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tv   Whatd You Miss  Bloomberg  May 17, 2018 3:30pm-5:00pm EDT

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kudlow told reporters that the president is "involved in every decision." prime minister benjamin netanyahu said israel's security services havece prevented terrorist attacks in more than 30 countries, including a plot to shoot down an aircraft. he spoke in jerusalem today alongside panama's secretary. a commonahu: we have battle to fight the sponsors, and we are doing it in the middle east, but it encompasses today the entire world, and we stand ready to cooperate. mark: israel has warned it will not tolerate iran establishing a military presence on its doorstep. iran is fighting alongside syrian president bashar al-assad in that country's civil war. secretary of state michael pompeo met with uzbekistan's president.
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a meeting on wednesday focused primarily on trade, afghanistan, and security cooperation. the country on afghanistan's northern border provides a crucial supply route for u.s. forces. phil murphy says his heart is broken following the crash of a dump truck and a school bus taking students on a field trip to two people have been killed, 45 others injured in a crash in mount olive. the impact of the crash ripped the bus apart and turned it on its side. the bus had been carrying passengers from around new jersey. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪
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julia: live from bloomberg world headquarters in new york, i am julia chatterley. scarlet: and i am scarlet fu. joe: and i am joe weisenthal. julia: we are 30 minutes from the close of trading here in the u.s. energy stocks on fire as brent crude is $80 a barrel for the first time since 2014. joe: the question is -- "what'd you miss?" scarlet: the president meeting with an envoy at the white house while the nafta slips by without any resolution. the boardroom meeting at 5:00 p.m. today to decide whether or not to remove the redstone's family power. and greenlight capital's david einhorn at a crossroads. star stuck in his old ways. "what'd you miss?"
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all eyes are on beijing's delegation in washington as they continue working to hammer out a trade deal. who is income who is out, and which chinese officials are getting a white house welcome? paul ryan's deadline for a new pack for nafta is today. speak orion told reporters he is willing to give negotiators some wiggle room of a week or two. when asked when they would reach a deal, "i do not know" is what he said. with more is "bloomberg andnessweek"'s kendra koi kevin cirilli. are we chasing the wrong story here by focusing on negotiators in the room and not out of the room and not focusing enough on the strategy behind the decisions? kevin: i think it is a great point. i spoke with people behind peter navarro, who shared the view
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that he is an isolationist, the tomer started just president trump, steve bannon, and what the sources have told me is the policy devices we have reported all in the past, you steve mnuchin and secretary wilbur ross between navarro are night and day in the personal differences are really exacerbated, according to my sources, during the trip to beijing. peter navarro accompanied the administration on this trip. that is where things get interesting. in terms of actual policy and how this matters, we should very personow what one senior told me, which is chinese officials really do expect that willse premier leo hoy negotiate directly with his counterparts in the united states, and that a secretary steven mnuchin.
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i think the bigger takeaway, though, is the pressure that president trump and his administration are facing on this, which they are not basing as much on nafta. johnson, ah senator republican from south dakota, and he said they are really nervous about whether china will retaliate on soybeans and other products. china just purchased a ton of soybeans, the most in history, from russia. scarlet: we spoke with senator ron johnson of wisconsin. negotiations, the in terms of we do not know what is leading what. i want to bring in a comment from david wu of bank of america merrill lynch about how nafta was supposed to offer some kind of blueprint for how the administration should tackle china. david: what if trump gets a deal with canada and mexico? deals withngly
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china, japan, south korea. he already has an agreement with half of the pcp countries. it could pave the way for the u.s. into the tpp. if there is no reaction to this whole trade war talk, to me, it is no more than negotiation tactics that are going in the right direction for this country for once. scarlet: so there should have been a sequence of events that happeneda, nafta first that would pave the way for china talks. julia: i call it a big mess, actually, a hot mess. had trade have negotiations, and what i hear is he is more interested in not doing a deal rather than doing one, whether it is nafta or china. peter navarro is an even bigger trade talk. it is trump who is putting cold water on talks. bloomberg had a story that he
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appeared with nato officials today, asking are these talks going to be successful, and he the i do not think so, and reason is because china is spoiled, other countries are spoiled. this cannot a few months ago on bloomberg, and it is striking third you have the vice from your of china trying to put something together, and you are, before we even meet with him, saying i do not see anything happening here. joe: peter, regardless of what happens in the days or weeks leading up, this is a diverging passing. it is not going to go away that to bedoes not want technological after 2025, regardless of whether they hammer something out in the short-term. peter: right. and that is what this zte dispute is all about. they put a death penalty on one of china's most important byhnological companies withholding for seven years key components that it needs. the company had to stop
