Clear winners while the homebuyers, there is less incentive to become owners. Scarlet i wonder if it is a terrible thing to be become like a germany. Joe we do have this history of encouraging homeownership. We got the housing bubble. It hurts renters instead of homeowners. Why not see if it balances out and not give a preference to one or the other . Lawrence the bubble was clearly a mistake and it arose from the subprime lender. From the societal point of view, it will enlarge the middle class , having a nation of property owners. Rather than having a nation of tenants. The fact that we have a solid majority of americans owning a home, and look at the overall wealth situation. Homeowners can only have a net 200,000, while the renters are stuck at 5,000. That is a dramatic difference. In order to a large the middle class, we need to encourage more Property Ownership rather than encouraging renting. Julia could we look at the 2 different bills we have going, whether it is the house or the senate, the way i see it, the house makes far more adjustments overall to housing vs. What is going on in the senate. Clearly you guys will push back and it is not good for the industry, but you have got to go to them with something, this is the very minimum we will are willing to put up with here. What is the very minimum you are willing to cope with not see further weakness are limitations to the middle class Going Forward . It is good for the industry, but more important, it is good for america. 85 of americans consider owning a property as part of their american dream. Even renters would like to become homeowners at some point later. The encouragement has always been there. The raising of the standard induction basically means you are enlarging the number of nontaxpayers. Homeowners can only pay roughly 85 to 90 of total income tax. Bearing a large burden. Without the mortgage interest, it would go even higher in terms of the homeowners. We need to understand that the consumer has expiration and we have always encouraged ownership , and some of the texas is to discourage negative behavior like cigarettes some of the taxes is to discourage negative behavior like cigarette smoking. Social benefits like more civic participation, lower crime rates, better students doing owning families versus renting families we need to consider all those aspects. Julia very quickly, lawrence come if we tie in the doubling of the standard production here, next standard deduction here, the wage growth that could come from tax reform, and the strength we are seeing in the jobs market, can you categorically say there will be a loss here . Lawrence absolutely. Julia even with all the positive benefits . Unemployment,r higher wage growth, that is what the country should look for, but not at the expense of real estate getting hurt and renters getting favoritism over homeowners. Course, onel, of group of homebuyers can make this work in their favor. They buy the property and turn it into rental property. From that there is a huge spectrum. 10 million home in the hamptons vs. A lockout been in this log cabin in the smoky mountains. Lawrence even a second home, there are allcash purchases. A large percentage of second homes and places like wisconsin, michigan, pennsylvania those were the swing states for the president ial election. We are hearing from our members that they feel uncomfortable how theyre going after the second homes or just generally against the Property Ownership, because they think america was founded on the aspiration and realization of poverty ownership Property Ownership. Julia brilliant. Great to chat with you. Chief economist of the National Association of realtors from washington. Coming up, a conversation with bill gurley. His take on his firms blessed uber ceo. E former this is bloomberg. Scarlet 2017 has been a bumpy ride for uber. Of course, cofounder Travis Kalanick stepped down as ceo. One firm keeping a close eye is benchmark capital. T was an early investor emily chang spoke to bill gurley s seatlked about kalanick on the board. I was replaced by my partner, t, and i know he is on the board and works with travis, and through my own conversations, he is getting good advice and help from travis. When i look at the current situation, i feel extremely happy relative to where we were in may or june. The entire board, including travis, is excited about the ceo. He is doing an incredible job. He did a great job interfacing with the regulatory bodies in london. You did it in brazil. Tony west,st, who eric holder helped us fire. We have reached a new level of stability and i look forward to where we are Going Forward. Emily benchmark which for travis pushed for travis resignation and went so for us to sue him. Why couldnt it have been done in private . Any Venture Capitalists hopes they can use persuasion to solve every problem that is out there so that stuff doesnt roll out onto the field like it did in this case. This summer, things that uber agreed to place from which we felt, along with 4 very large investors people say benchmark, but there was five investors including fidelity, who felt like all of the constituents in uber were at risk if action didnt happen sooner. We did some thing unprecedented. We get 2 questions quite frequently about this. One is i