Transcripts For BLOOMBERG Whatd You Miss 20170627

The house, a similar one from moderates and conservatives, seemingly irreconcilable. Pulled and all the sudden, the vote came back to life after negotiations behind the scenes. We dont how long this will take and we know Mitch Mcconnell does not want to let this hang in perpetuity or they want to get this out there because the substance of the bill is not great politics. Its hard to sell 22 Million People losing their coverage under this bill korn to the cbo. 15 million just next year. The savings are substantial. We do not know what the number be by the end of it. Not pull well. S you are right. Tough politics is a great way to say it. Kevin and give us your thoughts. Clearly, mcconnell has a significant amount of pressure to make this petition today. The senators around him will have increasing pressure, under pressure from the voters to not make a decision that ultimately will hurt individual americans as far as the Health Care Coverage is concerned. Were here at the white house. While getting from capitol hill to the white house, i was talking with several republican sources and they are saying what you are saying or the Senate Majority leader Mitch Mcconnell of course trying now to redraw the map so to speak and charge a new forward. All of the senators have been invited to the white house. Mike pence working capital earlier today trying to muster enough votes for the health care passage here and at the end of the day, numbers did not add up and it was not there for the majority leader. He can only afford to lose two votes and those opposed to even wasg this bill to a vote, not there. Handful of votes, people from right,r right, far ted cruz, the policy differences on this could not be more different. Advocating for the funding of planned parenthood and the far right as against that. More moderates proposing to boost opioid addiction programs and the majority leader proposed 40 billion. None of that is in the bill as well. The majority has 200 billion to play around with and i would anticipate according to the sources i am talking with that the 200 billion couldnt could come up for discussion here at the white house once we start to see republicans coming and trickling in. One prominent conservative activist told me that as lawmakers head into the august recess, when first theyre having to come home because of a july 4 recess, it was a tough sell for them to be able to talk about the bill, being dubbed obamacare light at town halls and fourth of july picnics and barbecues. Able to gethey are something passed before the august recess, that juxtaposes other pieces of legislation and that might the able to provide them some political cover. Here, no political cover for republicans at all. Of course, republican senators are reportedly going to the white house later in the afternoon to discuss the Health Care Bill with the president. Let me bring you into this conversation once again because Mitch Mcconnell drove institute steered the whole crop the whole process. The secret closeddoor meetings, the unveiling of the bill. To what extent will the white house be involved over the next week following the fourth of july recess once we try to go for it again . If you things. We know that the last time around when this was in the house, the president did not get involved until late in the process and finally, his involvement paid off and he managed to twist enough arms to make enough calls and get enough republicans on board here the president is not a policy walk and he is not a stickler for policy details. He later called it mean he is open to what the bill does and he wants to be able to sign it and get it off is played and claim a legislative victory and claim he delivered on promise and tax cuts he sounded a lot more animated about. Is corraln do republicans politically. Andaps to a little wheeling dealing and promised to go to their districts and help them in the reelection sites and that sort of thing. He has got some sticks play around with as well because we see a pro tom pro trump super pac attacking a moderate republican from nevada ahead of a reelection. An extraordinary thing for a group to attack of honorable member of their own party. The president is the most powerful political player around the debate and if he uses that effectively, he could potentially get it to the senate but right now, we dont know. Interesting about heather because seen as the most vulnerable. Following donald trump are on the road and very closely, he is not a policy walk on this front. Im just getting through his tweets in the last week and what i find fascinating is how little he has talked about the Health Care Bill. This is a window into his mind. He be at thisl stage and what do you think will happen, that discussion at 4 00 p. M. This evening . One thing i dont like to do since the campaign trail is try theroject or translate president and candidatess twitter account. I can tell you several Republican Forces up on capitol hill, when we talked about the new surrounding the pressure investigation and surrounding fbicommentary on these director james comey, when he is tweeting that and driving the focus away from policy and onto the politics and onto the water cooler talk of the day, that frustrates republicans on capitol hill because they say wait a minute, why isnt he putting the twitter hope it, the focus on the policy . Why isnt he targeting and trying to shift that . On the flipside, i spoke with several republican strategist who say the commentary on his twitter account is able to create a distraction of sorts so it provides cover for the majority leader to work behind closed doors. Frustration