Despite recent highprofile stumbles. We head to the auction house for the most expensive sweater of all time, the vintage green cardigan of the late musician kurt cobain. Lets get into some of these burning issues. With me are jason kelly, annie massa, and our other guest. Black rock increasingly catering to this shift toward private markets. How is blackrock positioning itself . Even the black rock is an indexing giant, they have moved toward investment. One cornerstone of that has been their attempt to raise this longterm private capital fund which they are targeting 12 billion in fundraising for. Lisa how successful have they been . As of april, only 2. 75 billion committed. They have a long way to go before they reach that goal, but they announce their First Investment over the fall. Lisa Erik Schatzker recently sat down with the black rock head of equities. Take a listen. I think we may see Companies Stay private for longer as a result of the availability of that capital, as a result of the ,ost of being a public issuer some of theof transparency. That was Erik Schatzker talking about the shift toward private, which brings me to kkr. The firm has raised more than 2 billion to invest in Tech Companies as they expand beyond the megadeals for returns. Jason, more money for tech startups. Why . Jason as mark said, these people need money. Kkr says we need we have money. It is coming at a time when wework is not that far in the past. Startupshflying tech may or may not be a good deal. But what we know is investor appetite is huge. This is triple what kkr raised the last time they went out. Lisa why arent people concerned about what theyve seen in terms of the recent blowups . , they are with wework working on gaming, online gaming. Privateeep in mind, the markets, they may be an outlier to some extent. That was a valuation that was really distorted by one single investor, softbanks vision fund. You look at Something Like palatine, even though its not been a darling in the public market, it is still well above its last round. Getad to raise billions to there, but these Growth Equity type funds are more than willing to do that. Think about general atlantic, kkr coming in, there is a lot of enthusiasm. Is a question of fundamentally how things are doing, which leads me to some of the risks that have been highlighted in the leverage loan market. Barclays recently commenting on some troubled deals. If you have a deal not structured properly that has some idiosyncratic weaknesses to it, the market can be pretty punishing at the bottom end. A couple of idiosyncratic deals have opened up peoples eyes that it is not a free ride. Lisa how much of a concern for big banks have these more difficult loans been . We are seeing some loans struggled to get done in the market, and these are loans by private equity firms. Around 2 billion as of last week. One deal sold on friday, so we are probably closer to 1. 5 billion. This compares to a market that is 1. 2 trillion in size. It is not a huge issue, but it is worth paying attention to. In prior episodes, loans like these got hung when there was volatility among the cross risk assets. We have not seen that in equities, junk bonds. They are all doing well this year. Speaks to how some investors particularly in the loan market, where you have managers facing outflows from mutual funds, seal those with limited appetite for risky deals, are unwilling to be in some of the riskier transactions. Lisa thank you to our reporters. That perfectly brings us to our next guest, michael herzig, thl head of business development. Have focused for more than a decade on the collateralized Loan Obligations market, people have raised concerns about it recently. Is legitimatehere trouble brewing in this market . Michael as you say, the market has been around for 25 years. What we are seeing is the normal push and pull of supply and demand going after one another. We are getting to a point where we have economic weakness. Lisa what are you pointing to in particular . See companies not performing as well as a year ago. Lisa is that economic or related to companies that may have gotten financed just find a little while ago . Michael it is industry by industry. Certain industry do not lend themselves well to operating in a high leverage environment, a lot of labor exposure or exposure to tariffs. With leverage, it is more difficult. The clo market has been through crises in 1998, 2001, 2008, and has come through with really good performance for investors. Lisa one concern people have is there are constraints for how much of the lowest rated debt seal lows can buy, concern that if there are downgrades, there can be forced selling. Do you see that as a possibility . Not exactlyt is right. It is not forced selling. There is a finite amount of shelf space for any ccc rated company. What you see is an increase in the ante to get into a portfolio as a b3 company, so that new issues that are coming, they have to pay a higher rate in order to qualify for the limited space in the clo folios. Lisa so you dont see that as looming pressure . Michael it is a constraint, one that can break a few ways. Will get cheaper, so it is worth owning them, or we will see more issuance at a b1 o r 2 rating. Lisa we have seen the price fall significantly. Im wondering how you interpret that. Of the the whole appeal clo market is it is not retail funds, these are institutional vehicle that are not redemptive. That is why they have succeeded in periods of volatility. A lot of times, clos can be the beneficiaries of volatility. Lisa have you seen institutions continue to invest heavily in clos . Michael issuance has been very strong this year, well over 100 billion this year as well as last year. We expect