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tv   Whatd You Miss  Bloomberg  October 10, 2017 3:30pm-5:00pm EDT

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killed at least 13 people, including a 100-year-old man and his 98 worldwide, who were unable to escape their burning home. when hundred 15,000 acres have been scorched. wineriesapa valley have been damaged. the blazes are among the deadliest in california's history and are burning completely uncontained. the british prime minister, theresa may's office has released a statement detailing a phone call today with president says thee statement prime minister stressed the importance of the iran nuclear deal president trump has criticized and threatened to withdraw the u.s.. the feud between president trump and senator bob corker's escalating. the president fired the latest shot in a tweet today, writing that the failing new york times and madee bob corker him look
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corker said the president could set the nation on the path to world war iii. the nfl president roger goodell has issued a statement suggesting out players should conduct themselves during the national anthem. he said he believes everyone should stand. he also said the controversy has been a barrier against making real progress on the issue. for the crisis will be
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reviewed at the owners meeting in new york next week. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪ julia: live from bloomberg world headquarters in new york, i'm julia chatterley. scarlet: on scarlet fu. joe: i'm joe wiesenthal. julia: u.s. stocks are climbing to record highs. joe: the question is, "what'd you miss?" catalonia, takes a step back from going on its own. here at home, president trump is plan,ing to tweak his tax
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as a public feud with senator bob corker raises prospect back -- raises questions about the prospects for that legislation. prize-winning economist paul krugman joins us exclusively on bloomberg for the next hour. ♪ "what'd you miss?" president trump looks for unity on tax reform. making he will be changes to the framework that was unveiled last month, as key senators raise concerns about specifics of the plan, which includes eliminating state and local tax deductions. economiste-winning krugman joinspaul us. professor krugman, thanks for joining us. julia: the prospects for tax
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reform during this administration? paul: it seems completely coherent and it seems like they have lost the thread on what they are trying to do. they have no way to accomplish anything that looks remotely neutrality, without raising taxes on a lot of middle-class people. it is a myth but i wouldn't be the first time that something that is a myth would make it through congress. joe: when you say it is completely incoherent, what do you mean by that? when you look at the policies, what stands out is not making any sense? paul: they keep on saying americans are the highest tax country in the world. that is a lie. we are just about the lowest taxed nation. but they keep on implying they are going to do a tax cut for middle income people. they keep on saying, we are responsible fiscally, and yet there is no way you can have what they really, really want, which is a huge tax cut for businesses and a pastor thing
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which would be a huge tax cut for people with high incomes, without somehow or other raising taxes on a lot of people to pay for it. at they haven't figured out way to make the thing hang together. julia: and don't forget the middle last -- middle-class tax-cut. paul: there is no middle class tax cut in there. they have a couple of ways they thought they were going to be able to pay for it, one of which involved repealing the affordable care act. scarlet: that didn't go so well. was thee other one border tax adjustment. since both of those have died, they have absolutely no way to make the arithmetic work. julia: you have pushed back on the idea that taxes are the lowest -- that taxes are the highest in the u.s.?
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paul: they are among the lowest. we have a relatively high corporate tax rate, but you have lots of deductions and our corporate tax rate is normal, and our individual tax rates are low. so it is amazing trump repeats this again, and again, and it is as false as anything there is in the world. side,n the corporate tax are there ways that you think taxes could be reformed, and a productive way, to make things more efficient or logical? paul: it is funny. the reform the paul ryan initially floated, a destination-based cash flow tax, was not a stupid idea. in fact, it was one of the few things i have seen from paul ryan. joe: this is a big moment, were paul krugman is praising paul ryan. paul: you could get bipartisan
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support among tax experts, saying this is a good idea. and of course, it being the one thing i have seen from paul ryan that was really not a terrible idea, it died instantly in the political arena. and without that, without the border tax adjustment that is a piece of that, there is no way to make a significant cut in the corporate marginal tax rates that doesn't explode the deficit. about art's talk laffer, and the laffer curve, and the implications for kansas, and what happened there. has been blown out of the water by every single example we have seen. there is not a single case that anything like to laugh curve has proven to be true. ffer curve has proven to be true.
