Transcripts For BLOOMBERG Bloomberg Markets Balance Of Power 20180112

Have been reached. Us morning on twitter, the president denied the remarks but democratic with dick durbin, who was presenting the plan along with Lindsey Graham, pushed back. Comments inseen the the press, i have not read one of them that is inaccurate. To no surprise, the president started tweeting this morning, denying he used those words. It is not true. He said these hate filled things, and he sent them repeatedly. White houselcome reporter shannon pettypiece. How much has the threat of a potential Government Shutdown risen in the past 24 hours . Shannon these comments, again, certainly are not helpful, about haiti come in getting a bipartisan deal. To the extent immigration and daca is part of the government deadline, ited as only complicates things. It also comes with its things on reaching broader immigration deals, if they decide to put on daca until march and include more immigration issues. Havelicans on the hill been working diligently to make some agreements amongst themselves to portray this as a dispute over National Security and border funding, security for ice agents. Now the president s comments bring a whole racial element into this that is disruptive, if not a complete derailing of the work that had been done on the hill by republicans. David disruptive in washington, is it within the diplomatic corps . He has anday, ambassador to panama, a former marine, career officer, who resigned as a matter of principle. It is absolutely disruptive with our diplomats overseas. The state department was furious over this, that the top official in haiti have been contacted by the haitian president to discuss this. Been hoping for some sort of apology. Not just in haiti but africa, latin america, a number of countries now, asking, are we, too, in that category, how do you feel about us . It is enormously disruptive to a lot of partnerships that the u. S. Needs around the world. Shery of course, this comes at a time when President Trump is making headlines, his physical exam today. When do we expect the results, will we also get a psychiatric exam, as some have asked for . The white house spokesperson was asked specifically about a psychiatric evaluation, he said there would not be one. The president , like all americans, has the right to keep his medical information private. The information we receive is the information that President Trump decides he wants released. That being said, the white house says they will put out a brief statement after the exam, which will take place this afternoon. Then the president leaves late in the afternoon for florida. Then on tuesday after the holiday, when the president comes back, they have said they will have a briefing with the president s position and opportunity for reporters to ask questions. They are certainly taking looking like they will take a transparent posture here releasing information from the exam. Thing, tell me about the f52 fighter plane that we are apparently selling to norway. Shannon it appears the present was reading from a statement and conflated two numbers. One is the number that signifies the type of aircraft it is, the there had been 52 orders placed, which was in the written statement. He ended up saying that there we a f52, which as far as know, is not a real aircraft, only in a videogame, unless there is a secret videogame Lockheed Martin secret project Lockheed Martin has. It was one of those odd moments in the white house. It kind of flu under the radar, no pun intended. Shery not sure President Trump would have. Thank you for that. Lets get a check on the markets. Abigail doolittle has the latest. Another day of record highs for the major averages. The rally continues for stocks in the u. S. Dow, s p, nasdaq all higher. On the week we are looking for another strong weekly gain. Nasdaq hads p and their best week since december, 2016. This week, all up more than 1 , the dow up 2 . Optimism about the earning season underway, plus, tax reform. The records are not limited to the major averages. Look at dow transports, up half a percent. Nine days in a row, the longest such daily winning streak since 2013. Adding to that strength, lots of momentum in airlines after a relatively left rough year last year. Delta put up a betterthanexpected quarter as well and talked about fares rising. Russell 2000 also putting in a record high. Perhaps one source of bullish optimism for investors, core cpi readings came in higher than expected, helping right job. Rates jump. Nowlue is the 2year yield, about 2 , for the First Time Since before the financial crisis in september 2008. In white, we have the s p 500 dividend yield. Amazing that we are seeing them cross. 