Transcripts For BLOOMBERG Whatd You Miss 20171113

Money as puerto rico continues to be without power. Thousands are still homeless. They Want Congress to adopt a tax overhaul plan addressing puerto ricos specific needs. Turkeys president is dismissing the u. S. Russias statement that no militaryan be solution to the conflict in syria. Speaking today in istanbul, the president said the statement was misleading considering both countries have a military presence in syria. President trump and president putin have called on all parties to participate in the geneva peace process. The death toll from sundays earthquake in the iran iraq border is now at 145. Over 6000 others were injured in the magnitude 7. 3 quake. Most injuries were in iraq. Caused skyscrapers to sway in dubai. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im Mark Crumpton, this is bloomberg. Abigail live from new york, im abigail doolittle. Scarlet im scarlet fu. Joe and im joe weisenthal. Scarlet stocks are headed for their first. Joe the question is whatd you miss . Mitcht majority legal mcconnell could be derailed by factions in the gop. Ges fall from grace getting his toughter ceo said love plan. Cutting dividends by half. An effort to get face time with but with the u. S. Embargo and the controversial Vice President Holding Investors back. Scarlet whatd you miss . Another bad day for general electric. As 8. 2 . S much that is the biggest intraday drop in two years. To hn flannerys wide give his future. Many investors said to little, too late. Your i know that from note, you believe the ceo is making the right steps. It will take time. That means shortterm pain in the meantime. How much more pain are we talking about here in terms of revisiting earnings estimates and looking at dividend . Jeff we hope a good portion of that is been taken into account here with todays strategic review. Probably in the upcoming quarter or two, we really look at some of the moves he has been making. The dividend cut was necessary. Obviously it was a tough decision for them. They have looked at their numbers. We are looking at the power of business. They are focused on getting think weabilized and i are setting the stage again to reset with 2018. Were looking forward to better opportunities in the longer term. Joe im curious what you make of the action today. Obviously everyone was expecting dividends to be cut. No one expected good news. Where do you think the gap is between what the ceo announced and what the market was hoping for the next lanes a fairly dramatic move . To your point, the dividend cut that had all been out there. I think there may be just a couple pieces of information that people are looking at. One was the 2018 guidance. Was lowereaking it than expectations. Theyre earning expectations range was lower than the consensus. That also did not include any payment from the capital dividend business. That kind of explains a little bit of the discrepancy. I think we are just now is the time people are trying to see where the earnings number is. Where the earning power is going forward. They are trying to baseline their models and anticipate what the company is worth. Abigail to follow up on joes point, is this really a problem of perception at this point . A lot of this news was already out there. They had thoughtful messaging, the stock finished higher after being down more than 8 but today it was just hammered. Is this more of a perception problem that they have to turn around . Yes. The company has lost credibility over time. The ytd performance has been disappointing. Can thes ms. Has power business continues to go down. If we look long term there is great opportunities. That is where there is discrepancy as far as nearterm where theyoking at can invest their money and get shortterm growth. Coreke some of these businesses like aviation and health care. We think they are taking corrective actions to get the power business stabilized. Of difference in perception as far as Investment Strategy and outlook. Longterm, we like the opportunities. Sayset Ceo John Flannery investors care about outcome. Predictability, margin rates that are clear. My question is what is their Investor Base look like . Halfit cut its dividend in , that perhaps alienates a big part of their Investor Base. How has the base changed . Jeff its a little bit of a difficult question to answer. Obviously, a lot of people have been owning the stock for the dividend and now that that yield is more competitive with a lot of peers, you might see investors shifting for more growth or more attractive business mix. Some shiftingsee potentially of investors. Obviously, we have seen an activist investor get involved. Now they have a board seat. Be ank that will continuing dynamic. That is what is weighing on chairs today. To a certain extent, those people are looking at what is the outlook over this next couple quarters. Maybe there is some shifting in funds from that point. When you look at the various units within ge, what area do you think has the most potential . Jeff we really like the aviation business. If you look at where they are positioned. They are sole sourced on the boeing 737. They have 8000 orders right now. That is an attractive growth opportunity. Years ofot only 20 selling jet engines, but decades of service that followed that as well. That is a really