Crying chuck stay. About 600 highrise apartment buildings are estimated to have the same sort of installation used on the burned last that week. Global news, powered by more than 2700 journalists and and over 120 countries. And york. Live from new joe were 30 minutes from the u. S. Ng trading here in the julia u. S. Stocks holding in green. Joe question is whatd you miss . Republicannate leaders unveil their healthcare overhall. Saying they arent ready to vote for it. Review off the annual the bank will come out one hour. The results. At and qatar express interest of buying up to 10 American Airlines. As competition heat up. Joe lets look where the major averages stand. Abigail is standing by. And s p 500 are all trading higher. This after earlier this morning, flipflopping between small gain and losses. Being helped by healthcare. Healthcare s p 500 index up more than 1 on pace for fifthn record close. Lets look at the worst sector 500. For the s p the financial sector, really being dragged on by yield. Ten year yield down two bases points. Is we do have some of the banks trading lower ahead noting, wells fargo when the second release part, ubs qualitative and Morgan Stanley, that might be only bank to not pass. Time will tell. Turning to healthcare, digging in a little bit. Mcgorman told our team the reason were seeing huge rally for healthcare today, release of that Senate Healthcare bill, many investors watchers its you can likely to be passed any time soon. We have rally from everything hospitals to managed care pharma. Ch to far we hop into the bloomberg take a look at btv. Chart. The year to date we have the s p 500 in blue up about 9 on top in white, the 500 healthcare index up 17 . Sectorlipped by the tech and in yellow we have the Energy Sector down about 15 . That sectorows rotation everybody is talking about that energy money going into healthcare. Abigail. Ks whatd you miss . Back to top stories of day. Senate republicans unveiling their health bill. Far senator rand paul along with three other republican abi. Whatd you miss . Back senators including ted cruz of texas and senator mike lee of utah and senator ron johnson of opposing the bill. Pulling the passage of the legislation in jeopardy. Clearly the bill hit a nerve in washington. Lets get reactions from across the board. Is a disaster. Its dead. Totally dead. Were putting in a plan today negotiated. We agreed on the need to free america from obamacares men date and the policies contained discussions. Well repeal the individual pan date. Negotiated. We mandate. So americans are no longer forced buy insurance. Potentially voting on it in a week. No committee hearings. Amendments and committee. Say fore on the floor ten hours. On one of the most important bills were dealing with in decades. Shame on this body. Fact is, the process is not been a good process. This should go through committee. Im concerned it didnt move back in february. Foridnt have the votes that. I would certainly vote for repeal. Bill. Ing to support this trumpcare inflicts great suffering on veterans, on seniors and working family and rural communities. It is a job killer. In a tailspin. Is we made a promise. The senateppy that has done the work to put together a bill that keeps that promise. I never seen a more radical legislative process in my time in politics. Stopst important thing, we legacy. Republican they have finally released what they call a working draft. They worked so hard to hide. We love to have democratic support. They are obstructionist. They will never support. We wont get one. Get somethinglly done. It will be something with meaningful. Ry joe here with the latest is washingtonhief correspondent Kevin Cirilli on capitol hill. To start with you weve seen the conservative ted others come out against it. Is this like the same deal with house. In the the right wing complained they get placated and the moderates sort ofng and this is choreographed. Kind of. Over the senior the conservatives in the senate all against it as bill is written. Moderate, people like senator Lisa Murkowski and susan come lins. Collins. You take a look at really why this potentially has a political matter for people like senator jean heller. From nevada who is up for reelection in 2018 in a Democratic State of nevada. Pull up his statement. He said, at first glance, i have bills impact the onthe nevadans who depend medicaid. If its good for nevada, ill vote for it if its not. Come down to to the wire. Congressional Budget Office referee has yet to score it. This bill is facing intense from all sides of the republican spectrum. Joe shannon, from the white perspective, is the white house currently making any active efforts to sort of move along as kevin described. Sort of difficulties or is it for now, theyre just letting to see how it plays out in the senate . Open toare leaving this negotiation. They are not giving any sort of throwing the weight of the white house behind this bill. Out and said, its up for negotiation. Sarah Huckabee Sanders said something similar. Wouldnt say whether or not the president has any position on cuts to medicaid. The house, during the early stages, the white house is not sure and is not getting behind this bill and mode. Ng into salesman theyre still in this is opening phase. Thinkis something i dont congress is used to seeing from president. Se or julia he recognize