in the senate is palpable. That the Senate Majority leader works behind closed doors and did not include them in the people in the room, many of whom are now posing him, many people working on it, people like bill cassidy, senator pat toomey, these folks also had frustrations. Everis not a bill that stood a chance of happening. If our national plutko correspondent joining us from capitol hill, we appreciate it and we will check in with you later. In the meantime, lets get to first word news with mark crumpton. Have in washington, we been reporting Senate Republicans have delayed a vote until after the july 4 sets. Theh mcconnell made announcement today after a group of senators declined to support even a procedural vote on a measure. We will continue the discussion on the conference and the distances differences we have and continue to try to litigate. We will not be on the bill this week but we are working toward getting at least 50 people in a comfortable place. No matter what tweaks they may add in the next week and a half and a half in a matter how the bill changes around the edges, it is fundamentally flawed at the center. Not wantcan people do medicaid slashed. President trump invited republican senators to the white house this afternoon. The state department has devoted china to the lowest ranking over the countrys Human Trafficking record. Tillersonof state rex report on trafficking. Ivanka trump, the president has his daughter and senior white house adviser. And said the enormous challenge ,f ending Human Trafficking policy for the administration. The foreign minister says the partial reinstatement of President Trumptravel ban is disappointing and they believe the band do it it is more about policy than security. Misplaced andlled misguided and has no basis in fact and would not help fight terrorism. It is used as a rallying cry. The scottish french minister is delaying plants for a second independence referendum after voters turned away from her party in the u. K. Special election, and she said she has reflected on the outcome and is rethinking the plan she set out in march. Not rule outwould referendum in the coming years are global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Julia coming up, a new cyber attack. We will have the latest from new york. This is bloomberg. Computers andks demand 300 in payments to allow access. The high concentration of victims are in russia and the ukraine. Andbritish Media Company danish shipping giant have also been struck. The attack is similar to last month and uses a similar virus an identical met demands. Lets bring in jordan, Bloomberg Technology reporter who joins us from the washington bureau. My understanding is this is a step up from the attack we saw it may so clearly, the hackers out there are learning. I wonder if businesses are. Indeed. In some ways, as you mentioned, the attackers are asking for about 300 in bitcoin. It is small enough so many people can pay it and not so large that many people will not pay. It does have interesting addition toics in the virus last month. It is really just a reminder hacking,yberspace and procrastination carries an exponentially increasing cost because anybody who waited fixed machines vulnerable are now paying a steeper penalty. What connects the Companies Involved in the latest attack . A warning that you have to do upgrades when youre told to do them . Part of it in one of the piece of connective tissue that from earlier in may and this infection today is the main mechanism for spreading is a leaked export from the u. S. Government. The exploit targets a piece of Microsoft Windows software cached for many months. It is not the only mechanism to spread but it is a reminder to companies that just because the earlier infection was stopped, by theto careless coding hackers, it does not mean the future ones will be easy to stop. It looks like attackers took more care in preparing this malware. You made the point that this is another example of it coin being used as the payment to unlock the system. What point do regulators have to step in and recognize us is helping fuel the rise . Bitcoin and Digital Currencies preceded the recent spike in ransom ware. Underlying the attacks by the cannot pay theu attackers anonymously, the attack just will not work. Clause i anonymous Digital Currencies, available to hackers come it makes the attack really easy and lawenforcement pays thely close attention to public ledger as it is called with a bitcoin. There are ways of tracing payments like these somewhat. If hackers are careful, it is basically an anonymous currency. Great to get your wisdom. Bloomberg Technology Reporter out of washington. Ceotill ahead, chairman and what is next in regulation, and efforts tothat leave regulate the Financial Insurance industry . This is bloomberg. You are looking at a live shot of the white house where senators will be arriving momentarily and we will bring you all of the details. Where does that leave the federal effort to lead the i spoke with the chairman of the to find out how it is positioning itself. What comes to financial reform, we talked before and i think it is currently important to have a Financial Service in the United States and you have different ability in the markets. You need to have smart and good regulation. Novak is not positive. They have good and smart regulation. I think that would be a very difficult lift to get through the Senate Reform to get out of the house. I dont see that happening. He would need 60 votes to get closure. I do not see that at all. It is an interesting proposal. When you talk about the financial choice act and how it treats driven us revved regulation under doddfrank, is that