attractive area. We do like the health care business. It is a Slower Growth area, but we have an aging population. In a lot Market Leader of the technologies that they sell. We do think there is going to be increased utilization in that space. That is a Good Business overall for ge. Abigail great observations from jeff quinn dow. Coming up, inching closer to tax reform. Live to capitol hill for all the latest as the Senate Begins the markup process for legislation today. This is bloomberg. Scarlet whatd you miss . Lets bring in emma chandra for her stock of the hour. When you have for us . Ma some reporting by our bloomberg colleagues and moderate democrat from the Senate Banking committee have a an agreement. Essentially what they would do is raise the threshold at which you can be designated too big to fail. It would go up to 250 billion up from some 50 billion under the current law. It rolls back part of doddfrank. It is most impactful for midsize lenders. What i wanted to do is be able excellent. The total assets by cyans zions above the 50 billion threshold. As i recall, there is wide bipartisan view that almost everyone admits that they said it too low. They heard a lot of banks that they didnt mean to. Emma thats absolutely right. There is a broader need to repeal this legislation. They have to get through the senate, then be approved by the house, and obviously as we have been talking about they have big priority items. Joe all they have some other stuff . Emma that might prevent this from happening too soon. Looking at the analyst recommendation for zion. Holds, it3 buys, 13 has been static like that for most of 4017. People have gotten a little more bullish here as time has gone on. Emma the idea that something could happen. The Trump Administration wants regulation. This might be the first step. And democrats and republicans are actually talking to each other. Fancy that. Emma chandra, thank you so much. Its time for the Bloomberg Business flash. Some of the biggest stories right now. Putting goldbergs mouth is, Bridgewater Associates boosted their holdings sevenfold. The hedge fund tripled its stake on ishares trust. Cold hit a oneyear high in september as investors sought. Natural disasters in texas, florida, and mexico. Tesla of black workers saying that they received harassment at the carmaker. They are seeking an order for tesla to implement harassment policy. Alibaba is looking to raise five point to raise five to seven dollars in notes. Been hired for the offering. They bring up a record 23 point billion dollars of sales. For singles day. Thats your Bloomberg Business flash. Scarlet whatd you miss . Missing were inching closer to tax reform. The senate began its markup. Lets go to capitol hill for the latest. When you look at the senates tax bill, which varies from the house, what is where is there the gap the biggest that the senate has to overcome . Problem thest senate faces is the deficit problem. They have 1. 5 trillion that they allowed themselves. Will be a problem for people who want to cut taxes pretty deeply. Flake, whorker, jeff have sounded the alarm about the debt exploding. The biggest problem is the bird will. After 10 years the senate is not allowed to add anything to the deficit. Beyond that, you have different factions who want a larger child whocredit, some senators used to be businessmen and want the largest gains to go to pastors and corporations. There are a lot of competing interests. Joe obviously of the house the senate bill, and passes it spill, it goes to conference and they have to reconcile. In alabamalection throw a spanner in the works there if the democrat wins . A good absolutely throw a wrench into this whole process. Republicans have a to vote margin in the senate. They can lose two both before the senate collapses. , there and more loses margin is down to one. We saw how difficult to votes was in the aca brood peel. Thatis something republicans are worried about. A sixth accusers. It raises the prospect that the house might have to vote to on just the senate version. If that scenario pans out, if the house passes its bill with the 10 thousand dollar property Tax Deduction cap, the senate eliminates salt it its entirety. The House Republicans will be faced with a choice of taking the senate bill as is, or blocking tax reform in its entirety. They want some sort of compromise on state and local Tax Deductions. Theyre facing a lot of issues at home. The process is pretty different from the first repeal and replace effort back in march. Considering we have both the house and Senate Working at the same time. What is the feeling . It had been optimistic going into the first house vote, how would you characterize this time. To march . Desperation. P are in simple. That republicans could go an entire year of pieces without passing anything. They would love to be able to go home and say, check out your paychecks next year. An issue, that will be for every one of them, but they want to be able to say that. They worry primarily about republican donors turning off the financial spigot. The money will dry out. That is where the real pressure comes from. Now, they are looking at thanksgiving, christmas not too far away without in a compliment. Scarlet theyre in the home stretch, and the elections dont leave them feeling pretty encouraged. What about the