tv Bloomberg Markets Balance of Power Bloomberg August 7, 2019 12:00pm-1:01pm EDT
welcome to "balance of power," where the world of politics meets the world of business. on the brief today, peter coy on what the markets are telling us about a possible recession. kevin cirilli on president trump's trip to el paso and dayton, and from london, emma chandra on the foreign secretary's visit to london. we are talking about the three-month versus the 10 year, which is not just flat, it is going south. what does that tell us about a possible recession? peter: since may the yield on the 10 year treasury -- it has been since may that the -- what that means is investors are simultaneously viewing the central bank rate which is the short end of the curve being relatively high and the longer yield, the 10-year being lower, which means either inflation or not much growth or some combination.
whenever you get an inversion like that, it tends to signal a recession within the next year to 18 months. this is the most in verdict it has been since 2007, which was the year the u.s. did go into what ended up being the worst recession since the great depression. nobody is predicting a severe outcome this time, but it is probably the loudest and clearest signal there is trouble ahead. we will talk about what relation that might have with the currency wars. in the meantime let's go to kevin cirilli at the white house. the president is in dayton on his way to el paso. what is the reception he is getting? andn: some residents prominent community leaders have asked the president not to attend either of these communities. that send, there has been politically divisive rhetoric that has engaged on the 2020 democratic presidential campaign trail, notably from beto
o'rourke. at aroundent, midnight, tweeting out a political attack against beto o'rourke, calling him "phony," among other things. the white house is saying today said to be a day of healing following two of the latest national mass shootings. going forward in making progress to avoid this happening -- the president said. yes on background checks, no on assault rifle bands. the unification in congress has been around a separate piece of that. the assessment you gave in the characterization is the optics and the political battle lines on capitol hill. then there is the red flag laws, which has been a rallying cry amongst republicans and democrats. lindsey graham and richard blumenthal, a fierce critic of
the administration, has reintroduced bipartisan legislation that would try to get states more grant funded access to flagging individuals who suffer from mental illness for being able to obtain weapons. that is one of the policies that is being discussed in washington. you mentioned the assault rifle ban. that has been something republicans, particularly president trump, have suggested they're not willing to move on. david: thank you so much for the reports the white house. now let's go over to london and emma chandra. you have a foreign minister attending the meetings in washington. what is he after? emma: dominique raab currently meeting with u.s. secretary of state mike pompeo. he arrived in d.c. last night. he released a statement after that, praising the warmth of the relationship between the u.k. and the u.s. and about how much
he look forward to working with the u.s. on trade deal and commerce security issues. the last referred to a number of things regarding security, not least maritime security in the persian gulf. the former is a potential trade deal. thisthe u.k. leads europe, is something the u.k. once very much. david: president trump has said he wants it as well. what are the possible hurdles between here and there? emma: there are a number of hurdles. in that same statement, the foreign secretary says there'll be a lot of work to be done. there was appetite on both sides to get there. there are a number of people who have been critical of the u.k. position, saying we have enough leverage to enter into negotiations with the u.s. on at the time we will have left the european
union and that means a much smaller part. not necessarily good position to get a good deal. it is something the u.s. has already analyzed in february. already roadblocks in a deal trying to be negotiated between the u.s. and eu, things like lifting tariffs and regulatory requirements on u.s. agricultural products. those things will probably create barriers in any negotiation with u.k.. david: so often it comes down to agricultural products. emma chandra reporting from london. we go back to peter coy. we were talking about the possibility of a recession. at the same time we have the strait conflict that has expanded into a currency conflict with china. what is the issue that president trump has to address. your a piece on the subject. trump istalk about how not happy that the chinese yuan has weakened so that the market rate is just over seven. that is a threshold that has not