a little bit of a reduction, but still probably a 100 billion year. Lisa we have seen the bank of japan issuing guidance about the potential for price drops. Focus on thee is a price drops, but if you read the e, itt, as many of us hav knows that many of these have very little credit risk and have never experienced any losses. Lisa and they have not pulled back . Not, althoughhave they were heavy buyers some of them at the beginning of the year. I think they filled their quota once spreads went wider. We could easily see them come back in. Lisa thank you very much, michael herzig. Americas middle class is getting hooked on debt with 100 rates. We are talking about loans that have gone from niche offerings to a hot industry. On one hand, this gives people access to credit. On the other hand, the debt often comes with triple digit Interest Rates. Coming up, Jonathan Grable discusses the increasing investments made by pensions into private assets, and how they are allocating their money. This is bloomberg money undercover. Lisa im lisa abramowicz. This is bloomberg money undercover. Time for our power player. A look at some of the most notable nanjing private markets. Pensions have increasingly invested in private equity, private debt, and real estate as they seek to boost returns, but the question is is that trend losing steam . We are lucky to get the perspective from jonathan greybull from the Los Angeles County employees retirement association. Thank you so much for taking the time to be with us. With, youstart recently changed some of your allocations, the way you allocate money which included lumping private equity market moneys with public equities. Its plain why you did that. Jonathan good to be with you, lisa. It really starts with our mission and why we invest. We invest on behalf of our 170,000 members that pay benefits today and into the future. Accordingly, we have some assets that are safe, provide downside protections, such as Investment Grade fixed income, and others that grow the fund to pay benefits into the future and that permanently includes investments writ large. Across the equity spectrum, we have some investments that one way to say it is, all other things being equal, we would like to invest in a lowestcost most liquid form of exposure to gain access to that factor. In some cases we do that through public equities, in other cases through private equity. Fundamentally, equities as a whole give us exposure to longterm growth. Lisa you have been reducing your allocations to equities broadly but in particular public equities. Have you also reduced private Equity Investment . Jonathan public equity is our largest single investment strategy. We have not reduced our exposure to private equity. ,hat is still a 10 allocation as you mentioned, public and private equity both reside in our growth portfolio. But we have allocated our asset categories more broadly, somewhat more defensively, but to allow the fund to perform in multiple investment environments, not just the one we have had over the last decade that has been dominated by growth and low inflation. Lisa given the low Interest Rate environment, have you reduce your annualized returns expectations Going Forward . Jonathan interesting you ask. Right now, our board is in the middle of what is called an experience study, where we look at the actuarial assumptions used by the fund, one of which, a principal one is the investment return assumption. It is something the board is in the middle of a deliberate process to evaluate. We have not reduced it, but it is something the board is looking at. Part of this exercise because we believe we are in a more muted or lower expected return environment, someone anchored by today. Ar at 1. 85 or so that really forces us to really look to optimize all aspects of our model, in addition to our certain return of. We want a sharp list sharpest implementation possible. We really look to eliminate all of the low hanging fruit and prevent the portfolio from working at cross purposes. For example, we have one manager that is long apple, another that is short. We need to understand the total exposure as opposed to paying excessive fees for what is in aggregate just a market exposure. Lisa how much do you look at fees to determine which manager to look with work with, and perhaps which was to cut . Fees are certainly a very important topic for pensions for all institutional investors. Here in california, we have an annual disclosure that we make in a Public Session for all private assets. So we look at fees. But we think it is more complicated than looking at fees. If we were to build a portfolio just focused on low fees, it may not optimize our returns. Ofwe look at fees as one four or five different dimensions, some of which are quantitative, others of which are qualitative. Include returns, performance, things that look at operations. We take into account our esg considerations, Strategic Value of a relationship, diversity inclusion, and these are just one of the factors that we use in our comprehensive analysis. John greybull, thank you for the time. I wish you all the best with respect to the fires. L. A. Ng us from coming up, the album tied to nirvanas iconic performance and unplugged but how much did that sweater vest that kurt cobain was wearing go for . This is bloomberg. Lisa im lisa abramowicz. This is bloomberg money undercover. Time for our billionaire beat. Vista Equity Partners robert smith is one of the worlds richest people with a 6 billion fortune, and he has pioneered an increasingly popular way to bring up that treasure. Tom metcalf is joining us from london. What exactly is he doing to free up this cash . He has pioneered this interesting trend that is spreading through