cannot believe you did this. The other is what any why didnt you do this sooner . We were in a place where we had to make a very hard decision. We, after much reflection, felt we were on the right side of history. At this point in time i feel like we have got things to a place where there is really Good Platform for success moving forward. While i wouldnt say that the i think we made the right decisions. Scarlet those emily chang speaking with bill gurley. Julia tampa the biggest business stories in the news right now. U. S. Bal settlement for the opioid epidemic. This according to people familiar. More than dozen states in 100 counties and cities have sued perdue, along with other opioid makers and distributors. The lawsuit accuses the fun of creating a Public Health crisis through marketing. The Justice Department is delaying a lawsuit against the time warnerat t deal becausewant to join the action. Was expected to be filed this week. At t wants to buy time warner in a deal valued at 85 billion. The next big hollywood film could be financed with crypto currencies. The producer of oscarwinner owndman is launching his token, movie coins. [laughter] julia im laughing because joe made a very funny noise. I apologize. It would appreciate based on the success of the film. And so displaying im a terrible googler. That is Bloomberg Business flash. Joe broken the julia concentration. Do the noise there you go. Scarlet joseph a lever. Julia we are going joe is a believer. Julia were going to do a segment on that. Scarlet but not right now. Shares are up sharply on pace for the best gain in more than a year. Abigail doolittle is taking a closer look. This is the comparable sales beat. Abigail they put up a very earningsarter and beat and sales. This comes in a tough retail environment, and to your point, comps did rise. We have a good short on bloomberg showing the rise. They have been in turnaround mode. This so longerterm chart. This is a longerterm chart. Lots of down comps. We see how the stock goes with it. In turnaround mode i feel like this is one of those companies abigail i love your point because i used to love i am getting myself, but back in the 1980s and 1990s. Very solid clothing, quality clothing, and that was when they were in the up vote. They have been in turnaround mode for a long time. Turning around right now is old navy. Mps are coming in better. Banana republic i used to love banana republic. Now it is so hit or miss, the quality. They need to turn that around. Something else they need to get right is bringing the right fashion merchandise to stores quickly so they can sell it. That has been an issue. They need another hit like cargo pants. Joe i will make that sound again. [laughter] abigail well, no opinion on whether or not that is true. Julia there was general agreement in the room here. [laughter] julia apologies for that there was general agreement, which is interesting. Thanks, abigail. Carlet Abigail Doolittle cargo pants, we will be wearing them tomorrow. We have the charts you cannot miss. From new york, this is bloomberg. Joe whatd you miss . Yield curve flattening. Maybe you didnt miss it because we have been talking about it a lot. I took this chart from our colleague. This is a look at every week and going back five years. Goes up, it is deepening. When it goes down, it is flattening. This is the most flattening just on a basis point level since late 2014. We are going to talk about it more on the show. But this really is one of the key macro themes, shortend rates run higher and the longend rates are languishing, driving lower. It is on everyones mind right now. Scarlet and everyone is wondering whether this leads to some kind of slow down and indicates a recession is on the way. People are looking for corroborating evidence. One piece of evidence might be in shares of walmart. Another walmart had a good week, the strongest sales growth since the recession. The blue line is the yield curve , the 530 spread. Walmart ande a strong week, but we know it tends to do well and the sales tend to be strong in times of distress. Consumers are looking for low, low prices. The fact that people are shopping for walmart and maybe that is an indication things are about to turn. Julia i like it. Talking about Interest Rates on my side of the equation. What im talking about is that st we asked about north korea, it is a risk, but we cannot price it. I would like to credit donald trump for what we are seeing behind the scenes, chinese envoy being sent to pyongyang, to the north capital. Maybe this is some result of the talks President Trump had in asia, but what we have seen is the cost to insure a south korean debt dropping the most in three months you can see that over on the right hand side. Perhaps it is to do with the dialogue going on. It is a bilateral swap a great between South Koreans and the canadians, decreasing the risks associated with south korean debt. I would like to credit donald trump, please. Scarlet im sure he would like to credit, too. Joe but it might be trudeau. Julia precisely. It is a good sign the risk of north korea is a concern here. Scarlet good news for all of us. Market close. The it is coming up, and we have a down day for u. S. Stocks. Bit of a choppy week. S p 500 losing just over five points. From