tv Bloomberg Markets Americas Bloomberg October 5, 2017 12:00pm-1:00pm EDT
♪ >> from bloomberg world headquarters in new york, here are the steps -- the top stories from bloomberg and around the world that we are following to it we will get to politics in a moment and also bitcoin, the ec what to make payments without banks paired with more than $100 billion in digital currencies, why are banks debating whether and how to get in on the action? >> as puerto rico struggles to , whatr from devastation is the treasury secretary saying about the dire financial situation? we will stick with richard just loversere plus, netflix will have to pay more. what it means for investors
julie hyman is with us. we are halfway into the trading day. julie: we headed more deeply into the session. major averages touch highs today, on a closing basis and we continue this march ever upward. risk aversion seems to be nowhere to be found in the market. another way to measure that besides continuing records is the low volatility that really persists here. the vix is something that really looks at that. vix is the on the current level. they are looking for continued low volatility. latest numbers show the net are at aon the vix
record low and longs relative to shorts are at a record low. net short as well. -- some folks are positioning for a possible return to functionality, the majority of positions are not. -- >> we have got leadership.ack into we have got manufacturing and nonmanufacturing out earlier this week that he estimates. the job report is tomorrow. we see that yield right now, the highest, it moves up. we see the banks benefit as well. a check on amazon, we have been watching netflix on the price increase and amazon is it fair meeting with a new delivery service that could make more products available for today delivery. it could pose more of a risk to ups and fedex.
that is why those delivery services are down. cavani: thank you for the update. ago, the housets has the votes to adopt the 2018 budget hear the motion passes for tax reform. for more, let's bring in bloomberg's chief washington correspondent. this is only the first in what could be a long and contentious process. how much support is the budget getting? >> it passed overwhelmingly. the bottom line is it paves the way for tax reform. you are right that this is just the first step. there are a lot of issues dividing them about how to pay for the tax plan, including $6 trillion, some estimates put it at. the one point $3 trillion would a off set i reduction and is point of contention among several republicans including
senator bob corker, republican from tennessee, who says he is not in a verb that. we also heard him senator rand paul. with representative mark walker, the chairman of the study committee who is in favor said it is aho long way to go. is it true that republicans are eager to enact a budget because it will allow language allowing them to run , the gop onlynate tax bill without the democratic votes in the senate? yes. the process, known as reconciliation, would allow them to go as -- to a majority in the senate. the dynamics of health care are somewhat in play in the sense that how republicans will ultimately decide to pay for to be a keyly going
test in terms of how effective they will be at getting their ultimate goal by the end of the year. the sources i speak with at the treasury as well as senior onffers and republicans capitol hill are quick to point out there is a large appetite to get some type of tax policy, or for -- reform package by the end of the year. the could be a lot of political theater. they have to raise the debt limit and pass a partial government funding bill to avert a government shutdown. they are not out of the water but today is the first step here and also clouding the potential vision of republicans trying to get tax reform done is hurricane relief packages. the white house putthey are notr but today is the first forth 29 billion dollar request. that is separate from the budget and they hope to have a vote on that in the next two weeks. criticism on the
ground in puerto rico, action on capitol hill, they have got a lot to do. still again, they took the first step of getting tax reform done by the end of the year. >> how can you pass a budget when there is not a budget? >> this is the first step. it is the position they have to put that check mark into get into the rudder -- for there to be tax reform. there are the committees that have to get to work on actually crafting the tax policy. will hear a lot from the chairman over at the senate and representative brady in the house as they work on that. >> we don't get a full senate vote -- vote until two weeks later. what is the difference between the house and senate budget resolutions? what are the key differences? >> you could see a little bit
but i think the bottom line is they are on track to do that and issues likecenes, where the corporate tax rate will be and state and local deduction where that will be, as well as other deductions in terms of tax rackets, we hear there could even be four tax brackets despite the white house calling for there to be three. all of the details are being sorted out now. that is where this gets interesting. isterms of the budget, this for sedro. >> kevin, thank you for the break down. banks are looking to join the bitcoin bandwagon. than 300%stored more just this year and are attracting interest from invest banks. lloyd blankfein weighing in on the debate using a tweet, reading, still thinking about
bitcoin, no conclusion, not the -- not endorsing or rejecting folks were skeptical when paper money -- michael moore, bloomberg's financial reporter. we had already heard from larry inc. talking about how bitcoin is used by criminals. there is a lot of debate out there. cannot not talk about this. clients are asking about bitcoin . is treading the interest, the clients. there is money to be made out there. people are trading bitcoin. to're seeing funds raised invest in cryptocurrencies. a lot of money pours into icl's. is out there and the banks are starting to explore, is there a possibility for us to step in and facilitate some of the trading and make a cut? >> for how long. to the occurrences go to zero?