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capital labor can easily flow so the chance is much higher at the level of one state, than the united states as a whole. even so, all it did in kansas was created fiscal crisis. the clinton tax hike was supposed to destroy the economy. we had the best boom of the postwar era. -- he is substantially increased taxes and 13 and nothing terrible happened. so there is nothing supporting this point of view, except the fact that some very rich people would like it to be true. that, do we on all understand the tax cuts and aggregate? paul: there is very little reason to think tax cuts matter much, one where or the other, for underlying growth. cut taxesns when you is, you cut tax collection. that is basically what happens. that: if you are grieving
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a lot of financing is going to be coming from higher growth due to the tax cuts. ball: there is no reason to believe this. scarlet: i need to ask you about health care because the president says he plans to sign executive action to create more health care options for people, outside obamacare. that is his sell. but what happens in the interim? because this wouldn't take effect right away. paul: insurers have to make decisions about whether to participate in the market. they have to submit requests for premiums. so all this uncertainty is wreaking huge damage, already. foriums are going way up 2018. that, most of that is from the trump administration and the uncertainty he has created. scarlet: can it survive until 2019? yes, because even in the
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individual market most people are receiving subsidies. and medicaid is unaffected by this. so it gets worse but it doesn't paulpse read scarlet: krugman is sticking with us for the next hour. coming up, the president search for the next fed chair and whether the central banks independence is perhaps at risk. this is bloomberg. ♪
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scarlet: "what'd you miss?" concernedconcerned that the sear the next fed chair might take a political term. nobel prize-winning economist paul krugman wrote, other federal agencies, are about to
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, that one ofd american policy positive's last remaining havens of competence and expertise will soon share in the general degradation. have a perfectly fine fed chair who could be reappointed. janet yellen has, by every indicator, done a stellar job. why not? just keep her. on the other hand, the prediction markets were thinking that the most likely pick was horsh, who does have a track record over the past decade read and it is consistent. he has been wrong about everything. he was worried about inflation, that the world was sliding into depression, that fiscal policy was get a turn us into greece, it is just amazing. it is almost awesome, you could
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taking whatever he says would happen and go the other way. a political point of view, he has family connections with trump. and he might be appointed although his stock has declined, a little bit. doesn't sound like you think kevin would be a good pick, versus a pick who would be being at trump's back and call. with trump calling him out for a rate hike, for instance. which would be a bigger concern? paul: both. you have somebody that is respected by the fed, and respects the institution of the fed, that person is not going to essurable by the white house.
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if trump just decides they like him or her, that is the type of person you would be concerned about, being criticized. is a: do you think there chance that his criticism of janet yellen was made perhaps, before he had spoken to people who have known more about monetary policy. and having learned subsequently, perhaps he is realizing that continuity would be a good thing and reappoint janet yellen? paul: well i would hope so. be you turns tend to followed by further you turns. every time you think he has reached a reasonable agreement on something, he finds a way to go back on it or it. speaking of janet yellen, one of the most notable things going on is the persistent failure of the fed, or the economy overall, to get to 2%
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inflation. to hit the inflation right. in light of a we've seen over the last several years, have you involved in your thinking of what the fed can do if you hit inflation? what have you learned about the fed and inflation by watching this persistent shortfall? paul: there are two things. one is, monetary policy doesn't have much traction when interest rates are low. even though the fed is normalized a little bit, we are still in that regime, where all the attention is on the fed and yet the fed has much less power than it does in what we would take on as normal times. the other thing is, if there is going on in the inflation process, whether it is the natural rate of unemployment is laid down, or the phillips curve or,gotten flatter, the underlying models we were
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using to try to predict inflation were never very good, and i now looking completely. favorite theory of what that something is? i think it is a mix. i think there are still pent-up wage cuts that don't want to happen, and there is still an overhang from the past. and come i think there is nervousness. i think people, having been through the great recession in the long, slow recovery, are just very reluctant to grant or demand wage increases that might be locked in during the next slump. scarlet: is that mean the fed should rethink its approach to targeting 2% inflation? paul: no, on the contrary. everything we have seen is that 2% inflation is too low, given that we have seen how hard it is to get inflation up, whence it is too low. given that it really looks like that we really need to have the
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opportunity of having ly negative, real interest rates, that the feds target rate should be about 2%. i am old enough to remember 4%. i remember reagan's second term when we had 4% inflation. it wasn't that bad and i give you more room for monetary policy. so, i would go there. it is a long way from being politically acceptable, but by no means to say that we are having trouble to get to the 2% target, which actually looks too low, that we should give up on even trying to get there. joe: should the fed not be hiking right now? if you are the fed chair? hiking would not be right now. i think the fed is trying to normalize and that version of normality when out the window, 10 years ago. julia: talking about changing political dynamics in the age of trump. from new york, this is bloomberg. ♪
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scarlet: "what'd you miss?" isublican senator bob corker in open opposition to the president, calling the white house and adult day care center and worrying the president could lead us to world war iii. paule back with krugman, nobel prize-winning economist. joe: corker said there are a lot of people in his caucus, who feel the same what he does. but none have called out trump, to the same degree. paul: it is about their political careers. attention toaying this stuff for a long time, and i read a lot. today's republican legislators, people in the senate, and more so in the house, they grew up in an era of a monolithic, very tightly organized republican party.
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the ours not people -- these are not people who courageously staked out a position that might be unpopular. these are people that joined a machine that would guarantee them a good leaving even if they lost an election. so, these are apparatchiks, these are not people who are going to step up and take a stand on principle. it is not the kind of people they are. if corker turns out to be more interesting guy than we thought, but he is also decided that his political career is over. there are very few that are going to be willing to do that, even under the most extreme circumstances. you have senator john mccain and senator bob corker. so you have two. the koren people who are on edge of retirement, or possibly don't have long to live, are willing to speak out. julia: losing two big senators like that is actually critical for the gop. paul: that is right.
