Transcripts For BLOOMBERG Whatd You Miss 20170907

Motivations. He still thinks it is a bad idea to increase the debt ceiling on a shortterm, threemonth basis. Republicans were pushing for the thing the ceiling for 18 months. Pope francis is urging colombians to come together to heal the divisions caused by five decades of armed conflict. Speaking in bogota during his address to president Juan Manuel Santos today, the pope urged the country to enact just laws to address the inequality that sparked the rebellion. Fiveday visit to colombia is aimed at solidifying last years police a peace accord between the government and leftist rebels that has bitterly divided the nation the you. Addressof opioids may the drop of 20 of men from the labor force, according to a study by princeton economist alan krueger. It links prescription peoplelers and lo primeh working. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. From the taylor live from abigail live from bloomberg World Headquarters in new york, im at the get a little. Julia im scarlet fu. Joe im joe weisenthal. Abigail the dollar is low today. Joe the question is, what you miss . Scarlet with Hurricane Irma, losses could suppress 30 billion. Party showdown with president esump and republican alli could set the stage for a showdown in december. And were looking at the winners and there is with the sports media titan winners and losers with the sports media titan, leo hindery. The white house is said to be considering at least 6 people for the fed chair position. Be a raceo longer between gary cohn and current chair janet yellen, but a much broader race. Never been any indication officially that it was a twohorse race. Lots of people figure that gary cohn was the lead. It would appear his audits have dimmed since his comments in ft a few weeks ago. Other candidates include Glenn Hubbard of lumia business school, columbia business school, a former bush advisor. A mix of business and academic names. Abigail it certainly opens it up a bit, and it will be interesting to see if theres influence in the days ahead on market action. Scarlet he will continue to keep you posted on further developments in the story. Whatd you miss . South korea warning of another north korea Intercontinental Ballistic Missile launch that could happen this saturday. Resident trump addressed with korea tension President Trump addressed north korea tension emir. He kuwaiti President Trump is it inevitable . Nothing is inevitable. It would be great if something could be worked out. We have had president s for 25 years cap who have been talking, talking, talking, and the day agreement is reached, new work begins in north korea. Scarlet there with insight into these delicate negotiations and strategies is kevin rudd, president of the asia society and former australian Prime Minister. The president was asked a question on whether the United States would tolerate a nuclear but contained north korea. He would not discuss strategy for negotiations with the media, so he did not give an answer to the question. Do you think that is where we are headed . Mr. Rudd there are three scenarios as a matter of logic. The United States accepts the fact that the emergence of north korea as a nuclear power, Nuclear Weapons state, and one of the other members of the nuclear club. Washington will say that is unacceptable. I think that is the operating assumption in pyongyang and china. Number two is there is a unilateral strike by the u. S. Against north Korean Nuclear capabilities, and that certainly is a life option in washington. How live, none of us know. The chinese dont think that is faintly probable, because that would cut deep in americas core interest in preserving its relationship with south korea. ,he third is diplomacy works but it wont be the current style of diplomacy where there is not enough in it for the North Koreans are chinese to make a move. Joe what do you mean by that . Diplomacy could work, but it wouldnt be diplomacy as we think about it. What is a plausible path that would be dramatic here . Mr. Rudd well, these things have been kicked around for a the but if you keep diplomacy focused on ok, north korea, china, lets get rid of north koreas Nuclear Weapons program, and lets destroy its existing arsenal, to which the chinese turn around and say to us, or me when im in china, and say, that is terrific, kevin, what is in it for us . Diplomacy that takes into account core Chinese National interest and north korean interest as well, which is about regime survival, and about keeping north korea as a stable state on chinas boundary , but also one which is basically prochinese. Joe so is there something that the u. S. Could plausibly answer to the whats in it for us question . Mr. Rudd there is, as a matter of logic, which is, one, lets the war that has prevailed since 1953, a formal peace treaty, get rid of the armistice. 2, the u. S. Formally recognizes north korean state as a regime, never done before. Number three is a tricky one. As opposed to the North Koreans that the only way to guarantee longterm regime survival is i will have my nuclear deterrent, why not have china and the United States signed a collective agreement to provide external security guarantees under an International Treaty for the continuation of the north korean regime . There is a final thing which is trickiest, which is if you can verify the North Koreans have stopped the program and got rid of what they have got, is there a stage down overtime of the u. S. Military presence in south korea . Of this the 4 bits fairly collects piece of a jigsaw, but it depends on the level of Strategic Trust between beijing and washington, which the president is missing. Abigail which of those three scenarios you have outlined one, the u. S. Accepting that north korea could become a nuclear state, or two, the northility of going with korea or new diplomacy what scenario is most likely, and why . Mr. Rudd i answer to that, didnt i . [laughter] mr. Rudd if i was a betting man, which im not because im in politics and it never works it would be a cocktail of the probabilities of one and two. It grinds on and you end up with a de facto north korea fully armed Nuclear Weapons state, a whole battery of icbms, or they crossed the threshold so badly in building up crisis if they launched icbms to fall either