2 2year yield now yielding more than the s p 500 dividend yield. One thing that rising rates are not helping today, the dollar. Take a look at the dollar index. We see down. 6 , its worst day in a month. Typically, raising yields rising yields and rates tends to help currencies. That is not happening. Today we also have the euro strong, up. 8 , after the German Coalition accord. The dollar taking a little bit of a beating, not helped by the rising rates we are seeing. Seems to be creating a risk on tone for financial markets. David thank you. Coming up, he says the president has a bad idea on immigration. As the dreamers wait for a deal on daca, john kasich has offered some solutions of his own in a new oped. We will hear from him next. Live from new york, this is bloomberg. David this is Bloomberg Markets balance of power. Im david westin. Shery im shery ahn. Lets get a check on the first word news. Mark crumpton has more. He signed a proclamation honoring Martin Luther king jr. Day, President Trump did not respond to questions about his use of vulgar language regarding immigrants from haiti and africa. As expected, the president took to twitter to deny media accounts of what he said. But during the signing ceremony come heat he spoke of dr. Kings legacy. This april, we will mark a halfcentury since reverend ing was so cruelly taken from us by an assassins bullet. While dr. King is no longer with us, his words and vision only grow stronger through time. Mark the chairman of the congressional black caucus, saidc rissman, a louisiana the president s comments about haitians and africans reinforce the concerns that we hear every day, that the president slogan make America Great again, is really code for make America White again. The u. S. Ambassador to panama is stepping down reportedly saying he can no longer serve the trump according ton, multiple media reports. The state Department Confirms john feeley is leaving his post that says it is for personal reasons. He was confirmed as ambassador to panama in 2015. The president has canceled a trip to london to open the new 1 billion u. S. Embassy, avoiding protests promised by political opponents. Some lawmakers had said mr. Trump was not welcome there after he retweeted videos from a far right British Group and criticized london mayor sadiq khan following a terror attack last year. President trump says his decision was due to concerns about the embassy move from the elite mayfair district to a far less fashionable area of london. Were churches in chile attacked with firebox today, days before the pope makes his first visit to the country. Was injured. Unknown attackers through pamphlets at the scene that contained a message for the pontiff. The next bombs will be in your on monday. Arrives global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I mark crumpton. This is bloomberg. David Governor John Kasich of wrote an oped in the new york times. He specifically says they are making a terrible mistake with the spec to daca and the dreamers. They should be allowed to stay in the country. Says securing the border is unregulated labor is unacceptable. I spoke with the governor a short time ago and asked about the approach he would take with different groups involved. John these groups of people are right on the razors edge. Are they going to be divided . Think about this for a second. Imagine that your son marries a dreamer, they have a sixyearold son, and then the dreamer come his wife, is told she has to leave the country. The sun causing and says, where should our son go, should i leave the country . We dont need to do that. These are people contributing to the country, they are working hard here. If they break the law, that is one thing. But if they are lawabiding and fully integrated, no reason to ship them out. Secondly, on this business of the salvador ins, you had george w. Bush that let them in, gave them a waiver, same with barack obama. Wheres a kays again there is no reason to start yanking these people out of our country to ship them back. We need changes in immigration, do we need Border Protection . Of course we do. I voted for Ronald Reagans plan in 1986. We did not see the kind of poor security that we wanted to have. Thats important. But lets not look in the Rearview Mirror to try to make up things that are mistakes made before. Lets look through the windshield. In this case, ripping families apart, going out there to deport people does not make much sense to me. In terms of the 10 million, 11 million, i was the only one on stage who said they should not have a path to citizenship but should be legalized, and all to pay some back taxes and things like that. There is not a practical way, nor is it right, to start driving around with school buses , loading them up and dropping them to the border. It is absurd. They have to forget the politics , make the changes that need to be made, but give people relief today, who really are so fearful of their families. Shery you said it governor, this seems to be politics. Is this just president right now taking a hardline stance in order to gain some Bargaining Power . John i have no clue. One minute they are saying we can get a deal, the next minute, no deal. You had a Bipartisan Group from the senate show up yesterday, and they got shot down. I dont have all the knowledge of their plan but it was basically things that both sides gave a little bit. What i dont like, and i hope the viewers dont like, is he using dreamers, kids that were brought here by their parents years ago, who are sort of a pawn in all of these negotiations. These are people we are talking about. We have a Republican Party that has always been