private equity. What they are doing is taking a Minority Stake of their firm, the investor equity, in roberts case, and selling that on to bulk buyers. Blackstone, goldman sachs. Those buyers are trying to get a slice of the private equity returns that these firms are seeing, whether Management Fees or carried interest. Ins is causing an explosion the value of the fortunes of these private equity tycoons. Toert smith has been able monetize some of this wealth locked in his firm and become one of americas most prominent leftists. Philanthropists. People are seeing this and saying this is a great way to boost fortunes. Lisa on the flip side, and increasing interest of investing in private equity firms, even with other private equity firms. Who has been the most active on the buying side . Howou have any idea on much more active this market has gotten recently . The poster child of this is dial capital. 10 years ago, they started to shift them investing from hedge funds into private equity. Hey have really led the charge they have done the most deals. In terms of the overall market, it has gone from nowhere a decade ago, now you are seeing about 20 deals a year. Has gone out and raised and 8 billion fund to invest in private equity firms. They have already pretty much spent most of that money. Lisa i do have to wonder how much of this shift, who is in charge, who has the most at stake. A lot of people getting out. I wonder if there are other private equity titans have been involved in selling their stakes. Pretty much all the big names that you would be familiar with. Founder sold air stick to blackstone. Silver lake, a big tech investor, they sold stakes. Hig in miami. A lot of the big names, albeit not the ones that have gone public, like kbr or blackstone, but otherwise, successful private equity firms are certainly having these conversations. A lot of them have already sold Minority Stakes. Lisa tom cap, thank you. There is a global battle to manage the ballooning money and affairs of the top 1 and the top 0. 1 , with a focus on germany. I find this interesting because you think about germany as being in recession, having a difficult time. How significant is the billionaire population in germany . If you been paying attention to the german data releases, at first glance, this is confusing. But when you look at the global rankings of what countries have the most wealthy populations, germany comes in third in terms of most ultra High Net Worth individuals. Its a perfect storm because you also have an aging population. That aging population is likely to be selling their businesses, which means you have added liquidity in these german accounts that are simply not going to go into savings accounts with negative yields. So you have these big banks starting to bet that those clients will need to go up the risk curve and turn to Wealth Management in a more profitable and stable income for these firms. Lisa what is Wealth Management when you talk about that . Wealth management is really becoming an increasingly important part for these banks. Especially High Net Worth individuals. Have seen partial fortunes personal fortunes grow at a rapid pace. They need more professionals and advanced teams to look over. This is not just a german phenomenon but global. Ubs, Morgan Stanleys earnings, all of them say look at how important this is, look at how much we are earning. If you cannot make money on spreads come you will want to do it on fees. Banks are already struggling with how to pass on, and if they pass on, to what degree they pass on those negative rates to their clients. We see Wealth Management, Money Management applications, those decisions are becoming more important for these banking divisions. Lisa are there any specific challenges when you talk about german billionaires in particular . The market is extremely fragmented. 1500 Private Banking firms in germany. We have seen foreigners to have to come in and break this market and its been difficult. Coding is to be more consolidation within the industry in germany. Baseyou have an investing that is traditionally more riskaverse. It will be more difficult to get se consumers out of more savings accounts and into the risk ladder. We see private lending, private equity become more popular that it is an uphill battle. Thank you so much. Speaking of big money, it is time for this weeks big number. It is tied to the green vintage cardigan worn by kurt cobain on his performance on mtv. 334,000, the most expensive sweater option of all time, especially considering i believe it had cigarette burns. It is unwashed and still has stains. It was purchased for 137,000 four years ago. You can watch as each tuesday at 1 00. This is bloomberg. Mark im Mark Crumpton with bloomberg first word news. Lieutenant colonel Alexander Vindman testifies today before three house committees, leading an impeachment inquiry into president trump. He was on the july telephone call with the president of ukraine. In a prepared statement, he said he was concerned by the call and witnessed other incidents in which Administration Officials conditioned 80 to ukraine on investigation of former Vice President joe biden. The u. K. Is set for its third general election since 2015, after Prime MinisterBoris Johnson won the backing of Jeremy Corbyn for a vote to be held in december. It may be the last chance voters have to choose between parties offering to cancel brexit or force through a hard split at any cost. Members of parliament will vote later today to endorse the election plan. Lebanons Prime Minister resigned today, after two weeks of antigovernment protests descended into violence. In a televised address, he reached what he called a deadend, and said it was time for a major shock to confront the crisis. Protesters in beirut thanked him for taking the first step to addressing popular demands but are now calling for other top officials to step down. Wildfires continue to rage across the state of california. Some of the wealthiest neighborhoods in los angeles remain under Evacuation Order for the second straight day. The region now faces a new threat with santa ana winds expected to reach 70 Miles Per Hour by tonight. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Shery live from bloomberg World Headquarters in new york, im shery ahn. Amanda in toronto, im amanda lang. Welcome to bloomberg markets. Shery here are the top stories we are following from around the world. U. S. Central bankers begin a twoday policy meeting amid overwhelming expectations they will deliver the years third interestrate cut to bolster a softening economy. Bonus bonanza at bank of america. The bank plans to pay employees a special bonus for the Third Straight year after reporting record earnings in four of the past five quarters. Recentch in teslas earnings report. The companys surprise profit came despite a drop in 40 of revenue in the u. S. Amanda quick check on the major averages. Shery alluding to some of the reasons we are seeing a lackluster day. High valuations, s p 500 close to record highs, and meanwhile, the question is are earnings justifying the high numbers . General numbers had cut its earnings guidance. You can see the whole tech group is way down today. Health care is a stand up to the upside. Pfizer and merck beating to the upside. This is all in the context of prefed. We have seen a lot of volatility in the yield of the tenyear treasury because of the sheer uncertainty in the market. We are back at 1. 8. This will be a wait and see market, as we wait for the fed to move, although it is fully priced and at this point of what the fed will do. The meantime, keeping our close eye on all of the Economic Data in the u. S. This morning, we had Consumer Confidence which on expense of the fell to a fourmonth low. This would be the secondlargest differential between expectations and the actual numbers since 2001. The key issue is that Consumer Spending has been propping up the expansion, and now we are seeing signs that this could see challenges, as we see weakness in other parts of the economy. There is so much uncertainty out there, including the ongoing u. S. China trade tensions, as well as the brexit tsonga s aga. Amanda the u. K. Now set for its third general election in four years. The backingn won from Jeremy Corbyn for a snap election in december. He is hoping it will break the brexit deadlock. Is readyal is out and to be approved by a new parliament. It will have a government yearning for every fiber of its being to get on and deliver our one nation conservative agenda. London, we have Annmarie Hordern following all of this. Almost exhausting in the twists and turns. Yet, uncertainty remains a huge issue for the economy. We have a poll agreed to in december. What does this all mean . Uncertainty remains but it looks likely that tonight Boris Johnson will get the election he has been pushing for. It will come just ahead of christmas my which will likely exacerbate this fatigue we have seen on brexit. Boris johnson think this is his one way to break the political impasse that we have seen in westminster. When we get atime second reading on the bill. This gives the initial approval for the bill to be debated in the house of commons. Then we will see a number of amendments be attached to that. That there some news was the idea that two amendments could be discussed tonight, one allowing 16yearolds to vote, as well as allowing eu nationals living in the u k to vote. Without those amendments, it is looking likely. This could be a clearcut victory for Boris Johnson this evening. The Prime Minister tried to pass this snap election just yesterday and loss. What has changed and what has does he have to compromise on . This bill is much easier, and amendment can be pegged to read, and the opposition likes that idea. Really the breakthrough for today was Jeremy Corbyn. The leader of the labour party, he has agreed to the snap election. For him, he has been waiting for the decision from the european union. We have that extension to january 31. He said once they had the extension, they would be willing to go forward with the election. With labour on side, it is not unlikely that the government will not win tonight. Shery thank you for that. Here in the u. S. , stocks are mixed, near record highs, as investors await tomorrows rate cut by the federal reserve. Dialio spoke earlier about the situation in the u. S. And how it could look over the next 10 years. Years,ink in the next 10 we have a very risky situation. In that 10year time period, we will probably have an economic downturn, almost certainly, while there is a large wealth gap, and while there is not effective monetary policy. So that is a scary situation. Shery joining us for more is. Athleen bostjancic i was mentioning earlier how we saw Consumer Confidence falling to a fourmonth low. When the fed looks at the economics out there i know perhaps too late to look at but all the Economic Data, whether hard or soft, what are we seeing . Do they show a complete picture . Consumer confidence was softer but overall, the index was at a high level. The labor market is still sturdy. We get the latest on friday with the october payroll data. I think gdp tomorrow will be interesting. It will paint a picture of a slower economy. We are looking for just 1. 2 . Or the second half as a whole, 1. 