do you escalate into a crisis where unilateral military action is indeed contemplated . My third option right now is the underdog, but if you finally got your crisis, i wonder whether that could suddenly come to the surface. Scarlet china seems other disengaged with this north Korean Missile crisis. Oddly does engaged with this north Korean Missile crisis. What do you think is happening behind the scenes that we dont know about . To beijinghen i go with my chinese friends, apart from the obvious question what is in it for us, if you drill into it, the chinese deep analyses of the north korean Nuclear Weapons program is, yeah , it is really unhelpful, but on balance it is a big problem for america, not much of one for us. Scarlet it is their problem. Mr. Rudd it is a problem for american allies, not so much for us. Secondly, we do what you americans want to effectively destabilize the north korean regime by cutting off their oil supplies theres a change of regime in the north, you are asking us as north koreas neighbor to buy into all of the uncertainties that will flow. What is the next regime look like . Will it be proamerican, prochinese . Take a back to the core question of their abiding National Security interests. Joe lets talk about scenario one, where the north korean regime has full nuclear capabilities, and it becomes a thing that happens. Under the old, mutually assured , this uneasy stability that nobody wanted to attack because that would be the end of everyone, with the same logic applied to north korea . Scarlet quick question. Mr. Rudd that is a great question. One of the reasons why washington is not prepared to accept scenario one as ive discovered is the north prince have never articulated anything approximate a formal nuclear doctrine. We have seen pictures like on your screen at the moment hey, look at that, bang is it to be used, the Nuclear Weapons capability, as purely a deterrent, exclusively for use against any oncoming attack, or will it be used as a tool of Foreign Policy to leverage more cooperation from allies in the region . Could it be part of nuclear war fighting capability . Our friends in the administration in washington are skeptical of scenario one what the hell would we be buying into . It is not iran, it is not israel, it is not pakistan. None of those countries have acquired icbm range. This is the first one that would have icbm range right across the pacific to the United States with a Hydrogen Bomb or regular nuclear bomb attached. Abigail great insights. Kevin rudd, thank you so much. Asia Society President and former Prime Minister of australia. Florida bears for a hurricane hit from irma. We will have the latest. From new york, this is bloomberg. Abigail Hurricane Irma on a collision course with miami after battering puerto rico and devastating a chain of small caribbean islands. Mason, thanks so much for taking the time to join us. You are there in miami. When his estimated that when is estimated that irma is likely to hit, and what are you seeing their . I hear theres mandatory evacuation and im assuming that versus stores, people are leaving, or are some people defined the Evacuation Order . Nathan today started off a little calm. Our office is in the financial district. They announced it is part of the expanded it activation zone. On the street,lm almost like the feel of a holiday. It is clear that a lot of people have gotten out of the city. Im near the port of miami, where a big cruiseship just came in. A lot of people, it looks like him are staying on the ship. People are talking about how to get out of the city commend those who are staying are talking about what to do, how to stay safe, because it looks like sunday morning is when people are expecting the storm to hit. Joe that is exactly what i was about to ask you. The people who are staying in miami, what are you seeing people mostly due to prepare this . Nathan people are stocking up on food and water, just the basics that people who have houses are boarding things up. It has been hard to find bottled water, so people are definitely trying to make sure that they have everything that they need. Or a couple of days, at least when you look at the prediction and see the size of the storm and the wind speed, it is definitely a little sobering, and there is a nervousness in the air here. Crooks, thankn you so much for joining us by phone from miami. Stay safe, although the present storm will not hit until the weekend. We head down to texas to look at how the 7. 4 billion relief fund for that city for houston, i should say will make a difference on the ground. Jason kelly is live in houston with more. Hi, scarlet. Im here with one of the big Business Leaders here in houston, the chairman of Tudor Pickering holt. Playtest inside houston right now take us inside houston from the ceos perspective, a longtime business and dealmaker. What is on the ground . Houston has a great tradition of Business Leadership in corporate philanthropy, and that is being put to the test right now. The leaders of the committees are first of all concerned about people. The amount of displacement and distress is very, very high, particularly if you are ha Large Energy Company were a lot of people live in the area. You are likely to have hundreds and hundreds if not thousands of employees badly affected by this. First and foremost, people are taking care of their employees. Secondly, they are being very philanthropic in terms of relief to the butter houston community. To broader houston community. Houstonf to the broader community. J. J. Watt had a very successful foundation. United way of houston is an Important Social Services provider and arm of corporate for the become also has played a big role here. Corporate philanthropy also has played a big role. Were pulling together as houston tends to do. In many ways it is a heartening thing and speaks to what is great about houston. There is a lot of people to take care of and a lot of distress. Jason you mentioned the energy core door. You were a banker at goldman for many years. What is the sense of how this affects business in the shortterm, midterm, it is just getting back to work, but also is their consolidation . It is hard not to effective in the short term, because people actually displays. Professionalsf bp are working from home right