profamily. Ok. Keep that in mind. The other thing thats important , i was talking to a senator the other day, saying, tell me about the faithoriented people that we have. We have a lot of them. Faith requires action. You dont want to disrupt these families and scare these kids. That is not what we learned from our faith. Lets just get something done here, we can deal with the more complicated issues around the corner, and the democrats will say we will do it. But there is nothing getting done. Maybe it will. I dont know. You tell me what will happen tomorrow. This could never make it on television because this is a reality show that no one couldve ever imagined. David in the end, to get things done, it is the art of the possible. Politicians, a number of republicans, who think it is in their political interest to take a hard position on this. Maybe they believe in it, i dont know. I think they ought to just pass a bill in five minutes. Ive been saying this for months , that says the dreamers can stay. End of story. That is what i think they should do. David you would be in favor of some sort of Border Protection as part of that. John if they want to put that in, fine. Take care of the dreamers and then you can do more comprehensive reform. We need copperheads of immigration reform. We have to make sure we know who is coming in, that we protect our borders, but why are we using the dreamers as a pawn in these negotiations . These are people. This is not a statistic or number, these are real people. Shery do you need to protect the dreamers before government funding runs out january 19 . I think they shouldve done this months ago. I dont know what they will do. I just hope these folks get protected and they can get this thing done. When i served in the congress, i was chairman of the budget committee. We balanced the federal budget. Bill clinton was the president. What was the result . We pay down the largest amount of a publicly held debt in modern history, balanced budgets, we worked together. Same thing was true on welfare reform. It is just a place that has become dysfunctional. David if you are back in congress today, would you be one to shut down the government in order to take care of the dreamers . John the answer is go to work and get this fixed. There is an inclination on both sides to avoid a shot down. Nobody wants to do a shot down. But i will also tell you there are times when you say, im not going along. We will see how it goes. Shery Governor John Kasich, republican of ohio. Coming up, a bipartisan immigration deal shut down by the president. Our next guest says it was the right move for the white house. This is bloomberg. David this is Bloomberg Markets balance of power. Im david westin. Shery im shery ahn. Hitting a wall. President trump rebuffed a bipartisan immigration plan headed senators to urban and Lindsey Graham yesterday that would have protected the socalled dreamers. Our next guest says every element of the plan was undetectable and warned the white house would be in deep trouble with its base if the president signed it. Directororian is the of the center for immigration studies. What was the big issue for you with this proposal . Mark every part of it. It looks like it was designed to be a deliberate insult to the president. Not justce, it did amnesty the people with the talk of work permits, who were the subject of what were talking about. All theamnesty to socalled dreamers. So probably 3 Million People, rather than 700,000. This is maybe the part that really got my goat. It gave work permits to the parents of all of those socalled dreamers. But the whole point of the dream act, and all of his push for daca, is that these people came as children, came before they turn 16, they did not break the law knowingly. So they should not be punished. There is something to that argument. But their parents do what they were doing, they were adults, and this proposal would have and just eat all of them permanently, given them indefinitely renewable work permits. It seems to me to have been a deliberately crafted insult to the president. David however we got here, what is it you can agree to . It sounds like you could agree to something that allow people who were brought here as minorities, young children, who now have work permits. Would you agree to give them green cards, pathway to citizenship . Mark absolutely under certain circumstances. That is amnesty. Its be honest about what it is. But every industry has consequences. It attracts new illegal immigration, and two, it creates downstream more chain migration, as those people sponsor their relatives a few years down the road. So you have to deal with those two consequences. If you got rid of chain migration and had real enforcement measures, i would be happy to have a package like workthat gave the dacas permits, green cards. The problem is, democrats seem to be willing to throw the daca people under the bus in order to preserve chain migration and keep it going. Shery you say the bill would have hurt President Trump, but the fact remains, if you dont get a deal on immigration or daca, the democrats could shut down government it would not be more harmful to the president . Mark democrats