been crossed in many years. he is worried that it will make the chinese economy more competitive versus the u.s., possibly offsetting the impact of the tariffs. ironically, trump also wants china to be absorbing the impact of the tariff, rather than passing them on to consumers. in a way he is getting what he wants. he seems to be conflicted about that. that goes to the point in my article. kudlow telld larry bloomberg the u.s. consumer will not be affected by this much at all. is this part of their analysis will go down, which will lower the price of chinese goods? peter: i do not think larry kudlow is right. there been a lot of independent analysis that shows u.s. consumers have, not just consumers can also producers,
because the first round of tariffs has been aimed at producers, that they have absorbed the bulk of the care increases. this would offset that, but the irony is that to whatever degree the u.s. consumer is shielded from the tariffs, there will not be the impact on causing chinese exports to go down, which trump also wants. the only way you get a reduction in chinese exports is it consumers do feel pain and dialback. david: is not just the u.s. and china. the whole world is being affected by this. central bank after central bank cutting rates. we saw this with india, with thailand. to what extent is this a function of the slowdown globally because of trade, rather than people actually trying to affect their exchange rate? questionat is a core and is important to be focused
on because the assumption is if you are in a currency war mentality that any time a country cuts its rates, it must be trying to depreciate its currency. the main reason a country would cut its rate is for its domestic purposes, to make borrowing cheaper in that country to sustain economic growth, which is perfectly valid. it does leave the u.s. in an awkward position. if everybody else is paying rates more than the u.s., that does put upward pressure on the u.s. currency. that is what the fed does. it looks at the totality of conditions, including the external sector. it says on this, where should u.s. rates be for optimal growth without inflation. david: trump may get the ray katz it once -- -- trump may get the rate cut he wants because the fed will have no choice. many thanks to peter coy. now let's find out what is going on the markets with abigail
doolittle. abigial: it does remain risk off on this wednesday. a resumption of the selling action was on monday. an escalating trade war between the u.s. china. the s&p down all last week. the s&p 500 down, nasdaq close to recession lows. the dow had been down more than 2%, but not so long ago we have the nasdaq down just fractionally. investors trying to figure out what is next. one piece of the equation is bonds. the 10 year yield down eight basis points. over the last nine days, yields falling eight of those days, shedding 45 basis points. that is the biggest rally for rates since 2011, during the u.s. debt rating crisis. you were just speaking with peter coy about the yield curve. 2-10s take a look at the spread. , 2013, a long-term chart
2014. at one point, a 250 basis point different in the 10 year spread. at this point just 8.6 basis points, the lowest since 2007, similar to the three-month 3.4%e with the 10 year at and the 10 year close to 1.64%. yield for locking up money for a longer time. let's look at the doubt. underperforming on the day. you can see after yesterday's big rally, down just .2%. investors trying to figure out what is going on. where they seem to know what is going on, let's take a look at the biggest drag. disney having its worst day since 2017. they put up a disappointing quarter, having difficulty integrating that box acquisition . jpmorgan falling on year -- jpmorgan falling on yields. occidental petroleum is down
again on that bond offering option. investors not liking it. david: thank you so much to abigail doolittle. we'll be reporting on the markets throughout the hour because a lot is going on. coming up, what begin as a trade war is expanding into currency. we talk with the peterson institute spread burstyn. -- fred burstyn. that is next and this is bloomberg. ♪
this was after the shootings that left a combined 31 people dead. the president spoke to reporters after leaving the white house to visit el paso and dayton. >> there is no political appetite from the standpoint of the legislature, but i will bring that up. there is a great appetite, and i mean a strong appetite, for background checks and i think you can bring up background checks like we've never had before. senateearly all democrats and a growing number of republicans have voiced support for so-called red flag away that would keep guns from people who might be in danger to themselves or others. at least 14 people have been killed, and 145 others wounded in a suicide car bombing in kabul. the bomb went off at a vehicle checkpoint outside a police station in the afghan capital. the nation's health ministry says most of the victims were civilians. the taliban has claimed responsibility for the attack.