attempt to end the obama care individual mandate. The president tweeted again today that he wants to see that happen. It would raise about 338 billion. At the very least, to pay down the listing tax cuts they have. Whether it is likely to happen, i dont think so. Conversations lead me to conclude that they really want to keep it out. They fear it would take down the tax bill the way obama care efforts went down. It would probably lose the vote of susan collins, complicate the votes of Lisa Murkowski and john mccain. They do not want to mix these two issues. Joe i wonder if throwing in idea is inroversial the art of the deal. Scarlet did you read the book . Youre kidding, but there is a grain of truth to what you said. Republicans do fear that the president could throw a wrench in in the final stretch before the vote and that could mess things up. Scarlet its a fine line. Week pulled more than 2 billion. The latest on credit. From new york, this is bloomberg. Scarlet im scarlet fu. Whatd you miss . November is a bad month for the japanese yen. When you see the green boxes, ist indicates the dollar gaining. Look at november, second to last column on the right. It is the worst month of the year versus the dollar. Versus thehere dollar. You can make the point, if you look at what is happening this year, that the yens relative strength is a bit worrying. Think about what else has happened. We have had a selloff in highyield credit. A steep incline in it going. People are wondering whether risky assets are under attack. Are these high risk assets now right for a correction . You might be tempted to say, perhaps we are. Abigail if you look at this a longer chart of j and k. Week jnk itsast average. Longerterm buyers are stepping aside. This may cause some investors to wonder whether or not this cycle , is it coming to an end . We see back in 2014 when the led tome we saw this, it the big credit selloff of junk bonds of 2015. This may suggest that we may see some more selling for highyield credit. Joe lots of people are paying attention to this right now. Heres something interesting. There is a new saying index. Now you can just type it in and see it. To 2014. Ack facebook, alphabet, amazon, netflix, google. It turns out it is almost the perfect analog to powershares. Is basically the same thing. If you want to get a sense of trade hasng performed. It is basically like the nasdaq 100. Its pretty cool that there is an index now so we can say how are the fangs doing. Scarlet you could argue that it marks the top of the market. Abigail that is a good call there. Scarlet those stocks maybe there is a little bit of risktaking going on. Very modest here. The dow up by 1 10 of 1 . S p 500 gaining 2. 5. The nasdaq is barely higher, but it is green right now. From new york, this is bloomberg. Anchor what did you miss . Day for its first gain in three days, moving higher. [bell rings] forail i am abigail in. Ulia chatterley joe we want to welcome you every day. Lets begin with the markets. They finished in the green. The dow up by 20 points. No big economic data. I bring this up because we have pi in coming days come which will be critical, pacheco before those who feel they will raise rates in coming days, which will be critical, particularly for those who feel they will raise rates. Lets dig beneath the surface. We are starting off with ge. My gosh. Look at that. Pretty amazings to consider that. 2009. 9, that is Pretty Amazing to consider that. They have cut their quarterly stock dividend for only the second time since the depression, and the Ceo John Flannery is really delivering his turnaround plan. For offered earned guidance 2018, and it looks like it is being taken as too little, too late with the stock down. And there is a 14. 8 billion offer for a portion of the company, about 66 of the company. A Short Interest on the shares of ggp. Single day the best ever going all of the way back to 1980. Twoal that would unite the largest toymakers. Hasbro made a takeover, but the terms of the deal were not quite clear, according to the wall street journal. And then look at qualcomm after rejecting the broadcom acquisition offer, but, of puts the Point Company in play. This could be one of the Biggest Technology takeover battles in history, and we see qualcomm shares higher against that backdrop. Joe lets look at the Government Bond markets. Happening, so the it isr yield, 2. 4 , but interesting that we had a move higher on the twoyear. There was a flattening of the curve, and you see the short rates rise, we had a little bit of steepening on friday, today basically reversing that. Up, for that will come sure. It is pretty quiet in currency land. Congress addresses tax legislation, the senate marking up its version of the tax bill, and, of course, we are paying attention to the yen and the and before Mario Draghi Mark Carney and others are due to speak, in which central policy may come up, or they might skirt entirely. I want to bring up the british pound. The pound clearly under pressure. It was one of the worst performing currencies. It certainly is among the g10 currencies. The party are not feeling too good about the situation with theresa may. Has just been bad news and bad luck for the u. K. Prime minister as they, of course come and try to get back negotiating brexit with the eu. Joe oil and gold come not