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production. that is going to redouble, reinforce china's determination to be more self-sufficient in technology. they are going to look at this and saychina 2025 plan this is essential to our future. as two countries, chimerica, some people say, are going to diverge. julia: i think there is a lot of confusion on capitol hill over the tweet from the issident and how zte concerned, saying if you want to focus on trade and the deficit, keep that separate from technology and the relationship that china has with the united states, and we seem to be blowing all issues here. that ijulia, two points note on that. i spoke with a source before i came on air who said wait a minute, the actuality right now of the north korea talks hanging in the balance about whether or not it is going to happen, you
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can have china and russia beginning to work together, and what that really forces the me sources isor they want north korea to denuclearize come up on the other side of that, it was just days ago that senator marco rubio, a republican from letter toaid another commerce secretary wilbur ross urging them to continue to double down on in forcing regulations against the chinese fortheir telecommunication, their technology that they sell a host of their own surveillance problems on the chinese -- intellectual property, technology rights -- all of the market access are issues that are wrapped up in all of this. i would just note on nafta, and i want to make this point very quickly, is that mexico and canada have to decide whether or andthey want the steel aluminum proposed tariffs
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increase. they have until june 1 to decide. commerce secretary ross said that a couple of days ago. he said how these talks are progressing is very much going to be a determining factor into whether or not they get full-time exemptions. if you are looking at the steel and aluminum market, you are looking at the june 1 deadline, and the republican caucus is divided on the support of nasa, but so are democrats. nancy pelosi becomes speaker of the house after the midterms, fight between the progressive wing and the centrist wing and the democrats in a divided government is very much trouble ahead for canada and mexico. julia: yeah, you have seen nothing yet. scarlet: peter, you talk about how maybe we should not focus on lighthizer, bringing different issues and to the same thing. the president, at least when it comes to nafta, seems to have an end goal line, the country of
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origins, for instance. do we know whether he has specific wants out of the china deal? concernse thing that me is he keeps talking about the bilateral trade deficit, as if we do see the deficit as an end in itself. as we know deficits are affected by a lot of things come up regarding the federal budget deficit. what you really ought to be concerned about is the technological wherewithal of the united states, and of course the prosperity of americans, and what you want for that is to have the strongest economy you can have. look at what china is doing. china is playing the long game. it seems like they are playing the short game, and china could actually assuage the trump concerns and maybe get a deal simply by shipping or accepting ,ore soybeans, more oil and gas so if manufacturers are concerned that is exactly the
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deal that will be struck, they will not be satisfied. julia: that is the problem of having to win elections. peter: [laughs] "lia: kevin, did you call zte e."?. kevin: i have not slept. i am a hot mess, julia, to use your language. [laughter] kevin cirilli, chief washington correspondent, and peter coy, economic editor for "bloomberg businessweek," great work. it is blockchain week. 2018wn manhattan for the cents as conference and we will talk with one of the industry's pioneers, a founding partner. that is coming up, and this is bloomberg. ♪ is bloomberg. ♪
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julia: "what'd you miss?" after a jump on monday, bitcoin has hit a slump this week. we welcome now richard muirhead, foundingpartner at ventures. talk about what interests you most. richard: there were three events this week, an event but i wanted to go last weekend called the ethereal, which is a bit more like a cultural festival, ethereal,round the and that a concert, which is kind of like stadium rock, which i did not go to.
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there is nothing wrong with stadium rock. joe: he is a punk rock guy. [laughter] richard: i had children chosen to go to the token summit, which is going on right now, which is more like jazz. like there is always some sort of new fad, so etheryum at some point, and this year, people are really excited about equity and other real-world assets. why is that exciting? richard: you definitely see it come out of token sales, when it was truly unfettered speculation. ourcertainly we see businesses with a fundamental project in the kind of holy way of computing, finance, and we see those projects being very thoughtful about how they raise
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money. they are treading very carefully in terms of regulation and maybe raising equity. talking to a bunch today. i think there is a big wave of interest now in security tokens, as they are called, and i think people around the world are getting their head around the fact that these are properly regulated entities. we have a little phrase, which is the tokenization is to ownership and digitization is to content. there is a pretty drastic change to the content over the last couple of decades. but for those who are really into the space of computing, tokenization of securities, though we think it is a massive opportunity, is not even as exciting as centralized data networks. scarlet: when you talk about tokenization, there are a couple of themes that crop up.
