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tv   Bloomberg Markets Americas  Bloomberg  August 30, 2017 12:00pm-1:00pm EDT

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bloomberg. ♪ from bloomberg world headquarters in new york, here are the top stories on the bloomberg and around the world we are following at this hour. tropical storm harvey making a second landfall in luisi -- louisiana. as the gulf coast continues to impact. with harvey's the latest from congressman the ground in texas. and part of our interview with warren buffett. the berkshire hathaway chairman a huge as he locks and investment in bank of america. and bloomberg's scoop on apple's grand plans for the upcoming iphone. will bidding the home button ditching the home button lead to a wave of new sale or scare customers away? let's start with a check on bloomberg first word news, with the latest on the dire situation
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in texas. mark: fema administrator brock long says the agency is focused harvey'sn the wake of second coming is on search and rescue. he gave an update today on the situation on the ground. more than 50that counties across texas had been impacted by the storm. he added that fema is ready to support efforts in louisiana, which he said still is not in the clear. after dumping a record amount of rain in houston, harvey has a landfall again, this time in leicester louisiana -- west in louisiana. at least 22 people have died in the storm and we expect that number to go higher. --e than to any thousand the 200,000 people are in shelters. meanwhile, 21% of the nation's oil refining output is off-line. officials say it is too soon to know that the thousands of houston area homes can be rebuilt.
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some homes have been flooded with as much a six feet of water. -- the counties flood officials say these homes could be flooded again after controlled water releases from two reservoirs. there has been plenty of devastation released on texas, but that does not include historic power outages people -- outages. harvey's biggest threat to houston was rain, not the strong winds that tear down power lines. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton, this is bloomberg. on thisfor more situation, i would like to bring in randy webber, who joins us from galveston county, texas, right outside of houston. give us an idea of what
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conditions are like where you are right now. you, vonnie. it is really bad. we have been all over the three counties i represent. it starts that -- at louisiana, jefferson county. storm withost of the harvey, it moved into louisiana and dumped record numbers of rainfall. they have plenty of people flooded out of their homes. so jefferson county is the hardest hit. we have marines headed that way, resources headed that way, it is unbelievable. galveston county, there are marines here on the ground in galveston county with amphibious vehicles going through 5, 6, 7 feet of water searching for homes for people, getting people out. we are still in the search and rescue business. in missouri county, same way. two rivers are currently at flood stage and over flood stage
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coming out of their banks. it is a massive flood. arguably, district 14 is the hardest hit district in terms of flooding. they are calling this the single greatest flooding event in united states history. vonnie: are you receiving the funding you need? does texas and the surrounding area need more? >> i have to say the administration has been very responsive. we will be getting funding up and running, and i have been in contact with the house majority leader. he will come into the district, we will do a two were before he goes back on september 5 so he can lay out the plan for exactly how we need to help the best, and what the funding package needs to look like. our district produces 60% of the and my jet fuel, district is not one of the five -- and it is not the five ports
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i have in my district. you are looking at an extremely important part of the energy -- i would say the capital of the united states. i expect fuel prices to go up, oil refineries are off-line, and we will see a spike in fuel prices. we will come back to the house of representatives and make a decision to say look, the most major flooding in united states history is going to cost billions, billions, and billions of dollars. we will not be able to have an idea until it is over, but we will be getting that funding. did -- and you represent mention that representative accardi -- representative -- whata -- mccarthy will pass? what will accomplish in order to undo the reading of the economy as the president will present it today? what he lays out
