what i mean, if you look at what they filed -- jpmorgan just wild a managed future etf, long short etf, that adds to their long driven etf, and you look at goldman, already all filed, they are covering the whole gamut. i call it a clone army because it is not a real hedge fund but it kind of is. they will be managed like real hedge funds. but their trying to do is tw thinko -- two things, they want to get access to a goldman hedge fund manager bit anyone can invest because it is an etf. it will be have the cost of an actual hedge fund and it will not be capital gains, so more tax efficient. the second is, can be peeled off any investors unhappy with actual hedge funds?
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that remains to be seen. i do think it is a good retail product. the other thing is this category recall alternatives has not been that popular, only 2 billion in assets so far in this area. two reasons, one, the equity market has done well. the second reason is because you have not had big issuers. nobody with the name and size and stature of goldman sachs and jpmorgan has gone in happy. as far as etf categories, the alternative space is wide open and we will see if they can make this space a hits. julie: maybe there is confusion about the definition of what or etf, the alternatives hedge fund category, so defined categories for us. fund --en we see hedge release a hedge fund etf, it can .ean first, direct this fund is investing like a hedge fund, buying and selling
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derivatives, and that will be the jpmorgan and working examples. there is hedge fund replication, also. that means they will use statistical measures to synthetically replicate the returned string of the hedge fund index. does but it qia uses etf, so it is not an actual hedge fund. the third is copycats. it goes along equities. julie: eric balchunas walking us through hedge fund like ats. vonnie: thank you. still ahead, it is not just health care worrying washington. there is also other drama ahead. this is bloomberg. ♪
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♪ >> breaking news. attorney general jeff sessions has been speaking at a news conference in washington. he says he will continue as attorney general as long as it is appropriate.
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again, jeff sessions saying he will continue as attorney general. this after president trump gave an interview to the new york times yesterday in which he said he would not have appointed jeff sessions if he had known he would recuse himself on the russia investigation it attorney general sessions speaking at an event about international cybercrime enforcement with rob rosenstein. the cbo is expected to release the report on the latest version of the health care bill after its projection yesterday on the number of americans who would be uninsured on a straight repeal of obamacare. let's bring in a former cbo director and american action form president and advisor to senator john mccain during his 2008 presidential bid. john will makeg
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a speedy recovery. i am optimistic. he is quite a fighter. >> today, we have another score from the cbo, working 24/7 these days i imagine to what is your prognosis? does the aca survive with all this confusion and washington? >> we are seeing a lot of insurers. the there will be some measure to stabilize the market, whether it repeal and replace or a straight repeal passes. something else must be done. that is the near-term concern of the insurers. we have had a poor performance by the individual market. >> we will come back to that. the specials, counsel appointed to oversee
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investigations in washington said to expand the probe to trump business transactions. examiningler is dealings. this is crossing the bloomberg right now, a bloomberg exclusive. the u.s. special investigator investigating a broad range of transactions involving trump businesses as well as associates. is important because we know president trump said yesterday that he did not believe there was any special investigation into his own businesses. that was during an interview with the new york times. and kevinaig gordon cirilli. of thisthe significance in washington as we have legislation filing of? >> this is a dramatic expansion
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of robert mueller's work. into thisn looking notion of whether the trump campaign colluded with russian agents, russian officials, russian government on the 2016 election. ist our story is reporting that robert mueller has expanded his investigation into a variety of business dealings, many going back years before he was the president, the miss america pageant held in moscow, and impart and in florida he sold to a russian oligarch am of the soho project in lower manhattan, so this is a dramatic expansion and creates great new legal jeopardy for the president of the united states. >> how should he respond to this or how is he responding? are we getting anything official from the white house yet? >> if you read the presidents interview with the new york times, particularly the ending portion in which he was asked