it will be negotiation. Does it pass the mean test . I guess the question is, what about the cbos score . Well expect to get that next week. It. Will play into i seen some saying, they are pushing back, the phase out of medicaid is all in order to get from theshot headline cbo. Suggesting less people will be without insurance in the of the cbo said initially. What are you hearing. Youre right. This is all a numbers game for the cbo. Political referee in order to get all of this down. Like senator dean heller and Susan Collins they will be to theiro back constituents if the big title millionscbo is that will lose their healthcare insurance. More conservative members saying they have to appease the by repealing parts of obamacare. In terms of whether or not this agree with shannon, the white house is not driving the policy ship. Relying on congress to figure this out. The president has essentially of his policy to the leaders of congress. That of course is reignited and stoked flames of the traditional infighting that weve seen republican party. Not even a gigantic scoop from jacobs about the president not having tapes. Will be able to distract people policy debate. This was a consistent campaign theoric message for candidate donald trump to repeal obamacare. In 2018 this will dramatically line. The political battle Joe Barack Obama weighed in saying the senate bill unveiled today is not a healthcare bill. Ofs a massive transfer wealth from middle class and poor families to richest in america. Theres more than that. Against it. Julia thats the bottom line here. Get back to you, whats the probability there week . A vote next well, kevin will be better on that one. Hes been up on the hill all day. Vulmost feel like it is deja coming as what we saw in the house bill. Where they came out with a bill was done in secret. Gave an artificial deadline for a vote. Becauseull the bill they din have the votes. There was all the back and forth. Able to cobble something together to get the votes they needed. It. They passed a lot of people were unhappy what they passed. Behind, well fix it in the senate. You see something similar happening here. They pull it, theres more rangling. They pass something that no one is happy with. Inyll fix is reconciliation. Joe thank you very much to both you. News, weve got breaking theresa may is going to the summit. The treatment of eu citizens working in the u. K. Be sending out proposals for the e you can citizens. Theyre currently in the u. K. After brexit. Beyond that, they want to work things like counterterrorism and the negotiations are constructive. This right at the beginning stages of the brexit negotiations. The wordructsive is may. Teresa plenty more to come from whatd you miss . This is bloomberg. Julia one industry that knows all too well about the Amazon Effect is retail. Bed bath and beyond report earnings today giving us a fresh isk what impacts amazon having on its business. Lets look at bed bath and in todays numbers dont lie. The retailer seen stock fall in we havent seen since back in 2009. Bed bath and beyond was drown graded this week. Two analyst out of 26 have a on the stock. This decline matches the fall in same store sales. Watched measure for investors. 0. 6 number dipping to just last year. That in turn, led to a fall in revenue growth. Suggesting a clearer downward trend. Bed bath and beyond is investing Technology Infrastructure and promotions to try and turn traffic and sales around. Coming at the expense of margins. You can see how the growth taking a itemly. Its expected to hit the lowest the company went public. I mentioned infrastructure too. Here how bed bath and beyond capex more than since 2010. Bed bath and beyond have been buying back shares to help stem the decline. They bought back 9 billion worth of shares since 2010. Ceo has been under pressure too. Compensation was cut 13 . Be following bed bath and beyond earnings when they are released in a few minutes time. U. S. Closing bell. Scarlet thank you so much. Trying to disrupt fashion business. Prime wardrobe. That allows shoppers to try on a andction of clothing, Shoes Accessories and send become what want. Ont is this good. Pioneers,one of the katia beauchamp. Good thing for other subscription box businesses that amazon is entering . Someoneinteresting when as important as amazon pays attention to a category that obviously impact it. They will say, theres something customers for helping discover. Amazon like environment, its clear which a it is so important them to understand how thesee going to tackle category. When that amazon thing holds over everyone else is value. Nd its not the infrastructure set up for it. What distinction does amazon offer that other subscription dont offer . S i think amazon has set the standard. They are almost where everybody goes to say, what are the new stable stake. Resources and the permission from the market to do everything to test everything. Offer it at the lowest price. Which is something that impacts all of our business. Think theyre going to bring that functional aty to the table. Think being the pure function. Lesso i make your chore feel like a chore. I dont think what this does is of, the delight effects of discretionary spend in the softer category. Still tdd here. We dont know what the execution will look like. Light in adefined very specific and functional