a good thing . It depends where you are here from our standpoint, most of our clients have some issues with doddfrank p are a lot of it is not so much on the doddfrank but the leverage ratio. That is a big issue for us. When you go to doddfrank, it is compliance and a lot of this is duplicate compliance. It is not healthy for marketplace. When it comes to doddfrank, the people that originally wrote the rules, i said it to you before. After Congress Approved it in 2010, the interpretation of what congress originally voted on might have been a little over the top. Start to see modification spiral writers and hopefully we can continue to grow the Financial Services business around the world. Project where they have been seeking public input on rules and regulations and practices to see what can be simple fight. I want to ask you if there are any specific rules that you think should be examined and rings them and and less of a drag on trading and the overall economy . A really simple one. If a simple one would be my comes to the proprietary trading amongst banks and the not in debt and derivatives, it makes no sense whatsoever. We have got to keep deep pools in liquidity. 20 million 2020 of debt in the United States. We need to raise the debt ceiling to pay our bills. We need people to provide liquidity in all different forms of the marketplace. There is no reason why the banks should be excluded in the Derivatives Market space when they are allowed to do so in the cash market. That is a real example of how the legislation did not take that into account when it comes to debt in the u. S. Grows be trading rewritten to encourage liquidity . Is that something they are encouraging . Block trading rules are something we have to be very careful with p ryan a proponent to a certain extent by the same time, i do not want to run a block institution. The great benefits of an exchange i see them making one of the largest Financial Exchanges in the world, we run a book that gives multiple people the same access to the same price at any given time. That is important to the credibility of the marketplace. You know that is negotiated between the two parties of the marketplace and box has this place in there but i would not want to see it continue to grow to a point where it takes away from that order. Obviously, person is policy. You have Chris Giancarlo still in a temporary role right now. What do you think of the job he has done so far . I think he has done a good job in medicine difficult situation to be and when you are the acting chairman but i think no one looks at the chairman as an acting chairman. They look at him as a chairman to he is nominated by the president and had a very productive Senate Hearing and confirmation. It is a matter of time. All in all, he is acting very professionally not only in the United States but around the world. He promotes our businesses within the u. S. And in asia. I think german geocarlow, acting chairman, has really done a nice job so early. This will help grow the business p we dont ever look for regulators to grow the business p we look for regulators to promote smart and good regulation and then we will compete with Anyone Around the world. Your taker tape on what is going on in the currencies . What is your view of , should there be more done to bolster these exchanges . I believe the currencies are so new that when you look at some of these exchanges that are products, youve got to see credibility of who is regulating them if anybody, the reliability of the products is a little bit frightening right now. A 20 increase in one day and 40 increase in another day in bitcoin. Those are big moves in a marketplace for any products. Is a new product that needs to look for more and more credibility. We have an index here at the cme group on bitcoin. We dont trade futures on bitcoin. We have an agreement with the royal mint in london p are we will trade gold where it will be on a distributed ledger. It will be for every gold bar out there. Intois our first entry Block Chain Technology as it relates to that but as far as the currency goes, it might feel butttle premature right now we have to look at this to see how the world wants to participate. If it does, you know as well as i do we have to have a strong and credible underlying cash market for we can create a Derivatives Market on this otherwise, per dispense are not quite sure what their trading. A lot of questions on what you need to see making the market on the products. I want your thoughts on how the Financial Services committee holding a hearing on the u. S. Market structure looking at how it is evolved and was getting in the way of it working better, and issue is whether companies are avoiding going public because of the cost and the Regulatory Burden and the fact that there are plenty of capital and private markets. Do you think Public Markets are losing at efficacy . Hard to really determine that. Everyone has a different motive about what they want to do with their companies. To takethe marketplace, a Company Public today, it is difficult. It in 2002. Here is a lot involved you can see were some Companies Just do not want to have the hurdles as it relates to being a Public Company and the costs associated with it. Lets talk about that because you look at the cost of compliance in the United States and were roughly around 300 alien in compliance for all businesses in the u. S. That number has creeped up to around 2 trillion. Private companies as well. You have to weigh the benefits. We are all paying costs even if your public or not. I think it is up to the individual participants who create these companies. We have some breaking news. 52 republican senators arriving at the white house, where they will be meeting with President Trump after Mitch Mcconnell delayed the vote for the Health Care Bill until after the fourth of july recess. We will bring you to the white house when that happens. Helpingdelay not stocks. Sentiment and tech shares resume their selloff. Live,f you are tuning and we want to welcome you to our closing bell coverage every day. Scarlet lets begin with our market minutes. What we saw was a droop at the end of trading. Look at the move in the nasdaq. Off by 1. 