now. Conical phillips has not even reopened offices yet. Delay, if you will, and it is not business as usual just yet. People are eager to get back to work and are hustling to do that, but when 10 of all the homes in the region have been damaged, the first thing you worry that is taking care of your people, and if that means you do less business, then you do this business. ,ason what is even prestorm the oil and brought energy market, little bit of volatility, to say the least. This is affected and how would you characterize the state of companies dealing with each other . Willwould not say it affect it that much. The industry has settled into a new 50 world with cost structures adjusted to make money in and around 50 wti. That is where or prices are today. The overall outlook for the business and attitude of the ceos hasnt changed all that much, and i would not expect it to. People are building colonies to companies to be successful at a lower price. It makes you think about the need to be larger and to have critical mass. We will see how that plays out. You helped run the advisory business. Tell us briefly about the state of m a more broadly, looking beyond energy. Has been a reasonably good year globally in m a. Total numbers are down a little bit. What is interesting is that big deals are down a lot and small deals are flat to up a bit. We have not seen as many big lock buster big blockbuster deals, crossborder or in the u. S. People are waiting on tax reform, waiting on a little more clarity around antitrust, etc. , and once people get comfortable with that, you will see more action. But it certainly is not an unhealthy market. We have had plenty to do at our firm and we expect that to continue to be the case. Jason bobby tudor, man of many hats, chairman of the board of trustees at rice, you will be busy in a lot of ways coming up in the city recovery. Well, thank you. Thank for having me. It is a busy time, but a time to make a difference. Jason scarlet, i will send it back to you in new york. Scarlet thanks so much, jason kelly and bobby tutor. Coming up, we have a look at stocks iimapcted by the incoming Hurricane Irma. It is scheduled to start miami sunday morning and move up the coast by monday, according to current projections come into the carolinas. From new york, this is bloomberg. Abigail it is time for the Bloomberg Business flash. Disneys bob iger says that this years earnings will be in line with last year. The company has been under pressure. Iger says the parks business has been having trouble, and that mergers and acquisitions are likely to continue. Targeted forp is 2019. Shares of go pro are searching today, with margins of the high end of the company forecast. Is in the midst of a turnaround plan that includes cost cuts and outdated product line. It is trying to make its cameras easier to use. That is your Bloomberg Business flash. Scarlet time for the stock of the hour, xl group, entering a bear market. Marke has has more. Oliver the most effective way to talk about it is through the business, the hardest hit countries, the hardest hit company at least as the market is interpreting it right now with Hurricane Irma in florida. It seems that with a history of hurricanes in the region, the reinsurers are the ones going to be guarding the brunt. This is a company that is having a rough month for a lot of different days and reasons beyond just this. We are officially in a bear market for xl group. Stock is over 20 , including todays drop. This brings up a question for todays investors, how are they going to absorb the pain that could come . This is not going to be as disastrous as the expectations, but you have got to be realistic. The losses may rival katrina. Joe when one of these big interest takes a big hit, what happens next . They have to recapitalize and that dilutes the Shareholder Base and so forth . Oliver that is generally the process. How they can stem the money flows out. Is and concern about the ability to do that, as far as wall street is concerned. But there are concerns about what it means longerterm. This is a pretty interesting point. If you are looking to shore up your finances, one way to do that might be to figure out where your cash flow is going and reverse it. When im looking at here are five acts for xl group. The white line shows the dollar amount, 800 million in the past 12 months. This is not on the scale of a big app abigail very few companies are. Thisr if you look at access, the percent of market cap, it is a. 5 . There is room to figure out where to get the cash from. If you are an investor, you never want to know that the company is slowing down. Scarlet advice from Oliver Renick to the xl treasury department. The market closes next. We have a mixed trading day in equities with the dow down 29 points and the s p basically unchanged. Abigail u. S. Stocks paring losses. Doolittle. Fu. Let im scarlet joe if youre tuning in live on twitter, we welcome you to our bell coverage. Scarlet u. S. Stocks ending the day little changed. 3 were up by as much as and down by. 3 and settled in going anywhere. Joe tons of news but nothing u. S. Equity. Abigail but we had big movers here. To look at is hardware,oration soaring on the day, a twoday chart showing the stock is up 44 . By 39 , salesings by 2 . The expectations have been low. Demonstrated by the fact that the this should be a short squeeze. 57 bear Short Interest on this stock so that probably accounts for why that much, prettyo amazing short squeeze there demonstrated by that chart. Moversook at a few other on the day. First up, we are looking at go pro, up 12 . Are higher, that stock is higher on a preannouncement of sorts. Are expecting revenue and Gross Margins to be at the high also saying theyll on a gas basis. Dayey having its worst since january 2016, down four after bob iger said 2017 earnings will be in line with 2016 with the stock down. Its clear investors wanted more affectingane irma is many segments of the market. Airways down 3 , battered, not just from the fact canceling flights or flights could be canceled, but its expected that we could have the issue of less travelers these winter season to regions and x. L. Capital, oliver downined why that stock is 5 . Joe lots going on macro, particularly in the government world, starting with europe. Across the board, big declines in european Government Bond yields. German 10year yield down. 04. Down in spain down 1. 