way to date. Theill think the way that rest of us have thought about tackling this problem of helping people kind of save their time and feel great when they spend money, weve from a much different way. The problem isnt just speed and price, the problem is the choice. Ation of scarlet youre looking past the convenience part and looking to offer selection and it is absolutely convenience. They defined convenience is speed and price. The way we define convenience is time and cutting through the clutter and getting you experience thats relevant and exciting. It has the delight factor. It isnt just the function and the 101 science. Scarlet are you surprised it this long to enter this line . About it. Im not surprised. Focusery clear what their is. They have really defined their place in the customers heart as taking the paper out of your chores. The way that Fashion Shopping shopping works, its ass of a chore. It can be hobby and fun. They have focused on the discretionary exciting part of shopping. They focus on the painful part shopping. We can make it less painful. Im in the surprised it took them long. The commodityg on aspect. Scarlet do you think amazon potential Customer Base for subscription boxes. Market share with traditional retailer from book sellers and Apparel Companies . Is as not clear this subscription. Attached to the prime membership. Its it doesnt necessarily mean a box is coming every month. This is a different behavior membershipn use your to fill a box similar to a pantry. Its takingar that away that whole factor of i dont know where to begin. Through ant to sort whole Department Store floor. Choices of fashion and beauty. Its still saying, you customer have to have some intense. Were going to give you great functionality and convenience to at a great price. Returns. It doesnt look lot different than what amazon looks like today. Scarlet lits talk about your Company Birch box. You offer a premium option. You returns. It opened brick and mortar stores. Two including one overseas in paris. How much customer overlap is lines. Etween business how much do you want there to be . I think anybody who shows a predisposition to shop online theres an over lap. Customers shifting more time and internet. He customers step further in our disruptive e commerce. Were share a lot of customers. To. Ry its competitive. Customers are like minded. They trying to heighten the efficiency without losing the joy of the fun categories. Thats what were all about, you and also have efficiency and feel great when money. Nd your scarlet birch box. Beauchamp. To katia joe reminder best way to watch breaking news on tv is right on terminal. Berg heres tv go on the terminal. You can look back to when we the talking about healthcare bill earlier. With kevincussion cirilli earlier. You can click on here and sends us messages. Of stuff. Best way to consume news and data. Go. T on your terminal at tv from new york, this is bloomberg. Julia time for the Bloomberg Business flash look at some of the business stories in the news. Priceline took alternative withr home capital came discounted stocks. Requires 300 million of the stock, providing a 1. 5 billion Credit Facility. Capital madevide companies. Source to thats your business flash update. Is next. Market close less than four minute to go for the before close. Unchanged here for the major indexes. Nasdaq finishing up in the green. Julia day of consolidation for u. S. Stocks. Aslthcare shares advancing senaters assess the version. Joe if youre tuning in live on twitter. We want to welcome you on our coverage. Julia we begin with our markets. U. S. Stocks limp into the lohse. Here. Ok at the numbers scarlet little change for the dow for the s p and for the nasdaq. Whats notable that volume in the nasdaq is still 12 above. Moving average. It seem that those tech names continue to garner the most attention. Joe volatility is diminished. Gains, in term of youre not seeing major indexes. If you come inside the bloomberg differentt the sectors and their performance today, its clear that theres here. Tstanding mover that will be healthcare stocks. Healthcare group, that sub index is at a record high. Gaining more than 1 as the Senate Unveiled its version of healthcare overhaul bill. Their response to obamacare, theres nothing in there on pricing. Ion drug perhaps, that gave investors a reason to push up a number of different healthcare companies. Including some of the pharmaceutical companies. In terms of examples of the Healthcare Company gainers, we moving high. The biotech company. Scripps. Ngs, express pharmacy benefit managers gaining 1. 