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repeatedly by those reporters whether he would fire special counsel robert mueller should he expand into the business transactions. the president of the questions that he did not believe he would do it. we know from this bloomberg exclusive that he is doing that. is aould note, there difference between the intelligence community versus what the investigations on capitol hill are doing. democrats on capitol hill have crested the white house, in particular deutsche bank, to provide documentation of the business dealings with president trump and deutsche bank. and so the republicans on capitol hill have not done that. counsel clearly making a move in that direction. it will be interesting to watch of lawmakers on capitol hill do the same thing. with us the person
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who broke the story, craig gordon of bloomberg news. farrell, i should say. who is being investigated and what is being investigated? story shows is robert mueller is taking a broad view, an extensive view come of his mandate you'd he's not just looking at transactions in the last year or two bank, but going back at least a decade to the sale of a palm beach mansion by donald trump to a russian oligarch in 2008. he is looking at a lot of russian money, russian investors who brought properties in trump buildings in new york and elsewhere, over a multiyear period, so this is a deep dive into the president's history with russia. know that robert mueller does not seem to mind broadening investigations. it may just be that he is being
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very thorough in his investigations, is that correct? >> that is correct. on a not the type to go fishing expedition. at the same time, there will be no stone unturned kind of approach. >> i want to reiterate that your story is telling as robert mueller is expanding the probe into donald's business transactions. yesterday, president trump did not know this or was not willing to admit this, but did say even if there were a broader investigation that it would turn up nothing because he has had no dealings with russians that weren't aboveboard. >> yes, the president has been consistent about that. he has talked that he has had some investments from russia into trump, not the other way and there is nothing there to find. as robert mueller keeps going, the president is correct that he won't find anything.
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>> how big of a bombshell is this an washington, d.c.? was it a widening and rumor, if you like? is arobert mueller prosecutor. if there is something to look at, he will look at it. he has built a dream team of prosecutors to do this work. there has probably been an expectation his probe might expand. for us to be able to confirm that is a dramatic development in this case. all the more so because of donald trump's interview with the new york times where he made it clear that he does not think it is appropriate for robert mueller to look into his business transactions and stop to fire threatening robert mueller, the threat that hangs over this conversation, whether trump might do something dramatic like that, but trump has made it clear this is a witchhunt, and i'm sure he will feel that way after he reads our story that just broke. thisis a big expansion of probe and big development and a
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fast-moving story already in washington, d.c. >> greg farrell who broke the story, let me turn back to you. this involves trump and those linked to him, associates. can you tell us who exactly? >> former campaign chairman paul manafort. there was an investigation that has been subsumed into mr. mueller's probe. in addition to that, there is a lot of focus on transactions, financial transactions, to the bank of cyprus, including when wilbur ross was vice-chairman of the bank. comerms of jared kushner the investigation is interested in any transactions involving financing for the properties that mr. kushner helped to manager run on behalf of his family. >> we are bringing the secretary of commerce into this even as he is involved in negotiations with china. wilbur ross was
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serving as vice-chairman of the bank of cyprus is also being investigated. >> i would not say being investigated. it is that at the beginning of a probe, and mueller's team is taking a wide you of that come and that includes looking into if there is anything worth digging into at the bank of cyprus when wilbur ross was there. the are looking into kushner real estate business and financing. in terms of those tangents of the investigation, i would not describe them as investigations yet. >> so transactions. >> they are interested in finding out more. >> and following the money. this all to do with pressure or anything else? >> it is all russia, and this is why mueller is taking a deeper view. things thatfind out may have led to the events that occurred last year, so by focusing on the events of 2016
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or 2015, it could be a lot of financial transactions that occurred many years before up to builder create relationships weren't apparent last year. >> will this entail further or upring -- further lawyering in russia? a fantastic scoop. much appreciated. thanks to craig gordon in washington, d.c. emma watson again with that scoop that robert mueller the special counsel is probing business transactions linked to trump and his associates. guest.et back to our doug, let me get back to the health care vote. , and will be one next week what that procedural vote will lead to in terms of debate, which version of the senate bill, or will it be just a repeal? >> we don't know the answer.