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do you see people coming up with solutions that actually address real problems? or are people looking at tokenization as a platform that consult self problems and looking for a problem to solve? richard: i think security tokens, something where you tokenmatch something to a or a piece of real estate in the able to trade those in a regulatory framework that was compliant, and actually if you are very good at doing that, i will give you better technologies, that is solving a real problem. if you can access a larger pool of liquidity of investors to get into real estate, and an example was given him a stage area today, rather than having an learning process of lower manhattan real estate, you could actually create that yourself just with a few cliques. -- clicks. that is solving a problem, diversifying the investor base,
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enabling more capital to flow, more hedging to take place. but that is in a particular space. you could argue the financial markets. i think it is fair to say that if you look at the next wave, what people would call the centralized applications, whether that be a decentralized whatsapp, then we are at a quite early stage come and people have infrastructure for that, but i think there are some problems to solve in those spaces. julia: what do you mean tokenization leads to ownership? when you use that phrase, what do you mean, and use it for facebook, given all the challenges that facebook has faced in the last three weeks -- or three months? comes towhen it
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facebook, it is the fact that you can create a connection between you and your personal data. it is managed from software. so less ownership of your data. represent be used to ownership of everything from your personal data all the way through to your house in a way that is achieved without having to rely on a third party but if none the less totally irrefutable -- that is yours -- and once you can do that and use software to define the relationship, that ownership, you can then invent all sorts of new platforms. j julia: how much capital is flowing into the space right now? are you cherry picking, or are you challenged in some way with other people wanting to throw money at this space? richard: definitely i would say even more of a hedge fund space than a venture capital space. people have locked in and said
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there is now enough of a mark et here to write some significant checks, and they are strong enough believers. how that will play out remains to be seen, because we do think at the end of the day, this is a wave of decentralized computing, where the we had cloud computing -- whether we had cloud computing on the web, and the venture capitalist plus, to lost,ome judicious -- to make some judicious choices. at the same time, it is distracting central capital. ructing central capital. joe: is there anything we can look at to get an example? richard: it is focused on holding onto bitcoin in the yourself in a very centralized manner, and then there is a wave of not centralized like
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coin-based, decentralized ones are being built. the problem there is storer value, so bitcoin is a storer value that you manage yourself, so that is a decentralized application. joe: the things relating to the themes themselves rather than anyone to do with them. richard: that is definitely true, but i will tell you the feeling is it is not a question youhen -- not if but when see the other applications appearing. ways,r those to be a few work being the real done to solve the technological problem. julia: how long? richard: it depends on the question. how long until a decentralized facebook? not five years, i would have said. if you include facebook within practical applications, maybe
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around 10 years, but yes, that kind of timeframe. scarlet: all right, richard muirhead, helping us get a look, founding partner at fabric ventures, thank you. richard: my pleasure. scarlet: coming up, one of the biggest laggards of the day, off by more than 7.5%. we will tell you why in our stock of the hour. this is bloomberg. ♪ this is bloomberg. ♪
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scarlet: our stock of the our hosting us worse decline in a year. shares of nektar therapeutics are down following results of its cancer medicine. what happened? >> they have a big meeting in june with a lot of different companies presenting different data. at this time, it seems like a lot of companies are releasing their studies ahead, sort of in advance of it. nektar is one of the companies that came out with study results
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late yesterday, and the company last yearing results with the drug they were developing, that used in ivo showedn with apt success for certain types of cancer. if you look at the stock in the past year, it has been through a surge of the company, shares over the past year, and there was talk about whether it would be up for sale, it was adding to the s&p 500, and that helped along the alarm, more than a 300% gain. the first that he that was a pretty small one, and this new study that came out with was slightly larger and did not show as much success. bigefore you saw the tumble. joe: in the grand scheme of things for a cancer drug, it is not that big of a selloff.
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we are used to seeing negative results, a 40% downgrade. julie: exactly. scarlet: julie hyman, thank you so much. the market close is next. this is bloomberg. ♪ xt. this is bloomberg. ♪
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julia: "what'd you miss?"
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energy stocks are on fire and bond yields rise. [bellringing] julia: i'm julia chatterley. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. if you are tuning in on twitter, we want to welcome you. scarlet: we begin with our market minutes. modest gains, i should say losses, for the major indexes. bouncing around a little bit, but it has been a narrow range of trading for the most part, especially getting toward the last 90 minutes of trade. joe: a more quiet day than we have seen in the past come a little bit red, but not much of a move bed scarlet: i am looking at the industry groups. it really was a very split day. you have five industry groups higher, led by energy and industrials, energy up by 1.45%. six groups lower, utilities, telecoms. the bond sensitive stocks, they
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are leading the declines. in terms of ended your names -- individual names, williams is one catching our attention, but by 2.4%. wham! says it -- williams says it will purchase an all stock deal. and we are keeping our eye on retailers. tail end of earnings season, jcpenney cutting their earnings forecast after sales have seen a cold spell. reviving concerns about department stores cannot compete well enough, not good enough to compete, and it comes on the heels of decent numbers for macy's. walmart also declining 1.9%. it has done reasonably well during the first quarter, but of course this goes back to something we had just mentioned, kroger making interesting moves and e-commerce, buying a 5% stake in kolkata, a british online grocery, finding some fight here. julia: okodo.