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and everybody saw the obamacare repeal crash and burn. tax reform, or whatever it is they are trying to do on taxes, is in big trouble. so it is quite possible they will have a completely sterile legislative agenda, which from my point of view is a good thing. but in any case, yes, they don't have the kind of margin that they need to push stuff through. the party has rallied around principles that seem to be in opposition to themselves. for instance, they want tax cuts on investment income to boost the economy. they want tax cuts for the middle class, all the while avoiding widening the budget deficit. you cannot have one without the other and something has got to give and no one is willing to concede any of that. phrase that we talk about, the impossible trinity. there are three things that everybody wants and you can only have two of them. they definitely have got
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themselves in the impossible trinity. problem also have the that trump sold himself to his base, as -- as a populist. swamp,ng to drain the and everything. and everything they're doing is standard republican. joe: how is that tension going to resolve, ultimately. as it does seem like the mcconnell wing and the trump wing are distinct, especially as how they see the economy, populism, taxes perhaps. you think the mcconnell wing will be swept out? paul: if you look at concrete legislative measures, and what trump has proposed or at least signed on to, first on health care and now on taxes, it totally the mcconnell-ryan wing. there is no hint of that economic populism in anything he actually does. he talks a populist game but his populism never translates into economics.
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he is populist on race relations and cultural wars, but on economics it appears to be entirely just rhetoric. if he actually tries to ion done, he apparently called chuck schumer and friday to get something done on health care. and tax cuts, tax reform, just a sort of bipartisan outreach has become the endgame if he wants to get things done. because he is a dealmaker, he wants action, results. all: the thing about a dealmaker though is, he tends to renege on all his deals. he had a thing of the dreamers and now he is gone against that. deal onam willing to health care, but now he is imposing conditions. who is going to make a deal with him, really? scarlet: what can democrats do when they are possibly working
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with the president on a deal when they are not clear whether it would come due fruition. and they are in danger of splintering? paul: i think that is very exaggerated. on policy substance there is not much division. in fact, the whole party is pretty much unified on anything that involves policy. scarlet: right now there unified against donald trump. paul: they are unified on obamacare, single-payer, and if you look at the standard single-payer plant most of it is a transition to a public option. i think there is much less division there. i think with the republicans do is, sound flexible, talk to trump, make it clear we are willing to talk to trump, but they don't offer him anything much, because, why? they know they will get shafted if they do, and they know that the base will be angry, if they do. and the debt debate, they
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didn't actually give up anything and trump did. paul, thank you. from new york, this is bloomberg. ♪
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♪ julia: "what'd you miss?"
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starts climbed to a record high as the dollar weakened. i'm juliette justly. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. if you are tuning in live on twitter, we went to welcome you to our closing oh coverage every weekday from 4:00 to 5:00 p.m. eastern. scarlet: let's begin with our market minute. highs fory of record the dow and s&p 500 and the nasdaq. gains of anywhere from 1/10 of 3/10 of 1%. joe: new highs once again. pretty remarkable. scarlet: let's look at some individual names here.procter & gamble declaring victory in its bid to keep , even asf of its board the hedge fund says the vote is still too close to call. 5%.art gaining almost
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that is a big move for walmart after announcing a $20 million stock buyback. also, it says it expects e-commerce sales to surge 40% in the next fiscal year. a quick mention of ual an american air. united continental surging after financial gains. you can see american airlines getting a little bit of a lift from that as well. joe: finally, let's go to the government bond market. very quiet today. hardly anything going on. --your yells unchanged two-year yields unchanged. really nothing going on here. julia: that is what we are seeing in the fx market as well. the dollar index, not a pretty chart, but the dollar is lower for a third day versus most of the g10. we talked about concerns about tax reform. i think we can take it as a pause in the recent rally looking like it is running out
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of steam. showing you what is going on in the euro-dollar, we have the catalonian presidential speech today to parliament stepping back from the prospect of a unilateral declaration of independence. he wants to engage. we have the euro above 1.18. want to show you what is going on in the euro-dollar. sorry, in sterling as well. the rally we have seen this week to around 1%. a mixed picture for the u.s. economy, but still more chatter about the bank of england raising rates in november with a one and done move. scarlet: a quick update on stocks. the dow finished a record, but the s&p and nasdaq fell just short. joe: finally on commodities, let's look at oil and gold. oil gaining nearly 3%, rising optimism that more countries are going to join with opec to cut production. supply.inished back above $50 a barrel.