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as planned. it is hard to predict. i am on the science, space, and technology committee and transportation and infrastructure committee, and it is hard to predict what this will do to those. i think the small business people will come up with some things, but you will see tax and haveederal loans, a lot of work to do. this will be something that does not take weeks or months, this will be years in the making. but i have to tell you i am so very proud of our texans. we watched people being pulled out -- first hand, i watched people on boats coming out of neighborhoods where i volunteered, and i hope first responders -- helped first that were in areas overwhelmed, pulling out people and animals who were overwhelmed and saving lives. guard came in from louisiana, and they stepped up. they have been a huge force for the community. vonnie: i will be speaking to
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you this week when you return to d.c. as well. represent an randy webber of texas, thank you very much hurricane harvey has displaced thousands from their homes, and estimates of damage ranged from $42 billion to more than $100 billion. the storms aftermath of highlighted a debate on whether the u.s. should respond to the extremethreat of weather by changing how and where homes are built. chris, it is a fascinating read on some of this research and also our news worries today. some of what is going to get rebuilt is on land that possibly should not have homes on it. problem inidespread the united states. tell us more. >> one of the debates i have been looking at in texas is between insurers on the one hand who say we should use this to rebuild better, higher homes that are tougher and away from
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what lanes. on the other hand, you have home builders and developers saying that is crazy, do not restrict development, that will hurt the economy. it is a tough issue and one that texas has dodged for a long time. they are very exposed to extreme weather, and how some of the weakest building codes in the country. it looks like harvey might at least spark a new debate over whether texas and the rest of the country have the right next right now. >> and that is the thing, isause the arbiter of this even in question, depending on what side of the debate you are on. there is no final arbiter, really. there are model building codes in the u.s., but they are not federal. this is a state and local issue, and different places impose a different touch. some are regulated and tend to do better in big storms, and some like texas do not have the same result. big floods can
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damage a lot. and the cost keeps going up to federal tasks fares -- taxpayers, it is very high. fema is more pressure from and congress, especially the republican climate talks, of all people, thing we should find a way to get local officials to reduce their exposure to extreme weather, not for that climate change exquisitely, but because we want to spend less money after the disaster. i think there is more and more pressure to change how this happens. >> such a fascinating case study right now with harvey. christopher, thank you. us on the phone from austin, texas. abigail doolittle is here with us now, and we are halfway through the trading day. what is the story now? abigail: the stocks are mixed, but the bulls are more in charge than not. the dow is down slightly, but the s&p higher by one quarter of 1%, and the tech heavy nasdaq is -- .61%, and looking at
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the bullish reversal we saw yesterday, stocks opening higher yesterday only to close lower. one reason the s&p 500 has reasoned to turn higher, it had been fluctuating between small gains and losses -- energy. it had been the worst drag earlier, but now we see that wheels trading hider -- oil is trading higher, and we see going into the department of energy weekly inventories report, oil had been down about that 1%, aive 1%, -- 7/10 of bigger drawdown than expected. it is now near session highs. not a big game, but after a couple days of declines for oil, we see that investors are cheering oil up again, about one quarter of 1%. let's hop into the bloomberg and see what is happening. oil energy has been the worst sector, and we now see that energy is among the sectors that
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are trading higher, more of the sectors for the s&p 500, in fact, eight out of 11 are higher. on top, we have materials near financials, being held by yields, rising ever so slightly at bonds selloff, and now we have utility and telecom near the bottom. are suffer when yields higher because the yield looks more attractive than a high dividend. a bit of influence here, but the best sector, we are looking at some of the building materials like martin marietta, vulcan materials, and cemex. material stock looking at benefiting from is your. the interesting thing here,'s cemex is annex --
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mexican company, and will probably be utilized in helping rebuild the united states. vonnie: investors receiving -- proceeding with caution. this is bloomberg.