5 . Molina healthcare also advancing. Joe lets take a look at the Government Bond market. Ton of action yields lower across the board. Right in the middle of the recent range. A lot. Julia when you get to five decimal places on currency, theres not a lot going on. Ly skip over some of the majors. Going onow you whats in dollar cap. The Canadian Dollar bouncing for several reasons. Some stabilization, old price, had retail fell this morning. Story out the big new bailout by warren buffet taking 38 . Canadianlifting the dollar. Euro norway saying go long norway. Recent price is supported. Also we have the largest easingducing dropping buyers today. Thats another central bank thats talking about the exit potentially. You can see, down. 6 of one percent. Dollar rand in focus today. Willlation that lawmaker try to out president zuma by a confidence vote. They talked about that rumor for the last few months. Mexicoheck of dollar here. We have Mexican Central Bank decisions there. Aising rates by quarter of percent. Joe finally, on commodities, lets look quickly as oil and gold. Both up a little bit. Oil has been getting smoked the last few days. Of relief there. Gold taking a higher on the same bid that push treasury yields lower. We told you about in healthcare driving the index gains today. Now to analyze what investors need to know about the unveiled healthcare legislation bloomberg healthcare reporter zack tracer and bloomberg coverage editor who is in washington. Zack, i want to start with you. Mentioned there was nothing about prescription drugs bill. It wasnt just Pharma Companies moving up. Of the hospital stocks didnt like the house version of the bill. Had a good day today. What was in the bill that investors reacted positively to . Bill we have a bunch subbeds subsidies being funded. At least over the next few years. Pain. Term, there may be we seen cuts come if longer term. Joe seems like lot of the reforms come after 2020. Which i think were having another election. Of get by design sort the big changes or around the next time were taking a president ial vote . Why would you say that . Know. T i do think they trying to have this both ways. Got gop leaders who are trying to figure out how to both conservative who wanted a full repeal of obamacare. And moderates who want to know how many people will lose insurance. Trying to get something where senators can try to have it both ways. Some ofhere you seeing the lower transitions up front. Youre seeing little bit of extra help from the marks and of extra money in there early on. You seeing as time goes out, youre seeing cost savings things. Some that try to cut deeper than the house bill did. Kicking in further on decade out guess, theyre hoping notice. S will scarlet i wanted to get to you now. Obviously these bills are moving targets. Points forarting negotiations. We dont know how the final draft will look like. When it will be voted on. Yet, when you talk to healthcare executives, the ceos of the do they plan for a uncertain future . You seen a lot of Health Insurers say this is too uncertain. We will pull out of these individual markets. Of two anthem pull out states. You seeing companies saying, we invest in this market. That uncertainty will continue. Scarlet is that the plan . Is what the Trump Administration let obamacare die . Is certainly trump said. You seen the Administration Come through and provide payments. Theyre not providing certainty. Lot of that is aimed keeping up republicans to go ahead and actually vote for a repeal bill. Anxious extremely deliver on Campaign Promises repealing on obamacare. Seem lot less interested what that look like. Factor here, you have conservatives and moderates of is there a way to square it. Toublicans can only afford senate. Votes in the julia so far they lost four senators have come out seined will not vote for this. This is not a repeal of obamacare. A massive slashing of medicaid costs even if you bit furthera little you stagger the reduction going forward. How are they going to fix this . Thats the problem. These four senators largely in saying this doesnt go far enough to repealing obamacare. Toy will negotiate as a team try to make it go further. You obviously have moderates who worried its gone too far in certain ways. How do you make changes to satisfy both . Callof these noes are tack noes. Theres members saying im concerned. Thats how you become part of a negotiation. Thats you try to put your input on the bill. Negotiated that was entirely in secret. It was kept secret even from the ofbers of the working Group Senators that had been formed to write the bill. Those members didnt know what in it. Theres a lot of people that know that the only way they have influencing it is to play hard to get. Tacticalmentioned noes. Ill ask you the question that i asked the other kevin, kevin hour ago. Alf anyone think those four senator no . Vote i dont think all four will vote no. Rand paul will be a very yes. Cult vote to bring to mike lee is also been very upset with the way this is played out the way the working group was kind of cut out of the negotiation. Are not going to be easy people to win over. On the flip side, you got moderates like Susan Collins of maine and Lisa Murkowski of who have very long standing deep concerns about the way the bill was written. Everyone knows that all of the noes today will not be next week. End of but some of them might be. Its going to be really tight. You for that kevin. Ive been accused on twittering this. Too harsh about i raised questions about funding capacity of obamacare. Is as a look at this theshot is it better for consumer . Well get the cbo score next week. At this and say, better . Going to be its a good question i think. Theres certain categories of folks who might make better offers. Young people will see lower premiums. Some old people will see higher premiums. Lower. Es will be the insurance you buy will have on average higher deductible. People will be buying kind of skippy insurance plans. People. Ot great for joe zack tracer who covers for bloomberg. Thank you so much to both of you this down. Us break julia coming