much happening. Oil has been on a run the last few weeks but is basically taking a breather, and gold is just inching up moderately on the day. That is todays market minutes. Did you miss . Central bankers including janet yellen the bank of japan governor will meet for an ecb conference to discuss messaging reputation and more. Joining us is srinivas thiruvadanthai. Thank you. You recently wrote a blog post. I think it is very fitting. Yet another day of basically nothing happening in the market, incredibly subdued allah to it he, and your concern is that we might be incredibly subdued volatility, and your concern is why is thist be something that brings you concern now . Srinivas there are several things, not just policy. Recessions we do not have it because of routine but the moreat, policy tries to iron out small it increases people taking more risk him which goes back to the idea that it leads to volatility taking more risk, which goes back to the idea that it leads to volatility. Capturing the distribution. There is something called q, which is how much loss you can have potentially, and when you try to smooth out the volatility , you encourage them to take more risk, and also more leverage, right question mark right . Are moredeclines severe, which is where the q comes from. You see somewhere were a dangerous amount of leverage is being added on or something that makes you nervous . Srinivas we have not built up the leverage on one side, but another site, yes. High butre another side, yes. Valuations are high. I have been wondering myself why the fed does not get this. Obviously, their mandate is not around the price, but they have supported incredible asset inflation, and taking a look at the longterm chart of the nasdaq, what we are seeing right now blows away the tech bubble, blows away the housing bubble relative to the nasdaq, so this lack of volatility creates underlying fragility. It really blows my mind. Think . Why is this allowed to happen . Goodr srinivas question. These are just reflecting the real economy. They do not blow back into the real economy. Of that,no recognition but still, i think it is more basic about the leverage. They do not think about the asset side as much, and one of the lessons they took from the 2001 recession when we had a bubble a different kind of bubble the bubbles that dont have leverage, the Banking System is not involved it is not actually predictive. Weight. You are saying the guardian you are saying, the gardenvariety recession the first three are bad markets, going back to the depression, number one. Was employment did not bottom until 2003. The recession ended in 2001. The longest period for which employment fell, and you never got the labor portion part to those levels back again. Of those things that i think fits into this is what is going on with hedge funds and industry really struggling to show its value and produce superior returns, and you sort of tie it into the financial conditions that we have seen here. What is the story of the underperformance of hedge funds as an asset class . They have been called by various names, but many do not realize it fully, but they are extracting liquidity one stockso you have that is not liquid or some bonds or stuff like that, and there was an influx of real investors or real money into these stocks, s and mutual funds and things like that over the next 10 years, and the proliferation of products on aged money nlever have the leverage to extract. That is the main reason. They do not volatility blowing up periodically. Srinivas thiruvadanthai thank you for joining us. Up on thee will catch latest of Fantasy Sports, next. This is bloomberg. I am Mark Crumpton with first word news. A witchhunt is how roy moore describes sexual allegations against him. This afternoon, Beverly Young heron said moore assaulted when she was 16, and he gave her a ride home from work. Gloriaas accompanied by allred. Wasia allegedly, when she a minor, she was assaulted by roy moore. He was a District Attorney in etowah county. Ores representative said this is sensationalist and that he is innocent and that he did not have any sexual contact with anyone. President trump has made his choice of the next secretary of health and human services, the former president of eli lillys azar. On, alex and the deployment of three u. S. Aircraft carrier groups around the korean peninsula, the description of the joint naval discussed in a letter sent from pyongyang to the united nations. Are described by military officials as a clear warning. North korea has complained in the past about the drills, and also implied in the letter that it validated its nuclear ambitions. They recently launched Ballistic Missiles that have the potential to reach the u. S. Mainland. Families of the victims of frances deadliest terrorists ,ere visited by Emmanuel Macron and the france counterterrorism Prosecutor Says they are still looking for suspects involved and that zones of mystery remain about the attacks. Global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Scarlet what did you miss . Has joined another fantasyfirstever live broadcast. Itll will offer live analysis with a Fantasy Sports twist. It will offer live analysis with a Fantasy Sports twist. Joining me is jason robins. Tell me how this will work. They will broadcast the next cavaliers game, as