Transcripts For BLOOMBERG Whatd You Miss 20170724

I caught up with republicans, coming out against voting to proceed. She said you would have to ask the leadership office. Repeal or will be a replace on health care. They said that absolutely, the majority leader will get what they want. They do not know what they will be voting on. It really is to the republicans advantage because each senator could say i wasnt voting on repeal only. Replace sot going to there are still kind of something for everyone. I think that is how republicans are trying to look at it. The process that there werent many, if any, is to be crafted. This really could set the stage for midterm elections, particularly in key battleground states like nevada where senator dean heller is up. They met with senators. As we look, they continue to rally this type of support. The twitter account earlier today, noting that he wants there to be a focus on health care and that is why youre seeing him anticipating comments. Rom him on the campaign trail, several rallies where it took that similar rhetoric, that similar strategy. The same battleground state they will be visiting tomorrow night. This is a white house that is looking to move on from the where theystigation hope the president gets back to a policy script. Julia even some that were carried over to protect their president , making it very personal towards him. Filtering into the blue room at the white house. The fact that the senate democrats. There are a lot of elements. Do we feel like we are closer to getting anything done . There is the midterm and longterm calculations. Remember when everyone was good await for senator john mccain in that situation has become much more complicated with the full diagnosis of his illness. If a vote were able to pass, it is the political reality. Prognosis on precisely even when you look at the president s tweets from the last couple of days, you see the repercussions will be far greater than any of them understand. Going forward and calling it the last chance to do the right thing. Theres that mean that this is the last chance to move forward . Is the signal but there have been a few last chances on this. This really is a lastminute push ahead of the summer breaks and the momentum heading into the midterms. It is still a very complicated proposition. Joe and we see Vice President pence. Will listen in as we room as we await the president s remarks. Pence President Donald Trump has been working to keep the promises he made to the American People to rebuild our military. Has workedent tirelessly to repeal and replace obamacare. It is another day American Families and american businesses struggle. Across the country, we have heard firsthand from americans just like those that stand behind me today, from families bearing the cost of skyrocketing premiums, to families who lost their doctors, and family starting to lose hope that congress will ever respond. Them,a told everyone of thanks to the leadership of president , help is on the way. Is fighting for you and will keep fighting every day into a give the American People access to the worldclass health care they deserve. The United States senate will begin the debate on the ability to repeal and replace obamacare. President said, after years of talking and campaigning on it, now is the time for republicans in the senate to act. Republicans will have a chance to do the right thing. To keep the promise of the American People. This president and the American People are counting on the senate to act. With gratitude for his leadership, his persistence and determination, to make American Health care great again, it is my high honor and distinct privilege to introduce to these families and to all of you, the 45th president , President Donald Trump. [applause] President Trump thank you very much, Vice President pence. Thank you, everyone, for being here today. Havoc on has wreaked the lives of innocent, hardworking americans. Behind me today, we have real American Families. Great families. We are suffering because, seven years ago, a small group of and special interests in washington engineered a governor takeover government takeover of health care. It turned out to be a lie. It was a big, fat, ugly, lie. Promised americans like site finn, that they would 2500 a year under obamacare. Instead, his premiums have more than tripled. That is pretty bad. His family and many employees on no other option, going medicaid and giving up their existing coverage. That is pretty bad. No choice, right . Them, obamacares promise was a nightmare. Fromhave a son who suffers spina bifida. Washington immigrants promised families that if they like their doctor they could keep their doctor, but there is only one says every year she waits anxiously to learn is the doctors and hospitals will remain in their network. You have seen that upfront. The democrats promised melissa that her sons preexisting conditions would be covered. They learned that obamacares promise was meaningless. The doctors you need to care for you are on your obamacare plan. So you just have a meaningless promise. After an excruciating series of events, melissa and her husband found themselves just before christmas, emotionally and financially devastated. Crying in a Doctors Office faced with another seemingly unpayable bill. When insurance wouldnt cover their care, the antidoubt outssas 401 k emptied melissas 401 k to pay their bills. Is first rule of medicine do no harm. Obamacares