6 . Whether it is the upside or the downside, that selloff in those big tech companies. Joe this does seem to be the story. All it was was about how tech was leading the way. It has been tech leading the way but on the downside. Scarlet you can see how concentrated the selling was in technology here. Technology shares off. You have pretty steep losses relatively speaking. In telecom, more of the defensive sectors. Financials the only sector to gain. 1 . By 2 10 of it really is all about the tech companies. Julie those who have been. Rought into most yellen talking about valuations. I think if you are having a second guess on where the fed perhapsms of these are the names to sell. Scarlet lets talk about how the nasdaq did for the day. I am looking here. This is the guest one day decline since june 9. Nasdaq leading the way here, whether it is upside or downside. We closed near our session lows. One of the big names in that tech rally is alphabet. Alphabet leading the way down this time after the European Union and slapped a fine, a record fine for out the bed skewing for alphabet skewing search sites. The selloff brought into other big tech names. Look at theake a Government Bond market. Despite this selloff and risk assets we did not see a flight to safety move in treasuries. U. S. Government bonds across u. S. And europe both selling off today. Uphave u. S. 10 years, france 14. , 3. 7. Y was a big move up draghi giving a speech talking about reflationary forces, opportunities in the future to rewind or pullback that stimulus. You had a selloff. Rates higher across the board. Perhaps the ecb pulling back on the stimulus. Very interesting that despite what scarlet was talking about we did not much of a slight to safety. Julie it drove the currency markets there. Suggesting they can look through the downward pressure on the inflation here, more than what we got from janet yellen. We have the eurodollar higher. The dollar the lowest it has been in 10 months. A push higher there in treasury yields, helping dollaryen trading. A quick marker on dollar cap as well. Line with what we are sinking commodity markets. I want to quickly mention the dollar brazil, more woes in brazil thanks to this supreme court. We will be talking more about brazil and what the latest allegations mean. We see brazil weaker in mexico following suit. Joe on commodity front, oil catching another dead today come today, goldr wind gaining 0. 2 . Those are todays market minutes. Scarlet lets discuss a tech lead decline in stocks. We peering in market reagan. We bring in market reagan. It looks like we have the Second Coming of that. Google mypointed out, so that google fund for the eu. It is going to be a rough day for tech. There is a lot more going on. To your point, John Williams and Stanley Fischer of the fed came out today and make you wonder if the fed is getting concerned prices. Set almost taking precedence over inflation at this point. Bettingseem to be inflation will pick up, the fed especially seemed like they were coordinating a message to talk down the equity market, to tighten rates to prevent this bubble. Joe is the idea there isnt a fundamental change with this story . Typically with a big shift something breaks with the story. Mainly that these were the stocks that are the center of speculative activity. Fed is is what the going to target that is what is going to get hit . I go back to that earlier in i cant even pronounce it. Expression crowded trade. To me that is what it was. That is something that spooks investors. Nobody wants to be in a crowded trade. We are feeling the ripples affect from this switch rotation out of tech. Everyone was piling back in and using the losses as an opportunity to buy. The trend has been down. All the things we talked about ,oday, even the Cyber Attacks the comments from the fed officials. It is a quiet holiday session. That is a lot to throw at a market. You look at volume, it is on par or a little higher than the moving average. You talked about the rotation out of tech companies. Bloomberg. Rg on the care is still firmly in the leading quadrant. That is a sector getting a lot people seen of late, it as undervalued relatively speaking. Mainly technology. That is absolutely right. This is one of the sectors left behind after the election. Strong asrallying as other cyclical groups. If you go back to the campaign and the first things trump said about drug prices he almost sounded like hillary clinton, made drug stock and vector is worry about will they do something about drug prices . That concern has pretty much gone away. They think it will be pretty industry friendly. The repeal obamacare my get rid of the tax on brandname drugs. , tradingheaper sector at a discount to the market as a whole. The Biotech Companies are trading as a discount. , it isople got spooked an area where you would rotate into to find some value. Scarlet thank you for your insight. Julie coming up, President Trump is meeting with senators at the white house. The latest on the delayed health bill next. Two more senators come out, i that seven. Im mark crumpton. It is time for first word news. Despite the decision to delay a vote on a gop Health Care Bill, the white house likes the legislations chances. Republicans phased as many as seven defections from their ranks, a day after the Congressional Budget Office said the measure would wars 22 million americans off of insurance. We are continuing to be optimistic. He president is committed all of the members of the administration have said to repeal and a place obamacare, working with the senate and house, making sure we get the best bill. Has President Trump invited all republican senators to the white house this afternoon. 