fear.t is the it is what banks are trying to wrap their heads around. couple of key questions, one of which is volatility. enoughs not a liquid market. hedging in that world, if there were to be principal traders, would be more difficult. debates, andf the what area to the banks get into this? the other is, know your customers. this is an anonymous currency. >> to your point about volatility, 4008 on the bloomberg, you can see bitcoin's's 30 day volatility against the s&p 500. look at that. a huge difference. i think that the question is what happens when more and more countries start cracking down on bitcoin and cryptocurrencies like china is starting to and south korea as well.
>> right. a big point of tension for the banks. they have close relationships with the government, a heavily -- industry. countries are cracking down. you mentioned china. thanks are interested in developing relations with china, do you risk angering the country theygitimizing something crackdown on? you think he got a call from jamie dimon or someone else saying, what is wrong? >> there has been public debate among ceo's is. coming out very forcefully against bitcoin. less than a week later, james saying this is something that may go around.
>> thank you for joining us. >> let's check on the first word news. here is mark crumpton. mass shooter stephen paddock did not plan on killing himself following his deadly rampage. investigators searched his hotel room and say they found a note. they say he was planning to escape. he committed suicide when police stormed the room. 58 people were killed and hundreds more wounded in saturday night. today is the deadline for the so-called dreamers to renew work permits. undocumented immigrants brought here illegally by their parents followed by the daca program which president trump wants to end. about 40,000 dreamers want -- have yet to turn in the paperwork. members of the party are calling for theresa may to step down following yesterday, which has received much criticism.
conservative party members, expressing concern over her leadership and say they want her to resign now rather than leave the party -- leave the party to defeat. say -- istorm nate sitting off the coast of nicaragua and on track to make landfall anywhere from louisiana to the florida panhandle next week. could disrupt gas and oil rigs in the gulf of mexico as well as damage cotton crops. news 24 hours a day powered by more than 2700 overalists and analysts in 120 countries. this is bloomberg. >> thank you. coming up, the clock is ticking for congress to come to puerto rico's eight. former lieutenant governor of new york who helped new york
>> welcome back. this is bloomberg markets. vonnie: i am vonnie quinn. puerto rico heading toward another flashpoint. burning through the $1.6 billion it had on hand before hurricane maria ahead. it'sreasurer says government faces a shutdown of congress does not provide billions of dollars in emergency funding. trump's as president remarks on waiting out the debt. for more, let's bring in richard, former lieutenant
governor of new york and one-time pro bono advisor to puerto rico as well. than that as well. author of the book, so much to do, a full life of his nice, confronting fiscal crises. that is what has been happening here. humanitarian crisis. you said that holders should not get anything. >> i think even before the tragedy of the hurricane, there was a serious question as to how much money if any was available because we did not know what the impact of the trump budget was. it clearly will involve cuts in the discretionary federal budget, which will affect puerto rico. of thet know given all things that have already the schools, collapse of large parts of health care system because medicaid, puerto rico --
the obamacare program. we do not know what it would have taken to restore the state rico.ial order in puerto that remained to be done, which is why the federal judges tasked with trying to mediate creditor claims first tired and at her so they could make an independent judgment as to how much money was really available to pay debt. you have a deteriorating economy and a diminishing federal budget. opinion, all the hurricane did was make it very clear that until we know how much money the spendingrnment will be , we are not going to
know how many relief. trump beingdent there and mentioning that puerto rico's's debt could be wiped clean, do you see this rhetoric as helpful or does this give us some sort of guidance? >> i am shocked so many people think his comments has any relevance to the reality of what will happen. they president cannot determine what debt will be paid or what will not be paid. what concerns me is some of the creditors are trying very hard to get the statue changed. there are lawsuits and questions of constitutionality, motivated by a desire to get a war that is more friendly than many creditors then it is to the well-being of the people of
puerto rico. the public will have to keep its eye out for that. happen for that is declared unconstitutional? people who arehe pushing that have a motive that they want to replace the board. >> that is always the potential motivation. if you are someone money, they want it back. where do you see an outcome that is similar tear in and the rewards investors and provides money in times of crisis? >> most of the money was not provided at a moment of crisis. a massive amount of debt from puerto rico, and a wide percent of it was insured by -- at a time when frankly, there was very real evidence that they
have the capacity to pay it back. audits.factory it did not stop the franklin templeton's and oppenheimer's and the hedge funds from buying all of us debt. they issued $73 billion of debt. 17 of which were issued by the former governor who ends up representing the insurance companies arguing the debt has hise paid even though and four years, he issued 17 billions of dollars of debt, most of which was used to cover deficits. appetite for yield that overcame any syrians -- the radiation sees had summers on stability asterisk puerto there is no fact real oversight over the issue.