up, express buying 10 of American Airlines. Why is this offer unusual . It change the air travel industry. Well be discussing all the from new york. Mark time now for first news. Former in on obama is weighing the Senate Republican healthcare bill. In a post on his facebook page, mr. Obama said the measure is not a healthcare bill. Massivehe said, it is a transfer of wealth from middle class and poor families to the rich. Mr. Obama said, simply put, theres a chance you might get family,t old or start a this bill will do you harm. Senators on both sides of the to quote do deliver on what the American People need. Technologyith executives President Trump criticized his predecessor signature legislative achievement. Obamacare is a disaster. Its dead. Putting in a plan today negotiated. To be we love to have democrats support. But they are obstructionist. Support. Never we will hopefully get something done. Be something with heart and very meaningful. Mark meantime, Kentucky Republican rand paul said he and senators oppose the similar to its too obamacare. They are definitely open to negotiations. The Senate Majority leader Mitch Mcconnell is pushing for a vote next week. Jeopardies thent bills passage. Emmanuel macron presented a security bill to threats tomist europe. Macrons government is seeking existing frances state of emergency through november 1st. The time it will take the new parliament. Through the move come days after an car carryinge on explosives. Scaletest several small attacks on european cities. Global news 24 hours a day powered by more than 2700 analysts. S and julia the julia the move sent american stock surging in morning trading. Lot up in the air. American board has to prove the deal. The company has been highly of qatar airways. Hes phoning in from london. Great to speak you. Start with you michael. What are you hearing on this . Feels uncanny given the current tensions in the middle east and the fact that to cozy up to this administration and ease the blow regionally there is. Theres sort of a theory coming together that qatar may feel a need to reach out to the united states. Initiallytrump was block aid embargo of qatar. The u. S. State department backed off that. Amiddist, probably couldnt hurt trumpto cozy up to the administration. Potentially cozy up to the largest u. S. Airline and one thats within qatars one world alliance. Make sense from geopolitical stand point. Julia we spoke recently to the airlines. Ar we have lot of new areinations that we launching. Qatar continues to grow fast. Dont get intimidated. Markets. Ind new julia i know you spoken to him in the past. Call him a pretty shrewd cookie here. I have. Met him on a number of occasions. Indeed, entities with him before. Shrewd operator. He said to me, i dont fly planes for benefits of governments. In terms ofve Acquisition Strategy and strategy, he has talked about wanting to invest in gold rather than scrap mergers, which is a hint what he of maybe some of the competitors. Ihg. Invested in the Apparent Company of the qatar airways. Very successful Airline Group based here in europe. Also in interestingly, British Airways one of the Partner Companies in that group who has relationship with american american. Have immunized joint venture. Julia the problem is they are pushing President Trump to tanks these guys. Not surprised with the response we got from American Airlines ceo. Want to see form of investment from these guys . Its very unlikely. Iagexample i gave there, was warmly welcomed. Ceo, they get on perfectly. Equallywhat woody is walsh about the gulf carriers. Indicated he doesnt believe people should be complaining but celebrating what weve achieved. Is not the case as you said american, initial words to staff. Doug parker indicate to this approach by qatar airway the backdrop about the three u. S. Carriers complained. Surprising. Julia great point. Scarlet we should mention, talked about this. The board needs to approve a of 10 of american by qatar. Michael, qatar made clear it to build a position which it doesnt play a role in management and governs. Does that sound credible to you . I think so. Is not the First Investment that qatar has made. In latam investments airway. Which is large south American Airlines. They have biggest stage in iag. Entirely possible. They see a stake as being beneficial. Reasons thatential american may not want to do this. Some analyst noted today. Are some tax implications, have. Large stake could there are some losses that loss be jeopardizedd by such an investment by qatar. There are some real questions whether american will want to do this. Thatcertainly feasible qatar may see some benefit in making a pass of stake. There any price which american will go, okay, you can get this. Accept the investment . We talk about a global and an industry that gone through a lot of the u. S. Tion led by refer back to iag, the partner of qatar, they themselves see part of the global process. Of any Political Considerations about global business,f the expanded north america across the pacific with the traffic in that qatarirection can bring. Certainly the strength working together. The past. To American Airlines themselves, were not too warm about the idea airways looking to merge them. Julia really interesting perspective. Great to have you on john jls of consulting. News. T we have breaking bed, bath