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♪ this is bloomberg markets, i'm vonnie quinn. upward to 3% in the u.s., the fastest pace in two years. stronger household spending, and a bigger gain in business investment. says investors should proceed with caution when it comes to markets. bearsnot predicated on use of the global economy, so let's find out what it is predicated upon. almost $1 billion
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in assets under management, and he joins us from boston. earish viewr bar based on? lexus i mentioned in our latest research piece, we are not bearish. if you asked me the direction of the market, i would probably tell you it would go up. we think the equity markets will have pockets of returns, but this is all happening in the environment where all asset classes are barely stretched -- fairly stretched. so as these metrics continue to rise, the risk return ratio continues to deteriorate. that portfolios should be positioned more conservatively, if only because the risk adjusted return is
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probably deteriorating. vonnie: but with equities continuing to show their resilience time and time again, when other classes are not resilient, are equities the conservative flame you think? >> if you look at the long-term numbers, even though market -- equity markets have been very low in volatility, almost absurdly low, 10%, 12% volatility. we harvey and north korea, we are probably in the mid-14% range. but that is still low volatility. we think that is a bit of an understatement. the long-term volatility of the stock market, for a lot of reasons, probably deserves to be high teens, low 20's. that is where we think it is. we do not think that 10%, 12% volatility on something like the vix is a realistic look at the way the world works. it is being more conservative
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within equities, not necessarily bailing with equities. again, the global economy continues to gather some strength. it is tough to be outright bearish on equities, even though you think you should be more conservative. vonnie: left-sided to some parts of the markets where it is find to be invested. and you also mentioned the global upturn. perhaps there are other countries whose equity markets may look more attractive. >> we have a slight bias toward europe in some of our international portfolios. broad there are a lot of asset classes that are demonstrably cheap, and you can cheapness.lative europe looks cheaper to us, japan looks cheaper, emerging markets. uys"e are no screaming "b out there in the equity markets, but europe is a better sector. we tend to favor value, places like banks are very worried about the slope of the yield curve. i think that is something they
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should not be worried about. they should be looking at the outright cheapness of the banks. so there are places to be defensive, but there are still some pockets of value in a market that is overall not that attractive. vonnie: what do you make of the economy at the moment, david? we did get the upgrade to the gdp for the quarter today, but that is not necessarily mean that gdp growth will be very healthy for us in the cycle. we are still in the status quo market since the beginning of the rebound and expansion, since the great financial crisis. we averaged 2%, 2.1%.-- maybe higher than that. my views are not much different rum the consensus. real gdp will probably be around 2.3%, 2.4% in the third quarter, harvey might knock 2/10 of a percent off of that. we might gain some back in subsequent quarters. but in the potential gdp standpoint, productivity growth
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plus labor force growth -- we still live in a 2%, two .5% long-term gdp. that is solid, it should keep earnings rising which was why we are not bearish on equities, but we do not expect anything gangbusters. david lafferty, thank you for joining us today. it is time for the latest bloomberg business flash, a look at some of the biggest business stories in the news right now. apple is in talks with potential partner day in to bid for toshiba's chips is this. -- business. familiar to people with the matter, apple is trying to secure a pie of toshiba's flash memory chips for its iphones and ipods. samsung also manufactures those chips. and the revolutionary new cancer treatment has been approved by the fda.
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cell therapy is working by changing immunity cells, which is been -- is then used to treat deadly cancers. this is the first of several such medicines being developed. bloomberg business flash update. ourl ahead, highlight from interview with berkshire hathaway ceo and chairman warren buffett. what he says about investing in bank of america. this is bloomberg. ♪
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♪ vonnie: this is bloomberg markets, i'm vonnie quinn. warren buffett of anchor america's biggest shareholder after buying 700 million shares. the move was promised earlier this year. david westin spoke with berkshire hathaway chairman ceo, warren buffett. mr. buffett: the dividend we will get now, the bank has
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increased their common stock dividend. -- we will bet getting 30 million dollars plus -- $30 million plus more. this exceeded the dividend on the preferred, we exercise our -- it was fairly automatic. but is this -- david: is this consistent with your philosophy in finding a long amount of time, philosophy you believe in iago -- in? mr. buffett: i have always liked bank of america. i have believed in it ever since i read their letter 85 years ago -- -- years ago. they got in trouble, made acquisitions that cause a lot of trouble, and that is like a great athlete eating in a
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hospital for an accident. they are out of action for a little while, but you have to get them back in shape. i came in at a time when people were particularly critical of the institution and, to some extent, the management. i believe they were wrong. so i actually got the idea in ie bathtub in 2011, and when went to the office, i called brian, and met with the ceo. we made a deal very quickly. >> bank of america, more than most banks, is dependent on the rates. the rates go up for them to make more money, because they are in the consumer banking business. do you have an idea where that is going? mr. buffett: not really. you are right about what you say. they are doing fine currently. they had a lot of troubles from win throughd brian those one by one, and some of them were very expensive to solve, some of them were time-consuming, but i knew we would get the job done. it was a very tough job.