that excludes from the jurisdiction the fcc, to parse offerings through the fcc. finish thisave to conversation another time. we could talk about this for a while. it is not going anywhere. still ahead, deals and technology. diversifies its plan beyond apple. do semiconductors still have room to run? this is bloomberg. ♪
million dollars. the acquisition will help diversify away from apple which makes up 74% of the semiconductor company sales. for more, alix. this will be the largest in the failed attempt. tell us a little bit about what is going on? only 276 $90 deal. a couple of years ago, you may people, it raised its bid several times and was eventually out that on the deale and shareholders did not like the deal. felt it was too expensive and they were paying too much money for it. they are coming around and doing a smaller deal here. the deal will not move the needle all that much in the sense it is a 270 x million dollar deal.
ist it stands for interesting. we have a graph shows the booming sales in semiconductor technology. a bullish sign for technology in general. they are not us, they are not people. their apple, samsung, and dell, device makers. is it typically or sign for technology because it means the technology making devices feel like there is demand to buy more semiconductors and see it further down. >> briefly, any others in the works? >> it is a great question because if you look at what activity looks like this year, it is down more than 50%. consortium line toshiba
late last week, it is down more than 80%. we have not seen a lot of m&a activity. of the reason why this is a $300 million deal and is somewhat newsworthy. twoer and the year before, dan or years, and we are now back down to earth again over what we had seen in the devious years. a lot of consolidation has already been done and there is not much to do. >> thank you so much. coming up, who will president leave the fed? we assess the candidates. this is bloomberg. ♪
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her's in new york city, i am vonnie when. >> is bloomberg markets. a quick check of the markets. u.s. stocks gaining for in a consecutive session. we are seeing a long run, the longest risk just winning streak since 2013. we see financial and tax stocks leading the gains on the 500. the dow rising by seven consecutive sessions. the nasdaq up .6%. we had data this morning, jobless names and factory orders eating expectations. >> yes. all right. it is time to get to first word news. here is mark crumpton. mark: thank you. the house of representatives passed $4.1 trillion budget land that includes deep cuts to social programs and government agency budgets. the plan passed along party lines and houston lukens have no intentions of imposing -- imposing the cuts. instead, it's a distaste to
overhaul the task code later this year. republican senators may impose them at on device -- second turn semiautomatic and only automatic firearms. the las vegas shooter used this bond stock to let him fire more john cornyn says lawmakers should hold a hearing on the device. the islamic state has lost one of its last strongholds in iraq and iraqi troops truths the militants out of a town, a quick for an operation that started to this weeks ago. the fight against the terrorist group is focused on a stretcher order where the islamic state is desperately trying to hang on. the head of brazil passes olympic committee was arrested today for a bribery scheme in connection with the 2016 games. accused of laying a roll in now -- an alleged operation to bring the olympics to rio. they were mired in several corruption scandals before and
after the event. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. >> thank you. the fed chair race is narrowing. a short list of candidates. top names include gary cohn, and the current that share, janet helen here it trump said expects to make a decision this month which will take the -- kickoff the process for the term expires in february. well.ews as the confirmation of the fed us his first vice chair supervision . in the last few moments, a enough tostory says be on the consideration for fed chair. raising and husband, eyebrow or two. that president is not
considering -- to break it all down, here is a lena, the bloomberg intelligence senior u.s. economist. , which is i just said most important today? >> the nomination would actually problem and make the fed more hawkish next year. even before his nomination, we estimated that the fed would become more hawkish next year. now with the addition to the roster, it would publicly become even more hawkish. he criticized the fed's low interest rates policy. after the financial isis, and he advocated rules-based policies as well. both of these things suggests he might be a more on the hawkish side monetary policy. he will be working with