and beyond reporting number. Ter comparable sales in a period by 2 . Ted declined estimate. Issing the updatingand beyond not its forecast. You can see there, bed, bath and beyond tumbling. Scarlet across Financial Market oil is in the driver seat. Take a look at this chart here. Blue line is crude. U. S. Urple line is the dollar. The white line is the ten year yield. Oil react to the dollar but these days, it is the influence. Is driving everything now. As you know, oil entered a bear this week down more than 20 from the peak. Tendollar moved high and year yield has dipped. Oila the other thing about is it creates winners and losers on the currency front too. You chance one month volatility. Time to fix the lid over the roof. Not only turkey is an importer is exporter. Ssia turkey cpi appears to have peaked. The good thing for those for carry is Turkey Central Bank high rates down to their liking. Thees time it put gains on relative bases. Turkey looks cheaper. To see hownteresting those two angulated in the past. Big picture look. For the most part, there has dollar, theon the broader em world which one might to oil, notsitive seeing much. The white line going down down here is oil. Else is the broad em stock. There holding up fine for most part. Isolated examples. While we have seen oil is off, most risk assets havent been concerned. Julia we were talking about yesterday. We were talking about why these doing so well. The yield curve on a relatively bases. The equities here are a safe bond market. E to scarlet oil driving on this. It prettys keeps safe. Results ofext, the the fed stress test is due out. And fails. Ses. Scarlet we have just gotten headlines from the fed stress test result. The fed stress test indicates all 34 banks have exceeded the minimum requirements. We got Morgan Stanley, 3. 8 minimum supplementary leverage in this stress test. Goldman sachs by the same 4. 1 . E has American Express was the highest 8. 9 . Federal reserve testing for s. Verely adverse scenario this is a quantitative portion stress test. You look at the controls of the banks and its a little bit banks to get a sense where they went right and wrong. All 34 stress test shows banks have exceeded the minimum requirements. Say that whether a bank pass or fail. They pass now. Us now joshua rossner. Banks passed stress test. That was to be expected. Get whatll going to they want in terms of being able to turn cash to shareholders. The two have very little in connection . A connection. Several easier ago, in the first necessarilydidnt pass. They were so close to the minimum level, we suspected they would fail. Scarlet they figured it out. The last several years, much higher. Because capital levels are hire. It dropped but it doesnt drop too bad. Where they have failed in the years, is the qualitative portion. Which we will hear about next week. Looks at other things such as how they really do risk management, how data control mechanisms are. Material. Of fuzzy joe should we take this news consume the Financial System is safe and healthy . No. Findf the things that i humorous, when we first started with the stress testing the markets didnt believe them. Now we have too much faith in them. Theyre a wonderful indicator. All they are. They are better indicator of what were going to see in outs. Ble pay which well see next wednesday. The fed each year focuses on a toferent portfolio prioritize the stress. This year commercial real estate. If you look at commercial real estate, the portfolios are in good shape across the board. All levels are good across the board. The fastests that growing portfolio and bank sheets over the past five years has been commercial and loan demands. Concerned about concerned about reserving and delinquencies. If you look at bva wells especially, you seen massive spikes in delinquencies. Havent seen corresponding secrecy you got some real problems in portfolios. Tohink you have to stick your fundamental analysis, portfolio by portfolio. This should really be looked at a way to get handle what the pay outs will be. The average yield on a cni portfolio at major banks prior 2011, or in 2011, was over 5 . About 2. 5overing at to 3. 4 . Havent been increasing the reserving. If you look at the delinquency numbers theyre starting to over the past year as a large number of the banks whos book. Rowing the on top of that, a, all all at b of their loans are cni. Residents is a percentage of is tiny. Ts recess than half of that scarlet the fed may not be looking at this. Attention are bank ceos getting to this . It was a big deal during the but then they backed off on that. Course. Of before the crisis, capital level were so bad. The crisis hit and losses went through the roof, they had nothing. Why we had to bail out half the Financial System around. He world if th not just the u. S. Still in the process of bailing out more banks. It year we stopped bailing out banks because the capital levels are better. Things stress test, certain portfolios do it differently. Least in the qualitative section, the fed looks at how modelnks are doing their for example. Happy with the model, they can fail this that. Even the biggest banks have failed or passed with conditions. Last year, Morgan Stanley passed with condition. Right. You better do this dont send these models that are not great. Detailst tell us the these. Y give them this is being