A Malaysian Police officer testified today in a trial of two women accused of murdering the estranged brother of kim jongun. The officer says the women were seen on Airport Security video with two men were believed to him provided news to kill in february. Both women are pleading not guilty not guilty. They will have death sentences if they are convicted. This is to prevent a repeat of augusts deadly incidents when white nationalists dissented on the city. One counter protester was killed which was struck by a car. Global news 24 hours a day. Powered by more than 2,700 journalists and analysts in more than 120 countries. Crumpton, this is bloomberg. Julia live from bloomberg World Headquarters in new york, i am julia chatterly. Scarlet i am scarlet fu. Joe and i am joe weisenthal. Julia we are 30 minutes from the close. We are sneaking into the rent with s p 500 pulling back from an alltime high. Joe the question is whatd you miss . Trumps chiefdent of staff insisting he was not quitting or getting fiber. He also fired. Nextso gave news on the fed chair the focus is on the big announcement from the president. He is talking about his plans regarding the Iran Nuclear Deal tomorrow afternoon at 12 45 eastern. In washington, policymakers are taking stock of Global Recovery efforts. We will be speaking of the finance minister of south africa. Whatd you miss . John kelly made a surprise appearance. Quell rumors of his dissatisfaction with his role in the administration. It all the i read time, very consistently, i am not quitting today. [laughter] not believe and i just talked to the president i do not think i am being fired today. I am not so frustrated in this job that i am thinking of leaving. Julia here with the latest on what has been a busy day in the te house is scheduled for kapour. Dudley the first thing i will talk you about is the press briefing and what happens with john kelly. This was great entertainment. Quite a surprise to have a chief of staff come into the Briefing Room and conduct everything himself. Very unusual. There has been a flurry of reports lately. Ly was them anonymous thinking of quitting. Vanity fair had a report saying he is miserable and only there to prevent the president from doing something disastrous. He seemed to come out to reassure us and markets and the world, i guess, that he is not going to leave. Alex what did we learn n we learn aboutd we policies . Sahil the house just passed a disastrous supplemental for a recent hurricane, the wildfires territory ofthe puerto rico. That was a little unclear to me. It sounds to me like john kelly was trying to get this story out and keepes mind himself out of the rumor mill. Does notresident trump like when his aides are in the news. That has not been a positive thing for people in his circle in the past when that have happened. Maybe kelly just wanted to clear this off the plate. Scarlet the also know the president doesnt necessarily like it when his aides do well in the press, perhaps outshining him. Do you think we are at risk of seeing that he was general kelly . Alex no. I think he is in a pretty safe spot with the president. Aboute reporting has been how general kelly feels about the job, not so much thought trump is matter him as a satisfied with his performance. Whenever he has a chance that he talks about talk him up and shows how much he likes having a general leading the stuff think that is something that is important to him. The staff. I think that is something that is important to him. This is the second time in two weeks when an official came out and did a News Conference to say he is not leaving the administration. About theked to me executive order that donald trump signed on health care today. My understanding is this is expanding from the Insurance Options for certain people, but it could also undermine coverage for those that remain or those that stay the healthier people moving outside. How is this going to work, and will this be better for obamacare or worse . Sahil as far as obamacare does, this is a pretty fair undermining. To be opted for outside of the exchanges. Those options can be barebones, lowcost, and he plans that do not cover a lot. The more you allow that met the more you have Healthy People getting out of the exchanges, buying those lowcost options, which by just drives up costs for those inside the exchanges. This is making a death i wrote spirale row death down the road. How are they could remain, there may be challenges to this. They have an enormous amount of authority to make changes to laws as far as the regulatory aspects go. Secretaryare that the can appear many times in the law and he has ultimate authority. Joe another thing we talk about all the time, the fed. A couple of weeks ago there was that indication that they were going to have a decision in a couple of weeks. We all had that same thought that in two weeks, white house is not does not always mean two weeks. Something that decision is not necessarily minutes. Steve mnuchin says it will happen within the month, which is longer than the president s adjusted. Today john kelly would not set a timeline on it he did say the president plans to more interviews. We do not know if that means additional people between the fivepercent shortlist we reported or if he has an interview or he has not interviewed everyone on that list yes. Scarlet you have a chance to talk to gary cohn and ask him about taxes. Did we learn anything new . Sahil that was my colleagues who asked him about some of our reporting this morning that the president thats President Trump was unhappy when he learns about the impact on one of the major policy proposals in his tax plan, to repeal the state and local tax. We asked gary cohn about this and he suggested the president has not actually changed his plan on this. Our reporting indicates he is open to a compromise. The white house and Republican Leaders are negotiating with , likes in high tax States New York and new