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scarlet: sorry, did not get that right. joe: we are taking a look at the u.s. two-year and 10 year yields. it is steepening. i remember when everybody was handwringing about flattening. that story has faded as the long you -- long-term yield has moved up . two year is down a little bit. julia: upbeat u.s. economic data helping the broader dollar index rising against all of its g10 counterparts. breaking it down. we've talked about this already, what is going on as far as nafta negotiations. both the canadian dollar and -- in the mexican foreign affairs minister saying that there is no date for reaching a nafta deal right now, but as you can see we have broader weakness. sterling is also under pressure. it rises after we saw a
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telegraph article, i believe today, suggesting that the eu, or the u.k. will to the eu they want to stay beyond 2021, so that will see those rise. strength in sterling. quick check on the daily return basis, what we saw as far as em currencies, tied to the higher dollar and higher yields. currencies,, the em they are under pressure in the session today. joe: finally come on commodities, oil and gold. west texas intermediate come up very modestly. basically doing nothing. gold doing nothing. but we hit a milestone in europe. taking a look at a five-year chart, we broke the $80 a barrel, maybe meaningless, but a nice round number before closing a little bit below that. those are the market minutes. julia: breaking news, the senate has just confirmed gina haspel
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as cia director, after opposition from her involvement in the w bush era interrogation. rand paul, jeff flake, siding with most democrats and voting against this decision. we also had several democrats, including warner and the donnelly, and heidi heitkamp, all supporting the nomination. she has been confirmed in the senate now. scarlet: for more on market action, we will bring in jim paulsen from leuthold weeden. as we look at big caps struggle to make headway, one step forward, two steps back or vice versa, small caps continue to go higher. russell 2000 at a fresh record high. doesn't have anything to do with rising yields? are rising yields dissuading people, pushing them to small caps? jim: my take is that many people attribute it to the dollar
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strength, but it was happening before the dollar got strong. i think that small caps do well particularly around full employment with rising inflation. i think that they track commodity prices fairly closely. the reason i believe that, is disinflation, high and intense topline pricing competition tends to her the smaller companies. larger companies have wider profit margins and they tend to be able to deal with topline compression much more effectively. small companies do not have much room to deal with that. but if you get into inflation with the top line goes up, there are much more operating leverage from the smaller cap companies and they tend to outperform. i think the small caps, the last time they did really well was in the merging market era when commodity prices were going up in the last recovery. they have not done as well in this recovery, but as we see the commodity prices revive, we see the small caps begin to
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outperform. joe: that is interesting, because one of the themes through the first half of earnings season, a lot of companies complaining that they had rising cost pressures, but not a ton of pricing power, particularly on the consumer facing side. the counterpoint, however, if you say empire fed yesterday, showing at least the manufacturing pricing power is building. are you saying that the q1 story will not be the q2 story and what we are seeing is pricing power is around the corner? i think pricing power is coming up, but the problem will still be margin pressure. in rising pressure, you generally have high prices going up slower than a low stage prices. so consumer price inflation is rising, but i bet the producer price inflation, commodity price inflation, even wages, will
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probably climb faster than high stage consumer prices. companies like the consumer stable stocks, for example, will be most exposed to a re-inflation. wages and labor costs go up faster. we already see those stocks that have come down the last couple years, move directly in line with the ppi inflation rates going from low levels, up over 2%. as they go over 3%, the pressure will get even worse. scarlet: i want to bring up the energy stocks. iny were the best performers the session today, 1.2% as a group. oil prices moving higher, to the surprise of some people, breaking above $80 a barrel. we spoke with rebekkah brunson earlier on, and she was talking about how the first leg of the rally was fueled by short covering. now the second phase is kicking in. how long can it last, when
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fundamentals are driving back investors into this sector? jim: i do think that these, this is a very under owned sector. they have underperformed for so long, the momentum investors have left this is sector, so there are a lot of portfolios that could come back into this sector, particularly if the momentum indicators turn up on it. price momentum, as you mentioned also, earnings momentum turning as well. as earnings come up, valuations look better as well, so i think that we will see continued outperformance here. maybe in the balance of this recovery. because i think inflationary concerns will remain. we are at a 3.9% and implement rate, so any growth will push people toward commodity like stocks overall. the real kicker that i think is interesting as of late, is how well oil prices and commodity prices in general, continue to
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do in the face of a pretty aggressive rise in the dollar. so if the dollar breaks again and goes back to lows, we could see a big jump in oil and other commodities here just on the dollar weakness, if it happens again. joe: what about tech? that is the other huge question of whether after two years of incredible tech outperformance, they have done well, so can they continue that? jim: that is a really good question. i am on the fence on that myself. i do not think i would stay involved with the most popular stocks. inhink if you have been them, pat yourself on the back and it take the profits, may be moved to other parts of the text spectrum. maybe down in capital a little bit timid cap -- mid cap names. i will stay with technology, at least in the market weight, because i think we are being overtaken by business spending