pakistan is underscoring his unhappiness with india's latest action in the disputed kashmir region. it is downgrading diplomatic ties and suspending trade. the government is taking steps that put kashmir under tighter control of the central government. india and pakistan have fought several bitter wars over the region, which is claimed by both countries. boris johnson says he will not sign of brexit to deal that includes the irish backstop. the european union says this is a redline. both sides are blaming the other for the diplomatic breakdown. britain has threatened -- britain is slated to leave the eu on october 31. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. david? david: what began as more tariffs on chinese goods quickly morphed into accusations that china is manipulating its currency's. nothing has changed president trump's mind about the need for
the fed to cut rates, tweeting in part, "our problem is not china, our problem is a federal reserve too proud to admit their mistake. we will win anyway, but it would be much easier if the fed understood that we are competing with other countries, all of whom want to do well at our expense." bergsten coming to us from washington. he is also a former white house and treasury official. thank you so much for being with us. one of the things that struck me about the presidents tweet is he seems to want to compete with the chinese on central banks, but he is accusing them of cutting their currency to hurt us. fred: he is wrong. they have not manipulate their currency. manipulation means when a country like china intervenes overtly to drive their currency down. the chinese have not done that. to the contrary, the chinese have been intervening to keep
their currency from weakening, doing what we want, keeping them less competitive. what the chinese did over the weekend was to reduce the amount they were spending to keep their currency from weakening. they let it go down a little, but that is a response to market forces, and particularly a response to trumps tariffs. it is trumps tariffs which reduce their trade surplus and weaken their economy and have pushed their currency down in the exchange market. the response, through the currency market, is to trump's own action. it is getting a reaction to his tariffs, exactly what one would expect. david: you understand the situation so well. how much more capacity does china have to use their exchange rate to put more pressure on the united states to retaliate or respond to president trump? fred: i do not think they will intervene overtly to drive their currency down.
they did that for 10 years. that stopped five or six years ago. i do not think they would do that. that would be inflammatory. they could take their hands off the rate and let it weaken further, as they did over the last few days. the result would depend on market forces. the question is how far market forces would push the chinese currency down. the market is clearly pushing it in a downward direction because the chinese economy has slowed down, because the trade war is hurting them, because they are likely to reduce their interest rate to cope with the weakening of their economy. we do not know how far it would go. if the chinese let their rates flow freely, then we find out. i do not think we will do that. the chinese are afraid their rate my fault a lot. they do not want that. that wouldraid prompt more capital flight and produce more weakening. it is a weak alliance between the chinese authorities and trump.
they will let the rate go down to react to his trade threat, but they will not let it plunged , they will not let it go down a lot. they will not weaponize it because they think that would hurt their own interests. david: until this week, the markets in the u.s. thought there would be a resolution, maybe not right away but in the not-too-distant future. now the markets seem to be concluding that might not be right. the markets have not reacted well at all. if you were advising the markets, how would you advise them in terms of will there be a resolution and how soon? fred: you're right. the markets were too optimistic for a while, and now i think they are too pessimistic. ,here is a lot of name-calling but i still think it is possible that some kind of agreement will be reached over the next few weeks or months. it would not be a definitive agreement resolving all of the real underlying trait problems,
but i think there is still a chance for a truce that would keep things from getting worse, maybe permit some of the trade restrictions to be rolled back. i would not despair. i think there's a chance for a tentative agreement and a truce, but the underlying problems will topically remain. that is going to be a long-term difficulty that the markets and everyone else will have to factor into their thinking. david: i want to turn slightly to north korea. on the one hand we had a u.n. report to the security council saying the north koreans were getting access to a lot of money, as much as $2 billion from their nuclear program, and then a report about a lawsuit that has been filed in washington to get information about three major chinese banks that allegedly are helping finance that. the chinese might see this as a trade issue. we see it as a national security issue. are the north koreans getting a paramount of financing,
including from the chinese, for their nuclear program? fred: there is a lot of evidence they are. this is an ongoing issue that has been percolating for five to 10 years. north korea is trying to evade the u.s. sanction, trying all sorts of subterfuge to get foreign exchange. there is some evidence that try to use chinese banks, and the u.s., in carrying out the sanctions, reacts strongly to that. so far, it has been on a separate track from the trade currency war. the u.s. could always link the two, ratchet is pressure against the chinese banks in partial retaliation for what china has been doing on the trade and currency front. the u.s. will say they are separate tracks. in large part they are. the chinese could interpret the other way. given the very delicate overall state of affairs, this could represent one further ratcheting up of the traded currency
conflict. david: thank you so much for being with us. fred bergsten of the peterson institution for international economics in washington. still ahead, take that, amazon. fedex is our company in the crosshairs after it announced it would no longer be working with amazon for deliveries. our stock of the hour is next and this is bloomberg. ♪
david: you're watching "balance of power." i'm david westin. fedex is taking the next step in cutting its ties with amazon and the stock has fallen to percent as a result. kailey leinz has the whole story. the ground delivery service, they are letting that contract expire about two months after the last and con tract expires. it is not a huge chunk of revenue for fedex, but amazon is their second largest customer.