63. , italy, the story, the e. C. B. Decision. Urgency of change in policy, perhaps markets were expecting more from sundhage light at terms of a the end of the tunnel. Not much news there and you saw it in rates markets all around world, including in the u. S. Which reacted to mario draghi, it at the twoyear and 10year, 2. 05 on the u. S. 10year. Funny, were back at november 9 levels. Saying november 9 levels because that day was so extraordinary. Levels in a lowest long time. Moves there. Scarlet im going to pick up where you left off which is what the European Central bank, draghi attempted euro. K down the a lot of people say the euros the dollar was because of a weak jobless claims print. Perhaps algorithms cant distinguish between trend changes and onetime distortions. Versus othere euro currencies, the euro is climbing. The dollar is sinking versus the loonie. Dollar at a fresh twoyear high after the bank of canadas second straight rate by 25 points yesterday. Bank of canada leaving the door hike but doingr so would boost the loonie further and hurt exporters. Canadas jobs report is due out tomorrow. Joe and finally, lets take a at commodities. Not much going on in oil. Ald getting a little bit of bid which fits with doing the same thing treasuries are doing. Up 1 . Gasoline futures falling, of course. Gasolineeen talk about shortages which we saw in places in texas postharvey, now in florida as many drive north. Nonetheless, not a lot of action in prices. Orange juice futures back up, lots of whipsaw action there the possible Florida Strike from Hurricane Irma. Concentrated orange juice prices up nearly 4 . Scarlet sounds like the duke brothers. What did you miss . President trump coming to a shortterm fix for the u. S. Debt ceiling and European Central bank soft currency remarks leaving investors with a little about. S to worry is based in london but joins us in new york. Larry, lets talk about the bank. An central how hard did mario draghi really the euro . K down he know he can be more forceful in rhetoric. Signaled serious concern about the euro. Lighter touch. Larry its hard to talk down fundamentals are improving. He stated the e. C. B. Upgraded their forecast for this years growth, obviously euro supportive and at the same time hes trying to tight rope between not announcing or taperingition tapering decision running ahead the governing council. Sizable moveee a in the long term rate markets across europe italy, portugal, france, spain among the biggest bond movers. Interesting that the euro strengthened, he wasnt able to talk it down. But we saw the long end of the curve making substantial moves. Larry they upgraded the growth euro supportive, euro appreciates. That means the e. C. B. Is more to delay Monetary Policy is bullish forh bonds. There could be a problem for the e. C. B. Insofar as that mix of lower yields, stronger growth, to reperpetuate itself and theyre in a circular dilemma for today it seems the market is saying growth will be stronger which is good for the and inflation lower, looser for longer, yields lower. Dismissed the idea that europe is stuck in low and indicated markets need to be patient. How credible is that . Larry it doesnt resonate in days. S these weve heard similar messages from the bank of japan for years economy is clearly past the point of full employment inflation. Weve seen similar messages unconvincing the United States unemployment at low levels and no sign of wage or price acceleration so the idea that phillips curve is alive is not a finding a willing audience amongst market participants. Or looking globally domestically, part of the story here in the u. S at the the year, like, this is the year well finally see inflation and higher rates. Sounds like people have given up on the whole thing and you rates market but it seems like as you say, people are accepting that japan is everywhere now. Larry in a sense they are and as far as u. S. Rates are concerned, weve come full day. E to election one of the reasons is is that people began to fade the trump fiscal stimulus story when repeal and replace couldnt be passed through congress which will give them the fiscal ammunition to cut taxes and spend money on infrastructure. Then inflation proved to be disappointing which pushed out fed tightening. The probable replacement of as fed chairwoman effect becausean it appears the market is saying yellen will move forward with adjustment to perhaps tie the hands of her successor but in doing so it means that rate hikes are a reason to be bond bullish. With aactors coinciding market that expected yields to go higher and now coming down to yields we see tonight. Theres very little evidence in globalonomic data or the equity markets that whats driving yields lower is worries about growth. The story for today. Abigail with all the 2009, ittions since almost feels the central bankers are playing ping pong tossing to other, some are saying there are distortions in Financial Markets and there are charts that may suggest this is a distortion. Its a longer term chart. Were looking nat white is the Bloomberg Barclays high high yield, European Index and in blue, the stock 600 which is yielding more than the junk bond index extraordinary, we see that difference coming down when investors were paying up, much for to be paid so the junk bonds. How sustainable is that . It generally isnt sustainable. You wouldnt expect this to be the case. You would expect dividend yields to be higher but distortions are definitely there. Driving them are factors you talked about, including the idea of looser for longer which who wouldestors normally buy Government Bonds into high yields, compressing those yields in the way you said. I think the only anomaly in todays price action and recent action is in a world where you have better growth from china, United States and and elsewhere, no inflation and willing to bewill easy, its apparent bond yields should be lower. What isnt easy to explain is why equity markets arent doing they already have. Scarlet larry hathaway, stick us, head of gam investment solutions. Becausemore coming up the white house is considering at least a half dozen candidates the next head of the central bank. From new york, this is bloomberg. Scarlet