new york, this is bloomberg. Julia whatd you miss . Stocks end in a choppy week ending a choppy week in the red. Is you are tuning in live on if you are tuning in live on twitter, we want to welcome you to our coverage. Ourlet lets begin with market minutes. We had a market rally yesterday that was not followed up. We had to climb studio 100 points for the dow industrial, so a threedigit decline we of 100 pointsoday for the dow industrial. Not huge selling, but no followthrough from yesterday. This is a company that just made its ipo today, closing up 1 from its initial offering price, stitch fix. Gap turning the corner, samestore sales rising for a fourth straight quarter, up by almost 7 . Old navy is the turnaround story. Foot locker, another big gainer ofthe day, showing signs pulling out of the sneaker downturn that has been rippling through the athletic gear industry overall. Abercrombie fitch up by almost 24 . The teenfocused hollister chain was the star for the company and make up for the namesake store. I was just thinking of the lfo ong summer girls. Someone remembers it. Joe short and of the yield curve, relentless grind higher continues short end of the yield curve. Yield tickingyear down to 2. 35 . This is the last month before, i showed how this was flattest week, the week since 2014, also the flattest in, like, 10 years. You can see how much we have traveled down since the middle of last month in terms of this curve. Julia the 10year just stuck. Lets look at currency and give you a snapshot of what the majors are doing here. At dollaryen right now, but the euro is headed for its best week in more than two months relative to the dollar. German data showing the euro recovery remains pretty consistent, pretty strong. Euro callshis is versus puts. These are threemonth risk reversals. You can see a consistent reversal, now trading close to october highs. This is the best bullish sentiment we have seen since october 2 thousand nine, despite the fact that we have not got the European Central bank not pricing in any full rate hikes until 2019. For europe. Goldman sachs coming out today saying they see a solid dollar. A soggy ecb does not have to do any work because the currency is kind of doing it for them. Quick look at dollarindia as well, jumping the most in eight months. Movies upgrading the country plus bond rating moodys bondding the countrys rating. This in recognition of structural reform. The commodities front, up. Of over 56. 50 oil gold futures have been inching up a little bit lately, too. No 300 an ounce. 1294. 40. Scarlet when you look at what is going on, what is being priced into the market right now, do you Pay Attention to the flattening yield curve . Do you look at the fact that the 10year yield cannot seem to move out of its range . John yes, but it is nowhere near flat enough to tell you you have a problem. Right now, the market says there is not a recession anywhere in sight. This may not be an inspiring market, but it is likely to keep grinding higher for much longer than perhaps people think. I think that really is the story. Six out of the last seven days or five out of the last seven days we were down not huge by any stretch. Jonathan down six out of seven days, 2 3 of 1 of alltime year . His theres not a story. Thisngs were really good season. We beat expectations by 6 . Earnings came in at 10 year over year growth including problems you had with hurricanes affecting insurance companies. That is about as good as you get. As far as the yield curve or any of these other macro signals, they are coming in in general in ay been nine benign way that is not concerning people. What is concerning people is if the market is becoming complacent. Saying seeing investors of sensibly focus on you are seeing investors of sensibly youre seeing essively focus on risk. Jonathan here is the story when you do not have an expectation of recession in the eext 12 to 18 months, p multiples go up every year you have limited recession risk, which means the market right now is really expensive and a year from now, it will be even more expensive and we will complain about it again. What you have to ask is what is going to break this cycle where things go bad on you. To me, there is one risk that we are not seeing now, but the most likely one to come up is Wage Inflation will eventually show up. When it does, the fed will get freaked out and get more engaged , but we are not seeing anything right now that tells you it is yet. Thea is it more about rising Wage Inflation or the tension we see in the risk assets . Jonathan their mandate is inflation and growth. You were flipping through one of my reports before, but when the fed moves to ultra easing policy, the market sensitivity to what the fed does went down. When money became free, the market stopped being as sensitive to it. I think it really is the fact if wages are not a problem, the fed is fine. Scarlet the market is less sensitive when the fed eases. When the fed starts tightening, do we expect that sensitivity to return . Jonathan when we get back to something that looks like a normal level. What is that . And onbetween now the short end of the curve, said before thee 2, 2. 