bloomberg intelligence says fedex may take a hit when you look at the full your picture. why do it? of theirs it is part shift of focus on the broader e-commerce market. they are looking at expanding to seven-day service. this is just fedex sees the writing on the wall. yup amazon building its own shipping infrastructure, investing heavily in that. shifting from amazon is a customer to amazon as a competitor. y is turningrenem more into enemies than friends. we also have trade problems going on. how much of that is affecting fedex? kailey: fedex gets a third of its revenue international. the white line is world trade volumes and the arch line is fedex. fedex very exposed international trade. all this uncertainty that
overhangs the broader market in general about what is going on with the u.s. and china, how close we will get to an agreement, are they even going to come in september? and then when you have the second largest customer and a relations, it is not great for the stock. david: a bowl step. thank you so much debt -- a bold step. shotxt, gun regulation has to the top of the political agenda. we talked a former congressman about what is realistic in the wake of mass shootings in el paso and dayton. live from new york, this is bloomberg. ♪
at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity.
it is not just president trump talking about it. political leaders on both sides of the aisle talking about the possibility of gun regulation. president trump has laid out his views. this is what he said this morning. >> there is no political appetite from the standpoint of legislature. i will certainly bring that up. i will bring that up as one of the points. there is a great appetite for background checks. we can bring her up -- we can bring up background checks like we never had before. david: welcome now our panel. number pennsylvania republican congressman ryan costello. former new york congressman joe crowley. he is coming to us from washington. let me start with you congressman castillo. has the president got the politics right echo yes on -- politics right? yes on background checks, but politics are not going to make in the house. turku the third piece is red flag lows.
that can also be part of the equation along with background checks. david: put about that, joe crowley? is he right red flags are likely to make it through? crowley: the president has a history of saying one things to the cameras. his handlers get a hold of him and say, we cannot do that. we sell that on a number of issues in the past. i do not want to compare this to any other issue before the congress and -- congress in this point in time. extensive background checks would be welcomed. i would be for an assault weapons ban. the majority of democrats would be for that as well. the american people are looking for some answers. these horrific killings. we do not know the death toll yet. others may still die. the lingering effect of this events hasevent or
been overwhelming to the american people. david: congressman costello, we have seen tragically, any number of these mass shootings through various presidencies. a lot of people talking about doing something. it has not gotten done. part of the issue has perhaps been the nra. the president on one of these earlier mass shootings accused the congressman of being cowards when came to the nra. >> do not worry about the nra. half of you are so afraid of the nra. there is nothing to be afraid of. if they are not with you, we have to fight them once in a while. david: i wonder what might be different this time. may it be the nra is not as strong as it was two or three years ago. they seem to be something like in a disarray. congressman costello: when you talk about the strength of the nice asian, look left -- of the
public opinion seems to shift not only towards background checks for all gun sales but also for red flag laws. i think to joe's point, and he is correct, is the president going to see this through and take it to the finish line? if he wants to do that, you need 60 votes in the senate. we do not have 60 votes in the senate. that is the math. if the president was to lean in strongly on this, there is a way to get 60 votes in the senate especially on background checks and red flag legislation. david: how much is it the president and how much is it senator mitch mcconnell? i hear he does not want to bring it to the floor because of what it will do to members when they run for reelection. congressman crowley: there is no getting around that. he is the one person who can