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,ut they are a retail bank compared to a jpmorgan or something. and it is quite an institution. it will do better earnings wise if rates do move up, but it is doing pretty well now and has been doing better quarter by quarter. david: take us down three years, five years. will it be more like we -- likely that you have 10% or 3%? to buffett: we are likely not sell any, and they have a habit of repurchasing their shares. will go up with a repurchase more shares. so i would guess our percentage interest would be higher in three years, but that's because of the repurchases. there is a similar deal to inject home capital to places
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in canada like a home lender. and now you have these prescription services coming out and opposing administering the second --. iago --t discourage you you? mr. buffett: no, the shareholders voted, we buy it, if they don't vote, we do not buy it. we had a piece of it going in, which was less than 20%, and we we owned our own backs up that was cheaper than the one they had. we would like to buy the stock, but if the shareholders voted down, we would be fine.
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♪ live from midtown manhattan, bloomberg's world headquarters in new york. i'm vonnie quinn, and this is
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bloomberg markets. let's get a check on the major averages before we proceed. still not too much movement. the dow is unchanged, the s&p up one quarter of 1%, and the nasdaq is up 6/10 of a percent. let's get to the first word news straightaway right now. mark? mark: harvey is now pounding louisiana. the tropical storm came ashore in the western part of the state early today. it is expected to drop substantial amounts of rain before heading north. meanwhile, the rain has ended in houston, but the trouble has not. at least 18 people died, more have been0 people rescued. floodwaters are still rising in .art of southeast texas egypt has put the names of more than 350 people, including prominent muslim brotherhood figures, on its terrorist list. the designation bans those on the list from trouble, put them
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on a watchlist, and grants authorization to the right to free their assess -- freeze their assets. there has been a severe crackdown on muslim brotherhood members and supporters after the removal of the president in 2014. the european union's chief negotiator says for now, he cannot agree to british demands for flexibility. he needs to know the british beition, and then he can flexible. the eu has accused the u.k. of lacking clarity. british princes william and harry paid tribute to their mother today, the 20th anniversary of her death, by visiting the garden created in her memory. the prison that princesses, along with williams wife the visited theambridge garden. they also met with representatives of some of the charities diana supported. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries.
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i'm mark crumpton, this is bloomberg. vonnie: president donald trump will likely cap tax cuts for the middle class and small businesses today as he takes his sales pitch to a proposed tax overhaul for the first stop on that to her, springfield, missouri. i want to bring in lori our tax reporter. she is with us from washington, d.c.. what details can the president give when he is not writing the legislation in any capacity? he is not even really talking to the tax writers right now, is he? no details to give, but nobody really has many details to give right now. republicans are still hashing of the details among themselves. what this speech is expected to be is a tax reform -- call for tax reform, what we need to do. but none of the expected specific provisions -- none of this does the provisions are expected to be there.