jersey. Republicans are uncomfortable repealing this so theyre trying to work out an accommodation. The reporting i have on this suggests they are likely to preserve it in some form without fully repealing it. The numbers are daunting. We have two dozen House Republicans here who are going, we have a real problem. This feels like the real Sticking Point in the house in order to get votes to pass this thing, surely. Sahil peter king, a new york republican representing long island, this is a big obstacle getting votes. He will not vote for a bill that repealed this because it is too important to his district and constituents. There are more than two doesnt in high tax district two dozen in high tax districts. They have to be placated. Once you placate them, you might still have problems down the road with conservative members. The House Freedom caucus votes are in a tory asleep difficult to win over and the havenots even begun to look at the bill and offer up their complaints. We have a long way to go. Think maybe we are not talking about this enough for people assume we will figure something out in the end and it will survive. Noises coming out of the latest round, not particularly encouraging. Alex they are not. I think the administration is drawing lines in the sand with canada and mexico. Saying, if you do not meet our demands we will let this thing died. The u. S. Proposed a sunset clause that nafta would go away in five years unless the three parties agreed to extend it. That sends hardcore demands that the mexican and canadian sites do not seem inclined to accept. Ahillet thank you to se kapur and alex wayne. A lot going on from john kelly to nafta to taxes. Reform,p, u. S. Tax Global Growth, and text destruction. That conversation is coming up. This is bloomberg. Scarlet at the annual meetings of the world bank, imf managing director sat down with tom keene. Tom asked her what she thought of the tax reform debate underway in the u. S. . For a few years now, we have repeatedly said that a tax reform was absolutely needed and it necessary in the United States, in particular, a Corporate Tax reform. There is no doubt in my mind and no ambiguity about that point. It is needed and necessary. We have called for it and we welcome the decision to think about a tax reform that would make taxation simpler and reduce loopholes and many deductions. That would be focused on labor class,y, help the middle progrowth. I will not pass judgment on the current draft that would be for consideration by congress. Drops go those ts go through. Lobbying efforts, it is not the end of the day. Minister as finance minister, you received every headache you can. Three days ago, some people can to your defense. Christine i do not need anybody to defend me. I can defend myself. They defended u. S. Phd economists. This ascension to me the , inction to me [no audio] what needs to be done is to look at the evidence of the data and the numbers and then to determine policies on that basis. Think, thed, to revenue, the spending, the of being agenda progrowth, of wanting to improve the situation of the middle class and the ultimately reducing excessive inequalities, if that is the case in the country. That is what needs to happen. Clearly, in those countries that have a heavy debt burden and entitlements coming to fruition that will probably increase the spending, it is necessary to take into account that mediumterm and to make sure any tax reform is revenuegenerating. What is so important here is the tone of the imf of a more optimistic world. The United Kingdom is off their aim at the battle over brexit and there are other serious issues in emerging markets. You also marked on the u. S. Because my right the imf is doubtful on successful tax reform legislation in the shortterm . Christine we have actually market of the u. S. Economy compared with our july numbers. And then we marked of a few other countries, including advanced economies. What we hope to see is implementation of the reforms manywe have called for for years, a good solid tax reform that will be simpler. Incorporates should be lower with a base that is much more solid and clear. That is what we hope to see. The sooner it goes through, the better. Scarlet they also spoke about the uneven recovery from the great recession. While we have certainly better growth and better growth forecast, 3. 6 for this year, 3. 7 for next year, it is not shared across the world. You still have about 25 of the gdp, which is in not enjoying that sort of stronger recovery. Wewe see the sun shining, are also while we are seeing the sunshiny, we also see countries and people not having the benefit of it. My message to the policymakers in the next few days will be take the Decisive Action to secure the recovery in order to make sure people actually have the benefit of it. Saw you in new york with our editor in chief. The idea of advocating forward womens rights within the world economy. One of the older ways of that challenge is technology. How is the International Monitoring funds looking at the future of technology and linking it into better quality across income and wealth . Christine it is critically. Mportant to help young people our children, grandchildren, whoever, to get acquainted and fully adjusted to what is coming. That is reasonably easy if the budget is there. They also should apply to those emergingadvanced should alsories who take ownership of those technologies. They will be destructive great they will be changing the way in which we manufacture, provide services. The way in which Financial Markets are organized as well. What we do here is try to anticipate from a Financial Stability point of view what will be the impact of those. We are seeing it. It is happening. Tom was you need from china . We have heard interview after and 34 yearst 20 to the federalism of beijing. What do you need to come out of these important political meetings in china . Christine i certainly hope they continue the reforms