block -- if he is listening to the american people, he can bring a bill or bills to the floor. red flag bills. background checks dealing with these bum stocks -- bump stocks and other accoutrements. ban.an assault weapons i don't ryan thinks it might -- it might not be possible. it has happened before. that is what the american people are looking for. much similar to what canada has today. population,e a roughly 270 deaths due to weapons in candidate. it would be the equivalent of 2700 deaths in the united states. we are -- there is something very wrong with our system. david: brian castella, i wonder to what extent the politics may get involved -- ryan castello, i wonder to what extent politics may get involved. of mr.ed to a supporter
trump yesterday. this is what he had to say about the republican party if they do not act. >> republicans lost 40 seats in the house. if the party wants to get those seats back and have a majority in the house and also to get voters in the 2020 election, the party needs to be willing to put a little distance between itself and the nra and show they are part of the solution rather than just having a deer in the headlights look when it comes to gun violence. david: does dan eberhardt have the politics right? congressman costello: i think he does. wn the house due to a reaction to trump. the issue in the suburbs, which is where the battle of the control for the house will be in the future, background checks, red flag laws, gun safety legislation is some thing most
suburban voters view favorably. especially the suburban voters who are going to decide whether they vote for a republican or democrat for a lot of these house seats. i agree with what the sentiment -- agree with the sentiment of what was said. david: as we look towards the house election, let's move beyond gun legislation. we can put up the list of people who have already announced they are going to retire. we have this issue on the republican side last time. is that going to pose a risk for republicans as they try to retake the house? congressman costello: i think there are challenges for republicans in terms of these retirements. the big challenge is going to be for democrats to maintain the 31 seats they have right now in districts president trump won. we do not know if the democratic nominee is going to be joe biden or elizabeth warren or marianne williamson. some of the candidates of the
democrats on the debate stage, some will get reelected. others will make it more competitive. there are two districts republicans are sitting in in seats hillary clinton won. 31 are democrats sitting in trump district. the is what matters going 2020. joe may have a different opinion. david: what you say? those numbers are sobering. -- what do you say? those numbers are sobering. i think ryan is congressman crowley: correct setting there are more seats that need to be offended. most of them come from overwhelmingly safe seats. there may be varying reasons for why they are retiring. most important one but they do not see the republicans winning back the house of representatives. i do think that is a telling sign. i do agree with most of what ryan said except for ms. williamson being elected
president. david: he was smiling when he said that. congressman crowley: i do think he is right we have a crowded field. until we know who the nominee is, there are folks who are on the stage who are not our strongest candidate. we will narrow it down. i think this is about the president. the last election in 2018 was about the president as well. democrats took back the house. that is what the issues are going to be. david: talk about the narrowing it down. would you as a democrat advise people on stage maybe they should run for senate instead? people talk about beto o'rourke and governor hickenlooper. where the party be better off if some of the same -- if some of the candidates said they would run for senate? congressman crowley: without having spoken to chuck schumer, i know he would prefer to see all three of those individuals run for senate in their respective states.