25 market starts really paying attention, saying this is getting tight. There is a long way to go between now and that point in time. Read on tax your reform and specifically how much it is worth to the market . Jonathan i have a very nonconsensus view on this. If you look at the companies that benefit the most from tax reform, they have largely been last sixorming for the months or so, so i do not think the market is being driven up by this. My concern is i think the cycle will keep going on as long as you do not get Wage Inflation. If you put more stimulus and pressure on an already tight createarket, it will more Wage Inflation, and it probably gets the fed more involved and shortens the business cycle, so im not sure tax reform is all good. Joe could that be a contributor to the flattening curve . We could get that shortterm jolt and get a little closer to that point pressuring the fed. Jonathan yes, you said it better than i could. I will not even try to repeat it back. That is exactly what i think happens. With low unemployment, if you try to stimulate this, there will not be people to put to work. The market may end up being less pleased. I do think you get a big jump initially. I just dont think you get a lot of followthrough. Julia how do investors make money in the interim . Importantnly question. Jonathan i would continue to stay long in the market. Within sectors, tech looks absolutely brilliant. Underlying fundamentals in tech and internet retail are just fantastic. Thanarnings growth, more 10 better than expected. That is unbelievable. The banks look really attractive. Everyone is focused on what the administration is doing on taxes. Quietly, they are doing a lot on the regulatory front. Much, thank you very chief u. S. Equity strategist for credit suisse. This is bloomberg. Alabamas governor says she plans to vote for Republican Senate candidate roy moore, even though he faces accusations of sexual misconduct. Today a reporters factor in her position as maintaining republican control in the u. S. Senate. Meantime, roy moores wife says her husband will not step down in the face of those accusations. She says they have been married for over 32 years and that the army veteran has always been an officer and a gentleman. After escaping house arrest in his native venezuela, the former mayor of caracas has fled to colpe by way of columbia ombia. He was accused of plotting to remove the venezuelan president. The embattled ceo of puerto ricos Public Power Company has resigned. He was under fire for the islands effort to rebuild the electric grid following hurricane maria, in particular the decision to award a 300 Million Contract to a tiny Montana Company that raised eyebrows and red flags. The contract has since been canceled. The white house says it will send an aid package to help with recovery from hurricanes in texas, puerto rico, and florida. This is President Trump posterity request, bringing thirds President Trumps request, bringing the commitment to new 100 billion. Julia whatd you miss . Five years ago, jon stewart of the daily show called it a deal. Yet legal a similar story is emerging builder. U. S. Home lisa is here to explain. Great to have you back with us. An isin to us who hovnani an explain what a credit default swap related to this company means. Lisa i dont think i will do it justice, but i will say, hovnanian is the biggest new jersey home builder. The issue here is its credit default swap. At the heart of what these instruments are is the idea that investors want to be able to protect themselves, insure themselves from losses in the does not a borrower come through. Saying to the company, we will offer you financing and a more attractive rate than what you can get elsewhere as long as , even ifto default it is a technical default, even if you just miss a few payments, because they will get paid out in the credit default swaps market from the people on the other side of the contract. Scarlet it is almost like a side bet on the company in a way. Lisa yeah. I dont want to say the company will not be affected, but affects because it does affect the perception of their credit, but they will not have to pay anything out. Joe blackstone is offering cheaper financing than they otherwise would because they are getting this cds trigger, but obviously, this enrages the entity that wrote it. Lisa which is a number of different players. The Hedge Fund Manager, citadel, black rock, goldman sachs, and a bunch of others on the other side of the trade that stand to lose potentially quite a bit should this go through as blackstone would like. Julia it is a small trade, though. Something in me says hovnanian benefit because they get cheap funding. Blackstone is eventual essentially lending less than the market would do. Lisa on a technical level, this is genius. Blackstone is coming in saying they figured out the game better isn the rest, and hovnanian saying that it want to mess around and potentially deal in something that feels unsavory. At the same time, you have a fiduciary sponsor ability to get the lowest possible financing costs, but there are other questions on a broader level, which is the more this kind of in the creditns default swaps market, theres a question of what that does to the integrity of the market and the ability of people to rely on it as an accurate gauge of credit risk. Scarlet and the point of the product as