they have started. Rating and credit is a necessity. Informing the state on enterprises is a necessity. Reducing capacity and certain ways is a necessity. Continue fromill an economic perspective. That was at the World Bank Meeting in washington earlier today. Stick around because believe that we will be speaking to south africas finance minister. We have some breaking news. Thatberg news can confirm President Trump met yesterday with john taylor, the professor from stanford, about a potential nomination for fed chair. John kelly told reporters today all the people who have been in to interview are in first round draft choices and we have more to come. We will keep you posted on further development. The stock of helio and madison analytics has tumbled throughout the trading day. What is going on here . It was the stock of the day yesterday and today because of the incredible ride. This is bloomberg. Julia it is time for the Bloomberg Business flash, a look at some of the biggest business tories in the news now. Goldman sachs is fine capital from oak tree. Genesis may 2 . 5 billion in short time loans over the past four years. Offered rich construction and renovation loans to developers. Terms of the deal were not disclosed. Telecom company is exploring a possible sale. Parent Company Offer is seeing it flourish since last year. Xtel has a market value tesla is recalling 11,000 model x vehicles due to failed mentalisms. Some of them mechanisms. Some might not lock into place property. This is from october 28, 2016 and august of this year. There are no reports of injury from the problem. And that is your boom Bloomberg Business flash. Houret our stock of the is a rare one because it is a repeat of yesterday. But helios and madison is going in a different direction. Julie hyman is here with this story. It is an interesting story. It has been up 1000 in the past month or so and today it is plunging. Helios and matheson is the majority owner of a service in which you can pay 10 a month ago to as many movies in the theater as you want. Scarlet like netflix for the movie theater. Julie there is just one problem, the company does not make money and they are not sure they will ever make money. That was revealed in a filing, which is what the stock is down so sharply today. Its as movie past expects it will see a qualification on the audited aikmans express andements expressing doubt concern. It is respectively a shrug. Are they going to make money . We do not know. It might or it might not. That is because it has half of its Business Model in place. Joe nothing like a challenge. Julie it does. It sold the subscriptions but moving past is still playing paying full price to the theaters every time someone goes to the movies. Way they plan to make money is to convince these movie theaters to get them discounts in exchange for Market Intelligence on these folks who are going to the movies in exchange for convincing them they will spend more things like concessions because they are not spending as much on their tickets every single time. That the have not come to those agreements yet. Joe at least revenue should grow really fast. Julie right. In theory. Joe if there are giving away things that are giving out a lot of money. At least the revenue is there. Right. And they have made big projections about how many folks signed on to this thing and how many will continue to sign on to this thing. Willroblem is if they never make any money and if they will keep needing financing, obviously julia and the Cinema Companies are going awesome. We may or may not file a deal with you but you can continue to give us the money. Some meister is owns inspection service, which would cut out of the past. Hadalked about how citroen tweeted about the company, saying the stock was going to go down to 20. Today, citroen tweeted again saying they covered it already because it went to their target price. It is expensive to shorts. They already make their money back. Joe i love this story. So good. Scarlet a very profitable bet for citroen. Thank you so much. The market closes next. Take a look, we have declined across the board for the major indexes are you this is bloomberg. The dollar is stalled. Tomorrow, cpi results. I am julia chatterley. Scarlet i am scarlet fu. Joe and i am joe weisenthal. Closing bell coverage from 4 00 until 5 00 p. M. Eastern. Scarlet we begin with our market minutes. All three indices closing down. Joe red numbers on the board. Scarlet it is in keeping with what we have seen, these are modest moves. We are moving within a narrow range. I think the interesting thing is in the individual names. Since 2008. Rst day sayingmore than 6 after that they lost over 90,000 subscribers in the Third Quarter because of competition and whether related interruptions. Network is falling in sympathy. Dish network is the other Satellite Program provider. Citigroup declining as well. Earnings have fallen in the by more than 3 . Helios and matheson analytics. This is a movie this is a company that sells movie pass subscriptions. That thisarning service may not make it. It is down 38 after yesterday lying by 17 or 18 rallying actually by 18 . Joe let us take a look at governmentmarket bond markets. Yields are a bit lower across the board. It makes sense with the slightly risk off flavor to todays trading. Not dramatic but interesting. 10 year yield added 2. 