we are looking at stocks finishing little changed on the day. We want to keep in mind that there are many headlines during the day. A News Conference from president who spoke about north korea. Didnt talk about the domestic policy situation and breaking well, that the white house is looking for the next Federal Reserve chair with at a dozen candidates under consideration. Lawrencek with hathaway, greg torres of Bloomberg News who helped break that story. Craig, what can you tell us about what weve learned with to the contest for the fed chief . Craig its not only gary and janet but also a couple of other people. That arent expected, for example, i find it that richard davis, u. S. Bancorp chairmans on the list. Think thats a very interesting choice. Its a big bank. Assets. And billions in dean ofenn hubbard, columbia business school, interesting choice. Solid economist. There, Lawrence Lindsey and a couple of others. Clear, cohn isbe not out of the running but one of the candidates. Scarlet and perhaps hes not front runner because of comments to the financial times. It matter more who will be fed chief now that we is departing . Er larry i think it matters more not janetppose its yellen chosen, with fisher macroeconomics core of the fed is hollowed out, depending on who they choose. Taylor and hubbard are respected economists with experience in government who can fill those shoes. Other candidates come from other areas so there pdgee seen to be a vacuum in particularily in the board of governors. Range of names that have been identified. Where are these names coming from . Who in the white house is sifting down the final candidate craig im not going to mention sources but i would say the itssity is intentional, something that the crew looking for these people is focused on. The twothink about picks in hand, Randy Quarles and marvin goodfriend, there are differences between those two. Diversity is a goal and that means you need strong becauseip at the top eventually all these diverse views have to come together and decision. Scarlet Randy Quarles has been but randy gutfreund has not. Gary we have had a highly accommodative fed over the last decade. If someone new was to come in, to what degree could the entire fed who doesnt understand the mechanisms, to what degree could that disrupt the markets and how much concern could that be for investors . Craig investors could be concerned with the process of learning on the job. In andct someone to in be decisive in terms of leadership but also understand the mechanisms in place and place for the process the issues with the Balance Sheet so you want somebody able to lead and work within a committee setting. Fore were all prerequisites any fed chairman at any time but particularly in these circumstances which are fraught with risk, particularly macroeconomic. Joe larry, im interested in you said during the last blog when you talked about janet yellen tying the hands of successor by beginning the during her watch. Why would that approach make sense . Larry no fed chair person could tie the hands of their successor but they can put things in place that might raise of changesterms going forward, deviations from the strategy. Jackson hole speech where she emphasized the continuity of the Financial Regulation taking place. But its abe changed higher bar to do that because someone with the authority and of janet yellen endorsed it. True in theld be shrinking of the size of the feds Balance Sheet. If that process starts, its more difficult for a successor it oncee it, to reverse the process is underway. Tying the hands might be an overstatement but youre downinly setting preconditions that will future actions going forward. Scarlet thank you so much to , and larrys gamaway, head of investments, chief economist based in zurich. Come back again. Up, reaching across the aisle. The white house finding ways to work with congressional democrats. Scarlet President Trump forming unlikely alliances with democrats, after cutting a short term debt ceiling deal yesterday with Top Democrats Chuck Schumer pelosi, theyre exploring another bipartisan agreement to do away with the altogether. Here with how republicans are unlikely move is schenker. Marty joe some extraordinary stuff happening over the last 24, 36 hours. Perhaps the thing that blows my mind the most is how a lot of core conservatives seem to be reacting with glee at the and mitchyan mcconnell have been utterly humiliated by President Trump in this. It is extraordinary but the Freedom Caucus and that side of the Republican Party has felt disenfranchised from the process, because, as we had those members of the caucus in our offices in washington, d. C. , they complained about not having a plan from their leadership so deal with the democrats is a potential problem for them if outrun by a deal between moderate republicans and democrats. To reassert themselves and the best way to ryan. Is to go after paul abigail after the seemingly that President Trump made with the democrats to get this deal done, is there any possibility hes a trojan horse democrats . R the marty this is this theme that was raised during the campaign that hes not really a republican, hes a democrat in disguise. 36 hours of sort of deal making with schumer and pelosi him a democrat. Give himoes do is positive results and the last 36 hours have, shall we say, been very president ial for this president. Give him positive gotten tremendous feedk from the press which is something he loves. Engender more attempts to reach across the aisle . Its possible. Loves press and making deals and as we mentioned, were getting more withls on his meeting congressional leaders on Chuck Schumer suggesting structural changes in the debt limit. Do you think thats likely . They its not likely and leadership of the Republican Party is dead set against it. Was totallyl ryan against it. Marty and the more conservative wing of the party is against it so its not likely but its intriguing. There are moderate republicans who think its a good idea. Go anywhere . Probably not when they have so much else to do. Scarlet do you think President Trump thinks its a good idea . Marty he said so. Scarlet but he also wants to a deal and get legislative wins. Marty i think he has higher priorities than eliminating the annual debt ceiling. Threemonth