regulation most of the time. classes and trusting he could be out of the running here for one, jeff is gone. thinking he knew would be the right candidate given how he has monetary stance and could go well with the trump administration. this is interesting. >> we have two candidates who will be easy on monitor policy area chair yellen will probably be the most like the candidate. absolutely. >> she is saying she doesn't have any -- >> she is low interest rate. it will be up to the president to decide whether he wants to someone with personality for the policy expected. somebodydent appoints whose policies will drive what
is going to happen, it should be yellen. a low interest rate person. opposition to deregulation. >> yes. obviously a deregulation person. if they areosed being held by deregulation? >> i think so. clearly stated this year, she strongly believes that what happened after the crisis, that that regulation put in place should stay there. >> of course, her friend has to jobless claims numbers coming below estimates. payrolls numbers. >> it is exciting. we expect a consensus number. we expect a bit of a
bigger impact on payrolls, remember, it is a gulf coast hurricane harvey and tends to be a weaker impact. if you look at katrina, it was a egg impact. hurricane, harvey and irma. another area that we should watch. earnings.iena kick in because of all of the work to restore. as earnings are little higher. a chart ofook at historic events, it tends to
know storms come if you are right. forth.ke the data and so but little bit of noise , augustg interesting data could show a chu trend before the impact of the hurricane. it was a weak number for the month of august. conclude -- ally >> what will you try to do? >> i think he will try to with what isimself going on at the fed. they are looking at regulation. that will be interesting to
>> welcome back. this is "bloomberg markets." vonnie: we're looking at a brand-new name on the nasdaq. the pharmaceuticals went public this morning. $17 per share and it has already jumped more than 2%. 71%. classic just keeps going. was a nine-year-old tech, they raised about $120 million in ito's. right at this top end of the range. it is focused on finding drugs and specifically a drug which
regulates balance. what is interesting is it is aimed at people with a rare genetic disorder. known as an orphan drug. the approval for this chart has been going up. it made you wonder what were so .nterest, only 15 oh people are starting to think it might have other applications. and if it works for this, it could work for other things. people think it could possibly work out. that the company and how it plays into the larger biotech story this year? >> it is in dressing. if you look at my terminal, i have got the tech index here. i use the function and what you it is performing
over 28% this year and that is at the biotech stocks plunged last year and people thought we would see more industry regulation. maybe a different result than the election where it current president have been saying he wanted to have more government control and that seems to have dissipated. concern thatttle he may be seeing a little bit of a bubble. there was a piece by one of our gadfly economist and he finds there were a number of companies gaining this year but actually, they had not in the evidence to back up claims about new drugs. it is an area for us to work through. is doing well now but there are a few skip out there. >> a fascinating story there. thank you. is doing well now but there are a few>> netflix raising itss once again, $11 per month is what netflix will now be charging for its most popular u.s. service plan.
they're helping to pay for a budget for tv shows, the movies, the markets, reacting quite they verbally for the news. is up 4%. joining me now to discuss is the bloomberg news media reporter gerry smith. pretty positive at least for investors. >> yes. netflix business is very sensitive, so even just a one dollar increase in the past, we have seen them race races and it has affected scriber growth. investors based on the stock going up this morning, they feel like netflix could continue to as drivers even with this latest pricing. >> there is more to this is there not just up and races. there is something more on offer. >> yes. they need to raise prices for the fact that there's ending an enormous amount of money on programming, about its billion dollars this year and $7 billion next year.