3 in the immediate wake of the job reports last friday. Wetrading. Not dramatic but interesting. Get cpi tomorrow. We will see if that moves the needle. Cpia retail sales and numbers already mentioned. Looking at sterling. Weaker early on in the session. Roundl see the fifth session of brexit negotiations ending today. In the swedish cpi coming less than expected which accounts for the selloff you can see their regarding the selloff of the euro. There is some profit taking going on as well. I have a chart i want to show you. That is not the right chart. My apologies. We are basically looking at what. An see in light of the implied onemonth volatility in the mexican currency versus the dollar versus the canadian dollar. You can see the convergence in the area that i have shaded in yellow. Volatility in the mexican peso rising. Which nafta member is the most vulnerable in case of the agreements demise. We often do not talk about the u. S. And canada but they have a separate agreement to fall back on and Credit Suisse is pointing that out today. Mexico is saying they have the strength to move forward without this. As far as options are concerned, the implied a la till it he suggesting that mexico is more at risk. At let us take a look commodities. Oil and gold. Oil has been in this range, sometimes 49, sometimes 51. Not a lot of direction lately but down a little over 1 today. Old getting closer to the 1300 an ounce. And soybean meal having a nice day, up about 326. The u. S. Department of agriculture data, lowering the amount of soy supply in reserves is lower. See supply and so prices go up. And those are todays market minutes. Turn our focus to market valuations. It did not happen today but the s p 500 has hit 44 high closings this year. Should we be worried about u. S. Equities . Is victor from london haghani. Good to speak with you. Thank you for taking the time to join us. A lot of people spreading over valuations and looking at cyclically adjusted pe. Is that the right metric to use . Victor in the recent piece we put out on bloomberg profits, we it is axplain that useful measure in terms of thinking about longterm expected returns in the stock market. What that we should not get carried away or overly fearful of what seems to be looking at thisry, the reversion of metric. Why this walk through is important and why it is telling us that the expected return of equity is lower right now than it has been at other times. But why we should not be overly concerned insofar as what history has been tell us and not tell us. Here withe a chart the ratio and the s p 500 and there is a red line on here which is the average. As you can see, we are significantly above the average. What you say in the piece is that while it does show a belown going above and the average, it does not necessarily follow as you put it, it can randomly cross this line. There is not a lot of predictability. Why is that . Victor what we try to explain in the peace and what you are starting to get at there, joe, is that first of all, to begin with, we would not have known what the average was going to be. There is a little bit of a bias anytime you are looking at mean reversion. There is a bias when you look back at what the mean was and not recognized it at the beginning. Significant but partial effect of what is going on here. The other two things that we talked about is that sometimes, when we are seeing it moving from a high level to a lower level or from a particularly low level to a higher level, it is because earnings are catching up with stock prices, rather than the other way around. And then the final, and most important thing is that it does predict longterm equity returns and it is kind of like putting too much weight on it to then even go further and say ok, when it is high, the expected return is to be lower with owning equities. But, there is not this extra deductibility that says equities are going to crash, at least in terms of what history is telling us. We really tried to focus on that question. There are so many other things that people can think about regarding the stock market but it is important to have a clear your of what history is saying and not dating and that is what we really tried to stay focused on. A historical record. Joe that is an important analytical point at the beginning that the average number was different at the start. Itsee it as an average but is always moving around with the price change. Julia you told us what not to look at but what should we look at . Victor what we are saying is good but we should not get carried away with it. Cape is telling us it is high. There is economic sense and statistical significance in theng when cape is high, longterm expected return of equity bill of equity is lower. Cape at 30, we to beexpect an investor making 3 or 4 above inflation by owning u. S. Equities. I would like to insert in there, that this is all looking at u. S. Equities and the world is a big place and there are many other equity markets out there a different valuations. It is good to keep in mind that we are only talking about the u. S. Of 30 is indicating a 3 or 4 type of Long Term Return with a good deal of variability around it. Cape is great. It is a sound way of thinking about longterm expected returns for a 80s. But, as i say, when it is higher than its average, we should not be overly concerned that it is going back down to its average quickly. That will translate into losing lots of money on equities. Butill get a lower return from a has oracle perspective, a high cape is not saying to us that equities are going to crash or go down by 20 or 30 in the next few years. Isy may do that, but cape not telling as that. Were i love the way you so excited when you came back to my question and said cape is the way. Victor thank you for having me. To see you, victor haghani, joining us from london. Easy to make that mistake. Failing to make the mistake in distinguishing. Up, the South African finance minister, minister gigaba, will speak with us about how he is convincing investors that the South African economy is on the mend. From new york, this is bloomberg. It is time now for first word news. President trumps chief of staff, john kelly am a surprised reporters today when he conducted the Daily Press Conference meeting. He put to rest rumors about his job security. Although i read about it all the time, i am not quitting today. [laughter] i do not believe that i am being fired today. I just spoke to the president. [laughter] and i am not so frustrated in this job that i am thinking about leaving. Added that the president is dedicated to serving the country. The president has introduced his top choice for Homeland Security secretary. Nielsen. The Current Deputy chief of staff under john kelly. She also worked for kelly when he served as head of the department of Homeland Security. She previously worked as a special assistant to former president george w. Bush. The house has passed a hurricane aid package totaling 36. 