will not shut down the government over this. They already chose not to do so last month when this came up. They are not going to do it before january 19, which is when the funding bill has to be passed by. They are not going to shut the government down over amnesty for illegal immigrants. It will not happen, take it to the bank. David you refer to the democrats a couple of times. It is also republicans. The newich wrote in york times, this will break up families, and that is antithetical to what the Republican Party has been about, certainly going back to ronald reagan. Do you have any sympathy to that argument that we should not be breaking up families . Mark no, because we are not breaking up families. Nobody is forced to stay here. If you have young children, even if they are u. S. Born, people who are illegal immigrants, born overseas or came here, if they leave, they can always take their families with them. Nobody is breaking up anyones family. That is a false argument. I am willing coming year, in fact, to give the daca people who are left basically in limbo because of obamas illegal program, he was not allowed to do it but got away with it be a give them green cards. It has to be done in a way to make sure that it does not just create more problems in the future. Mr. Kasich talk about voting for the 1986 bill. The fact is, this legislation, this proposal given to the president probably would have the exact same affect. In other words, people who are illegally here get amnesty, nothing changes in the future, and we are in the same place 10 years from now. David ok, mark, thank you for being with us. Washington,rom showing us why this is such a complicated issue. Still ahead, we will talk with Michael Froman about the future of nafta. This is bloomberg. David this is Bloomberg Markets balance of power. Im david westin. Shery im shery ahn. Of theet a quick check major averages. The u. S. Stocks at record highs again. S p 500 adding more than 1 this week, up half a percent. The dow is being boosted by jpmorgan who says tax cuts will balloon profits this year when they release earnings. The nasdaq up by. 6 . The 2year holding above 2 after we saw inflation accelerate in december. David time for some headlines from first word news with mark crumpton. As he signed a proclamation honoring Martin Luther king jr. Day, President Trump did not respond to questions about his use of older language regarding immigrants from haiti and africa. As expected, the president took to twitter to deny media accounts of what he said, but Senate Minority with Richard Durbin was present in the Oval Office Thursday when those comments were made. You have seen the comments in the press. I have not read one of them that is inaccurate. To no surprise, the president started tweeting this morning, denying he used those words. It is not true. He said these hate filled things come and he sent them repeatedly. Mark House Speaker paul ryan says his ancestors were irish and were really looked down upon. He calls immigration a great story and said haitians in his hometown of janesville, wisconsin are incredible citizens. The European Commission president is welcoming the Coalition Government in germany. Speaking to reporters in bulgaria, he called the european part of the deal a significant, positive, constructive future looking contribution to the european policy. The agreement includes more government involvement in education and changes to Health Insurance but no tax increases. Turkey is warning its citizens about traveling to the u. S. In retaliation for new u. S. Travel advisories that warned of americans about terror threats and arbitrary detentions in turkey. The country says the u. S. Travel warning unfairly portrayed turkey as an unfit unsafe country and did nothing to improve frayed ties between the nato allies. In montecito, california, crews are searching through mott and rubble to find more survivors. 17 people are confirmed dead, at least five others remain mixing. About 100 homes were completed destroyed and another 300 were badly damaged. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. David this month, trade negotiators from the u. S. , canada, and mexico will hold negotiations in montreal. The canadian government is preparing for a possible u. S. Withdrawal from the agreement altogether. When we spoke with two authorities earlier this week in washington, we heard things may be getting better. What is the risk the u. S. Will pull out of nafta . Coming up on much less than six months ago. The people involved are getting all of it more educated. I am very concerned, even if it were a small percentage of suggested, heust has lowered his risk, evaluation, the downside problem that would be created is so huge that i am still frightened. David as u. S. Trade representative under obama, Michael Froman was responsible for trade policy. He is now at the council of foreign relations. Good to have you here. Lets start with what we just heard from tom donahue as well as carla hills. Arear as we know it, where the talks at this point, what is the danger of a u. S. Pullout . The danger is very much still there, though i agree with tom donahue, that the administration is becoming