80 banks in the ukraine and russia have been affected by a widespread virus including russias Largest Oil Company and danish shipping company. They will update information as it becomes available. The u. S. Ambassador to the United Nations says russia and iran are officially on notice if Syrian Forces carry out another gas attack on rebel forces. President trump ordered a missile strike on syria targets and april after its military launched a chemical attack. The u. S. Said it identified potential perforations preparations by assads army similar to the april attack. Ew survey says americas since President Trump took office. That compares with 64 at the end of Barack Obamas presidency. Powered by more than 2700 journalists and analysts in over 120 countries, im mark crumpton, this is bloomberg. Scarlet we have some headlines from President Trump after meeting with the republican senators. He says we are going to solve the problem on obamacare and ads are getting close on health care and things the senate bill is going to be great. Senatorslicans, meeting with the president at the white house after Mitch Mcconnell delayed the vote on the Health Care Bill until after the fourth of july recess. Julie lets bring you up to speed. At the white house, im looking at these headlines as we speak. Three more republican senators are saying they oppose this bill. I make that eight at least. A couple of senators, you have people like shelley moore, and rob portman, a moderate republican from ohio, coming out against this proposal put forth by Mitch Mcconnell. They are having concerns about custom medicaid and opioid addiction. Statesest virginia, the are hit significantly by this epidemic crisis. They have put forth the proposal. What itell you spoke with a senior conservative aid to a member of the conservative movement on capitol hill who suggests there could be later on, not this week am a one of the bargaining chips could be with senator ted cruz. We have to jump in here. President trump we are getting close. For the country we have to have health care. It cant be obamacare which is melting down. The other side was saying all sorts of things. This will be great. If we dont did it done it is going to be something we are not going to like. That is ok. I understand that. But i think we have a chance to do something very, very important for the public, very, very important for the people of our country we love. I will ask the press to leave. Love you very much. You are understanding. We will now ask you to leave. Thank you very much everybody. Julie that was visited from speaking about the Health Care Bill. The comments you just make me he says the bill is going to be great. Huge campaign promise. What is he talking about . We should note his smug comment to the media following the deputy weiss white house secretary combative say the lease briefing that she gave, trying to lambaste the media as opposed to focusing on the failure to reach a deal with the Republican Party on health care in the senate. Thesecond point being president saying they are closer to reaching a deal. The math isnt there. The right isnt fair. The moderates are not there. Saying, perhaps the potential bargaining chip could be the expansion of Health Savings accounts. That has been a substantial policy area put forth by ted cruz, a republican up for a safeion, seemingly in spot but also having to placate susan collins, the more moderate , perhaps they can do that getting rid of the defunding of planned parenthood, something that is largely unpopular, and increasing funding to battling opioid addiction. Not the weekend white house wants to be having. The hurdles are still there in terms of them reaching a deal. They are nowhere close to reaching a deal right now. Does this feel any different than when the house had their bill collapse only to be revived . Is this just a process . That is a great point. It is similar to what we saw with the House Freedom caucus. The clout in washington that someone like the Senate Majority leaderit is similar to what we w has, and the ability for the senate to really influence the president s ability to get to other items on his legislation, the senate has leverage. The senate is standing in the way and setting the tone. This is a republicancontrolled senate. On theearing set everyigence committee, hearing set, every person called to testify, that is a republicancontrolled chamber. They are setting the agenda influencing the white house ability to move on. Julie some great points. Thanks to kevin. They were saying he believes this bill is going if itat, and if he doesnt happen, he wont like it but i would be ok. Eightmatures senators are opposed to this bill. Joe there has been a surge of interest in crib so currencies. Still with us to discuss the prospect of Central Bank Digital rencies is andrew 11, levin. He joins us now from our washington bureau. Thank you. There have been there is ideas floated about the possibility of a state issued crypto card. Do you think this is likely a direction we see some countries adopt . That is already the case a number of Central Banks are boring this. The german central