5 million. The legislation provided 16 million for claims. Pressedand texas had for some 40 billion more. Legislation goes to the senate which plans to take up the bill next week. Progress is being made in some of the largest wildfires earning in northern out of when you but the death toll is almost sure to search. The number of dead dance at 26, more than 8000 firefighters are battling the blaze is and additional and power and equipment have been pouring into the area from as far away as australia. [inaudible] global news 24 hours a day powered by our 2700 journalists and analysts in more than 120 countries. I am Mark Crumpton and this is bloomberg. Julia south africas finance out to sell the story. They have downgraded the credit. Ating on the other abrupt axing of the countrys finance minister. Mr. Minister gigaba joins us now. Thank you for joining us today. What is the message that you are helping the president S Administration share with the International Community . Min. Gigaba the message that we are sending to the International Community is that south africa remains a constitutional democracy. We continue to undertake our programs as we had committed in 2016. Have maintained a fiscal fiscal framework. On mobilizingn International Partnerships and coalitions to continue accelerating Global Growth and medicating global risks as well as to harness International Support to invest in africa. Particularly, to drive infrastructure so that we can andort our economies increase our regional and international conductivity. And in short, that south africa template and be that south africa can be an important aspect of growth. South africa has to play its role in this growth. Minister, how do things stand on hitting deficit targets . Have you identified further spending cuts or asset sales that will be necessary to hit your goals . Min. Gigaba could you please repeat the question . Joe how close is the finance ministry to achieving the deficit targets that you have laid out, and have you identified other asset sales that you will need to do to meet your goals . Min. Gigaba in the next two weeks, we will be presenting a mediumterm budget. It will outline a number of issues. Plan for the fiscal framework. Growth be outlining our outlook and projections. We have looked at the different assessments that have been undertaken by different entities including our own national treasury, the South African revenue service, and the south African Reserve bank. And because of the outline, the debt ratio and outlook that we foresee. We will also explain what the revenue shortfall is anticipated to be at the end of the year leading to the budget of february 2018. We believe we have a a lot of work to maintain the fiscal framework and the spending framework. We also understand that the South African economy is in a difficult position at the we have identified structural reform programs that we need to implement in order to drive growth and that we continue to implement fiscal accommodations. The revenues the revenue targets are not going to be met but the expenditures remain in place, we will need to implement expenditure plans to achieve our budget targets and spending priorities. The largestf problems you have here with investors is trust. That ties directly to the governmental family which ties to the anc and goes directly to the president himself. What assurances can you make will bet entire issue cleaned up and the country can move on . And that their influence will not continue . Min. Gigaba the country is moving on. At the present moment, you have seen the countrys economy in the Second Quarter moving out of the recession into which we entered after two consecutive quarters of gdp contraction. The agricultural sector. It formed, very well. And challenges do remain, however, in the mining sector. But, generally speaking, the economy is showing signs of improvement even though we are still growing slower than expected. Julia minister, i apologize or interrupting you, but i am asking about the influence of that family. There is concerned that this family is still influential on government policy and that corruption will still be a problem even after december. Can you promise that that issue will be resolved . Min. Gigaba this family is not influential in government. We are doing everything we can to ensure that we run a clean and ethical state. And so, the investors need to be comfortable that the government is doing all it can to fight corruption, to ensure that we run a clean and ethical stage. The concerns which you are talking about are being addressed. And, as we have said in the government and in the ruling party, we are going to institute a commission of inquiry to allegedall instances of state corruption so that we can root out all of those problems. At the same time, our institutions remain stable, independent, and well functioning which include the different institutions that have been established to fight corruption in south africa. South africa remains a very committed country to rooting out corruption and all instances of state corruption, alleged or real. Julia what are the policies on the South African rand . The approach seems to be that a week South African rand that a weak South African rand seems better . Min. Gigaba the policy towards the South African rand, the Foreign Exchange . Julia yes. Min. Gigaba the South African rand, and its value, remains determined by the market. We have a floating currency and that provision has not changed. Julia can i ask you about the conference, the