they would be very strong candidates. some of them are also incredibly gifted people who are contributing to the debate for president as well. i do not want to put myself in position where telling them what to do with their political future. not at this point in time. the field will narrow naturally. it is difficult for some of the cap -- some of those candidates to reach the threshold they need to make it to the next round of debates. david: i appreciate both of you being on. it former congressman ryan castello and former congressman joe crowley. good to have your insight. coming up, i'm candidates for president have laid out ambitious plans including redoing health care from the ground up. we talked to the architect of obamacare, m.i.t. professor jonathan gruber. this is bloomberg. ♪
david: this is bloomberg balance of power. the democratic candidates for power have an aggressive plan on what to do about health care in the country. a lot of people have raised questions about our we are going to pay for that. we spoke with a senior economic advisor for bernie sanders. she said we would save money if we went to medicare for all. >> what we would be projected to spend if we would to transition -- if we were to transition away from the inefficient system we have today to a more efficient system like medicare for all that we will be spending less as a society on health care and end up adding more coverage. david: we welcome now jonathan gruber.
he is in m.i.t. economics professor. he is the obama care architect. he is the author of a new book, jump starting america. welcome. you heard what the professor said that if we have medicare for all, we would save money. she right? jonathan: she is probably right. if you look at the overall cost of health care, medicare for all would cost society last then today system. it depends on things like how generous you make it today's medicare insurance is not that generous. it is not covered -- it does not cover dental. it does not cover vision. there is a big copayment when you go to the doctor's office or hospital. she is leaving aside the bigger issue, which is it would save money overall, but it would replace a hidden tax, which is what your employer pays for your health insurance with an explicit tax, which is a medicare for all tax. it is one thing to say it would
save money. it is another thing to actually pay for it. that is going to involve mary -- involve americans trusting they will get raises from their employers to offset the cost employers are paying for health insurance. david: the government would be paying all that money. the 16% of the gdp that goes to health care. the government would have to tax us. of health care spending today is private. most of that is employer. m.i.t. does not give me health insurance out of the nest of their heart. they give me health insurance and lower my wages. if medicare for all in place, my wages would go up. i would pay more taxes. i would end up slightly better off. the paying more taxes part you can run an ad on. the wages going up is hard to run an ad on. that is the problem you face, getting from here to there. david: you were there when obamacare was created.
did you think about the possibility of sinker. -- of single-payer echo -- single-payer? jonathan: not really. you have three fundamental problems. you have to pay for it. moving from a hidden tax to an open tax. the second is, people giving up insurance they like. under the affordable care act, we got an incredible amount of difficulty for causing trillion people to have to give up crappy individual insurance coverage. you're talking about 160 million people giving up employer coverage they are ok with. that is a difficult problem. you have to take on a $1 trillion private health insurance industry. we do not have a great track record politically of beating industries like that. david: talk to us. about the public option. . it feels like from the democratic presidential debate so far, the move has been, more progressives go to medicare for all. moderates say we should have obamacare but we are going to add this public option. is that someone that was
considered echo why don't we have -- consider? when we have that now? jonathan: for the public option, you have today system. everyone gets an extra choice. medicare for all who wanted. you have an extra choice, which is, in addition to your exchange plan you can choose to be on medicare. the pro of that is, as the advocates for it say, if it turns out medicare is a better deal, it will take over. if it turns out the private sector people are right, it will wither and die. it is the idea of let's run the market test. the insurance companies are afraid it will be too successful. the view it as a potential existential threat along the line of medicare for all. the providers are worried because the reason medicare is cheaper is because it pays providers less. doctors and hospitals get paid 20% less than private insurance.
they are worried if the public option gets too big, it is going to eat into their pay. for the public option, you have to thread the needle of giving people a new public choice without upsetting too much the private insurance industry in the providers. david: most people say we should have everyone with health care in the country. the question is, how you get there, how much it costs and whether it is worth it. one of the first concerns was the portion of gdp given to it. how do we bend the cost curve? has the affordable care act done anything on that front? jonathan: the affordable care act did a little. since it was passed, employers spending on health insurance has gone to the lowest rate in history. the affordable care act did not deserve all the credit for that. it differs -- it deserves a small part of the credit for it. it is in remiss challenge.