bank. Banks are working on prototypes. They have launched a smallscale experiment. This is not science fiction. We are talking about in sweden the central bank with a currency in the next couple of years. That manye use money cases is mostly digital. Things like this. What would distinguish that the digital money we already use daytoday . The Central Bank Digital currency would be like a will. Like a paper bill. It would be representing a u. S. Dollar. But it would be basically free to use. Starbucks,d go to and there would be no fees at wayfor using it in the same you pay in Paper Currency today. That is in contrast to paper currencies. Sort it and clean it and make sure theres no counterfeits. Thats expensive. Digital currency could be a benefit. One of the people people like the privacy. You can track the history of a dollar bill. Would that be an impediment to an official Digital Currency . The idea you can easily track them . Call and iosal my have made recently, the Paper Currency could still exist. People would be free to use that. Most people are using digital payments. This will be another option that people could use. Pay using a Federal Reserve Digital Currency instead of Federal Reserve notes. There could be real benefits to consumers and Small Businesses because this would be a lowercost option. Joe one of the reasons some people have proposed getting rid of physical currency entirely is to eliminate the zero lower bound. Perhaps the central bank could go to negative Interest Rates and not worry people are going to put money underneath the mattress. This central bank crypto currency, would that be a solution . Or would that not apply . Made, weoposal envision Digital Currency would be interestbearing. Positivebe very interest. Compared to cash, which pays nothing. Another element of our proposal stability ofto the the value of the dollar over time, true price stability. So the value of a dollar in terms of consumer goods would be stable over 2, 5, 20, 50 years. Which would help businesses and consumers to count on the value of a dollar like a meter in a yard. It becomes a predictable standard value. Fascinating paper. Thank you for coming on. Scarlet coming up, two u. S. Senators considering a plan to break up fannie mae and freddie mac. This is bloomberg. Mark it is time for first word news. Says wet trumps will solve the problem of obama care. His comments came hours after the gop delayed a vote on the Health Care Bill until after the july 4 recess. Mitch mcconnell goal made the announcement after senators declined to support even a procedural vote on the measure. We are going to continue the discussions on the differences that we have. We will continue to litigate. We will not be on the bill this week. We are working to getting 50 people in a comfortable place. No matter what tweaks they may at, no matter how the bill edges, it isd the fundamentally flawed at the center. The American People dont want medicaid slashed. Theresa may kept her grip on power promising extra funding for northern ireland. Extravernment will funnel money to ireland for securing the support of the democratic unionist party. The uks chancellor of the exchequer spoke about the money. It is a relatively small amount. , thered have expected would be some additional money anyway. We will find that within our budget. Mark the state department has tamara devoted china putting in the same category as north an. A, zimbabwe, there are 20 million victims globally. Ivanka trump and a senior white house adviser appeared with secretary tillerson and said the norm is of ending Human Trafficking is a major foreignpolicy priority for the administration. 9000 migrants have been rescued from the mediterranean according to the United Nations which said the migrants have been trying to reach europe fe boats. Global news 24 hours a day powered by more than 2700 journalists and analysts in 120 countries. This is bloomberg. Joe lets get a recap of todays market action. It really was all about tech once again. 1. 6 . Sdaq what down the nasdaq, 100. More concentrated. Not on the board, rates up everywhere after some perceived hawkish comments from mario draghi. Julie some better news for kp homes. They beat on the revenue line earningspershare coming in better than expected. . 33 versus 26 cents expected. ,t was a show me story increasing by 180 basis points year on year. The ceo said the recovery continues on a steady path and they boosted their Financial Year targets. Bipartisanship in the senate, republican senator bob corker and his colleague mark warner are open it working on an overhaul of friday may and fannie mac. Has been covering this story from washington. Great to speak with you. The goal here according to corker and warner is to foster more competition in the funding of singlefamily homes. Talk to us about what they see happening. We are still early days here. They are just beginning work on hopefully a bipartisan plan to overhaul fannie and freddie. One of the ideas they are considering is splitting fannie and freddie into multiple companies. How do you ensure there are more than two competitors in the singlefamily secondary market . The last go around senators were not able to get that comfort. One of the ideas they are considering is breaking fannie and freddie into multiple companies. Joe the big question that remains is what about the risk . Does the government remain a backstop to a significant chunk of the u. S. Housing market . How with their plan deal with this . The is an issue they have not resolved yet. Still early days. One of the first Housing Finance hearings happening thursday. One of the things the administration has expressed to some is moving