anc conference thatat is the likelihood the next candidate that becomes the president of the party can push forward, with all of the things that you talked about including the reforms of the utility sector, the business records, and the closure of the race issue within the country . Min. Gigaba i think the investors need to be comfortable in the sense that the anc is brand much a collective a collective run organization. The president of the agency will implement the policies of the anc and not their individual policies out of their own heads. Whoever becomes the president of the anc, will continue with the put ins that the anc has place including the reform of the state owned enterprises, the structural reform programs, and other policies that are in place. At the end of the day, all of those programs are anc policy. The National Policy conference in july all of that is set in motion, the framework of the therefore, any of the leadership candidates, any among them that could be elected as president , will continue implementing those reform policies and programs. Julia minister, great to have you on. Minister gigaba, thank you. Kingdom, saudi arabia, may take longer to evaluate the budget. From new york, this is bloomberg. Julia it is time for the Bloomberg Business flash. Second could be facing a cyber attack. Pursuedit company has extra efforts. Equifax said it is being investigated. Floridas orange crop took a big floridas orange crop took a big hit from hurricane irma. The 2017 to the aging crop the 20172018 crop estimate is down significantly. Goldman sachs is said to be growing its trading business in switzerland. It will broaden broker activities. The move is subject to Approval Program manager. Up next, a tale of tax reforms for banks in the Third Quarter. Core morgan and city city core are reporting and what that could mean. For first worde news. President trump is praising the pakistani government for its help in freeing an american tople held by a group linked the taliban. Ducted fiveere of years ago while traveling in afghanistan. Ducted five years ago while traveling in africa in afghanistan. The pakistani governments cooperation is a sign that it is honoring the american wish that it do more to provide security in the region. I want to thank the pakistani government. Mark the family was being held by the hikani network. The American Government has called it a terrorist organization. Senator says the executive order signed today by the president to allow consumers to Purchase Health insurance across state lines will not make them cheaper. It is going to make matters worse trying for individuals trying to get into the market. It takes healthier people out of the pool making it more expensive for those that have no other options. The president is taking steps to undermine the Affordable Care act. Mark Officials Say it could take ones for the changes to kick in and may not be finalized in time for coverage in 2019. The uae said it would stop issuing visas to north korean workers in an effort to limit on limit north korean work. It plans to pull its ambassador and prevent North Koreans from opening new businesses in the uae. Global news 24 hours a day powered by our 2700 journalists and analysts in more than 120 countries. I am Mark Crumpton. This is bloomberg. Arabia may arabia may cut subsidies more gradually. This is all intended to lessen the economys reliance on oil. It comes straight from the countrys finance minister. Thank you for taking the time. This sounds like saudi arabia is slowing down its austerity drive on the recommendation of the imf. That is true. Downdid announce this slow in some of the planned reforms after the imf recommendation. The finance minister said they would remove some of the subsidies on Energy Commodities more gradually than previously announced. It did come about a week after the imf advice. The saudi arabia and government was to pin was to consider slowing down the reforms. The saudi finance minister today said they were slowing down some of the reforms and that they were not feeling in such a huge rush to hit their selfimposed 2019 targets were a balanced budget. It shows they are listening to some of those calls, including those from the imf. Ago i remember a while there were concerns about the declining wealth of the kingdom. Is their willingness to slow down the pace of these cuts is that an indication that they feel they have some space in the market . Saudi 2030 vision was considered to be a very ambitious plan and it would take saudi arabia from its current state of economy to one that does not rely on oil income anymore. Any step back from some reforms or the pace that was committed to is a significant development. It leads to an inevitable situation where you will have some saudi businesses that will cheer this development but on the other hand, this might lead to some others questioning whether there may be a loss of reform appetite. But it does feel that it has the capability to slow down a little bit. It has the reserves and assets necessary to slow down its reform agenda. If the imf is telling them to slow down, you would imagine it gives them more credibility. Talk about the stimulus program. There is that 50 billion stimulus program. But are accelerating that, the likelihood is that they could add more to that to stimulate growth. Is that right . It is a program that had a certain budget and they had allocated about a fifth of it so industrialanies and development funds. Now, the saudi finance minister is saying before the end of this year, they will announce the details of a second phase in the same program and that it will be bigger than the first in terms of the impact it might create. Julia thank you so much. For joining us from the washington bureau. Jp morgan and citigroup are kicking off thirdquarter earnings for the banks. Revenue for the currencies and commodities trading plunged. This is information from the wall street journal. Bigs