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gold futures gaining again up to 1290 an ounce. those are today's market minutes. scarlet: "what'd you miss?" the postelection market rally that was not predicted. we are still here with paul. you made the call that market would tank. soon and i retracted it afterwards. i did what you should never do, which is let your political biases interfere with your judgment. i thought this is a terrible thing, which it was, but it is not necessarily going to be terrible for every indicator. this is a me a call. this was me doing exactly what i tell people not to do.it is going to happen . we are all mortal. one thing is worth saying. we talk about the trump bump. there is a merkel about, macron bump, abe bump. stocks have been up all around
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the world. people like stocks. i always quote my old teacher, paul samuelson, who said the stock market pretty good eight of the last nine recessions. predicted eight of the last nine recessions. julia: a viewer question. a justification of business owners will be the largest piece of the pie with employees in the public at large eating less high and more -- pie and more like dirty air and water. paul: investors think other investors will pay more for stocks. it is not say much at all. i am surprised the market does not worry more about the downside of a totally catastrophic response to something bad happens. when we had something really bad happened and they handle everything the way they handled puerto rico? we know that markets tend to
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ignore those things that actually do happen. scarlet: i wanted to play for you a comment from richard beeler on what he thinks about what is going on in the stock market. take a listen. >> i don't know about you, but i am nervous. it seems like when investors are nervous, they are prone to being spooked. nothing seems to spook the market. as you said, it curls up slowly but surely. if it is all based on the expectation of some big tax cut, surely investors should have lost confidence that that was going to happen given what has happened so far out of congress. scarlet: especially what we have heard of late. joe: there is all this uncertainty as you said.we have seen an example of disaster
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response that has not been impressive. active saber rattling about north korea now almost every other day. threat of military conflict. your theory that basically markets are not really good for discounters and basically taking into account what happened. paul: that is not a theory. that is an observation. some of us remember the housing bubble. that was the clearest thing i had ever seen in my life. month after month, the prices caps on rising. say, if there were really a bubble, surely it would have burst by now. one day, it did. scarlet: do you see a bubble right now? paul: it is much less clear. profits are high.interest rates are still very low, so it makes sense for stock prices to be high given that. in this case, i do not see a real overwhelming bubble. i think there is a disaster risk
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that the markets are not taking into account. julia: when we asked people about this, they say we have the secret is growth pattern with a look around the world. do you buy that? paul: not necessarily because sometimes the sequence growth pattern means interest rates rise, and that is not happening. -- bob shiller famously did a study during the 1987 stock crash. they asked people, why are you selling? in real-time using fax machines. the only answer that appeared with any frequency, there were all kinds of rationalizations, the only answer was i am selling because stock prices are falling. i think that is all going on. joe: we have a show. it only people just gave us 90 minutes of their day. [laughter] scarlet: in terms of the
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economy, i wanted to get your sense of the labor market because you cannot really read too much in the latest jobs report. people were saying look at the participation rate. it has gone up. look at earnings. it has gone up. what do you take from the latest couple of reports and what it says about the economy? paul: i have a hard time figuring it out. i have been looking at the >> quits rate, which is back to normal. people seem to feel ok to leave a job because they can find another one, which suggests we are at full employment. earnings are not really showing that. wage increases are still subpar. also, it is interesting the prime age in the labor force is creeping back up. all of those who said it is structural, turns out it is lack of jobs. there is some actual good stuff. i would not take one month's number very much.
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joe: just a reminder we will get the rate tomorrow. something to watch. scarlet: perfect timingscarlet:. stick with us to talk about urban policy and perhaps how to avoid disasters like hurricane harvey in houston, or at least it could have been minimized. from new york, this is bloomberg. ♪
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mark: it is time now for first word news. it sounds as though an executive order on health care could be in the works. president trump tweeted that since congress did not pass a replacement for obamacare, he will be using "the power of the pen to give great health care too many people." rand paul of kentucky says he
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has been working on it, and it will be a big deal for millions of americans. however, so far, no details have been released. catalonia's push for independence is now on hold. the regional president suspended the disputed october 1 referendum today in a speech to parliament. he says the landslide victory in the vote provides a mandate to push for a break with spain, but barcelona and madrid need to talk. so there is a call for dialogue across europe because europe is afraid of the outcome if it is not done. those calls should be heeded. we need to open up a time period to have dialogue with the state of spain. mark: spain's prime minister has pledged to take all necessary steps to prevent catalan independence, which he says is impossible under the country's constitution. he addressed the
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catalan parliament, the european commission president spoke in brussels. he urged the cow and leader to resist a formal call for independence and instead work with the spanish government to find a solution. conflict, not lead to caused consequences would obviously be bad for the cattle lands, for spain -- catalans, for spain, for all of europe. mark: he says the continent depends on "what unites us." kenya's president says the kuroda rerun of the nullifying election will go ahead despite opposition candidate's withdrawal. he says the election commission has not made changes necessary to avoid the "illegalities and irregularities of the last boat, which took place in august -- vote, which took place in august."