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we are seeing pressure being put on senators by the white house, by the base, which 81% of republicans are in favor of repealing the aca, 71% are in favor of repeal and replace, so there is pressure to move forward. senator mcconnell will have a score of the street appeal. they have posted a new version of the bill today and the cbo will likely put out a score on that soon. we did won't know -- we won't know until the last minute which way they will go. that broke this exclusive robert mueller is expanding its probe into business transactions involving president trump's personal affairs and his associates. how is this detracting from getting legislation done in congress? >> i think it happens in two ways. number one, it takes time for the white house to deal with the press asking
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questions, to respond to what ever news might come out, and that takes away from the ability to work the process and try to provide some guidance to the hill to get legislation done. it is also true at the other end of pennsylvania avenue. senators and congressmen are looking at this and wondering whether the white house will bill ifommitted to the the russia probe. it affects their ability to move forward. i don't think it's any good news with this latest development. have lunchmcconnell with the president wednesday and revised to this. with alle come a point of these investigations that are going on and rumors swirling and so forth am a does there, point senator mcconnell ones to distance himself from the administration? , it think big legislation is imperative to have the white house fully engaged and the
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president make the sale to the american people. health care and tax form are like that. president is the not politically in a position to do that, it harms those efforts tremendously. it will be everyone capitol hill watching those developments. >> the other thing on her mind today apart from tax reform its we have been breaching the debt ceiling limit in the fall, and ending on what happens with health care, there may or may not be a deficit reduction element there, but either way, the last time this happened in 2012, s&p downgraded the u.s. on political turmoil. is there a chance of that happening again or s&p coming out with a warning? >> i worry anything about the debt limit. it is something were nobody has any interest in harming the fundamental integrity of the treasury market, liquidity, which is the back one of the international financial system.
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nevertheless, it has turned into a political wire storm on a regular basis so there is something worth watching carefully. in terms of the longer outlook, everyone knows the u.s. has a long-term unsustainable budget deficit. would bee first steps something like health care reform, which had two major entitlement reforms in it. that will be the kind of thing necessary going for this year or not. >> that may be true, but mcconnell might have other ideas and might need to entice the senators for their votes? >> those pressures are real. theink the key is for public to understand the choices not between say the medicaid proposal this and it has and what we have currently. the choice is between the proposals the senate has an another senate reform that must take twice because the current law is simply unsustainable. .> our thanks
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up, puerto rico's debt crisis tangled in the legal battle. one of the creditors challenging the puerto rican government is our guest and joins us next. this is bloomberg. ♪
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♪ live from london and new york. vonnie: this is "bloomberg markets." the fight over puerto rico's debt is headed to the courts, bondholders challenging the government and the federal oversight board over the money they are owed. whitehead capital is one of those creditors. >> thank you. good morning. 2015, newr bondholders had a deal with the electric utility, and that deal
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has been renegotiated a little bit, now you are in court. what on earth happened? >> we cut a deal with the former administration to restructure the islands debt to provide a moratorium, a reduction in coupons, and a deferral of the principal payments. it was a hard-fought negotiation. nobody was happy to which suggests it was a fair deal. we renegotiated that deal with the new administration of order ofo, and we were told -- puerto rico, and were told we had the blessing of the oversight ordered. -- this wast board the only pre-existing deal. the board not to approve our deal. or do made aat couple of suggestions about a deal that i found my however, they were eight at the 11th hour
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and 59 minute and we did not have time to effectuate the changes they were looking for. or as aepresenting voice for bondholders are prepared to renegotiate to a certain degree to incorporate these helpful suggestions? >> we would be willing to continue the dialogue. as fiduciaries for our investors, we have to pursue the real remedies that exist in the bond contracts which are quite strong. we feel comfortable with the debt we own and our legal provisions, and i think our view is that where we to take that to its conclusion, meaning litigate to a judgment, that we would prevail. the reason we are willing to do a deal is we think we could trade expediency for certainty. a willingnessis on the part of creditors to do that. went you begin the process of
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litigation, it is often difficult to turn around and stop, so there may be a short window where a deal that could be struck that would be beneficial for all parties, or we will have to pursue the legal route. >> you have asked the court to appoint a third party that would cut out the federal oversight board and the government of puerto rico. what path does that put you on? there receiver would be to do with the utility was supposed to do under the bond. events originally, raise rates to service the debt, but before we get to our along the process, it is important to note that the service as a percentage of utility bill is only 10%, so when people talk about high electric rates in puerto rico, the rates are really driven by a host of other factors. the deaths are a small component comes ultimately we are talking about a few percentage points of the overall rate, meaning debt