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his supporters turnout, they will support him. but what can you tell them that about how their lives will improve when it comes to income and health and lifting out of their socioeconomic status? >> any plan will have some sort sotax cut for individuals, we can talk about that. the skies and scope of those -- size and scope of those, and whether they will be good. but he is good at riling up crowd, and the details of tax need to bely do not in a presidential rally speech. buteeds to move the crowd, as far as the details? he does not have them. vonnie: the optics, is that with this is all about? willis boost -- will this boost his poll numbers? >> i do not know, but this is the pivot to tax reform, moving away from health care, starting a busy legislative month going into said tender -- september
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with the debt ceiling. but this is a big policy priority. this is the main focus in the headlines and that they are making tax it -- progress on this, and this is the first flag in the ground. vonnie: springfield, the start very important symbolically to the start of the tour. our things to lori davidson -- thanks to lori davidson. for more on the tax agenda now, the state of the u.s. economy, i a member of the economic advisory panel to the new york fed, and the former chairman of the council of economic advisers. lori just mentioned that any tax it looks like it might pass, will have individual tax cuts in there. it does not matter what tax bracket you are in, it will. where will the revenue to pay for those come from, or do we blowout deficit?
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probably blowout the deficit. the only thing i disagree a little bit with in that previous the description of this was going to plant the first flag in the ground. this is literally the fourth time that the president has done this thing that it sounds like he's going to do today, which is get up, without any details, and say "we really ought to cut everyone's taxes." he goes to congress, congress says we do not know how to pay for that, and in they moved to border adjustment, all of the other details of the white house says no, we do not want to raise anybody's taxes. i think that is their tension. mitch mcconnell has made it clear he is going to try and pass the tax bill with no democratic votes, so they have to figure out what can they get 50 republican senators on board , and there are at least a few of those republican senators
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that remember that they were abjectly against lowing out the deficit when we were in the middle of the recession, and i think they would be a little embarrassed to do so now. really takent has a detour. we have gone down some very strange paths this august and even in july before congress went on break. does that make it more likely that there will be some kind of a compromise when it comes to tax reform? after all, the senate majority leader has found areas where he to show look,rs this will pay for something else. >> may be, but it might work the opposite way. we will have hurricane harvey forefront of the mind, and they will have to come up with money to pay for that. we did not pass the health plan that the president wanted to , so to repeal obamacare there are still a bunch of
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lingering tax issues that come out of that. if anything, august has just made the job of congress to pass the tax bill that much harder. it may just slow it down. those who fight for dynamic scoring paying for this might fight that we have a rate gdp number today, much better than we forecast, and write a three handle, which is around where the president promised we would be. we know that is not a yearly gdp growth figure, that could be an argument, no? >> well, what would be the argument? the gdp growth is already going to be 3%, then the dynamic scoring i think does the opposite way -- that is, if we are already growing and approaching full employment, how would we increase the growth rate after passing this tax cut? that proponents are going to have to make an argument that we are actually
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still in a recession, that the growth is not as good as it looks, the unemployment rate is not as solid as it seems because otherwise, you would fear that having a big fiscal stimulus through a tax cut would be inflationary. chart weoing to the are looking at right now on the bloomberg, the gdp, the actual number is going up. cast is coming's down, but what about the debt ceiling and that drama? is that has to be resolved -- because that has to be resolved. we are seeing others saying that october 30 was the last day, at that point the u.s. would fold. no one is going to say that the u.s. is going to evolve, but do you see that at all? >> i hope not. that would instigate the largest financial crisis in the history of the world if the u.s. treasury defaulted for no other than stupidity
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or stubbornness or something that we could pay the bills, we just choose not to. i don't think it would come to that. that is different than the government shutdown. i think mitch mcconnell will find a way to raise the debt ceiling, maybe in the dead of the night attached to some other thing, but i do think there is a decent chance that they get in a fight about the budget and have a shutdown of the government. but i do not think the debt ceiling will end up being anything. mcconnell, mitch would get a lot of votes for the debt ceiling increase if he's willing to make a compromise. vonnie: returning to the subject of the day, we are going to hear at 2:30ident speak eastern. if you were to call it now, how does this get resolved? do we get some temporary tax cuts, the sunsetting of some of the