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global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. scarlet: "what'd you miss?" we are back now with paul. we turn our focus to urban policy and infrastructure. professor, you have written about the flooding disaster that was caused by hurricane harvey in houston and how is largely due to bad policy, including unregulated development. somehow the storm costing up to $2 billion in damage. what is the lesson here? what should be done differently? paul: people have been warning about this for a long time. too much of it is paved. you need to have places to drain. in what is very much a place that nature wants , if you occasionally
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have completely unregulated development, you end up with no place for the water to go. the funny thing is the thing that makes it agonizing is in some ways, houston does it right by not restricting development in ways that prevented building housing. you have the extreme san francisco style, which is disastrous, and houston has much cheaper housing because it did not do that. on the other hand, you have completely ignoring the environmental consequences of unrestricted development, and we seem to find it very hard politically to find the balance their. -- there. joe: you look at all of the boom cities over the last decade, new york, los angeles, san francisco, they are completely unaffordable for homeowners of the middle class. houston has been a success story on this front. right and city economically were middle-class people can afford it. paul: when we asked, why does texas grow faster in general
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country?rest of the it is the things the texans like to boast about. it is not because of low taxes. it is because they have a housing policy that lets you build houses, which the northeast and even worse the far west do not have. that is a good thing. you have to have a place for the water to go when it is a hurricane, and they have not done that. citye -- the only that seems to have adequate regulation, big city, and affordable housing, is chicago. we have chicago winters. scarlet: and the primary. julia: can you steal something from them in terms of practice? you compare it to san francisco and say, actually, look at the situation they created where people have extreme commuting.
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paul: well, we have some of that here. i know a couple of people who commute to manhattan from bucks county. julia: how long does that take? paul: two hours. technically, there are no problems -- technically, there are no problems. the question is -- julia: politics. paul: politics. i don't know if we found a way to make that happen. de blasio came in with very good ideas about trying to expand of wearable housing, and he has done is quite a lot in new york. it is such a huge city that it is just a drop in the bucket relative to the size of the problem. scarlet: how much are we going to rely on local politicians, city mayors, state governors to do a lot of the work here because everything is so gummed up at the federal level? paul: this will have to be local policy in any case. it will require local politicians. when people talk about
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decentralization, the fact of the matter is by a large with many honorable exceptions, but a lot of local politicians are pretty terrible. not that many people vote in state and local elections. you have machine politicians. scarlet: not getting the best people. denouncemuch as i can something goes on in congress, i am not sure there are many state legislatures that i would prefer. joe: if there's something here in new york city when you look at regulations of the housing market that you think could be done that the mayor or city council could do to beat housing prices? paul: sure. even though we are an enormous city and very dense, there is still lots of potential building. there are lots of places where we can still build up. there is still land that is unbuilt that could be built without destroying the quality of life. if you are going to have a city or a metro area with 20 plus million people, you're going to have to have some really dense
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developments. look, i actually checked my zip code. it has about 70,000 people per square mile. it does not feel impossibly overcrowded. it is high-rises. you can live that way. we need more of that. julia: paul is staying with us. next, we get his take on the political uncertainty in europe. from new york, this is bloomberg. ♪
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julia: catalonia backed away from declaring independence outright. the catalan president opted for a middle ground in his matches to parliament today, calling for talks with spain.
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what will this mean for europe's economy? let's talk about spain to start with. what do you think here? paul: well, not at all familiar. i don't. spain.l-- i don't know certainly not catalonia. if you thought there would be bad things to happen in spain, you would have thought that would be three or four years ago when the spanish economy was in the dumps. strength is making a comeback.a fair bit of that in catalonia . the auto industry is coming back. incredibly expensive process, but there is some light at the end of the tunnel. kind of odd to have this happening now. i understand catalonia has been deeply oppressed culturally, but to try to think of what it means to break catalonia from the rest , it is like, my god trying to imagine virginia seceding again now.
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a really impossible thing to happen. julia: when you look at europe optically, they had the macron victory in france, angela merkel back in germany. we have hotspots like italy and the tension in spain, but overall, what is your sense of europe at this moment? paul: the euro continues to function badly. the euro was a mistake. they paid a huge price in high unemployment, but the political cohesiveness of europe with the exception of britain has turned out to be much stronger. us anglo-saxons did not quite understand how deep the commitment of much of the european was. joe: in 10 years will all of the countries in the eurozone still be there? paul: if greece was not going to leave the euro with 27% unemployment and a depression level slump, who is going to leave? i think it is very hard. people don't want to do that
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even when the economics of it make a lot of sense. julia: we sent in brussels, do not underestimate angela merkel's will to get this thing together. scarlet: a really good point, yet there is an attraction to populism. people in spain and france cannot turn away from it completely. paul: everybody's got their little trumps. not necessarily in countries you would think. by the way, this is a demonstration that economic anxiety is a distant and secondary thing. germany has been a success story this whole period. even though, they have a resurgent hard right. scarlet: we want to bring in viewer questions to wrap it all up, to wrap up your hour with us . why don't you start on this one? joe: a question about the lives curve. we talke-- the phillips curve. what do you make of it?
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some wonder if it is the changing nature of the economy. maybe it was never valid in the first place. what is your take? paul: yes, my take is that i do not really know. [laughter] some things we can see. we can still see there is an awful lot. there is a spike at zero, which tells us one thing is still going on is there are still who really should from a market sets be taking wage cuts and because they cannot, there is a pent-up wave. some of it may be that expectations after years and years of inflation falling below forecasts that that is starting to get reflected in expectations. all of this stuff, i have a feeling like an astronomer doing epicycle,cycle -- an the answer is i don't know.