usual. Will be working with them picked what does that mean . Things is about two you will be working with them. What does that mean . Jason it is about two things, including drawing in new people who might try out draftkings. Scarlet and what about streaming Something Like this . Jason really, this is new territory. We have a lot of great data showing our customers have an and want toppetite consume more of the content, but most of that content traditionally has been different what this is. This is a new category that we are experimenting with. We will have to see. Of this the distinction show that you are launching is it is tied to the Live Streaming of the game, and i know do you worry about blowback, perhaps, from critics, from media critics, who say that you are educating and promoting these money games to viewers directly . Have beentasy sports around for a long time, and i think this is something we have seen with espn and many others, so fantasy broadcast and fantasy content is not something new. Msg has a leader resigning it does this change relationship . Jason know, we have a great relationship. They are investors in our company. We plan on having a successful relationship with them for many years to come. What is the strategy . You are doing this with the cavaliers game, but are you doing this with other games . We are making a significant foray into new types of content, really focusing on building out the media side of the business. There has always been an a demande synergy with the for content, and we are trying to figure out the best way to actually partake in that and provide new, great content to our customers as well as new content that will draw in new fans. I think we will have to try new things and figure out what works. Some will be successful, and some will not. We are committed. They are willing to experiment and try new things and like working with new technologies, have aaftkings, and we great team. They want to figure it out. Into thelooking out future, its Sports Betting were to be legalized in the u. S. , you Sports Bettingf were to be legalized in the u. S. Is a i think when there major change where you have 90 of our customers, the way we do in the u. S. , you have to take a look at how that is going to impact your business. What that actually ends up meaning for us, there is a wide range of outcomes of what could happen in the u. S. And how that would actually affect our business, and i think depending on those outcomes, there made the nothing for us to do, and we will sit and watch that as fans and observers, as others might, or there might be a great opportunity for us, either directly or as partners to partake in that market, and we will have to see how that plays out and take a look at different options, but anytime there is a major change, you have got to Pay Attention to it, and this is something i would qualify as a potential major change in the landscape in the u. S. Andlet you also have nhl mlb with draftkings. Investment in the sports book, the way they are approaching the investment in draftkings . Jason they had an investment in draftkings long before this came out. I think this is a new development, something that came about a few months ago when the Supreme Court take a court case that nobody thought they were going to take. That changed things, and people have to be attention to that, including us. Several years ago, we had, and we continue to be excited about the potential for Fantasy Sports, and in the last two years, you can see that. It has gone from draftkings being unknown to being a household name, and we think that is in part due to our great partnerships, and we hope to continue to build upon those partnerships, regardless of what happens as we go on. Scarlet all right, draftkings ceo jason robins. Thank you. Up, assetoming allocation and an outlook for the u. K. And for spain. This is bloomberg. What did you miss . Politics changing the dynamics in europe. To mcvey withkkr spoke mcvey spoke to Erik Schatzker. Spain could grow two point 5 , 2. 6 , and we think the u. K. Could be half of that 2. 6 , andd grow 32. 5 , we think the u. K. Could be half of that. Seething we do not what you is inflation above incomes, and that is what you see pressure on the consumer, which is our view for the u. K. Erik tightening . Henry they have been easing. With rates being down, credit spreads bringing down the dollar, so the fed is in action, but today, actually, financial conditions are easier today than the fed started raising rates at the beginning of this cycle, so our view is they will continue to raise rates. I think Economic Growth is solid, and i think there are things they want to do to send a signal that come up to kerley where credit spreads are, that they are not going to leave the they want to send a signal that, particularly, where credit spreads are, they are not going to leave the punch bowl at the party. Us, highyield spreads is one of the single weakest indicators we look at. Two, us, implied default monito, 1 ,before last week, it was and put that in context, in january of 2016, it was 8 , so the market has gotten quite constructive. I think him place it is a good term. As a firm, we managed a lot of complacency isk a good term. A lot of, we manage loans. The highyield bond is less. If you take a step back, that seems a little bit