lives have caused this and the whole country, families like this nothing but pain. Erin and andy are Small Business owners from illinois and have six children. Their youngest daughter has a rare genetic condition. Condoms they are sometimes called butterfly children. She has to wear special bandages all the time. Obamacare, the insurance has been repeatedly discontinued and replaced with what washington deems equivalent policies. These plans are not equivalent timehe family has to spend and resources fighting for exceptions. Steve. De promises to they ignore all the pain, all the suffering, and all the money , the tremendous amounts of money that these lives of cause lies have caused. And the many they are continuing to hurt every day by refusing to help us replace obamacare. Republicans have been united in sanding up for obamacare victims. Repeal and replace. Every republican running for office promised immediate relief from this disastrous law. We, as a party, must fulfill that promise to the voters to repeal and replace what they have been saying for the last seven years. But so far, Senate Republicans have not done their job ending the obamacare nightmare. They now have a chance, however, fix what has been so badly broken for such a long time. Replacementthrough of a horrible disaster known as obama care. The senate is very close to the votes it needs to pass a replacement. The problem is, we have zero help from the democrats. They are obstructionist. Thats all they are. Thats all they are good at. Making things not work. Right things and and do exactly what they are not supposed to be doing. Not giving us one vote so we need virtually every single vote from the republicans. Easy to do. The senate bill considered outside of the outright repeal will provide emergency relief and will deliver truly Great Health Care and health care citizens want,r need, and should be demanding. Youll see that at the photo booth, believe me. Booth, believe me. The senate bill a lemonade to the painful individual mandate. It eliminates the job killing employer mandate. Reveals burdensome taxes and will significantly lower americans premiums. Stabilize collapsing Health Insurance markets and give americans far more choice and far more flexibility. The senate bills coverage for preexisting conditions and you dont get this from the democrats. , andlike to tell you this they dont even know the bill. Obama care is death. Thats the one thats death. And it is failing. Populartically expands Health Savings accounts and provides tax credits so americans can purchase a private plan that is right for them and their families. It devotes substantial resources to fight the opioid and this is a tremendous problem. He Opioid Epidemic so billion is being put in that the people of many states like new hampshire, ohio, and so many others that have such a big problem, can be helped and helped greatly. They will be fighting the drug problems very seriously in my administration. The ministering medicaid to better serve their citizens. The senate will vote on whether to allow this urgently needed bill. Democratic republican, if they be more constructive to our country. Againsttor who votes starting debate is telling america that you are fine with. He obamacare nightmare terrible harm they have inflicted on americans like those. And for Senate Republicans, this is their chance to keep their promise. , they canver again now keep their promise. Toprovide emergency relief those in desperate need of help and to improve health care for all americans. The American People have waited long enough. There has been enough talk. Now is the time for action. Obamacare has broken our health care system. It is collapsing. It is gone. It is up to us to get Great Health Care for the American People. We must repeal and replace obamacare now. Thank you, god bless you. Julia what he sees the critical failures of obamacare, he called it death. Coming back to discuss is our senior White House Correspondent joining us from the white house. And we have kevin cirilli, our chief washington correspondent. A pretty impassioned speech from donald trump. Tie this now to the meetings that hes going to have in West Virginia and ohio. Does he get the senate votes he needs to pass this . Seeing some discussion of the bill . You see making this emotional argument, using the bully pulpit, trying to leverage pockets of support in the see him doing something smart, rather than being on the defensive about the bill, going to that party, most of you have been talking for years. Storiesttempt to find that have not fared well under the Affordable Care act. Barrage of the opposite sort of criticism in , upwards ofislation 20 Million People could actually lose coverage or questions about. He promise a lot of Unanswered Questions pollinging that the of americans. It for keeping the promise of those protections, a very difficult needle to thread. President trump has not been able to put forth a new argument as much as emphasizing more emotionally some of these at your other arguments. The first time the senate tried this, there was criticism for not doing more to get the ball over the line, so to speak. Now that the senate has started that, is he having more of an influence on getting the 50 votes . Something that we saw on the campaign trail in the sense that he is really putting pressure on republicans. In fact, the base of President Trumps support likes it. Especially taking on his own party. Even