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provisions from the previous tax era? what happened the? -- what happens? >> it goes in two favorites, and they might be rolling phases. the first is that the president comes up today and says we must have tax reform, we must cut taxes. he relies on the very vague blueprint that he put forward in the campaign, which was massive corporate cut, massive high income cut, abolish the state tax for very large multimillion liker estates, cut passes -- cut passes, a lot of things like that. all of that adds up to things like 5 trillion, 6 trillion -- $5 trillion, $6 trillion. and then they say here is all the stuff i want, the corporate rate at 15%, all of these things, and modest tax cuts for the middle class. gets in a fight with
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when rupert republicans, saying we cannot add $6 trillion to the deficit -- come on. let's make it $2 trillion. they go back and forth, and i do not know if they will be able to agree. if it were two weeks ago, i would have said to make a compromise, instead of $6 trillion, they will make it to trillion dollars. it will cut a few taxes, not as much as what they thought, but i do not know if donald trump would accept that. i think he will press them, having been defeated on health of the legalome regulatory arenas, i think you going to press them -- -- he is going to press the -- i want it bigger. austan goolsbee, the university of chicago with professor of economics. thank you for joining us today eerie at -- today. coming up next, a new scoop on the iphone. what tim cook and other ceos might have up their sleeve when they get on stage next month. this is bloomberg.
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♪ vonnie: this is bloomberg markets. i'm vonnie quinn. our latest stock of the hour, boosting its sales growth forecast as well as the earnings forecast for the year. -- puts the stock into the top 10 gainers of the s&p 500. joining us with more are taylor riggs -- is taylor riggs. as you mentioned in your intro, the earnings per and the revenue guidance working for the company, going into fiscal year 2018. 4.6% growth forecasted for the year after that.
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the highest growth you have seen going back a couple years. the higher sales, especially when it comes to the premium brands often translating into better profit margins for the company. they are also looking to expand more for the emerging markets. those deals also giving them a boost. and cost savings as well, that increases probability and that will aid in some more brand innovation as they look to go forward. back in may they also had backed off a takeover from .onstellation brands performance since that announcement, when they rebuffed had been down only 3%. i would still maintain that the family maintains where it is. the ceo sent out a statement laying we are fully independent, have a family control, no plans. so a big boost for
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the company. brown-forman from our stock for the hours. . last week, bloomberg was first to report on several features of the new iphone, including a 3-d facial recognition sensor in order to unlock the phone your face, and today we have news on how apple is expecting to change exactly how people plan on using their iphones. now is our correspondent from san francisco with all the details. so unlocking it with your face just sounds funny. i'm not sure how it works in , if people walking around with their devices literally front of their faces, what have you experienced? >> it is an ambient technology, so this facial technology scanner will know it is you when you are picking up the phone, taking it out of your bag, pulling it out of your pocket. when you start using it, it will
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know it is you, and let you unlock it rather than having to put in your fingerprint. it is a seamless experience, or that is what they are shooting for. any concerns about privacy and apple having everything, including your dna at this point? >> i do not think privacy will see howue when they integrated it will be. theapple security team has ability to veto a security feature if it was passed a person's privacy threshold, but it is clearly making the cut. apple does not believe it is a problem, i doubt most people will think that. what are some more features on it that we have not already seen from its competitor, samsung. >> some of the big features we are talking about on our story detailed,is highly the removal of the home button. not just the physical home button, but there is no virtual
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home button either, they have changed the definition of how and control the iphone, they are looking at multitasking to jump between apps. get inton hard to siri, all sorts of functionality that will not require the home button or two use the phone. really weird,is because sony people are used to pressing on that button to get back to square one, or zero. do think this will put people off, still be used in one hand, for example? >> it is a big change, and one hand usability is a big addition to this phone. there are two iphone sizes seven, and thene iphone 7 plus. the bigger screen, people love it but it is too big for a lot of people. like the smaller iphone 7. what they are doing with this new phone, the more expensive version of the three phones they
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are announcing in september, they are putting a screen that is bigger than the one in the plus in the same overall size of the smaller iphone. the sevens are getting a bigger screen without, rising the port ability of the smaller phone, and they are doing that by removing the bevel, the home button, and reading it cut out at the top of the screen in order to fit -- creating a cut out at the top of the screen in order to fit the details and the camera. that is a significant change. vonnie: mark reporting from san francisco with all of those details. exclusive reporting as always, thank you, mark. buffett andarren berkshire hathaway by 700 million shares of america, to a large-- investment gain. this is bloomberg.