offsides, to me. Same time,e notwithstanding this backup in spreads, valuations, almost across all asset classes, are on a relative basis still very rich. Is thei think that headline, but i will give you a more optimistic view. This reminds me of the 1990s. You had a lots, of investors chasing growth and simplicity, and they left things that had problems around them stuff, and we are nine years into a bull market, and you still have over half of index this is relative to a nineyear bull market that is pretty credible. The Consumer Network net worth looks incredible. The majority of americans have wage growth. O me, this whole bifurcation simplicity. The one area, say, the equity market, we are certainly quite constructive on asia. Japan is a very big market for us, and i think we talked about this last time. We have been calling for a turn in the asian markets. We think we are entering a cycle. Things are happening fast. We think that will happen for the next couple of years. Implicit what i am saying is we think the bull market and the dollar has largely run its course. A that was henry mcvey anchor that was henry mcvey with our Erik Schatzker earlier today. Mark i am Mark Crumpton with first word news. Beingpublican party is forced to choose sides in the Alabama Senate race, some saying should drop out amid allegations that in his mid30s, he initiated contact with a 14yearold girl. Today, Beverly Young nelson came forward to accuse moore of assaulting her. Beverly mr. Moore assaulted me. Let himing forward to know that he no longer has any power over me. Mark moore was joined by her attorney, gloria allred. There was a Washington Post assaultedt moore had other young girls. Androdrigo duterte President Trump agree on their dislike of obama. Earlier, President Trump said he had a great relationship with president duterte. And Angela Merkel in the final talks about a new government, talking with three other parties, including the greens. This raises the prospect of a minority government or another election. Agencynited nations nuclearng irans activities has not identified any violations. Last month, President Trump refused to inertify that iran was implies, saying they had committed several earlier violations and was receiving disproportionate relief from international sanctions. Global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Lets get a recap of todays market action, little change here, just slightly the s p, ande out, the nasdaq actually rising for the first time in three days. You are looking ahead for ppi week, lookingthis at whether the fed will raise rates in december. What did you miss . Softbank has an agreement to buy on the in uber with more way. They reach the deal on sunday. For more, lets bring in a Bloomberg Businessweek columnist, and thanks for taking the time, of course. I understand it took time to reach this deal. Reporter lows it allows uber to move forward. Investors basically removed basically controlled the company. They added a bunch of board seats that are contingent on this deal, and they take away the power to name directors without consulting with the board. Now, some of the early investors, in exchange, one of the investors is going to drop a lawsuit, and they will have the opportunity to sell a big chunk of their stake, albeit it looks like at a bit of a discount joe . Joe a bit of a discount. Final ubers like a raise . It, andould not bank on 2019, that gives them a pretty good chunk of time to get through before that, so i would not be shocked if they went act and raised additional fines. If they went back and raised additional funds. I think there are buyers if uber is selling, so they can raise money premuch at any time. Pretty much at any time. Scarlet what can they do now with the money that they could not do before . Max only 1 billion is going into uber itself. The rest is going into Employee Bank accounts, but what it does do is it takes away this incredibly toxic relationship between the ceo, kind of the person who kind of consider the most important early employee, the de facto founder, and the most important investors, and they are suing each other. There is more litigation going on. There is just a whole mess of litigation, and what this does is very neatly allows them to move on. The thing is, we are already seeing investors, some small, early investors saying, wait a minute. I dont know that i want to sell my shares to softbank. Part, but theg rest of the deal is happening at a discount. And some of these early investors are saying, hey, why is it that softbank should benefit from us fixing this problem . So they have to figure all of that out. Abigail that is what i was going to ask you. For some, that would be enough of an enticement, but this is. Ot a done deal will this get done . Incentivizedy is collectively to do a deal, but uber is worth so much money and is such an exciting pot and a big return for all of these investors, that they all have to swallow a little bit and lose some power. Anything out,unt but it seems likely that this deal will go through. Or max, in the last year a couple ofave been ,tories, one the Business Model and is this a big moneymaking business it looks like maybe they are putting the era of corporate drama behind them. At this stage, the people who know the books well really think this Business Model proves to