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led, rather than consumer spending. i think it would look for a era technology spending to be a leader in the economy, but i just think that the most popular fang stocks are over baked and overdone, and if there continues to be turbulence, or we set a new low in the market yet this year, i think that those stocks will be prime sale candidates by a lot of portfolios -- sell candidates by a a lot of portfolios. joe: no way they can keep at it. julia: thank you so much, jim paulsen chief investment strategist for leuthold weeden. the white house confirming that the president is currently meeting with the chinese vice premier, now in the oval office. it is a closed meeting, but if we see any comments after that we will bring them to you. coming up come around one goes to the redstone's. a showdown in the battle between
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cbs and the family that controls national amusement. that coming up. this is bloomberg. ♪
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mark: i am mark crumpton with first word news. i have vote of 54-45, the senate has confirmed gina haspel as the first female director of the cia, following a rocky nomination process. her role in a former program to detain and interrogate terror suspects at covert sites abroad following 9/11, came under scrutiny. john mccain opposed her nomination. he was absent from the vote. the syrian president made a surprise visit to russia to meet
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vladimir putin today at vladimir putin's summer home. a transcript of the meeting released by the kremlin promoted -- quoted assad saying that syria is making progress in fighting terrorism, "which opens the door to the political process." the two of them also discussed economic cooperation and growing investments by russian companies in syria. the european union wants of the trump administration to stop threatening tariffs on steel and aluminum. as they met in bulgaria, the european commission president said that europe wants unlimited exemption from the proposed u.s. tariff measures. >> if you would give an unlimited exemption from the tariff measures, we are willing to engage in talks with our transatlantic partner. mark: he continued, we will not negotiate at this -- with this
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hanging over our heads. it is a matter of dignity and efficiency. pope francis held an emergency summit with bishops in chile and thanked them for their willingness to do whatever it takes to recover from a cover-up scandal of sexual abuse. he held four days of meetings and prayers with that the bishops. each bishop already apologized to the victims. he added that the bishops had joined in "with the firm aim of repairing wounds." 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. julia: "what'd you miss?" today,or the redstones free to make changes at cbs.
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the second round of the battle cbseen the redstones and will take place at 5:00 p.m. this evening. joining us is our bloomberg intelligence director of north american research. great to have you with us. explain what the ruling today means in terms of control of ownership and what difference this makes to a future tie up between viacom and cbs. >> it was a win for the family for national amusements, and it temporarily blocks cbs from issuing a special dividend, which they planned to do tonight at the meeting, which would dilute the shareholders' value of the voting shares of the 17%, takingown to away their control premium. that is not going to happen, so now the question is what will happen tonight at 5:00 p.m. at the shareholders meeting at cbs. julia: what will happen? >> there is a lot of speculation it could be the end of -- and it could be the beginning of the
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board being replaced by sherry redstone -- shari redstone. the bare case is this is really increasing the odds that a merger with viacom can be pushed through. it would be pushed through without les moonves. scarlet: you say this would be the beginning of the end of les moonves, meaning they would take steps towards getting rid of him, but he could be out of cbs? >> the could be if that is what shari wants. the question is, is there anything left to salvage? given what has happened between them, it is a wonder if they could ever work together, even if both companies were comfortable, it has been such an irreparable break, you cannot see them going back together. julia: he just dragged her through the courts, she put him in place, this relationship is completely toxic now.
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not a bad payday for lesnar does, if he does get let go. >> he said he is old enough and rich enough, if he cannot get the transaction on his terms he is ready to walk. that is not with a shareholders want, they want to see other cbs remain a standalone company, under list move as -- under les, or maybe a company without national amusements as a control shareholder, maybe allowing the sale of the company. julia: you have to look at the performance of cbs under les versus viacom without him, to see why shareholders want that. joe: but the important detail, how much will he get if he is kicked out. it is a a lot of money. julia: there have been reports of $280 million. scarlet: not to mention years of perks, private jet. joe: here on the bloomberg, 65 terminated as of the end of last year without cause. >> they are the best paid
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executives anyway. scarlet: what about viacom in all of this? >>'s management team, the ceo and his team, executing on their turnaround plan. they have a very ambitious turnaround plan with a lot of work to do. the cable network has a lot to do. paramount studio has a lot to establish itself. so there is a lot going on. the very early returns are generally pretty good in investors are giving the team a decent vote of confidence. it is early, but i think that shari has seen enough to think that bob bakish can run the company. scarlet: and she is hand-picked by her to run the company. julia: what is in the best interest of shareholders? this,hari redstone out of her own personal issues, because this is what les has argued, that this is not in the interest of shareholders. >> he says that because viacom is such a challenge and there is such a long-term turnaround, and
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no assurances that it can be turned around, so standalone cbs is a much better play for his shareholders. now the question is, ok, be that as it may, if you are going to force me to emerge into companies, do it on my terms, financial terms for my shareholders, and allow me to run the combined company. because i think my management team has the greatest ability to create value longer-term. that was the last point that shari could not swallow, the inability for her to put bow back-ish -- bob bakish in management or on the board. julia: conditions that need to be met. thank you for making sense of this. scarlet: bloomberg intelligence director of north american research. coming up, david einhorn's midlife crisis, how he is set in his ways and what it means for his fund's performance. this is bloomberg. ♪