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service today might be 10% of the wanted to be 9% or eight. thatwill not change the situation important rico. the electric rates in puerto rico today are lower than any island we can find in the caribbean, lower than hawaii, so this is not what is causing the economic distress that exists in puerto rico today. >> what are you prepared to give up if anything? prepared to talk about a transaction that would allow some level of certainty for all parties. the government and oversight board were concerned about what might happen to electric rates if you had continuing levels of high expatriation. so perhaps there is a structure that would allow us to benefit if we are bright and allow the government and the people of puerto rico to benefit if the more dire forecasts are correct. >> you not talking about a
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deeper haircut? >> no, that's not something we think is necessary. it would not change the electricity utility rates if we were to do that because the debt service cost is already so low. government and the oversight board prove unwilling resistance to continue to negotiate to come back to the table as it were, how willing are you to pursue or at least to fulfill as you described your fiduciary responsibility and seek it in court? >> the important thing to remember is that if there is not a willingness to negotiate in good faith, it calls into question whether we are supposed to be in title iii. that calls into question whether there was infected faith negotiations, but if we presume that all parties act in good faith and we can get to a deal, a deal will be found. if that does not happen, we have
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to protect our investors and their rights by pursuing legal remedies. that may mean taking it all the way through the litigation process. >> before the end of the restructuring support agreement and imposition of title three, there was not a perfect alignment of interest among bondholders and the bond insurers. are those interests aligned now? thet the time of the rsa, interest were aligned, and right up to the time of title three. whether they remain aligned is not something in my control, but i believe the insurers are generally willing to find a path forward. >> they are bondholders now. they have to take the same haircut you do. to the would be up various parties to negotiate the transactions and determine whether they receive the same treatment, but like all bondholders, they will pursue legal remedies if they have to. the reason behind that is important to understand.
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the reason bondholder sue is that there is a rule of law that broken,and when it is you go to the courts to say we have these legal protections at want you to respect them. >> i want to ask you about venezuela before we run out of time. you own bonds. there is a great deal of nervous is about the degree to which venezuela can honor those obligations. as an0 has been cited important date because that is when president maduro has promised to hold these elections for the constituent assembly. november is the maturity date for some of these bonds. some are nervous whether venezuela is able to live up to its obligations. what is your view? >> we look at venezuela, a very small investment force, similar to the bonds, but not exactly the same -- we look at this and say this is a phenomenal asset that if it is allowed to operate as a normal company, it will
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have an enormous amount of value and that value will accrue to all venezuelans and improve the economic circumstances on the island. the key is can you get from where we are today where things are dysfunctional to the point they can operate like a regular company. >> and? >> it will be a rocky road, but there will be a point in time where there is no other choice. >> how much time does venezuela have left? billion of $10 reserve before the last debt payment was made and have 10 billion of reserve today, so calls into question that there is more capital there then may be evident to the public markets as result of the disclosures made, but i think they have in the vicinity of 6-18 months depending on the level of liquidity outside officially reported sources. >> you think the instruments you own are good? >> we think the return can be
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spectacular if the companies are allowed to operate as a normal business. >> great to see you and thank you for joining me this morning. whitehea wagner from whitehead -- knight capital. vonnie: fantastic interview, thank you. the u.s. special counsel robert mueller who is investigating ties between the trump campaigned in russia and last year's election is now examining a broad range of transactions involving trumps businesses as well as those of his associates. that is according to a person familiar. next, the dollar declines precipitously. this is bloomberg. ♪
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nejra: you are watching bloomberg markets. vonnie: i want to begin the power with bloomberg exclusive reporting.
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u.s. special counsel investigating possible ties between the donald trump campaign and russia is examining a broad range of transactions involving trumps businesses as well as those of his associates, including jared kushner, all manner of fort and the president himself. investigators are looking at real estate dealings and bank transactions. you can read more online or on bloomberg to read the full details, including trump hotels, the miss universe pageant, and much more. again, bloomberg exclusive reporting. markets are reacting, particular he the dollar. julie: the dollar has been more react to political news than we have seen stocks react to political news. this time was no different. the dollar at 10:00 a.m. taking a leica lower. it had already be

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