better educated about what the downsides of withdrawal would be, not just for the ag sector, but for so many in the u. S. Economy that depend on an integrated north american supply chain, or are dependent on those markets, mexico and can detect, for exports. The talks are at a sensitive stage, a lot of outstanding issues. Most of the major issues are still outstanding. The risk is very much still there. Shery canada filed a sweeping trade case against the u. S. At usewto challenging the u. S. Of tariffs to punish unfair trade practices and protect its markets. Is this part of canadas brinksmanship when it comes to apply more pressure on the u. S. . Our trade remedy laws are important escape valve to make sure that if other countries are exporting to us unfairly, we have some remedy against that. Canada has always had concerns about how we apply our trade remedies, they brought suits against us before. Sometimes they win, sometimes they lose. I dont think this is a particularly good time to bring this kind of case because the Trump Administration is itching for a fight with the wto and would welcome a chance to say they dont understand the importance of trade remedies to the u. S. Can i give it an excuse to pull out of its dispute mechanism. David the actual negotiations are very secret, but we hear from the outside a lot of saber rattling about the u. S. Pulling out. At the same time, the administration is not moving forward on breaking the hill about that possibility. Should we read the tea leaves, that this is a negotiating matter, rather than sears in considering a pullout . Michael i think there is a lot of negotiating noise in the system. Having said that, we need to take the Trump Administration at face value. Their first choice is to get a renegotiated agreement along the lines the proposals they put on the table. But if they cant, they are prepared to withdraw. And see that as a perfectly acceptable outcome. Regardless of the Economic Impacts here in the u. S. Ofry if president pulls out nafta, entire supply chains, Rural Communities that rely heavily on trade with canada and mexico will be affect it. How will this hurt his Political Base . Michael very good question. If you look at the recent tax givenit may have americans across the spectrum some modest tax benefit, but coming out of nafta will hurt them so much more come in terms of raising the costs they face on the products they buy, the products they need as inputs into manufacturing. It would hurt jobs in the united states. Of course, when it comes to exports from the acceptor or otherwise, it could have a devastating impact. At theiris base looks concerns from their pocketbook or their desire to see him be strong, visavis the rest of the world, and pull out of nafta in a way that was consistent with his promises in the campaign, that remains to play out. David give us a sense of what we should be looking at. There are six rounds. Up to the last possible second to know whether they will pull out or not . These negotiations always take to the last possible second, and then some. One Interesting Development is the comments the president made yesterday that maybe there is flex ability on time, maybe negotiations could continue after that mexican election. Mexicans, of course, have their own view on whether that time a great greater flexibility in the negotiations or not. We should be looking for whether there is steady progress in addressing the real, significant differences between the countries. Whether that is canada opening up its highly protected dairy market, whether it is mexico addressing some of the labor and environmental concerns, or whether it is the u. S. Showing flexibility on some of the proposal it has put on the table around rules of origin and sunset clauses. Michael froman, thanks for joining us, former u. S. Trade representative, currently at the council of foreign relations, joining us from washington. The headline crossing now, President Trump is said to waive the Iran Nuclear Sanctions under the nuclear deal. Deciding on friday to continue to waive economic sanctions related to the 2015 Nuclear Accord with iran. That believe the deal in tact for now. At the same time, the u. S. Is imposing new sanctions against 14 people and entities involved with irans Ballistic Missile programs, and a crackdown on government protesters. We know the president is required by law to certify every 90 days the iran nuclear deal. Now waiving sanctions, this would include another 120 days. We had heard this decision was coming. We are now hearing this will also include new sanctions for 14 people and entities involved with irans Ballistic Missile programs. David coming up, 350 million voters will be heading to the countries toous elect new president s this year. Will the antiestablishment tide break over latin america . This is bloomberg. Shery this is Bloomberg Markets balance of power. Im shery ahn. David im david westin. Thes time for stock of hour, a stock that could have made a stock of the year last year, facebook. It was up over 50 in 2017, but today down as much as 5 at one point, after Mark Zuckerberg said he would be shaking things up. Your check swing what is going on is emma