well. The product is meant to be an insurance policy, and it feels like there is an artificial situation being set up. , but itat is correct has gotten away from something it has gotten away from that over the years. Joe if this were to become more regular, you would see companies being much less inclined to write credit default swaps, if there could be games that we play. Lisa it does happen not infrequent me and there is a larger question for the market. I dont want to get too technical, but you have these credit default swaps, but also credit default swaps that rely on companies and their perceived health and their perceived ability to repay their debt. A lot investors have been upset these marketsat have fallen down. Theres a question with these kind of shenanigans. Will people be less willing to engage in these markets if they can be manipulated by one player getting in and getting such a big size they can play around with the Company Capital structure . Could it make the company less liquid and less viable . Are talking about Companies Potentially in distress, too. The bond has to be trading at very low levels in order to make it financially worthwhile. Lisa this is the interesting thing. Trading ats not stress levels. It is trading at par. When a company defaults, the amount of people selling protection the amount that people selling detection have to pay is based on that bond. Right now, it does not look like there is the economics, but blackstone is creating a new security that will have a much lower value to use as deliverables so they will get a much bigger payout. They declined to comment, but they did say to jon stewart they shot back that time saying ont he was the funniest guy tv, but that he misunderstood how this would keep the company afloat. Thank you so much. One of the most widely read stories on the bloomberg today. Coming up, tesla introduces the stellartwo new vehicles, but is it all a distraction to of secure larger problems, which is a livery on those model 3s delivery on those model 3s . Julia whatd you miss . Elon musk wowed another audience last night, but it has not soothed some investors worries. Tesla still has not addressed its production problems. Jamie is in detroit. Great to have you with us. Talk us through what we saw unveiled last night. I know there were a lot of expectations. Did elon musk managed to fulfill those expectations, aside from the concerns we still have about model three . Unanswered, and the questions about the truck, but it was a win for elon musk last night. He unveiled the truck on time last night, like he said he would. They brought the truck out, said it will have 500 miles of range. It will charge pretty quickly. Super torque, great acceleration. They did a demo of how much faster it gets to speed than a regular diesel truck, so that was the big win, and then he had the surprise moment at the end where they pull out the tesla roadster. It was surprising, and we knew that roadster was coming back, so it is there a hot. Joe why do people think any of these will see the light of day, or at least any time soon . What is the reason to think they could scale these up in any sort of reasonable timeframe . Jamie the idea of how they are going to make them, find room to make them, where they will make them, and do it within the other promises they have already made. S a big question mark but a lot of people would not have expected elon musk and tesla to still be in business and have three vehicles in their lineup at this point, so they have really achieved a lot of things that did not seem very practical. Most of them come later than initially targeted, but eventually, they have gotten them out. There is such a huge backlog on model three, and they are trying to make more model 3 us out of that factory than toyota could make corollas, but with enough money, you can solve enough problems. Julia it is all about the innovation, though. So many people comparing him to steve jobs, or have to see an actual followthrough but we have to see an actual followthrough. What do you make of the roadster . Jamie very pretty. It is a niche vehicle, and this is tesla being like a car company. Sometimes they are a tech company or an energy company, but as a car company, you want to have a halo car that elevates your brand, and this was the perfect vehicle to do it with. This was the original vehicle, and we always forget about it. They had the one before these current 3s, so it was great for them to bring this back. Scarlet the product lineup now includes the semi, the roadster, the model 3, the model s, the model x. What is next . How do they execute . Jamie it has to be the actors need to start producing a itlbore they need the has to be the factories. They need to start producing at fullbore. You add up what they promised and planned, it looks like they will need a second or Third Assembly plant. A second, third, fourth battery factory. They will have to put billions of dollars into the ground and thousands of people they will have to hire and train. Scarlet jamie getting me more excited again over teslas new truck. A former Hedge Fund Manager is offering a word of caution for investors looking to venezuela. This is bloomberg. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Mark im Mark Crumpton with first word news. The wife of alabama Senate Candidate roy moore said today her husband will not quit the race in the face of allegations that he sexually assaulted young women years ago. She was joined in montgomery by several dozen women at a rally supporting roy moore as she spoke in defense of her husband. Let me set the record straight even after all the attacks against me, against my family, against the foundation, and now against my husband, he will not step down. Mark meanwhile, the governor of alabama says she plans to vote , despite the allegations. She said a factor in her decision is maintaining republican control of the United States senate. Civil rights leader Jesse Jackson has announced he has parkinsons disease. In a statement, he announced he will make Lifestyle Changes in order to slow the disease us progress. The killingay says of transgender people in the United States is on the rise. The Human Rights Campaign says 25 Transgender Americans have been homicide victims this year, the most in a single year. The report says discrimination has resulted in transgender on ae having to rely dangerous underground society to survive, putting them at risk of violence. Reporters were told today the u. K. Had not yet made sufficient concessions on settlements or the issue of the irish border, but british Prime Minister theresa may remains confident that brexit talks will remain on schedule. We agree Good Progress is being made, but we are clear and i am clear that what we need to do is move forward together. That is how we can ensure we will get the best deal for the United Kingdom and the european union. Received a warning that several issues need to be resolved by december in order for brexit talks to advance to. Rade i am Mark Crumpton. This is bloomberg. Recap oflets get a todays market action. A down day for u. S. Stocks. We could not build on yesterdays rally. The dow losing 100 points on the day, despite some big gains in some retailers, which shows you we are at the end of earnings season. Joe i missed it yesterday because i was not here, but i heard we had some big gains. Yesterday, the International Swaps and Derivatives Association made it official venezuelas state oil company is in default, triggering credit default swaps on some of its 30 billion in debt. Already, some are drawing parallels between the chaos in venezuela and argentinas defaulted debt. Two separate issues going on. I just want to clarify what we talked about yesterday on the show, saying now weve got the credit default swaps. The Insurance Protection has been triggered. How is the payout determined on that . Can you briefly explain that, and then we will move on to the comparisons with argentinian venezuelan default. What is going on with venezuela is that these payments that were not made, which triggered the credit default swaps, are said to be by the government on their way, but they were not there in time, so if you are holding the cds, you get paid on the trigger on your insurance, but you potentially also get paid on your coupon, which is on its way. What will be interesting is to see lets say the coupon is on its way that does not make it into your bank account before you are supposed to deliver your bond to auction, which is one way of settling cds. You bring your bonds and submit them into an auction, and they figure out what the right rise is and you make 100 minus the youe of the bond, but do want to submit them to auction if your coupon is on the way . This is something we are now talking to traders about. Typically, you want to bring the cheapest to deliver to these options. If these bonds are technically in default but not really in default because their payments are late, the price will not be as low as it would be in a typical situation. Julia critical. Joe common theme across multiple segments today on whatd you miss . We talked about this on one of your recent appearances on the for owners of these defaulted bonds, is there anything recoverable . It is not clear that anything is. This is no argentina. What is the story there . Katia we spoke with jay newman, who ran that on the argentine default for 15 years and retired a couple of months after engine tina finally paid. We talked to him about what he sees in venezuela and what he makes of the situation. What is really interesting is that unlike the case of argentina, venezuela has a state oil company with assets around the world. It is involved in global trade. Argentina was a big commodity producer but does not have state entities from around the world. The ability for elliott to collect on argentinas assets was really hard. They ultimately won because of legal savvy. It had nothing to do with seizure of assets, but a lot of people said with venezuela, you had so much to seize that it will be easier, and his point is no, it is not. He thinks the value of assets around the world is very small because so much has been borrowed against them, so you have very little to fight over, and third, he said you could be in a situation where it loses its Oil Concession because it belongs to the government. Me aboutat confused this is that the russians, the chinese are happy to lend venezuela money because they recognize theres underlying assets here with the oil. You are saying the state could go the