scrutinized. Not great. Umbers are except remember, historically, Residential Real Estate was largest asset on bank portfolios. Today its commercial its cni loans. First time in history. Theyve had 50 growth as an in that loan category since 2011. While the yield has gone down on portfolio. Averaged duration is about three and three quarter years. Of Interest Rate sensitivity. But you scrape the bottom of the borrowing. Erms of fortune 500 companies arent included in that. Cycle they go to the Capital Markets. You been adversely selected and growing this portfolio aggressively. Its something that may be its already part of our communal psyche. Considered. Be julia banks going through the roughly up with 50 billion more capital they need. She expect big banks to allow to increase. By 8 . Ds getting into danger territory were seeing banks extent . Ut to that to so degree we are. Especially win you take it in context the psychology in washington. Were hearing this morning with regulators were talking about reducing the requirements under doddfrank. If you have the Mortgage Market for,m theyre pressing youd end up with government backedee with mortgage security. I think that we have very quickly forgotten the lessons we should have learned. Scarlet going forward, the stress test may look completely different. Annually. Ot be held mnuchin indicated they have administration, under President Trump wants to dial down Regulation Bank regulation. When we talk about different ing it will happen. Thatnt know how tough could be because legislative is very hard to do. Rid ofge to get doddfrank. Theres a lot. Do. Heres more to trump is going to appoint the fed. Ew people to all these bank regulators. Years, we can see things being tweaked. One of them is going to be likely the stress test and it might be every two years. The leverage ratio is already ring. A dynamic tension in washington between the forces. Tory i think that lot can be done. Stress test i look at it differently. More for it may do regulation. I think Capital Markets have become so focused on the stress they think that the stress test has more value and more meaning than it does. A way of placebos so thele done bother doing same degree of fundamental analysis. Scarlet thank you so much. Get you now to news. Mark President Trump ended weeks of speculation and said he does not have tapes of his conversations with then fbi director james comey. Tweeted that he tweeted that he did not make or have any recordings. Mr. Trump himself raised the question of whether he was taping his Oval Office Conversation he sent out a suggesting thes existence of tapes. The british home secretary amber told parliament review will be done how authorities handle u. K. Ecent attacks in the to see lessons can be learned in the wake of attacks. African president jacob zuma sparred with Opposition Parliament debate over scandals. Performance unfit. President zuma faced calls for from within the Ruling African National congress. Thats been seven motions of no confidence against him. Expected several more oppositions by the end of the year. John bellgovernor edwards is urging state residents against dropping their guard. Pical storm cindy is weak weakened. The state is now the out woods. Large part of the state is still at risk for flash flooding. The storms is expected in north louisiana by tonight before moving out of the state overnight. Joe thanks mark. Canadas Mortgage Lender jumping as much as 20 in news that warren company. Backing the this is bloomberg. Joe billionaire Warren Buffett road to the rescue of the capital. Disrupteaten to market. S property berkshire took a stake. 1. 5 billion credit line. With allenpoke hubben a board member on the firm. Weve had a process under for about simple weeks. Weve been out there. We announced that we were seeking Strategic Alternatives and that process has been pretty robust. Strategicrms of partners as well as financing salenatives and asset alternative. Berkshire hathaway emerged out of that process. We got together. Joe did the government play any together orging you was it purely in the private sector realm . This was 100 in the private sector. The government had nothing to do this. Joe lets talk about some of the aspects of the deal itself. Are better terms than the Company Previously had from the of credit. How does the ultimate numbers compare to what youre ultimately going for here . Entered into the agreement with berkshire were focused what will be the stand by theme. Facility there was a stand by fee of 2. 5 and drawn Interest Rates of 10 . In this facility, after we the first if will be 9 . Fee. 1 stand by that was particularly important as we expect to be able to pay to zero overlity the course of the next 45 days. Joe lets talk about the brand now. Hathaway, Warren Buffett specifically talk about the brand and how you can spend years building it up and destroy it. Hcg is the brand value of given the recent trouble . I think theres no question that the brand value of hcg has byn negatively affected this. Thebrand value actually of canadian alternative Mortgage Market has been negatively affected. Remains to be seen whether we can recover the brand value. You, even before we with Berkshire Hathaway we were seeing very strong return to our deposit flows. We expect that with this stamp on us, that should improve dramatically from there. Going