extension on the debt ceiling is not the only sign of a democratic trump lovefest going on, with the tweet today where he told people not told be affected worry which was retweeted by pelosi. What i would be wondering if i ryan, how do i reinsert myself into this situation to make sure at the big december agreement, where they have to keep the government they debt ceiling, that dont get completely rolled. Marty this is where tonights dinner between donald trump and paul ryan which is happening ifomes very interesting and im paul ryan, i want to ask that question, how do we get to same page. If donald trump says you do what i ask you to do and get results aisle,going across the it makes an uneasy relationship even that more difficult for ryan so will it be detente, trumpl it be donald giving paul ryan marching orders is the question. To bring weather into this with Hurricane Harvey and Hurricane Irma. Since the two, it seems theres more friendly tone struck between President Trump and certainly the democrats and now deal passed by congress. Do you think that has played a role at all . A coincidence. Marty no question its played a trump gived chief of staff kelly credit for this. He helped orchestrate Donald Trumps response to the hurricane and has gotten pretty good reviews for the way he reacted to this and that abovethefray attitude donald trump is taking. Joe is there anyone who could lead the House Republicans and lead them in a way that the rank and file would be happy with . Not. absolutely the thing about paul ryan in a leadership role, if you remember, he didnt want, he was reluctant and was drafted into in who would want that job this circumstance. Abouteres no real buzz any alternative to paul ryan and even people who are not happy dont offer alternatives and they dont want the job themselves. Going to be extraordinary in the next three months. We thought september would be the restng and boring of the year. Thats been shoved to december. The should be fascinating. Marty schenker, thank you very much for joining us. Next, well be speaking to the c. E. O. Of lending tree on the state of thin tech. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Mark im mark crumpton. Hurricane irma is on a collision course with miami and it could storm inst expensive u. S. History. Forecasters say the chances for florida someon time sunday continue to increase. Mandatory to evacuations in downtown miami beach. Mi irmas 189 mileperhour winds dev puerto and of and devastated a chain small islands. The u. S. Passed the aid bill for harvey, nearly twice as much as President Trump requested, including raising the three monthsfor under a deal democrats made with the president. Bill moves on to the house. The president says north korea behaving badly and it. As to stop speaking at a new conference, President Trump was asked if war is inevitable. A President Trump military action an option. Is it inevitable . Nothings inevitable. Somethinge great if could be worked out. We would have to look at all of the details, all of the facts had president s talking and talking and the day after an new work is reached, begins in north korea. Trump said het does not want to go the military route but if he does, it would day for north korea. Pope francis is urging young colombians to take in promoting forgiveness after half a century conflict, saying they should enact just laws to resolve the structural causes of poverty and inequality to overcome conflicts that have apart the nation for decades. Global news 24 hours a day powered by more than 2700 analysts, imd mark crumpton. This is bloomberg. Today, goldmanr sachs hosted its seventh annual Financial Technology conference in new york. What is the latest state of call it, as we often and where is the industry heading . One of the speakers at that doug lebda, with lending tree. He joins us now. Joe doug, thank you very much for joining us. What are the big themes at the conference . Are people excited about . Doug the interesting thing about where fintech is evolving, of movinge early days tree, 2 oflending mortgage originations. Lenders coming lendersing on, whether marketplace platforms like prosper and club. G you have online mortgage lenders and more lenders coming online and Technology Companies enabling technology and making it possible for lenders to then you have market places like lending tree, and we soe been around 20 years were the largest Comparison Shopping site. Thats just starting to happen. Stock over the last five years up more than 1400 percent as Interest Rates go lower so your industry has benefited. What happens if the fed somehow loses control and rates shoot higher . How does that affect you and the industry . Doug the neat thing about our indexed is we are not to Interest Rates. Were indexed to the overall growth in the market so lenders need us more when in the same way that Hotel Companies need marketplaces when the as high so we have been able to buck the mortgage industry trend the past four years and grow mortgage 30 year over year as industry originations decline. Scarlet if youre leveraged towards the lending cycle . Doug more towards the penetration of online. Scarlet where do you think we are in the credit cycle . Have quite a bit at stake, even if your leveraged to the growth of the industry think we where do you are in the credit cycle and what does that say about peoples morengness to take out loans . Doug we are indifferent about the credit cycle. A year and a half ago in the personal loan marketplace, lenders pull back and we grew through it because weve got scarlet no interruption . All no interruption at because we both have a monetization advantage on the lenderred, we have a marketing challenge so as lenders pulled marketing costs grew and profits grew through it. Joe one of the themes in the is that a handful of Companies Like facebook, amazon, grow sore going to large that they dominate every industry in the world with profits and noly one else can compete and people talk about from time to time, though theyve been less active, getting more involved in online fintech, becoming banks. Does that concern you . Theres a risk that amazon could a loan marketplace and become a major player there . Doug the neat thing about our space, similar to search, we have a monetization advantage with over 500 lenders, all