expected to discover a windfall to deliver a big windfall to the banks. Allison come great to have you on. To thes more leverage currencies and commodities division. We saw some squeezing of expenses to cushion the bottom line. The lower expenses was key. It is a big focus for all of the banks. We saw a similar moves at j. P. Morgan. Trading is down, almost in line with expectations. Well priced. The negative was in the car business. That really got people concerned. Joe it is a function of the same thing that we struggle here with every day. Whole lot going on, the lack of volatility is not good for generating trade. Correct. It is almost 2 of their top line, an area that people focus on. Next quarter, we are likely to see seasonal decline. But i think the big thing people are focusing on is consumer. This has been a great story for many years. For the most part, people do expect that consumer losses should continue to rise from the lows. In terms of the others, the revenue line it is not just credit but an overall weakness. Scarlet you mentioned credit card business. There is a lot of question regarding the credit card business. They spent so much up front for that. What did we learn from jp morgan on that . From jp morgan, really Nothing Specific on that but what people are concerned about is that when you have such a big of for a cost, it will take you time to recoup that investment. Is reader clause from city that there is still a lot of competition in the business in terms of they talked about their teaser balances and that part of the business. A are spending a lot of money to grow and hope those loans will turn profitable. City the members of their optimism was based on the fact that the portfolio would turn positive and they would see the fruits of that. That is an overall industry worry. For jp morgan specifically, the rate went down in the quarter. They did talk about some normalization of credit although that is probably not specifically to the sapphire card. They talked about going on the credit they talked about going down on the credit spectrum. Seeing something they had but coming tod the numbers, people are worried about how bad it will get. The city cfo said we are not getting complacent. I think that says it all. We have seen that, done that, and purchased the tshirts. Williams, thank you so much. Up, oil barons below the border. There is a Bloomberg Businessweek mexican edition. From new york, this is bloomberg. Mulvaney called out the imf. Is heavily fund invested in the failure of the u. S. Tax reform. Tom keene caught up with Christine Lagarde at the imf annual meeting in washington and she said she welcomes u. S. Tax reform. For a few years now, we have repeatedly said that a tax reform was absolutely needed and necessary in the United States. In particular, a Corporate Tax reform. There is no doubt in my mind nor any ambiguity about that point. It is needed, necessary, we have called for it and we welcome the decision to actually think about tax reform. That would make taxation simpler. That would reduce the loopholes. And many the duchess. They would be focused on labor activity, help the middle class, that would be progrowth. I am not going to tax pass judgment. That will be for consideration by congress. I have done my job as tax reform as minister. Job is difficult. Tom Metta Lagarde was trade minister and finance minister for finance. Jason furman came to your defense this morning. I dont need anyone to defend me. I can defend myself. Dio theefended distinction to me is between the blue book, the green book, and the red book of the imf. To linkage of tax reform fiscal responsibility. How does the imf link constructive tax or for with the worldwide idea of getting our debt house in order . Christine lagarde what needs to be done is to look at the evidence, at the data, at the numbers. And then, to determine policies on that basis with in mind, two things. The revenue, the spending, and the political objective. Of wanting to improve the situation of the middle class and ultimately reducing excess of inequalities. To happen. T needs clearly, in those countries that have a heavy debt burden and those that have entitlements coming to her wish and that will probably increase the spending, it is necessary to take into account the mediumterm to make sure that any tax reform is revenuegenerating. So important is the tone of the imf, of a more optimistic world. The United Kingdom is fair game with the battle of the brexit. U. S. Lso marked down the because the imf is doubtful on successful tax reform legislation in the shortterm . Christine lagarde we have economyp the u. S. Compared to our july numbers. And we have marked up a few countries including advanced economies. What we hope to see is implementation of the reforms that we have called for for many years. A good solid tax reform that will be simpler, where rates will be lower with a base that is much more solid and clear. That is what we hope to see. The sooner he goes through, the better. Lagarde. Ristine earlier with bloombergs tom keene. Whatd you miss . The again, both sides in brexit negotiations. On this question, we have reached a state of deadlock which is very disturbing for thousands of the project promoters in europe and it is disturbing also for taxpayers. We continue to work constructively in a professional and determined manner this week. Any momentum. I remain convinced today, with political will, decisive progress is within our grasp in the next two months. While there is still much work to be done, we have come a long way. Significant progress since june. No deal will be a bad deal. The u. K. Is preparing for everything. Side, weclear, on our need to face any eventualities. Julia so wonderful to hear those english voices battling it out. Deadlock. Let us bring in the bloomberg executive director for international development. There was a speech in florence and theresa may said we will pay the bill. But when i hear them