2 . I think that will catch their attention. Business inventories are probably going to be a bit higher potentially, but Business Investment we think will be done for a Second Quarter in a row. That is worrisome, related to the trade policy uncertainty. Amanda this has been the story, we have seen this manufacturing a session, parts of real weakness, and it is showing up in earnings, that tariffs are an issue, and yet the consumer is doing its thing. What does the fed due to address that . It has done what it can do, but they do not really fix what is ailing the manufacturing sector. Them to fixult for what is happening globally, but they can try to insulate the rest of the economy. Kathleen hopefully you dont see a spill over to the service sector. Consumer lower Interest Rates can help, it is not the only factor. The labor market needs to see relatively healthy we expect some slowing but at the underlying pace is under 120,000, that keeps the on a plumbing rate stable. That is the key for the consumer. Do they have jobs, are they earning income . Lower Interest Rates help on the margin. In canadais is true as well, we have record low on a planet rates, and yet consumers dont feel as positive as that number. Something is different this time. We know its a composition of the workforce, parttime work. You could add in the fear of pessimism coming from business infecting consumers, feeling worse, even though things are not that bad. Kathy the hope is confidence does not fall further. Yes, we had a pullback the last two months in Consumer Confidence come a particularly the expectations component, but the present conditions still remain quite buoyant. Pullback on Business Investment, typically you see in employment start to pullback as well. If that happens, that would be bad news for the consumer. So far, we have not seen that. That is the expectation, but certainly we are in a slow growth environment. We expect the fed to cut rates one more time. I think they will leave the door open to another rate cut in december. Some people are speculating that they will signal a pause. We think that is premature or them to do that and risk having some tightening in the Financial Markets if they do that. Shery we have seen this Global Manufacturing slump. The u. S. Number also in contraction as this chart shows. It is also china, germany, seems to be a global phenomenon. Thispect the ism numbers friday. What are you expecting, how bad could it looked when it comes to the overall economy . Kathy we think it will stay below 50. In large part, the gm strike will hold back activity in the many fracturing sector. That showed up in Industrial Production data. Outside of that, we may see some bottoming in the manufacturing activity. We may move above 50. Nevertheless, manufacturing will not lag behind. It is tied to what is happening on the trade front and the slowing of activity. Amanda great to have your thoughts on this, kathy bostjancic. Boeing ceo Dennis Muilenburg testified before congress today. His performance on capitol hill is being called into question. This is bloomberg. Shery this is bloomberg markets. Im shery ahn in new york. Amanda im amanda lang in toronto. Boeing ceo Dennis Muilenburg finished testifying before lawmakers in Congress Jets thattwo 737 max crashed, killing 346 people just over one hour ago, pledging his commitment to safety. The airplanes will return to service once it is safe. This is not going to be timelinedriven. We are committed to answer every question regulators have. The airplane will fly when everyone is convinced it is safe. That is the most important thing here. Shery with more on what we have learned about the testimony is brooke sutherland. When you look at the performance convincingrg, how was he on showing his commitment to safety . Brooke i could feel his emotion. There was a moment in the testimony where they have family and friends of those lion air victims stand up and show the photographs of those who died in the accident, and muilenburg was clearly moved by that, said he was sorry, acknowledged boeing made mistakes. At the same time, he was put under pressure to answer questions about those instant messages that came out that appear to indicate some sort of internal concern over that Flight Software system that is being linked to the crashes. He said he was only made fully aware of those messages when that he knewublic, generally types of documents were being turned over to authorities as part of a government investigation, but was never involved in the process of deciding which authorities got those documents. And he didnt know what those messages said until recently, as a is a huge gap for me, ceo facing one of the biggest crises in the companys history, how do not know that . How do somebody not make you aware of those documents . There were a number of different senators that hit him particularly hard on that issue, including ted cruz. They are asking valid questions. As the ceo, you should be and howly involved these decisions are made, particularly after a crash. Amanda obviously, this was going to be a difficult hearing a matter what. In terms of how he performed, some of the typical questions, is the Company Setting itself up to move on, or does it strike you that this will be the beginning of a long, complicated liabilityridden period . Brooke the other thing that was interesting, muilenburg did not have specific recommendations for how to improve the faa. He pushed back on some senators who called the relationship to cozy. He did acknowledge that the balance needs to be right in that relationship, but like i said, no specific commitments. Those senators were looking for Something Like that. The fact that he was not prepared to commit to that at this point will continue to raise concerns about how much boeing wants to change. Is it really committed to making these airplanes safer, putting