the loan types, working us for over years. Weve beaten microsoft at this once when they tried to create a marketplace and weve beaten back froogle twice. Our brand has been around and is known by over 70 of the u. S. And were not depending on any one marketing channel. Search and of tv, every other type of advertising. Abigail i come from a stock background. Over this tremendous Stock Performance you have but high bearee a shortage, 18 . What dont the bears like about itr story and how does compare to the Short Interest six months, a year ago . Doug Short Interest has gone down as a percentage dramatically. It effectively happened as we proved out the business model. Weve grown despite mortgage andinations going down personal lending cycle. More lenders benefit the platform. A convert a while back putting Short Interest on the stock. Proven themve wrong. Abigail you expect it to go Single Digits . Doug i hope so. Convert a short as much as sell a long. I really dont care. Joe theres always the question about wall street and fintech, build versus buy. Legacy institutions innovate and build. How do you see that . Doug the answer is absolutely yes. Weve seen a major lender shift from startups, whether the lending clubs, the prospers and loan depot and quicken loans who joined early. Youre seeing chase, citi, wells, getting into the mix and new technologies enable them to be more efficient changing the because wer business have more lender command and market again. Can scarlet doug lebda, founder and c. E. O. Of lending tree. Breaking news. Equifax says there was a Cyber Security incident that potentially impacts about 143 million u. S. Consumers. The information accessed primarily includes names, Social Security numbers, birth dates, instances,nd in some drivers license numbers. It just seems to me that 143 a small number given how many are affected by and the stock off by afterhours trade. Abigail hurricane jose is a category three hurricane, according to the National Hurricane center. These hurricanes dont seem to stop. Harvey, irma, jose and katia, i behind that. From new york, this is bloomberg. Scarlet what did you miss . The 2017 nfl season kicks off tonight with the new England Patriots hosting the kansas city chiefs. Backdrop is that tv viewership for the nfl was down last season. Of thatto consider all as everyone in media gets ready for the new season. That andiscuss all of the wider world of sports business is leo hindery, partner of intermedia partners. Thanks for joining us. To anything else, we had the ratings decline in the nfl season last year. Oneoffgree it was a with the election that people, weak matchups and Colin Kaepernick taking a knee turned off people . That gives too much credit to mr. Trump. Ground swells underway that are concerning. About a decade ago, the balance sports the value of programming as viewed by the consumers, the viewers, began to fall out of sync with the price of that programming. I have been around the cable whole career and for 25 years we had one sports in everynd now metropolitan area of the United States, weve exposed our 35 to 40 involuntarily each month for and at the same time a youth generation coming withhorter Attention Spans different devices. They dont sit on couches and programming. F ae nfl has an advantage with 16game season but the longer products, 162 baseball games, 82 , and you findes these on different sources of programming, there are problems. Young person i think looks at nfl as being manyommercialized, too advertisements, too little relative action. Watch an nfl game tonight, starting at 8 00. 11 30. Nt stay up until real issues. Joe you cite compelling issues about concerns for the sports industry. Weve already seen probably the most famous brand in sports, into severalrun road bumps over the last several quarters, yet it seems weve got news this week about record values for the houston rockets. Is there a certain level of unreality about how certain sports assets are valued . Was an absurd price to play for the rockets. Wall out concrete there and once you give viewers of a la carte or voluntary programming, only watch what you want to watch, you watch what we grew up in an industry for ate what it you served and paid what i charged but there was only one sports earlier to as i said scarlet, joe, youve got eight dominant Sports Services competing across each other and theres been little correlation decade now between viewership and the underlying whole sale cost to that programming. Take espn. Two years ago this month they 100 million households paying at 8 a month. 88 million but the cost of the programming it acquired hasnt gone down. In fact, in some cases, its gone up. So there are brick walls out there and theyll be hard when hit them. Abigail sticking with that theme, it seems were hearing a lot about a bubble in art, bubble in exotic cars, perhaps a bubble in stocks. Though perhaps would you think this as a bubble in terms of the valuation of sports and if the cable industry somehow disrupts it . Just sou think its much money flashing around . Leo i dont think so its a a trend moving adversely. Its more acute than a bubble. Take the average household here in manhattan. 40 ae spending 35 to month involuntarily just for the sports pieces. When given a choice to only watch and only pay for what they which is coming, its unavoidably coming. Its happening with espn. Be a wall out there and it will be a crash and it will show up in players salaries. It will show up in the value of certaines and theres a amount of value to a franchise buttsw many what we call seats. Alex rodriguez is making 25 million this year sitting in florida while the yankees play. Because of the value of the yes network. As this stuff begins to cut down beitself, there will implications all over this country to municipalities who arenas in stadiums to players coming up who expect to be the next lebron james in compensation. All of that will shift. Former you would know, chairman and c. E. O. Of yes network, which airs the yankees games. Nfl,we talked about the amazon will be Live Streaming nfl thursday night games, as well. Somentrance of amazon in of these online players, means live sports rights have gone up and up. Will online players do things differently . Will they change the way things are done . Theyve helped drive prices