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julia: the transition mechanism. some sense it will wash out at some point. paul: i don't think the service economy changes or anything. in general, structural change is overrated. right? the fact that people think it is easy to find jobs should be showing up in higher wage demands. why it is not showing up is still a puzzle. julia: a mystery. scarlet: janet yellen has said as much. will that be successful in reducing its balance sheet? paul: yeah. the idea that there was never going to be a big problem there was a fundamental misunderstanding. they have tools. i don't see any problem there. joe: one last question. we have a few seconds left.years ago you said that bitcoin was evil , and it has not died yet. i am curious what you think about it because so many conversations come back to that.
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paul: i think it is still evil. i do not think there is any very legitimate purpose for it. it isis suspended -- suspended. i think it is a wily coyote thing. you go over the cliff and wonder you notice there is nothing under you,m but i have been saying that -- you, but i have been saying that for years. scarlet: thank you so much for spending the time with us. he is a columnist for "the new york times" and a professor. coming up, we will be speaking to the new owner of the houston rockets about his hope for the franchise and where he sees nba valuations going. from new york, this is bloomberg. ♪
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mark: it is time now for first word news. hundreds of additional firefighters and law enforcement officials are headed to northern california to battle wildfires that have killed at least 13 people, including a 100-year-old man and his 98-year-old wife who were unable to escape their burning home. more than 115,000 acres have been scorched. at least a dozen that value dozenies have -- not nava valley wineries have been destroyed. justin trudeau arrives in washington this week for a new round of nafta talks after president trump -- on his threat
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to walk away from the agreement. the president said he thinks nafta will have to be terminated as reports surfaced the u.s. maybe putting potentially deal breaking proposals on the table. the british prime minister theresa may, her office released a statement detailing a phone call she had with president trump today. the same it says the prime minister stressed the importance of the iran nuclear deal, an accord president trump has criticized. it has been nearly three weeks since hurricane maria ravaged puerto rico, and most of the u.s. commonwealth is still in the dark. the energy department says 85% of customers on the island do not have electricity. puerto rico has said it could take months to restore power. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. julia: thank you so much. let's get a week cap -- recap of
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today's market action. stops inching higher once again in the session.we had a rally in consumer shares . walmart serving in the gains after announcing some exciting prospect for their e-commerce. 40% expected rise as far as e-commerce sales. scarlet: a move for walmart which usually does not get that big of a boost. julia: i would buy that. scarlet: exactly. down closing at a record high. would yo"what'd you miss?" a client list of some of the worlds most wealthiest investors. where does he see their interest fighting in terms of the future of the fed going? is credit.arkable , would say across the board but also incorporate -- in
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corporate and investment rates. . see a lot of complacency >> enough to cause alarm? >> to be honest, i think it lasts much longer than we expected. therefore, it is too early to not.t is or >> what are you hearing from clients right now? what are they coming to you and asking for? sergio: we see a little bit more of willingness to deploy cash. that has not really changed from the beginning of the year. oureasure a little bit indicator is cash balances in the bank. we have been drawing the last four or five years in the high 20's. now we are in the mid-20's. it is good news.
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a little bit more willingness to deploy money and invest money in equities than in bonds or any other asset classes. still looking for diversification. the conviction level is not there, to be honest. diversification, and one thing we did not talk about in the magazine is cryptocurrencies. is anybody coming to you asking for more bitcoin? >> some. people are more curious than willing to invest. i don't think there is any meaningful desire by high net worth individuals to take big bets on this kind of phenomenon. >> are they curious right now? sergio: on cryptocurrencies, at the end of the day, we believe existing currencies may move to become more of a cryptocurrency, something to make it much easier for intermediaries, for clients to exchange services and pay for
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services. don't really believe there is much room for the creation of new currencies if there is no real backing for a credible issuer of the currency. julia: usa billionaires don't want to speculate with bitcoin at this stage. dust you are saying billionaires don't want to speculate with bitcoin at this stage? >> not yet. the impact the fed will have on retracing stimulus, how concerned are you buy leadership change at the federal reserve? sergio: well, not overly concerned. i think at the end of the day, there is a sense that we had a change and a high degree of continuity. we will need to see if there is any change, but if there is a change, i am not sure anybody has an interest to do something disruptive, so the market is
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already pricing the probability or the expectations that you might see half a point or three quarters of a point in the and probably even equity markets are applying this kind of potential hike. i don't expect the fed to move aggressively. they have a nice ability to exit just by the fed getting a lot of the bonds that expire. they will be able to contact the balance sheets smoothly. julia: one of the wildcards is a u.s. president not shy about sharing his views on monetary policy as it occurs to him. are you worried about the independence of this that going forward? atgio: usually when you look this kind of political intervention, not only in this country, but generally in the world, they may attract the