chandra. Peoples Facebook Newsfeeds will give it back to post from friends and family, away from businesses in media outlets. The key point by Mark Zuckerberg making the says by changes, i expect the time people spend on facebook and some measures of engagement will go down but i also expect the time you spend will be more valuable. The idea of less time on the site means maybe fewer ads. That could affect revenue, and that is what has wall street a little worried about. We have seen a mixture of analyst reactions looking at that. Some of them have said this is bad news. We have seen some downgrades on facebook, others say this is a buying opportunity. Shery of course, at a time when facebook has been embroiled in this controversy of fake news. Does this have anything to do with that . It does. And analysts said that this was a recognition of the issues they face regarding toxic content. People are frustrated with the fake news, russia revelations, and we have seen them stop engaging on facebook. We have not had much of a reaction from washington yet, but facebook is on capitol hill next week, along with twitter and youtube, where they will discuss the spreading of the extremist propaganda. David and we will get a read on whether congress is satisfied. Shery and actually, there could be more other companies that take over that role from facebook, and not surprising, twitter could be one of them. Their stock is up today as much as 6 , on some talks that they may be the beneficiaries of people looking for more news content. We will have to see if that place through. Shery thank you so much. A big Election Year for latin america with voters from mexico to brazil choosing between the status quo and a rising tide of outsiders. All of this as the u. S. Looks increasingly inward, sparking questions about the fate of nafta and chinas global role. Here to talk about what motivate voters in the region is susan segal, president and ceo of the americas society. Thank you for joining us today. Big Election Year for latin america. Which ones will be the most crucial that we need to keep an eye on . Susan two out of three Latin Americans will choose a new president or parliamentarian members during the course of the year. 50 of latin americas population are in brazil and mexico. I would say those elections are pretty important. Tendency to is a reduce it appeared north of the border, to say they all go left, they all go right. Are they all individual . Susan they are all individual and i also think that they are all about oil left or right. There are three or four very important issues that Latin Americans care about. Andt of all, growth socially inclusive Growth Continues to be a theme. When you think about the recession that brazil had, mexico with only 2 growth, generally latin america with 2 growth. So growth with inclusive growth remains important. The second thing, it is really on the mind of latin american, corruption and impunity. I think Latin Americans are tired of corruption and they are tired of impunity. The third thing that is very important is personal security to Latin Americans. While each election in latin their own individual, candidates, own ideas, separate countries, there are some themes that run maybe not just in latin america but globally. Shery one of those could be leftleaning. In mexico, lopez over door could be the front runner. Could be ang this huge deal when it comes to nafta negotiations, especially when this should wrap up before the july president ial elections. If we i like to think dont wrap it up, it could impact the elections in july. Its very important im a strong believer that nafta has brought prosperity and competitiveness to north america, and it has also helped buildthe project, friendship between canada, the u. S. , and mexico. I believe nafta has been very beneficial to the united states. About mexico specifically, does the ordinary mexican feel that way . There are some reports that say the benefits have gone to the upper strata and the ordinary mexican has not seen a substantial improvement in their livelihood because of nafta. Susan i think the ordinary mexican has seen an improvement in their livelihood, whether it is specifically related to nafta or specifically related to the fact that over the last 30 years , 40 years, mexico has embarked in a number of reforms that have really changed the face of mexico. It is very hard to distinguish one from the other because they are very related. Is,the fact of the matter there is a very important election in mexico. One of the things we need to look at is, because, unlike other countries there is no second round in mexico, a president could be elected with less than 30 of the vote. Shery another election that is important, brazil. Whatront runner, da silva, is happening with his criminal corruption . This has embroiled many south american countries, even touched american investors. Still out there, we dont know what it will prohibit him from running or not. Brazilians, he is still very much liked by many people in brazil. Remember, he took over 20 Million People out of poverty and brought them in to the lower middle class. That is very important. People remember that, over