state oil company does not own these assets, we own them. Katia exactly. It is left with all the liabilities and none of the assets. If you want to hold out and i situation, youve got to claim on nothing. You have an empty bag full of liability. Julia what happens if these bonds were issued under new york rules . Does that give them protection . Katia they could sue in the United States, but the point is that they will be pretty valueless. They are worthless if the no longer producing any oil, right . It is really kind of fascinating. Almost a Conspiracy Theory because you have to assume the worst Case Scenario that the government is willing to do this to creditors, and it has mostly been shrugged off, so to have a guy like jay say that this is a ibility [indiscernible] they have made that clear. Scarlet what is next . What will you be looking for at the next turn in the story . Day. it is really day by we are all in the dark. This is the most opaque i have seen. It is really because the government says one thing and that does not end up happening, or at least it does not end up happening right away, so nobody really knows they are being lied to or if there is something more devious at play. Right now, we are tracking to see if they are actually making the coupons they claim they are making. When is a default really going to happen . They say they are going to keep paying coupons while they figure out when debt will be restructured, but then the coupon payments take so long to arrive, we are all trying to piece together if they are faking a default or not, so it is really fascinating stuff, every day keeping track of those payments. Thank you so much. Coming up, once a trailblazer in online media, now mashable may be acquired. We will talk about what this may mean in the digital space, under a lot of changes right now. This is bloomberg. Scarlet whatd you miss . Mashable is one of many newer online Media Companies running low on cash and seeking financing and is near a deal to be acquired. Its not just mashable. Its other Digital Media properties as well. What is the backdrop . Why are they running low on cash and why are they not getting the eyeballs they once did . There was Venture Capital enthusiasm, Venture Capital enthusiasm, and they assumed advertising would follow, but facebook and google have swallowed almost all the money. These companies raised a bunch and do not have much to show for it. All that original video takes a lot of investment and money and you are not seeing a payoff. Lucas they raised a lot of , and theinst the idea rates on online media are pretty small. Joe what do you think is above the overall sustainability of the Business Model . I dont think mashable was considered to be the top tier, but buzzfeed long considered to be the sort of bestofbreed, and they are substantially missing their estimates. They have been around, like, 10 years and are still struggling to find their Business Model. What does that portend . Lucas that online news was probably overvalued five years ago and now there is something of a reckoning. The companies that have successfully navigated this are companies that have found other ways to make money. Selling shows to television. That old model still has real revenue for them. A lot of people are saying consolidation was needed, and probably, there would be some strategic acquirer out there. Who are the natural acquirers echo when we look at the landscape out there, the big Media Companies are busy talking to each other, disney at fox, comcast and fox. Lucas viacom once upon a time talked about putting together fu onion, and i think it was college humor, but you are right that we have to comcast,stocks disney, fox talks shakeout before the small ones do. Is there space for all of these people . Do we need to see consolidation . . E they adding value lucas if you look at it in terms of the tears that joe years, the smaller ones need to be consolidated or go away because they do not add as much value. One of the challenges for the larger ones is that in trying to pursue scale, they may have lost sight of their core identity, their core brand, but buzzfeed alsoice have sprawled into to areas that it is difficult to know what they stand for. Julia would speculation change this . After the ads spanned by russians according to intelligence sources and the fact we have regulators asking questions of the like to facebook and google making us think about where the advertising spend is, do you think regulation changes it for these smaller guys . Lucas theres a belief among investors that Media Companies will eventually collect a greater share from facebook and google, but facebook and google have been slow to adapt. Joe i think some of these companies do phenomenal journalism. Their intuition about what people like online is extraordinary. There is no being good enough to get leverage against those companies . Lucas unless you get so big that they have to listen to you or some regulation says, facebook, google, please make this more hospitable to these other companies. I dont know, i think there is perhaps opportunity here. They just have to redefine their roles. Thank you for joining us. Avoid a nohe u. K. Deal exit from the eu without capitulating entirely to the demands . The blocs some insight