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contrary reaction of people trying to show they are independent. therefore, i don't think it is a smart move for politicians to interfere in banking, monetary policy. >> what you think about that policy specifically, is the you?ing that excites how would it benefit your business? sergio: no, we are not overly focused on those kind of leadership changes. the angle that really matters for us is not necessary monetary policy per se. thehere any implication to other side of the part of what the fed or any central bank is doing to our industry? i think it is the path they seem to be taking. i don't expect a number of changes. julia: sergio speaking there. scarlet: coming up, we will stick to the new owner of the houston rockets tillman fertitta
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about his hopes for the franchise and what he -- where he sees nba team valuations going. this is bloomberg. ♪
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scarlet: "what'd you miss?" tillman fertitta is betting his next career move is a slamdunk. he was officially introduced today as the new owner of the houston rockets, a basketball team he bought for $2.2 billion, the largest bit in nba history. he joins me now from houston with more. congratulations on finally getting it done. well done. tillman: it was an exciting day. it was interesting. it is great to own a team in your hometown. very few people get to do that. gosh, i have been sitting on the
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front row for 35 years. this was a lot of fun. scarlet: a lifeline. of course, -- a lot of fun. course, a lot of people talk about the price tag surpassing the $2 billion acquisition of the clippers in2014. in 2014. how high do you think valuations can go? tillman: i think you will be surprised. if i did not think this team would be worth $3 billion in the next eight to 10 years, it might have been a little tougher decision to buy it, but there has never been a team sell for less than it was paid for. believe it or not, it was not the most extensive price for an nba team. it was also nfl and mlb. realize you cannot get caught up in how much the team makes and then try to put a
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price on it that way. it is, what is it going to be in the long run? this is a generational asset for me and my family. we will own it for many years, and i think we will be fine. scarlet: of course, a lot of what is driving the franchise value is the tv money. at some point, did you expect that to flatten out, plateau, or even go down? tillman: we are all time to figure it out right now. one thing we have learned about technology and what is happening in this world is we have no idea what is ahead of us. you know what? may be the major networks, the contracts go down, but maybe streaming because that is what the millennials and younger people are doing now, streaming, and it can be on google, facebook, amazon, or anything. i just think we all do not know yet, but i think the money will be there because you still have the users out there, and they still want to watch the sporting event. sporting events dominate the viewers. how it gets to the viewers,
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maybe people do not watch it at home on their tv anymore. scarlet: of course a lot of the youngeople say that people will engage through this port is betting. i know the commissioner has been pushing for legal betty.you all the golden nugget casino. would you push for legal betting? tilman: pressure. inht now, the golden nugget atlantic city, we have the number one internet gaming company in america because it is the only jurisdiction in new jersey that allows internet gaming, and we are number one. i think you will see a lot happened with sports betting in the last two years. i don't know how that will help the values of the teams, but i think we will get a piece of the pie somewhere. hopefully i can be on both ends of it somewhere. i just don't think they will let me participate with the houston rockets. scarlet: ok. let me ask you about the national anthem. the season has not yet
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officially begun. we know the nba policy is for players to stand during the star-spangled banner. if one of your players wanted to join the protest, how would you encourage them to best express his views on social policies? tilman: this is the way i see it, ok? there are 30 owners in the nba. we have a lot of rules. in the nba, it has a rule. that is you stand for the national anthem. i follow all of the nba rules because i just went through a bunch.i expect the players to obey the rules, too. there is a rule in place. scarlet: there is a rule in place. i also wanted to ask you about the tragedy that hit home for you, which is the shooting in las vegas. i know the golden nugget house victims and supported first responders. do you see any longer-term impact on the city, on people's mindset from the shooting? tilman: i don't believe so. it is very tragic. thatd one of our employees
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was flat-out murdered that had three young kids. this is a tough situation. i think everybody realizes there is a crazy person in every city. that could have happened anywhere. i don't see it having any effect on vegas. it is not having any effect now. we have to watch out out there. is mental illness. that is what we are fighting, mental illness.everybody needs to pay attention to the person next to them .don't be ashamed to say, hey, this person maybe needs to be checked out. people who do this, they show something on their way to doing it. we all have to pay attention to what is going on around us right now. scarlet: as we pay attention, does the tragedy change the way you think about security? security at your casino? tilman: for sure. we have upped it a little bit, but we just tell you this. there was nothing you could do about that. i believe he snuck the guns in a
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golf bag. who would have ever thought you don't even have a balcony, and he would just take a hammer to break out the windows? that was a non-preventable incident. that is when you look at the security and say, what do we do? know what he believes in security more than i do, and i just do not know how that incident would have been more preventable unless you do not privacyle quit -- put banners on their doorknob where somebody cannot get it every 12 to 18 hours. it is still amazing the amount of guns that were snuck up there. you would have thought somebody somewhere would have said there is something not right in this room. with all of our people and all five of our golden nuggets around the country to pay attention to what some is doing, be aware of what is happening around you. scarlet: vigilance in a word. final question to you on a lighter note. can anybody beat the golden state warriors?