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scarlet: "what'd you miss?" david einhorn has had a rough couple years, despite his worst performance, he continues to keep his investments and tax. so far this year, his greenlight capital has handed its investors a 15% loss, bringing the total decline since the end of 2014 to 25%, one of the worst showings among his peers. we are joined by peggy collins from washington. good to have you join us again. talk to us about the specific he has notn which adopted into sticking to his old ways. peggy: he has been a very resolute in sticking by his strategies as a value investor. his long achieving stock like general motors, but he has stayed short on tech stocks like
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netflix, which has continued is a big gains. it is a universal thing that a lot of us struggle with, wendy let go and decide to adopt and change your strategy, or how long do you stick with the old traditional ways? he is sticking with his ways of where he made his name in the business, seeing great that's in 2008 --bets in 2008, but a lot of his peers are beating him in terms of returns. joe: the killer part about all of this, is he never really know in real time weather things are different this time -- whether things are different this time. you could change and in a year from now all of those stocks collapse and get down to normal prices. so this is the existential question is a lot of value investors are facing. margaret: that is right. our great story today points out that a number of investors sticking by him essentially say that david einhorn is a smart
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guy, and only really takes a change in the markets to show how smart he is once again, but other peers of his in the industry have a shifted. and people like lee ainsley and steve cohen have tried to into their -- tragedies. we have seen steve love by the tech stocks, moving into those markets, even though that is not the traditional bio investor that we think of. thesis, what is his what is his big picture view on the economy and what kind of calls has he made of late? does it generate the same kind of frenzy that it used to? margaret: he is still one of the biggest names in the hedge fund industry. when he speaks at the conferences, he is the marquee name that comes up. he made another call at the phone conference a couple weeks ago, where he was basically calling out the assured guaranty stock, saying he was short that
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company and betting against that, like he bet against allied capital in years past. basically saying, they are in a good position and the stock rebounded after taking a dive after einhorn's call. we will see how it plays out. joe: a lot of sure investors, they have very specific catalysts in mind. they say there will be a decision, or some losses that will drag through the courts. julia: tesla. joe: good example. is it read as the people shorting on valuation alone? margaret: we have seen more hedge fund managers change the way that they act toward a short over the last few years. we have seen a number of them stop shorting and use indexes and options, or essentially really be more careful about trying to call these market catalysts, which seem to be harder and harder to call, in
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part because you have other factors, a huge move of money, as well as quad trading and computers involved in the trading on day-to-day moves. scarlet: i am looking at kathy burton's story and she mentioned investors have bolted from his fund, pulling $3 billion out of the firm in the last few years, had is that compared to his peers? margaret: we have seen a lot of hedge fund managers see redemption, said he is not alone, but it is a really big hit in terms of money coming out. a number of investors we spoke with for the story said one of the reasons why was because he had gotten very big, $12 billion at one point, now down to $1.5 billion, and that could have forced him into more large-cap stocks when he really made his best called in the small cap and mid cap area. scarlet: coming up, senator john kennedy of louisiana discusses why he joined senate democrats in voting to restore net neutrality rules.
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mark: i am mark crumpton with world news. natodent trump is pushing countries to increase their defense spending. he mentioned it during an oval office meeting and a cabinet nato --with the general, who says the president's work is really having an impact on defense spending within the alliance. mr. trump has pressured nato members to increase their military budget to reach a annual benchmark of their gdp. angela merkel says it is unrealistic to offer -- affected by u.s. sanctions over iran's nuclear program. she met with other european
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union leaders in bulgaria who said they still stand by the accord. opinion that the agreement is not perfect, but we are in favor of maintaining the agreement and want to talk to iran about the listing weapons program. listing businesses that would be impacted, angela merkel i think we cannot and will not create illusions. and ebola outbreak has spread to the crossroads city of -- with a population of more than one million, marking the first time congo has encountered the lethal virus in an urban area. >> the regional spread is moderate. the true global spread -- we are in the process of revising risk --essment because of news of
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and we will have a new assessment and grading. three dozen probable and suspected cases have been reported in the congo. 23 people have died. hawaii's kilauea volcano has summit,from its shooting ash 30,000 feet into the sky after dozens of fissures opened miles to the east of the intoor and spewed lava neighborhoods. global news, 24 hours a day on air and on tictoc on twitter. powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. let's get a recap of today's market action. a mixed day in u.s. equities, major index closing lower. energy shares up, and the interest rate-sensitive sector
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has declined. small caps at a record high. handlesared kushner drama in d.c., but things are looking up in new york. the company owned by his family is said to be near and dear with brooks asset management to salvage its -- no entity has any involvement, investment in, or knowledge of this transaction. they are in no way involved. taylor broke the story. tell us that set the scene. -- set the scene. this has been -- >> it has been many years in the making. different approaches with investors before getting to this point with brookfield. ,e went around the world
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separately talked to members of royal family, before getting to this point with brookfield. nato out ofould buy the building. they haven't seen eye to eye on what they should be doing with the property. julia: it has been a bit of an all the kushner company. why has brookfield felt the need to come out here and say that qataris know nothing about the deal. clearly they have a significant stake. caleb: they own more than one quarter of the publicly traded entity. the kushner family has been in -relatedth qatar officials and individuals previously. brookfield is coming out with this statement telling us there is nothing to do with qatar julia:. and to take this.