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vonnie: this is bloomberg market , i'm vonnie quinn. warren buffett making headlines
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converting $5 billion invested in bank of america and 2011 to an $11.5 billion investment gain after buying 700 million shares. bank increased its dividends. i would like to bring in our editor at large. investment ord able to remove? >> it could be both. warren buffett comes out on the wrong side of the transaction like this. he came in with rescue money to goldman sachs and did very well there. he's doing very well in the case of berkshire hathaway. gain,e an $11.5 billion but it is worth pointing out that, shareholders lusted as well as warren buffett in the amount of money, the return generated on the stock since the day that buffett made his investment. it is almost the same.
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the only difference, and a difference worth pointing out here, is it is because buffett had preferred stock and was higher up in the capital structure, so his risk return was better than the common shareholder. but his nominal return is only slightly better. vonnie: that is fascinating. i do not think people would have realized that until you pointed it out. he mentioned in the interview that it is likely that shares will go higher, but he pointed to -- >> the interview he did with david westin? exactly. he pointed to more re-share purchases, which was interesting. >> when i speak to brian moynihan, it will be hard for him to say at this point how a willsively be ofa -- bof want to pursue this. it is possible that in future
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years, the fed will be a little more light touch on the stress test process, and that is something i will be discussing with brian moynihan, because if all the steps in bank reform that steve mnuchin, the treasury secretary outlined he wanted to achievedh in june are -- that steve mnuchin, the treasury secretary, outlined he wanted to a coalition joubert achieved, we will see a ton of mass and come up with a probably 20% increase in pretax profit to be shared among the six to biggest banks -- six biggest banks. some will than a fit more disproportionately, like -- benefit more proportionally, like morgan stanley, some less. but this is relaxing the posture -- sec, fed or the fcc, occ takes. vonnie: i wanted to ask you more
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about what you would be discussing, because david westin end date -- and warren buffett spoke earlier. asking brian be moynihan? it is not all that bad, is it? >> sure. --has a big bank to wrong run. a lot of people have described bank of america as a leverage bet on the economy. so if it is doing well, it itsld be doing better than universal banking peers because it is so much more centered in america then jpmorgan is. however, if the u.s. economy is doing well, the fed should be raising interest rates aggressively. we know that notwithstanding, the u.s. economy is not doing all that well. the bank of america economists expect growth to go in the order of 2.2 percent for the next year and a half. we will not get that many rate
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hikes, the yield curve will not eat positively sloped, and that will not be good for bank of america. so what is his plan b if bank of america does not benefit -- generate as much net interest income as he would like. vonnie: that is at three clock p.m. eastern. that is a do not miss interview with erik schatzker, our editor at large. ceo brian moynihan sits down with erik schatzker at 3:00 p.m. eastern. and you can find all of our charts on tv , functionality, charts, and much more. more to come, this is bloomberg.
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vonnie: it is 1:00 in washington. i am julia chatterley. welcome to bloomberg markets,
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balance of power. we focus on the economy. here are the top stories we're watching at this hour. one day after visiting storm-ravaged texas, president trump is traveling to missouri to take on a storm of the political sort, convincing americans to support tax reform. is the u.s. out of words for the latest north korean provocation? president trump seems to think so. we will talk about what that means for american strategy toward north korea and kim jong-un. executive david olson wants donald trump to pardon michael milken. we will speak with him on his request later this hour. let's kick off with the bloomberg first word news with mark crumpton. mark:

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