this is something that could improve profit margins as well. mean there is more original content, and you can see it in high death, forex apple. all of these things were not available last time. alexius spirit netflix has three different rates and the lowest rate at eight dollars a month will stay the same. higher-priced lands will increase by one dollar to two dollars. do theygs the question, need to raise prices or are they just in greedy? -- being greedy? is canher big question increase prices in the u.s. but other countries where maybe pricing power is not as large. vonnie: it has only struck me that netflix is extraordinarily cheap relative to other of these type services, including hulu, i
already named names. but netflix is way down there. hbo now is on top again. >> netflix has been around for a while and in the last couple of we have seen a lot of these subscription services and online tv services like plus as much as $40 month. much continued -- contingent on netflix content. stranger things is still a big hit for them. their ability to raise prices and gain subscribers defense on the content, which is costing a lot of money. when it comes to overseas viewers, and i was in hong kong, my brother has it in brazil and the kick action was why are we getting -- not getting the same content that you got. we did not have the same tv
series you had in the u.s. it did not seem all that appealing. >> we wanted to watch some things. >> yes. so how attractive is it for these overseas scriber's? >> the challenge is to hold. a lot of the shows my not have the right to introduce certain countries. they want to create programming specific in the language and specific to certain countries. challenge they will have to face but it is something that will have to cost money as well. >> do they need to go with stars ? are the content creators? the screenwriting, the show running?
>> there are shows where most ours -- are extremely successful shows -- shows. certainly, the talent is not cheap and the show runners in particular, you see people getting poached. for anyone in the tv industry, it is a golden age. >> thank you for that. >> i did cancel that subscription. who knows. maybe if they had better content. >> thanks once again. president trump passes comments, puerto rico'seven point billion dollars debt. a chocolate groupon mark. the managing director and financial analyst mark palmer
says the remarks will not have any real in fact -- real impact. there is a judicial process. we believe once we get through that, it will be favorable for bondholders. the guarantee such that debtholders get a -- get paid. >> meanwhile, the british -- the owner of legoland, a potential deal. familiar, hepeople made a big for parts of seaworld. it can be a barrier. seaworld, and out -- outright sale. at a record every day this week. both reports from deutsche analysts. self driving and car sharing. a big turnaround for gm. shares of stuck in neutral as most investors pick a better
looke: now for an inside into guggenheim partners, the boutique investment firm. amid frustration over money and management style. and analysts have headed there in the last two years. joining me for more within -- on the turmoil within guggenheim, our bloomberg reporter along with john. talk about the genesis. quite sit really flared up early last year when this woman went
to the client relationship. what happened then was 22 people were let go. there were a lot ofto the cliens about, issue service 5 -- certified for the job? her lawyer says no. business relationships between her and the ceo of the company, they said there was no non-is this relationship that if there was, it would read the proper channel. leaving.han 60 people how are they stopping this? now. people from 2015 what is interesting is to say, what is happening now that this has an out in the press, or what will happen next? the most notable question is the ceo, we have previously reported he is taking steps to unwind his personal interests from the
firm. >> he is a fascinating character. tell us a little more about what the interests are. ? walters is interesting. there from the very beginning. he has this plantation in florida. he does have a lot of interests outside of guggenheim, including investment venture in january with the dodgers. mike is another interesting character in the story because todd -- guggenheim had to take $20 million to settle in fcc investigation into a personal loan he had taken. lives in florida -- classy has a lot of former
guggenheim employees working for him at an investment firm. also one of the dodgers and owners as well. i think you're talking about market in florida. >> an amazing story. i do not need -- mean to make light of it in any way. >> we have breaking news out of catalonia. base on a parliamentary october 9. that would be the central government. they want to declare independence. this has been deemed unconstitutional by the supreme court. we are now hearing that separatists are planning a parliamentary debate on the ninth. the central government would not allow that to happen. are now hearing those directions from the central government.
>> they may be won't talk about it tomorrow. that was on the cards earlier in the week. here is the development. again now. >> still ahead, we will talk to the chairman of the house of watch it committee on the latest on the republican-led effort to advance a budget resolution for fiscal 2018. vonnie: a quick reminder. you can watch all of our interviews in case you missed them live on the bloomberg tv . you get functionality charts and all of our great interviews. this is bloomberg. ♪
here the top stories we're watching this hour. house republicans advance budget resolutions. as puerto rico struggles to recover from devastation left by arricane maria bonds take dive. how much should markets rely on trump's words? the guessing game in spain. catalonia's president keeps tightlipped about whether he will declare independence. we will bring you the latest we are hearing from catalan separatists as they plan a debate on october 9. ♪ marty: the house passed their budget resolution for the fiscal year taking their first concrete step towards enacting tax reform.