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tilman: the houston rockets can. i will be there next tuesday. they are a darned good team and we are thrilled to play them in the opening game. there is a lot of great basketball teams, but i tell you, we have two great superstars in harden an chris paul. we are looking forward to giving them a good game next tuesday night. scarlet: our thanks to tilman fertitta, houston rockets owner. congratulations once again. julia: thanks very much. up next, the summit in seattle for exclusive interview with bob ferguson, washington's attorney general.from new york, this is bloomberg . ♪
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julia: "what'd you miss?" "bloomberg technology" is in
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seattle this week broadcasting live from the summit. it is what premier technology conferences in the u.s. emily chang is on-site there now with a very special guest. emily. much. thank you so i am here with washington state attorney general bob ferguson. thank you so much for joining us. you have a very outspoken in challenging president trump's policies from daca to the travel ban and most recently birth-control. why? bob: the president continues to go beyond the limits of his office. we won four cases. he is accountable to the largest like you are an im. said you have an ax to grind. bob: with anybody who violates the law and harms my state. does not matter if you are a business or the president of the u.s. if you are harming washingtonians, you will hear
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from my office. let's talk about this birth-control situation. just spiraled suit about the government's latest. bob: we have multiple claims, but the problem is you cannot use a religious freedom argument or even a moral one. keep in mind the president said they had a moral obligation and then deny that health care coverage to women. that is not right. that is a gender discrimination. we think it is civil rights violation, statutory violation. we think the actions with illegal and con constitutional -- and unconstitutional actions. emily: you said he will try to file against the clean power. bob: we would take a look at how that goes moving forward and be thoughtful about our lawsuits. emily: you have joined other attorney general's to sue perdue pharma. they make oxycontin.
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what do you hope happens? you want to take this to trial, push settlement? bob: we don't file a case unless we are prepared to take into trial. we believe they engaged in misrepresenting oxycontin, for example, a product they have created. two people die everything with a of opioid overdoses in washington state. we filed a lawsuit in washington state.we are prepared to take this as far as we need to know go. emily: there is concerned that the attorney general position is becoming too partisan. bob: it started when president obama was president and republican attorney general's pseudonym on everything from obamacare to other issues. from my standpoint, i did not have a problem with that. i disagreed with their legal arguments, but everyone is entitled to the rule of law. i don't see a problem with that.we keep winning . there is speculation
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you might be interested in running for higher office as a result of all of these efforts. is that true? bob: people's point of political things when they don't have a legal argument. i just got reelected as attorney general.i love the work i'm doing, and i am focused on that. emily: have googled anything out? bob: of course not. i'm a person who keeps my options open. we are very focused on the work in my office. emily: we are less than a year into this administration.what are your biggest concerns ? bob: hard to know where to start. , what i've only seen him after he became president was to focus on immigration, civil rights, consumer protection, the environment. emily: let's talk about taxes. washington has no income tax. politicians in seattle say they are looking into passing local income taxes. bob: that is correct. the city of seattle passed ordinance adopting a city income tax so the question is whether the ag's office will be involved
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in the lawsuit. we are not a part of that lawsuit. we are taking a look at it like any other issue like that and will make a decision soon. emily: has coordination between attorney general increased since president trump's election. bob: on the democratic side, certainly the communication increased, just the volume of what is going on. there is a lot of focus on the partisan aspect of these things. for example, you mentioned on the opioid drug manufacturers, that is a bipartisan work of ag's working together. emily: what other issues do you foresee taking on? bob: right now, we're focused on the third travel ban. we will be making a decision soon if we will be challenging that. emily: bob ferguson, they do so much for joining us. back to you in new york. julia: great interview.emily chang at the geekwire summit in seattle. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪
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scarlet: "what'd you miss?" the dow jones industrial average setting it another record. as of the end nasdaq not quite there, but close. coming up, christine lagarde will be speaking at the first day of the annual meeting in washington. joe: i will be watching for five minutes -- fed minutes at 2:00 p.m. eastern rn. maybe we will get more certainty from the minutes of that discussion. julia: don't miss this.
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the house ways and means committee congressman kevin brady will be joining bloomberg tv. that is at 1:00 p.m. eastern. he is going to be talking about tax reform. joe: that reform plan that paul krugman likes. julia: yes. scarlet: that does it for "what'd you miss?" julia: "bloomberg technology" his next. joe: have a great evening. this is bloomberg. ♪ retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. >> i am from washington, and you are watching "bloomberg technology." let's start with a check of your first word news. catalonia's push for independence is now officially on hold. speaking to parliament today, the carlin president says
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barcelona and madrid need to talk. >> so there is a call for dialogue across europe because europe is a fruit the outcome if , thoses not dialogue som calls should be needed so we need to open up a time period to have dialogue with the state of spain. alisa:' president trumps secretary of state rex tillerson president trump and rex tillerson met for lunch at the white house. the president reaffirmed his confidence in tillerson when he met today with former secretary of state henry kissinger, but also reportedly challenged tillerson to an iq test. hundreds more firefighters and law-enforcement officials are headed to northern california to battle wildfires that have killed at least 13 people. more than 150,000 acres have been scorched and at least

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