therly, since last four years, they have had a really strong recession. David you talk about corruption, brazil has become a poster card for corruption. Can they ever put this behind them . Susan i think eventually they ifl, but i dont think you talk to brazilians, many of them would like to just take it and let it finish. David just let it go. Susan it will come to an end, but it has to come to an end in its own time. Shery will we see a vote in venezuela this year . Susan good question. I dont think anybody knows the answer to that question. I hope that we will. I think its time for democracy to return to venezuela. David i hope you are right about that. ,hank you, susan segal president and ceo of the americas society. Haven politicians may achieved a breakthrough in forming a new Coalition Government. We will have the latest. Live from new york, this is bloomberg. Shery this is Bloomberg Markets balance of power. Im shery ahn. David im david westin. German chancellor Angela Merkel have been trying to put together a governing Coalition Since elections in september. She tried with one group and then another. Finally, after an allnight bargaining session, it seems she may be making some progress. They announced she has negotiated a broad outline for a possible deal with the social democrats, the largest party. We welcome our German Government reporter Rainer Buergin in berlin. Can you hear me ok . I cannot hear you. This is huge drama, a very large, important economy over in europe. Spikedwe saw the euro because of that reaction, that this could be good news for the economy in germany and the rest of europe, the euro now at 1. 21. The chancellor now moving to a fourth term, said that her time was running out. David you wonder whether the difficulty of putting together this coalition may actually marked the beginning of an end for a remarkable chancellor. Look around the world stage today, how many World Leaders are there of the caliber and stature right now of Angela Merkel . Shery suffice it to say, it is not a done deal yet. A key vote is coming up and that will be her next challenge. To rainergo back bergen, who can now hear us. Of whatse context happening in germany, how important it is that we are closer to the deal. Rainer we are closer now but not a done deal yet. That is certainly correct. There is a lot at stake here because the political future of all three party chair people hinges on the outcome of the social Democrat Party congress and its decision that it will take on the 21st. Even if that hurdle is eventually overcome, at the end of the negotiating process, which will go well into february, then there is another spd grassroots effort. So we are not there yet. David give us a sense of the substantive issues that could separate the parties, how much is further integration in europe, how much is immigration . Rainer immigration has been a key concern, especially for merkels block. It was mainly the Bavarian Sister Party who was very adamant that refugee immigration to germany must be capped. The preliminary outcome we have seen does kind of reflect that in a certain way, so they have migration. N refugee it remains to be see whether the especially, who are much more prorefugee, promigration, will be happy about that, would be willing to accept that. Shery on top of this key issue, they also agreed on modest tax cuts. From a business perspective, from the perspective of higher wage earners, the outcome of this preliminary decision is disappointing. What they have agreed on is basically a tax reduction of 10 billion euro over four years. That is not a whole lot. There is this surcharge on which willprofits, be reduced slightly, but mainly for low and medium income earners, and not for higher wage earners. Shery thank you so much for joining us and hanging on while we had those issues. Rainer bergen of bloomberg news. That is it for Bloomberg Markets balance of power. Go to bloomberg. Com for the latest on Global Politics in your inbox every day. David coming up today, wells fargo ceo john shrewsbury, here to discuss the banks quarter earnings miss. That is coming up at 4 00. A quick reminder that you can check all of our interviews on the bloomberg with the function tv. It is all on your bloomberg. This is bloomberg. Scarlet its 2 00 p. M. In new york, 11 00 in san fransisco, and 7 00 p. M. In london on friday. Im scarlet fu. Julia and im julia chatterley. Welcome to Bloomberg Markets. Scarlet we are live in bloomberg World Headquarters in new york over the next hour. Here are the top stories we are covering on the bloomberg and from around the world. Investors hitting the dislike button on Mark Zuckerbergs latest post. Will these changes lead to people spending less time on the site . And a new report on the cross for then bloom agricultural markets. That will be in todays commodities close. And inside the western worlds busiest trade station. The disasterous tunnels money spent station. Forward to looking that. Lets bring you up to speed with mark crumpton. Mark somebody who has to come through those tunnels every day, it is pretty bad. President trump decided to continue to waive economic sanctions related to the 2015 Nuclear Accord with the