speaking there, it seems as far away as ever. There was a lot of optimism from theresa mays speech. What did not happen when you spoke to eu officials is that they never saw any meat put on the bones of the agreement. A are waiting for u. K. Officials to come out and concretely say that may was positive. This is basic stuff they should be doing right now. Gottenve not even really to what the brexit relationship is going to look like. The eu is all part of negotiating strategy. U. K. Know that what the wants the most is a relationship after brexit and trade relations. They are holding the feet to the fire and saying we will not talk about that until you a great on how much money you will pay. Scarlet there is a deadlock between the eu and the uk. Talk about the divisions. The party is split down the ,iddle, on the sides, left right, and center. That is the problem. No one really knows what the u. K. Policy is. There is so much chaos, division , and bad blood behind the scenes, there is not enough Common Ground for a u. K. Position. What is remarkable, when you think about the referendum being just about two months ago julia this is brussels. Everyone has to work out how to walk away. Is there any sympathy from any country, any leader, for the u. K. That could ease things . No. There are always divisions but the one thing that always unites it is written leaving the eu and its conviction that no other country should dare to leave. Joe last week, theresa may had with asastrous speech coughing fit and the letters falling but in another sense, she is a lucky policy she is a lucky politician. Luckiest,probably the unlucky politician that the u. K. Has ever had. Her position is so bad. There is a challenge that she has no one actually wants this job because it is so difficult. Be to leaveld theresa may standing for as long as possible. Allow her to negotiate a bad deal and then come in and save the day. But people are getting very impatient. Julia the timing is shockingly poor. Scarlet there is a lot of that. Julia i am so happy to be in the United States of america. Can i just say that . Mexicos new rules regarding the oil sector. They have opened the doors to a new class of industry players south of the border. This is the cover story of the latest Bloomberg Businessweek, x ago. Here is jonathan rhys. Us about thel context of this article. How involved are mexicans in the Global Oil Industry today . Mentioned, this is on the cover of our magazine for this week. To thes are getting used private investment in the oil sales sector. Consider that for more than 80 years, we had all investment from one company. Now, we have a bunch of companies coming here. You need to consider that there are already 67 options and we many there are a number of companies that have come to mexico to invest in these sectors. What we intend to show with this namesis the faces and between the mexican people and the companies. Joe what are the specific types these assets that International Investors are most intrigued by . Governmentons of the so far have to do with shell and others where there is no water involved. All of the money is coming mostly from around the world, not entirely from mexico. We are seeing two different types of companies coming to the country. We have chevron and shall and exxon mobil they already have won subcontracts here. But we have Different Companies that are owned by former employees of the companies around the world who are trying to do a new type of investment and getting capital from companies around the world. Employees from statoil or elsewhere that are creating new companies. They are getting capital from around the world to invest here in the country. And in latin america as well. For example, in the case of visa, oil and gas. That is inil company the stock market of mexico. Finally, we have our First Company in this index of the mexican stock market. Engineering from and at that comes from argentina who used to work for sloot mercker who used to work for another company. This is the first stock in mexico. Julia i think we can underestimate how important this is of the oil energy ending decades of state ownership of this asset in the country. How important do ordinary people think this is . Jonathan you need to consider that Oil Production in mexico is going down. Right now, we are around 2 Million Barrels per day and we used to have production of 3. 4 Million Euros per day, 1015 years ago. The government and the country are concerned about Oil Production. Contracts, it could bring they could bring 100,000 barrels of production a day. 5 to thedd around production today. They are important but they are level tot now, at the change the oil industry. We know that more actions are coming and we need to see what happens to them. And we know there are some associations with other Oil Companies to produce more oil in the gulf of mexico. Julia jonathan, i am going to interrupt you to take a break. We are super excited and we recommend that everyone go to article on mexican oil. Joe coming up, what you need to know about trading today. This is bloomberg. I will be looking at retail sales for september. Banc of america reporting thirdquarter results. Bloomberg technology is up next. This is bloomberg. You are watching technology. Lets start with a check of first word news. President trump is expected to try to sell his tax plan in pennsylvania. It allows consumers to buy Health Insurance across state lines. Officials say it may not be finalized in time to impact coverage for 2019. Drums chief of staff says he is not leaving his job anytime soon. I am not quitting today. I do not think i am being fired today. President trump has introduced his pick for Homeland Security secretary. Kristen nielsen is a petite chief of staff under kelly. The house has passed a 36. 5 billion hurricane aid package. 16 million will pay for flooding. Requestedd texas have about 40 billion. The death toll from wildfires raging is now 26. Officis