next. This is bloomberg. Julia whatd you miss . A big deadline looming in the brexit negotiations. The eu says the u. K. Must agree to pay its divorce bill by the summit of the European Council. If not, the potential collapse of talks looms. We spoke to the senior visiting fellow at the London School of economics who laid out what he sees could be the possible outcome. Is lots of noise about what this person wants, what that person wants, and what that persons red line is, and it does not really matter what that persons red line is. A choice ofhave accepting with the eus offering or crashing out without a deal. That is that reality, and it is starting to sink in. What is the endgame . Where are we in march 2019 and thereafter . First of all, we have to get through the next European Council meeting when one hopes a decision will be taken about moving from phase one of the negotiations focused on Citizens Rights and how much britain needs to pay to the eu and the issues at the irish border to the future trade relationship, and we are not there yet. Just today, the irish Prime Minister said he wants a written about there not being a hard border in ireland, which will be hard to avoid. We are nowhere near the u. K. Promising to pay what the eu is demanding. You think it is just a matter of time before that 60 billion is signed, sealed, and delivered . The choice is to crash out without a deal. If you are a certain kind of can tell yourself it is a supplyside shock and that you cut off relations with , andmain trading partner out of this the phoenix of the british economy rises, and suddenly it is a supplyside boom. I do not think it is a particularly credible story. If you go down that path, at the last minute, either you have a financial or some kind of crisis or just sheer panic, and that leads to either accepting the eu cost terms at the last minute or potentially deciding that brexit is the wrong decision. Side,s take the other the other possibility that as you say, the u. K. Does accept eus terms. Rms then what does the economic scenario look like . s if the u. K. Accepts the eu terms, that includes a transition period of around two cost of, then the brexit is postponed. As it stands, the u. K. Position is that it does not want to be like norway, and it does not want to be like canada. It wants the flexibility with much better market access, and the reality is that will not be possible. That is going to hit very hard because it is an trade deals with other countries. Going to hit Financial Services in london in particular. Speaking of Financial Services, we have heard from a number of Different Companies talking about their contingency plans or even just their plans already to move some folks to other cities in continental europe. Under the current scenario, do you think that what we end up seeing for the Financial ServicesIndustry House in london will be worse than it currently looks like, or will it be better or just about as expected . It depends on who is doing the expecting. I think certainly, there will be jobs and operations moving, and, clearly, that has an application for the cost of any financial business. You have to have two subsidiaries in europe. If you are a bank, you have to have two separate capital bases, and that over time can lead to london losing much more ground than it might initially. Its time now for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. Natural disasters have made it a tough year for insurers. In an exclusive interview with soomberg, ali on allianz chief Financial Officer spoke of it. Less than 100 million euros, which was really small, so i if the insurers come to us and ask for more money, we will be hesitant to agree to this. Scarlet he said the catastrophic weather will not suffer company from reaching its projected profit this year. The Worlds Largest wealth manager is not allocating funds to bitcoin to do a lack of government oversight according to the chief investment officer, who says bitcoin has not reached Critical Mass to be considered a viable investment. Ubs is being cautious, and its not that out of the ordinary. Julia big bank. Makes sense. , thethink of the risk moment Something Big happens, a terrorist attack, and they find out the funding channel was bitcoin. You have to consider the risk and the legal ramifications. Did you see the value of bitcoin in zimbabwe this week . That was incredible as well. That was my chart of the week. I thought was incredible with the zimbabwean stock market. Scarlet just give yourself a shout out. Joe the key thing, in dollar terms. Coming up, what you need to know to gear up for the week ahead. This is bloomberg. Scarlet whatd you miss . Little bit of volatility in u. S. Stocks with stocks ending lower on the day. For theill be watching fed minutes throughout wednesday on 2 00 p. M. Eastern. Also wednesday, Philip Hammond makes his budget statement before parliament. Scarlet that does it for whatd you miss . Julia Bloomberg Technology is up next. Joe a lisa im a Alisa Parenti in new york, and you are watching that contract has since been canceled. After escaping house arrest in his native venezuela, the former mayor of caracas has fled to europe by way of colombia. In a phone interview, he told , i am moreed press useful fighting for venezuelas mockery