it is a -- it is an enormous challenge. it is a part of the conversation we are not having enough. we are not talking enough about what we are going to do about the fact we pay higher prices for medical services than anywhere else in the world. implicit in medicare for row is lowering those prices. we have to start asking candidates who are not medicare for all, what are we going to do about the prices? professor, one of the things people ask questions about is how we are going to pay whether it is from medicare for all were giving all -- or forgiving all students of debt. when proposals -- one of the proposals that come up, from elizabeth warren, let's have a wealth tax. would that work? jonathan: well, it is hard to know. they would be a new tax. it is hard to know if it is constitutional. would have lawsuits against it.
enforcement would be tricky. if you look at elizabeth warren's calculations which were done by smart economists, it is estimated to raise a certain mode of money. if you look at what we get from the estate tax, we raise much less than that proportionally. the trick is going to be, how well can you enforce it? how big is the loophole? money.d raise a lot of whether it would raise 70% of what elizabeth warren says or 7%, that is going to depend on the details. david: one of the questions president trump put in the front of his campaign was growth. actually grow the overall pie. you have written a book about jumpstarting america in which you have ideas about how we make it growth going. why don't you explain what those ideas are? jonathan: my co-authors simon
johnson and i have written this book to address two problems. one is the slow rate of growth. it was historically 4% a year. it is now projected to be 2% a year. what causes growth? ? causes growth is innovation. spending on research and develop. public spending on research and evolvement. private companies are increasingly focusing their r&d on their bottom line. not on the scientific breakthroughs that grow the economy. the things that lead to satellites and digital computing. that all came from public r&d. at its peak in the 1960's was 2% of our entire economy. it is now down to less than .7%. theave gone to 10th in world in spending. it needs to go up in way that is not just benefit cambridge and berkeley. our proposal in our book is to have placed r&d investments. there are technology hubs all
over this country writing from rochester to knoxville, tennessee. have locations that are ready to take the next step to compete with the cities on the coast. david: it is generous of you not just limited to cambridge and berkeley and stanford. why does that make it a better program -- if you go to pittsburgh and tucson and places like that? there is a good track record of those places doing well. jonathan: there are two arguments. the first is that the reason and mike you better is there is a norma's -- reason it might do better is there a norm -- there is a norma's untapped potential. kids growing up in the cities who do not get the resources. cities were adults are patenting kids grow up and tend to be inventors. if you want to get more resources into what we need, which is research and
developing, you have to spread it around. you have to recognize science policy is develop a policy. science policy is jobs policy. we do not need those jobs in boston and new york and washington and l.a. and san francisco and seattle. we need those jobs in upstate new york in the rust belt. in the south. david: thank you for being with us. jonathan gruber, he is in m.i.t. economics professor, architect of obamacare and author of a new book. this is bloomberg. ♪
were higher. we have recovered some. it is still decisively risk off when you look at it from a perspective. you can see the ones that are outperforming like consumer is because of an upper performance in metals and mining stocks. gold is getting a huge bid today. financials at the bottom getting beaten up today. david: when people are rushing at gold, that is not a good sign. >> definitely looking at safety. we are seeing financials under pressure. you are seeing the 10 year under seven basis points. the curves are flattening. a 210 spread at the lowest since 2007. toid: one thing seems correct itself. the bond and equity market are sending the same signal. the equities kept going up. the yield went down. the price went up -- the price went up. >> that was what we sell at the
rally yesterday. we are getting back a lot of the gains today. that is risk off. david: that summarizes it beautifully. sign up for the balance of power newsletter at bloomberg balance of power.com. get the latest on couple politics in your inbox every day. coming up, we are going to hear from the canaccord ceo. this is bloomberg. ♪ hey! i'm bill slowsky jr.,
i live on my own now! i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass.
scarlet: this is bloomberg etf iq refocus on the access, risks, and rewards offered by exchange traded funds. ♪ scarlet: going for the gold. the precious metal top $1500. investors seek refuge from the trade war. a world of easy money. in search of healthy returns. the team of business schools comes out on top with the millennial fitness index. seeking shelter for millennials who