from an implicit guarantee on any and freddie to an explicit and paid for aaron t. That sort of move would be to address exactly the issue you were talking about. Not returning to a situation in which there is a wink and nod to investors that while the federal government before hand wasnt technically on the hook for betty freddie and fannie losses, they stepped in. That is one of the situations they are trying to avoid if they are successful. Watch the spreads widen. The point we were making as we introduced you, the idea of breaking up fannie and freddie. In is that going to work practice . These are holes they need to fill. As they mentioned, in previous breakups of large companies, many years ago they were able to break them up along geographic lines. That is not something you want to see with National Mortgage guarantors. Just imagine what would have happened to a Mortgage Finance company that specialized in detroit. That would have tanked a company with too much exposure. These are question they will have to answer. If they are not able to answer them theres a chance they decide it is not the way to go. Lots of holes to fill in here. Watch this space. Joe light joining us from washington. Corruption,ed with accused of taking a bribe, now in the hands of the nations congress. We have the details. This is bloomberg. Scarlet todays present today brazils president rejected the prosecutors charged against him as fiction. He claimed there was no evidence behind the allegations. Here, before iou get on to those charges i want to move to the next allegedly charges. Saying that actually they are going to slap obstruction of Justice Charges on him. We are expecting him to split up the charges. Congress has to vote on each of them individually. Saying, they have been this possibility is he does one next week and there is another one left. Inwhat is the appetite brazil but not just the politicians but the people at large for another iteration of this . Are people gunning for this . There is some fatigue. You dont see protests on the streets. You would think. You didnt really see any spontaneous protests like when the lula takes were released. We are talking about it is not just about the accusations. They are saying they bright 1800 politicians. It takes away thatet that is more served in the senate. Julie in order to forward with the charges and go to trial, two thirds of congress have to back these charges. Two thirds of the lower half have to accept the charges. Hadlawmakers, which have firmly on his side. For now it seems so. A lot of the members have said we are waiting for new fax to fax to decide facts to decide. Aside,rruption charges does he have the Political Capital to do anything . He did. He was getting reforms done. He had enough support. Is he using this Political Capital for the reforms or to survive in power . Scarlet what happens next . How are investors dealing . Delma russoh when was on the hook. Stocks thesolve the next day it has tapered off. It was a regular day. Not a great day but not a tragedy. Julie thank you for that. We are going to stick with the emerging market thing and take a deep into the bloomberg and talk about profit projections. I loved this chart. What we have seen is earnings increasing for the expectations for earnings results. Ast you see in the last week those turn for the worst. We have been questioning the acceleration we have been seeing in the emerging markets. Suddenly one of the key determinants here, starting to see concerns about the outlook. Something to watch. Joe ultimately that is what keeps stocks up. If that deteriorates it is hard to imagine equities wont follow. Brazil, we can bring in that one as well. Scarlet where does the money go from there . We will see. Crypto currencies is something i have been looking at. Those plunged yesterday. They are extending their losses. People preferred to it as a flash crash. The bigger story is the runup we have seen. Bitcoin is a white line, up 180 . There is a correlation with chipmakers, the purple line and a graphic cards maker, the higher the price of these crypto currencies the more people are mining for them. They need powerful hardware to do that. That is lifting demand for those stocks. Joe because theres no easy way to invest, investing in the companies that provide the equipment is one of the more available routes to have exposure. Im looking at Consumer Confidence data. Something i was playing around break it down by states. California versus ohio. Middle america versus coastal america. They are doing pretty well. California had its highest level in a long time. Though,g interesting you see that red bar towards the right. November ohio confidence shot ahead of california confidence. Not that hard to dig your out what happened in no in november. The general fame is confidence is up and doesnt seem confined. Julie i would love to do this analysis based on the cbo. At what point do these headlines impact Consumer Confidence in the states . Revisit this a month from today. Scarlet coming up next, an exclusive interview with brad katayama. Ism new york, this bloomberg. Scarlet time for the Bloomberg Business flash. The biggest business stories in the news now. When it comes to not sharing salary history, women are penalized while men benefit. Those woman received offers lower while men received higher salaries. Women were perceived as uncooperative. Massachusetts can new york city and philadelphia have enacted bans preventing employers from asking a previous salaries. Deutsche bank could be safe and eight derivatives clause. The german bank bets on u. S. Inflation has gone wrong and being reviewed internally. The Federal Reserve failed to can fly [indiscernible] the bank will keep hiring over the next two decades despite the growing dread on wall street triggered by the rise of box in the financial sector. He discussed the interview the issue with an interview with linkedin. Bringing Investment Bankers in. We are all these growth opportunities. We are always finding ways to be more efficient. It creates capital. Im not worrying about that. That is the business updates. Dimon jamie id. Jamie defending the Human Element in finance and banking. Harding. Te was david this is a trend fund that relies on the power of computers. He says it is not even possible to dispense with humorous entirely. How do you automate intuition . Over time it will get there. That is the concern among people. View, dont have a strong but it is depressing how theres a series of data glories categories. Them inl never beat poker, and then they did. It seems like there will be a couple of people Teaching Computers but scarlet people still need to make the big decisions. Computers and robots can look for strange anomalies in patterns but they dont know what to do with it. You need a human being to say lets go with that or forget it. That is the point, how do you automate intubation . The one job that could never be performed by a robot. Ours. Scarlet one to our will be replaced by a robot. Testifying to the house Financial Services subcommittee on it we market structure. Erik schatzker spoke with him about whether the hearing was productive. It expresses a different amount of views. In the first panel you saw clients express concerned with the conflict of interest, you saw a unanimous consensus about the exchange conflict selling market data and being the ones who govern market data. , which something you saw was exchange operators. I was the only one who represented those views, where the exchangers were defending their entrenched positions. Havent watched or participated in every single hearing that has ever been but i will say this is the first time farley your rival, tom and Chris Concannon acknowledging there are these conflicts of interest and they have to be managed. Was that something new were, if not totally new to you. It is definitely a new thing. Provese public data that these conflicts are affecting how brokers write orders. Violatingokers are best execution. The biggest broker is jpmorgan. I just think the size of the payment is tiny compared to their client franchise. They are a broker who manages it well. Many fall victim to the shortterm payment of rebates. It is essentially a kick back. You have two chief economists calling it an illegal kickback. This is something now being addressed through data. It is hard to hide and say there isnt a conflict. It is important to separate the allegations or accusations of conflict of interest. On the one hand you have the maker take her issue, these rebates you prefer to. On the other hand you have the data issue. Sometimes highspeed trading firms are conflicted when it comes to the axis two and sale of market a duck. Lets talk about the maker take her issue first. The suggestion was made that if there were a more dynamic approach to the size of rebates relative to the amount of order flow, that might fix the problem. As opposed to the your suggestion to get rid of the morning get rid of it altogether. Would that go half way to addressing your concerns . One of the challenges, a lot of the regulation we have in the market are basically trying to manage the conflicts, which is the rebate. Where are we just going to the heart of it and working on further improvements to the market . Addressing the conflict headon is better than indirectly trying to manage it through mechanical regulation. Brad speaking earlier with bloombergs erik schatzker. Julie what you need to gear up for tomorrows trading day ahead. This is bloomberg. Scarlet whatd you miss . Another tech lead decline in u. S. Stock. Double the decline on the s p 500. Technology the clear loser in todays trading. Joe even further beyond that, those same stocks that ran it up and everyone was chasing, now we are seeing them flip. Valuations,ng about it is not just about the most overbought things. It was across the board. People have been honing in the dead going after financial conditions to pull the speculative activity there. Scarlet i will be taking a look at earnings reports from monsanto along with general mills. Those reports will be released it 00 a. M. I will watch the stress tests tomorrow, the second part of the annual stress test. It will be important to see what kind of dividend levels things are able to pay out. Prices tomorrow. Scarlet that does it for whatd you miss . Julie Bloomberg Technology is next. Joe this is bloomberg. Anchor you are watching Bloomberg Technology. Senate republicans have delayed the vote on the Health Care Replacement bill until after the july 4 recess. That is after eight gop senators declared they were against it, and a handful refusing to even back a procedural vote on the matter. Reacting to the announcement say the fight is far from over, and plan to readable efforts to defeat it. Senate minority leader says no matter the tweaks made over the next week, the bill is still flawed at the center. He says americans dont what medicaid flashed. Democrats reacted to the investment say the fight is far from over and plan to redouble their efforts to defeat it. We really mean it. We are going to do it will more time. Clearly this fight is going on. U. S. Ambassador to the u. N. Nikki haley says russia and iran isofficially on notice Syrian Forces carry out another poisonous gas attack on rebel forces. President trump ordered a missile strike on syrian targets in april ats