higher. Leo they have but as ive to abigail, i think its a wave coming down, scarlet. What youve got is a youre going to transition to the but youreervices taking 100 of Television Households and paring that back and men whowomen want to watch it and the economics dont match. Households two years ago, 88 million today. The underlying cost of that didnt drop extraordinarily so these are longterm deals and football is different. Football is a 16game season and will drive it has a force behind it, its impacts will be felt less the impacts of what im talking about will be felt less in the near term but it will hit its moment, as well. 3 1 2 hours to watch that game tonight. Joe one thing that sports has going for it clearly in this media environment, it is youably the only media that have to watch live and so theres nothing else that you really have to watch at the same else. S everyone you can binge watch. Thrones. Game of joe maybe game of thrones. How much is this forcing people bid no matter what even if its uneconomical prices because to not no alternative having it. Leo thats the problem of the or purveyor head. You sit there as the head of espn, you still have to put the there. Out there are seven other people trying to get the same product. Thats a highly competitive environment but you have a fragile audience suddenly. To remember that for decades, when we formed the for decades, you ate what i served and paid what i charged and theres a whole it that says, let that doesnt fit me anymore. And abigails right, the streaming services, they will have an impact. It will be an adverse impact. Theres 100 million Television Households in the u. S. And almost no mathematician alive can turn 100 x and turn it into 88 y or 30 y. Abigail leo hindery, thank you so much. Dell,ahead, michael c. E. O. Of Dell Technologies, thoughts on the evolving i. T. Landscape. From new york, this is bloomberg. Abigail one year ago today dell completed its largest acquisition of e. M. C. Created delldeal technologies, the company that and operates everything from dell v. M. Aware. Chang sat down with c. E. O. Michael dell about the future of landscape and possibilities for consolidation. Whats if you look at going on in the world, i. T. Is shifting to b. T. , business technology, where you cant actually do anything without technology. You cant sell anything. You cant buy anything. Cant make anything. Cant have customer relationships. True across organizations of all sizes and government, society. So, i actually see the you considert when the Role Technology is playing so when i golarger visit the Largest Industrial Companies or automotive companies, manufacturing, retail, theyre thinking about how they use data in a different way. Are very important. But ultimately its the data business and when you start to layer on these next generation computer science, artificial intelligence, computer learning, data is the fuel for that. Thetore more than half Mission Critical data in the world and amount of data will grow much more in the next 30 years than it has in the last 30 years. Its doubling at a faster and faster pace because of all of nodes. Onnected emily will you ever go public again . Michael were happy with our structure. Ontrolled we have two Public Companies in quiteoup and its working well. Emily we talked about m a earlier. Going to do aere lot of m a but its been fairly quiet. Why is that . Valuations . Are you not seeing anything you like . M aael weve done some inside v. M. Ware, done a little bit in dell e. M. C. Well continue to explore m a. Dell Dell Technologies capital is investing in companies into the future, working on new things. Theres also what i would call a wicked consolidation going on in the existing parts of i. T. And were using our supply chain, breadth, portfolio effect and innovation to drive that and in that core, as well. Toly would you more likely invest in hardware or services at this point when it comes to m a . Look at theyou things were investing in, its artificial intelligence, machine intelligence, next generation tocessor architectures enable new computing models, security, how do you enable the cloud native apps those kinds of things. Were pretty good at hardware, right, and were going to continue to grind away at making that more and more efficient so theiries can run infrastructure in a super efficient manner and look, weve innovation engine internally and with our partners to help make sure we continue to gain share. Look at theyou competitive landscape, who can challenge dell more than it has . Ofhael theres no shortage competitors. We happen to be doing well relative to our competitors. I think the best way for us to plot our future is really to to our customers. If were going around following thats nottors, really a great strategy. H. P. E. , is it still the rival it once was . Michael theyre not doing so these days. Thats a better question for them but were clearly gaining share and theyre clearly losing share and some of it is this portfolio effect. Innovation engine is on high. Weve passed them in servers. They inr bigger than storage. Will customers ultimately vote with their feet and their dollars and theyre voting for technologies. Abigail that was michael dell c. E. O. Of Dell Technologies with emily chang. Joe coming up, what you need to know for tomorrow. Lets start with a check of your first word news. Donald trump jr. Told Senate Judiciary staff that he didnt inform the president about the 2016 meeting Trump Campaign with a russian lawyer, according to a person with knowledge of what was said interview. Staff trump jr. Also said he went the fitness of hillary clinton. British, french and dutch are rushing aid to caribbean islands after Hurricane Irma left at least 10 dead and thousands homeless. The monster storm is tracing a course for a potentially catastrophic strike on florida. By puerto rico this morning leaving thousands without Running Water or power. Passed the aid bill for Hurricane Harvey, the askage nearly twice as much President Trump requested, including raising the debt ceiling for three months under a democrats made with the president. Three people familiar with the matter say the white house is sixidering at least candidates on the growing list of nominees to succeed fed chair after the wall street journal reported wednesday