be sustainable . Managementnior thinks that there is something here, but this is not 100 figured out. Ceo last week, the current said they are not profitable in the u. S. , and they will not be for some time because of all of has thrownthat lyft in, basically taking advantage of ubers position and throwing and are throwing huge subsidies at riders. That can play out around the world, especially there are tons of private capital flowing into these companies. The idea that there is a really Good Business, hailing taxis with a smart phone, premuch everybody agrees on that get that can make money. Hard to seew, it is how the economics work. There are questions about how profitable uber and be at the prices they are charging. How profitable uber can be at the prices they are charging. Broadcom is determined to go forward with a deal. With insight on what would be the largest takeover battle in king in sanan francisco. When you look at what they are saying about why they are rejecting this offer, it says it itervalues them, but really comes down to that broadcom has a very Strategic Vision for qualcomm, and qualcomm does not share it. That is right. As we put out in our story this morning, there is a fundamental difference between the two s ides. Qualcomm is old school. Its Still Believes it can grow and believes in its technology, and that is it Still Believes it can grow and believes in its technology, and that is different. Joe is that really why they are rejecting it . Well, you have got to separate what the shareholders broadcom believe what said today is basically they like what they are offering want,hat the management and some are on the board, and it comes down to what the board decides is a likely path. We are going to come back. Dont worry. We will get a deal done. We will be fine. It is really the case of whether the board will believe that. That qualcomm wants to be bought by broadcom, the right now they are saying they do not, and there is a very strong relationship with apple. Price, do raise the there could be a reason to sell at the right price . Ian there is all manner of positioning going on. Broadcom says they have a great relationship with apple, which is a way for them to say, hey, we will make all of these problems go away, but how much does qualcomm get paid by apple . That is what makes qualcomm such a good company. Many variables here that need to get worked out in terms of the deal. What you also found, ian, under the company had approach them privately and was rejected. What are you hearing another themny had approached privately and was rejected. What are you hearing . They arectively, what saying is, hey, come on, lets. Alk this out from the qualcomm management on what most i think people are expecting is we will see a price raise as a means of opening the door towards a more friendly way of doing things, but when i spoke to one person last week, he said he was prepared for these outcomes. Scarlet yes, the battle is just beginning from his perspective. Ian, when you look at the rest of the Semi Conductor space, how are others positioning pertains to this hostile takeover or a takeover, in general . Than twoave had more , in power is concentrated more and more in the hands of a and power is concentrated more and more in the hands of a few companies, and broadcom wants to be one of those. They have to go after intel, which is almost unimaginable. People are saying, perhaps, if this is consummated, we really know where the battle lines are drawn. Ongail great perspective broadcom and qualcomm. Thank you, ian. Scarlet lets bring you some breaking news, more m a news, an offer to buy buffalo wild wings, an offer of 150 per share. Private equity firm that focuses on companies that have investments in Companies Like jr. s, carvel, and carls in mid2015, peeking over 200. Under 100. Year, sort of struggling like a lot of these eightname chain brands brands. Gname chain clara and narrow bonnd panera to buy au pain. And venezuela rolled out the red carpet today. Literally. We will discuss the latest out of caracas next. This is bloomberg. Scarlet what did you miss . Red carpets, with venezuelas bonds expiring over the weekend, the government held what we could describe as debt talks, and they said more than 400 bondholders would attend, but not a single board member intended to make the trip because of u. S. Sanctions. Atning us is a senior fellow the council on foreign andtions, shannon oneil, we were not sure this was a a restructuring, or something else. We have been using these words interchangeably. The president used those words yesterday, saying he was not going to default. Anyone show up . You have a typical debt restructuring, but because of the sanctions and because of venezuela leaving the talks, himself a sanctioned individual, who can have the conversation . That is interesting. They brought people down there and gave them chocolate and coffee, and some of the u. S. Investors had to be in a separate room so they would not be in the same room with the finance minister and others who were sanctioned by the u. S. Government. So based on your knowledge of this, the debt talks, what actually was the outcome . The situation moved forward . Forward it did move think it shows that, one, this government is increasingly desperate. They have paid most of their debt. There is a