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cool, we know jared kushner is heavily involved in the middle east. i think that establishing the jaredf an action between kushner and the kushner companies, the fact that he separated himself, and the relationship with the atari's. >> qatar is in a fraught wrongcal position, on the side of a blockade with saudi arabia, bahrain, and the uae, currently much more closely aligned with the white house than qatar is. as we have seen in the machinations around michael cohen, there are people around qatar trying to cut business deals. not necessarily this one, but in other places. julia: we have to separate that. it looks like the kushner company finally has someone who can take the 49.5% interest in the deal. what is their ongoing
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involvement? it is not completely out, even if -- >> they will separately owned the retail at the base of the building. it will be interesting to see how brookfield and kushner would result the $1.2 billion mortgage on the building, and if we are trying to see -- qatari involvement are no, the question is, what does kushner company's equities stake look like. a complex story, brilliantly clear. three republicans joined all 49 democrats to pass a bill restoring net neutrality. was one ofn kennedy the gop outliers, and spoke with kevin cirilli on capitol hill. >> there were both arguments -- good arguments on both sides. , the cable017 order
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company or internet service provider is allowed to throttle thelock or discriminate internet service provider declares it, tells the consumer, here's what i'm about to do, you can do it. the argument was made, it's an internet service provider does slows down service, offers a fast lane and you don't want to use it, all you have to do is switch internet service providers. but it is not that simple. of of americans and 22% ns have access to internet service provider that can download at 25 megabits per second and upload it three, the minimum speed the fcc recommends.
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and i just didn't think it was fair. kevin: is your party wrong? would never say my colleague is wrong on this or that. i disagree with some of them. i don't see this as a republican or democratic issue. i make a couple other points. one, i believe people should be able to write what they want to, say what they want to, download what they want to on the internet without getting permission from the cable company. i do. telephoneign up for a , the telephone company can't tell you who you can call. the telephone company can't tell you what you say when you call. i think the internet up to be the same way. we need legislation. this issue his ping-pong back and forth for six years. if a democrat becomes president, it will ping-pong again.
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all of my colleagues say we need a bill, but nobody does a thing. everyone says, i'm going to go to heaven, but not ready to take the trip. kevin: you have a bipartisan bill with senator amy -- regarding big tech companies. did you make of the testimony yesterday and of the prospects of your legislation? >> i learned a little bit from mr. wiley about what happened inside cambridge analytic. i would have liked more time to , thats the larger issue it is undeniable that certain social media platforms -- one being facebook, but it is not the only one. these platforms have the ability to influence what we believe, how we vote, what we buy, how we feel. that fact needs to be disclosed in a clear manner to consumers,
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and if they want to proceed, that is up to them. to havere there plans ceos of other tech companies testify in the coming months? >> i hope so. the privacy issue, or what i call the propaganda issue, we can all agree it is being spread on the internet. to hear from the tech industry. i don't want to regulate than half to death. -- and the regulation that we do attempt, i would like the social media companies to weigh in and say this would and wouldn't work. kevin: final question regarding china, which is dominating so much of president trump's time, especially this week with the vice premier meeting with is trump today. a tradeconcerned about war with china? what are you hearing from people in your state?
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>> there are two sub-issues. one is traded, the other is north korea. i think china completely controls north korea. i think if you turned xi jinping upside down and shook him, kim jong-un would fall out of his pocket. i believe you can't negotiate with korea without negotiating with china. in terms of the trade war, this is the bottom line. china was at one time an emerging economy. you've expected to have higher tariffs. but china is no longer an emerging economy, it has arrived . it is the second biggest economy in the world, tariffs three times higher than american s, and they still steal our intellectual property. i think the president understands the only way to win a trade war is not to fight one.
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but china has to revise its promises if we are going to have any sort of fair trade. >> i have to ask about bte. do you think that has to do with north korea? buy a zte going to telephone. i'm not in a buy one from -- not to say they are not well made, but they are controlled by the chinese government. i buy american. kevin: is president trump? president trump right or wrong? >> -- scarlet: we have breaking news crossing the bloomberg. paypal buying a swedish small business platform for $2.2 billion to expand in europe and latin america.