more authority in the hands of regulators . Amanda thank you so much for that, brooke sutherland. Appreciate it. Now to bank of america, which is pending planning to pay its employees bonuses after record earnings. Dollarsl give thousand to employees who earn 100,000 or less a year, while higher paid staff will receive a stock award next year. We go to the person that broke the story. What the bank has done in the past and where it is headed, this is good news for the employees involved. Obviously good news. This is the third year in a row bank of america is doing this. In previous years, it was linked to the tax cuts. This year, they had a string of record earnings for several quarters in a row, so Brian Moynihan said that they wanted to share the love with the employees. The employees who earn less than 100,000 will get 1000 for christmas. Higher paid employees will get stock early next year. This is something that really ties into bank of americas there did in recent months about doing good, both for its shareholders but also employees. Brian moynihan is involved in held economics forums, so has been one of the ceos out in front talking about this issue of doing well for shareholders as well as stakeholders. Ads inthey are running more than 90 local markets touting this program . Brooke yes, they have a picture of the market president , that persons email. It is really about trying to get out in front and be in the communities they are income in addition to giving their employees this pay bob. Shery tell us about bank of americas latest performance. Its been incredibly strong. This year, they had a 2 billion charge which reduced the profits. However, they have come off a string of record quarterly earnings. The bank has done extremely well the past few quarters and are true clearly trying to make sure the employees feel the benefits of this. Shery thank you so much. Coming up, a new sec filing u. S. Sales tumbled in the third quarter. What it means for the electric carmaker. This is bloomberg. Amanda this is bloomberg markets. Im amanda lang in toronto. Shery im shery ahn in new york. Despite reporting surprise thirdquarter profits, a new sec filing shows nearly 40 drop in revenue. S. The automaker saw sales fall 2 billion in the latest quarter compared to the previous year. With more on the news and exclusive survey on tesla is tom randall who covers tesla for bloomberg news. We have seen this latest sec filing showing the 40 drop. How in line with this is this with teslas performance so far, and what you have heard from those respondents on the survey and how much people like the car . Tom sales are being compared to last year. Last year at this time, the model three was only selling in the united states. In february, it opened up to global sales. In the last quarter, it was a Record Number of sales for them. In terms of the survey, we came out with a survey today, this was a project that we have been working on for a while. Ownersd 5000 model three what they thought about the car. We published our first initial results today about quality, reliability. One of the things that we found, when tesla were starting to make the model three, they did have some issues. In fact, we saw those issues of 2018, about 80 issues per 100 cars. Over the last year, they have steadily improved. Facto rate that comes with the car has improved by 44 in q3 of this year. They have been making great improvements. Shery thank you so much for that, tom randall. Breaking news at the moment. We are hearing the Trump Administration wants to dictate how and where global Auto Companies make cars and parts to secure a dutyfree treatment under the new nafta, usmca, that was negotiated between the u. S. , canada, and mexico. Lets bring in shawn donnan from washington, d. C. For the latest on this. This put at risk usmca which has yet to be ratified . Shawn this is just another wrinkle in the broader debate. The big question now is whether nancy pelosi will take it to the floor for a vote in the coming weeks. They really need to get this through congress by the end of this year before we go into next years election. This is a big push by the Trump Administration. This is one of the big items on its trade agenda. The story we are breaking now just shows you some of the wrinkles in this new agreement. In particular, how much control the Trump Administration wants bothert on Auto Companies, of u. S. And overseas, and how they produce cars and parts. Obviously, this still requires ratification in canada and mexico. My read of this is the canadians will not approve of this. What is your take . Shawn i think thats right. The canadians and the mexicans have a right to be aggrieved about this. However, this has been going on for some months. We have been hearing that the u. S. Trade Representatives Office and officials from their have been sitting down with individual companies, going through their transition plans, literally dictating where they would make individual parts. That is pretty spectacular. Amanda it is, indeed. Thank you, shawn donnan. From toronto and new york, this is bloomberg. With i am Mark Crumpton bloombergs first word news. House ways and Means Committee chair richard neal says House Democrats are really to reaching a deal on the u. S. Really close to reaching a deal on the u. S. Mexico trade pact. Diplomat Rafael Grassi was chosen today to lead the. Nited Nations Nuclear watchdog the International Atomic energy board of governors nominated him. He still requires approval of all 171 member countries. I thinkl do my job and my job is to implement the mandate in a manner which is to defend it, which is fair, which is neutral. I have said when it comes to safeguards and verification, thorough and fair