question of whether it entered the banks. They have another one coming up, and they do not have the money for it. They are worried about sanctions expanding around the world paid we saw the e. U. Put sanctions on arms. Expanding around the world. We saw the e. U. Put sanctions on arms. As you mentioned, it appears that they got through. The debt payment, issues with mechanics, getting money into the accounts of bondholders. That alone is a fascinating thing. What do you think will happen over the next year, now that there is time before the next big payments come due . Today, the was a meeting to decide whether or not they missed a payment area payment. They paid it, but late. That is the shortterm pa we will see what happens there. That is the shortterm. We will see what happens there. But overall, what do they decide to do . They have cut back on importing food and medicine. People are starving. There is a whole other problem and also a political problem with this government, looking forward to next year when they also have president ial elections. Longerterm, it seems that many think that default is going to be the outcome, and on the bloomberg, take a look. This is venezuela. Insurance against the bonds, really suggesting, in fact, a couple of weeks ago, it is not a question of if they default but when. What are your thoughts . Shannon i think that is true. I do not see how they keep saying on the backs of their people. Oil production has been going down and fell below 2 Million Barrels per day. Previously, it was 3 million. This is falling month by month. I think this will continue. Scarlet this could be a good time for them. Shannon but that is not the case. Imagineis hard to even restructuring, but are their assets that investors might reasonably have claims on and have a shot at capturing . Shannon it is a question of sovereign default or of energy companies. Oil every day. Those could be grabbed onto, but sovereign debt at least right now would be separate. I think there is a good argument for why those two are the same thing, but that is a whole judicial process. And venezuela, when they have nationalized companies, they have gotten a judicial decision that has pierced that sovereign veil, so that is a long road. Scarlet you talked about how nothing got done, but if it was done for political purposes, to gin up political support, did they get that from a political point of view . To see we will have tomorrow, and the media there is very statecontrolled. That red carpet that you showed will definitely be front and center in the state run media. That there is a question. We tried to reach out and negotiate, but it was the u. S. Sanctions or the investors who did not show up. People whoy are the are destroying your life, not us, the regime. Abigail all right, great perspective. With the council on foreign relations. Thanks so much for taking the time to join us. Up next tesla could be hitting a legal snag. Why the company is being called a hotbed for racism. This is bloomberg. Scarlet it is time for the Bloomberg Business flash, looking at stories in the news right now. A founder has resigned from Venture Capital after claims about his conduct. He had taken a leave of absence. Who denies the allegations, says he will focus on personal matters, including taking legal action against those who filed false statements. Tesla is being called a hotbed andracist behavior, employees filed a lawsuit, saying they faced pervasive issues at the company. They want tesla to have stricter harassment policies. And after recommending gold as an investment in august, Bridgewater Associates boosted their holdings seven. The hedge fund also tripled its shares in a trust, according to regulatory filings. Investors sought safety because of rising u. S. And north korean tensions and natural disasters in texas, florida, and mexico. President trump made a personal xi jinping about basketball players who were arrested in china last week according to the Washington Post, which said that president xi promised to look into the case to make sure the three were treated fairly. They are accused of shoplifting store. Uis vuitton and that is your business flash update. Up, what you need to know for tomorrows trading day. This is bloomberg. Coming up this week, do not miss this. President trump concludes his trip to discuss security issues. Joe and the ecb conference, all sorts of things that central bankers will be talking about. Abigail and filings for the quarter come out. Scarlet that does it. You are watching bloomberg technology. Lets start with a check of your first word news. Republicans may be forced to choose sides in the Alabama Senate race as Sexual Assault allegations against gop nominee roy moore intensifies. Reporters in kentucky asked Mitch Mcconnell about his candidacy. Do you believe these allegations to be true . I believe the women, yes. Moore tweeted a response, writing that the person to step aside is mcconnell. Accuser, Beverly Young nelson, came forward in new york to accuse him of sexually assaulting her when she was 16. Mr. Moore attack me when i was a child. I did nothing to deserve this sexual attack. His position and has power. Today becauseward i want mr. Moore to know that he no longer has any power over me. The Washington Post reports moore pursued other teenagers decades earlier. Moore has ni