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the deal is the biggest ever for paypal and will help it compete with square. and began as 2010 a mobile phone gadget, expanding into software and financial services. momentum. musk's his cutting-edge transportation project. a wrench in his work. ♪
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moreet: tesla may need than $10 billion in external capital and debt refinancing by 2020, according to goldman sachs. it would be used to fund --
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we are joined by dana hall. it is not just goldman sachs. rudy's has also said it expects tesla to pay -- we know tesla burned through more than $1 billion in the first quarter. responselon musk's other than, no we don't? teslary analyst thinks needs to raise cash. he said he doesn't need to end his restructuring the company, but it depends on whether they can thread the needle in terms of getting the production model up and getting enough cars out the door. everyone thinks they need to raise money, just a matter of when and where. everyone is seeing a big delta. if they land a factory deal in .hina
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first, they've got to get the -- out the door. key thing is there's no getting around the fact that it just -- they have to spin all kinds of stories, but what is the latest we think we know? >> the reports are all over the place. they start shutting down the factory later this month for more retooling and automation, but this is sort of forecast in the -- and you have elon tweeting that they have a hackathon to figure out the bottlenecks. we won't really know what the delivery figures are until early july, but it is all about the three. on thele prospect is three working well. the question is, are the cars they are producing high quality? are customers coming back?
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othert: he has plenty of projects going on, including the , looking to solve the problems of traffic through hyperloop score big tunnels. he is expected to unveil a big announcement tonight. i think what is interesting is that the boring company is proposing to build tunnels under l.a.. elon wants to do this because it's a is building -- because spacex is building out of a port to -- regardless of how charismatic the founder is, they require a lot of stakeholder buy-in. the city of los angeles is kind of a sprawling place. they'll give a presentation, answer questions. really trying to get stakeholder buy-in from the different
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neighborhood groups about the proposed route. seem like people are into it, or is there opposition? dana: i think like any infrastructure project, it depends on where your houses along the route. often, people think that musk is now focused on la's horrific traffic, which lots of people know about. he won't do it with public funds, so the question is, when does this happen? what about the environmental review process? some are pulling for this to be fast tracked, and some say it can't be. scarlet: dana hall covering all things elon musk, including the boring company announcement tonight.
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minister --nance chance of crafting a new nafta deal. ♪
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the ongoing nafta talks have taken on a new urgency as paul ryan says he will need a deal in the next few weeks for congress to approve it this year. bill morneau spoke with amanda lang and gave her a status update. >> that me tell you, it is not just us working hard. , in the lastday few days, i've spoken to the treasury secretary of the united
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states, the mexican finance minister. we are all engaged. there are people at the table dealing with the issues we need to deal with. to make sure we keep the progress going. it is hard to know how close we are. what i can say is that with the continued focus, i remain optimistic we can get somewhere. but there's more work to be done , issues of significance. for canada, just like it would be for the united states or mexico, we need to think about how this would work in practice. -- to deals to make with problems. to make sure this field creates the investor certainty that is needed. having a deal for the long-term is what makes sense. , and areowing ahead hopeful we can get there. >> in two weeks? >> i won't give you a prediction
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because that would be making a guess but i can't say with any certainty. but i can say it is in our interest to get there, and we have seen the issues there and are working through them. it is sometimes difficult at details matter. >> can you or your counterparts on the canadian side bring pressure to bear on, for instance, your mexican counterparts, on things like cost of labor. that, to step back, there is an opportunity for things to gain. we can make this deal better, a number of places where it is working in that regard. to your direct question, we are all exerting pressure. we know that in a negotiation,
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everyone has to take a little water with their wine. but we need to get things right. things include the auto sector issues, big for all three countries. you are right, and it is in some ways challenging for mexico, but in other ways, there is real opportunity. road isthe rules of the a potential for positive outcome. >> donald trump characterized nafta as a terrible deal, awful deal. in thee a sense of that room, that the united states has to correct an imbalance? >> i can only speak about my personal interactions. i've worked with steven mnuchin, a practical guide. onis smart and focused making sure there is investor certainty in the united states. he recognizes the trade going
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back and forth. i've met with a number of governors. there is a sense of the practical advantage of nafta. i can't really say that i know exactly what is in everybody's but they seem intent to get this through. scarlet: that was canada's finance minister speaking to amanda lang. >> coming up, what you need to know for tomorrow's trading day. ♪ ♪
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scarlet: what did you miss? modest lessons for u.s. stocks. >> not dramatic. scarlet: here second-quarter earnings before the bell tomorrow. >> and i will be looking at the recount data. scarlet: that does it for what did you miss. bloomberg technology is next. ♪
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is bloomberg. we are in boston this week, showcasing the innovation, diversity, and power. we are at boston's historic fenway park. in the next hour, we sit with red sox president sam kennedy and talk about


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