to be, are we an hcg brand. I cant pick late i cant speculate. Hcx goingodel of forward. Do you have more liquidation plan. Point have you done enough on that front . We have a number of that are in process as i said. Were definitely looking over next 45 days the to execute on a couple of transactions that would in addition to the mortgage sale withaction, we announced kingset this week. Would reduce the amount under new Credit Facility to 64. After that were done. Shrinkingplanning on the Balance Sheet anymore. Were hoping that if the back, well get a positive bump and the balance again. Ill grow joe that was my interview with hib. Now is who covers from bloomberg. What is berkshire getting out of this deal . Great terms. Is right out of buffetts play book. He likes these deals that are opportunistic. Getting paid high Interest Rate on that credit line. Also getting a sweetener in that could equity make this financially even more successful for berkshire. The terms compare to investmentkshires in u. S. Financial institutions crisis in the immediate post crisis period. They are similar. W. Of the things to remember about crisis the u. S. Investmene made, they were much larger. Of billions of dollars of capital injected. Really get in the weeds here. The Goldman Sachs investment for instance where preferred shares paid a dividend but they also had warrants involved. There are differences ins and outs that will matter in the long run to the returns. Its safe to say these are terms. Ive aboutt give you contacts Warren Buffetts holdings. We talked so often about his investments here in the united states. He leveragedt is canada . Buffett tends to invest on a case by case basis. Thatd a story that moved talks about the 82yearold thisr who helped bring deal to buffetts attention. Thats what were seeing here. That said, he does have a history of investing in canada. Kingsed finance burger he hasion for merger a big electronic distribution in western canada. Hes certainly familiar with the country and shown a willingness there. H to invest scarlet do we know how long how holding on the stakes. How quickly might me want to get out of this once the stock return. At the bloomberg terminal here, home capital it the demise of the company price. S of share is is there a point he looks at . Yeah. He likes the hold stocks for the long term. If you dig in here, i dont think necessarily get the right away. I think were just going to have on that. Nd see julia i will ask you about Something ElseWarren Buffett invested in. Thats american airline. Sum on his pretty investment in this one too. Thats certainly an interesting development. The airline bet took a lot of surprise. Berkshire hathaway took large stakes in the four biggest u. S. Carriers. Including american. Buffett has said that part of that bet is sort of his view on the industry and theres a lot thatnsolidation there and the industry isnt necessarily it used to when to whens there was much more capacity. know what who cover thank you very much. Up on petering smith on the companys latest round of fundraising and volatility currency. That interview 5 30 p. M. New york time. Scarlet it is time for the Bloomberg Business flash. Bulk of mylan investors the 2016inst Compensation Program after it contained a package for the ofpany chair set to be north 96 million. This marks the third time a majority of investor have paid programans since 2010. Tesla has signed a preliminary production in china. The electric car maker reached a city of shanghai. It would move tesla step closer manufacturing. Theurope, largest ipo, Irish Government looking to raise 3. 6 billion from selling stake in allied irish bank. They spent more than 23 billion the lender and countrys real estate melt down. The World Biggest maker of iphone preparing to invest the u. S. On in fox con will begin with a decision where to build 7 billion display making plan. They have named seven state where is the factory could be built. Most of them in the midwest. He said the company could end up tens of thousands of u. S. Jobs. That is your business flash update. Joe coming up what you need to know for tomorrows trading day. Is bloomberg. Tomorrow markser one Year Anniversary of the brexit referendum. Joe im looking at you u. S. Tmi sales data. Julia u. S. Commerce department is expected to release a preliminary decision on 18 dutydumping joe have a great evening. This is bloomberg. Alisa i am a Alisa Parenti from washington. Youre watching bloomberg technology. President trump says the oh era is over. He criticized his predecessors signature legislative achievement at a meeting. President Trump Obamacare is a disaster, totally dead. We are putting in a plan today that is going to be negotiated. We would love to have some democrats support. We wont get one, no matter how good it is. We will hopefully get something done, something with heart, and very meaningful. Alisa Democratic Leaders are slamming the bill, arguing millions stand to lose coverage. Nancy pelosi described it as mean and heartless. Chuck schumer echoed pelosi, saying millions will be kicked off medicaid in three years. Former president obama weighed in, called it a massive transfer of wealth from middleclass and poor families to the rich. He said senators on both sides should deliver what the American People need. President trump tweeted today he does not have