if folks dont buy that. They are fine with the obamacare nightmare and they took on Senate Republicans themselves. This is the chance to keep their promise. The American People have waited long enough. To thosee is speaking conservative folks. A republican from West Virginia, President Trump will be traveling later this week. It is a procedural vote that we are talking about. Think the likelihood is . Investors that are concerned about this. It is to the procedural vote. It will continue to discuss. What is the likelihood . It is added. Susan collins, a top critic for the majority leader as well as President Trump, she was unsure. Leaves,ook at the tea the targets against his own that seemingly suggest they are more confident than they were last week. Julia thank you kevin, and margaret, our chief White House Correspondent. Joe David Rubenstein Carlyle Group is set to seek 13 billion for the next u. S. Buyout fund. For more, lets bring in kyle porter. Kyle, put this in context. 15 billion for the u. S. Fund. How big is it compared to the typical fund . Apollo is ray close to raising 23 billion very close to raising 23 billion. Would we know about the performance with the first five . Current and a fund that is four years old. The value drops the low one and the aim. There are others that are pushing in this sector. Quite interesting to get a sense for how much money in total these funds are managing. Them come out. Investors cant get the returns elsewhere. Alternatives is a great place to put your money. Joe obviously raising the bigger fund, it implies there is a lot of demand for it. Are starved for yield and traditional asset . On top of that, you have sovereign wealth funds. Is a breakdown of International Money coming into this . It depends on the funding question. I think it would roughly be saying that any major u. S. Pension plan will be putting to someone like carlyle or accent. Is there any limitation that you can go into . Or is it openended . They tend to be able to draw this pretty broadbased. Canada, for example, puerto rico, if they want to. With so much competition. Joe in terms of the potential target, when you get news like this, do you see a premium rise that is sort of the theoretical target . It is to look be traded are held by one of their peers. And when the funds actually race, it is even at a very strong market. Begin to us there, the market close is next. Lets get a look at the major averages before we get the equity close there. The alphabet there, we get those results in just a few minutes time. It is set to close at an alltime low today. Discussing it in just a few moments. From new york, this is bloomberg. Scarlet whatd you miss . To close at a record high. Sdaq closed at a record high. Joe if you are tuning in london tolive on twitter i want welcome you to our closing bell coverage. We are waiting for the quarter earnings. Lets take a look at how stocks ended the day in the trading session. The s p 500 a touch lower. The nasdaq performing out some 4 10 of 1 . Nasdaq, a few weeks ago we were talking about was the tech outperformance over, now here we are. Up 4 10 of 1 . , earnings to do any moment. 13 apron is in focus, up in the trading session. Goldman sachs and others coming out with their First Research ratings. Steeplethe likes of coming out, chemical, watching that, 14. Facebook, also high in the trading session. Joe we have alphabet earnings, they are out right now. 22 eps of five dollars and one tinny. 5. 01. Lets take a look at how the market is reacting in afterhours trading. The various first the very map of the earnings, a 2 gain aftermarket hours. On eps. Nings julia six dollars was a number of who are focusing on. A dollars and . 46. Expected to come in at 8. 25. In terms of revenues we got 26 billion. It looks like a bit on the revenue line as well. When were talking about the Second Quarter we have to factor in that fine we got from the eu billion. 2. 8 epf 5. 01. 4. 49 expected. Slightly less of a beat. Joe the market is initially liking the reaction at 1000 a share. Asia it looks like as far some of the numbers are concerned, atbat outperforming performing. Ut you have a company with 90 billion revenue. How long can it continue to post 20 topline growth. People are looking at the other businesses like youtube and cloud. Julia to give you a reference 8. 90t, a dollars . 90 expected. Up, how does this stack there has been concern about how much they are blowing on some of this stuff. Is that a number investors are ok with . Onthe cfo is keeping her eye it. When they created the alphabet structured they were able to give investors better visibility on the revenue. They are going to continue to invest in these businesses but do have an eye on the operating expenses. Investors feel they are being managed appropriately. Percent, that 52 is aggregate pay. Go 52 for this mature to the early days of google up until now, paid to click, advertising. Total advertising revenue hit 22. 6 billion. Is there any indicator this is slowing down . It, and youot seen think about the Digital Display Advertising space, facebook and google taken over 76 of all those dollars and 90 of the incremental dollars. There is a duopoly in advertising. Going toe advertising the googles of the world and the facebook and it is up to twitter and snapchat to see how they position themselves in an advertising business. Julia 1 10 of that is on mobile. If you compare with facebook, they are in the low80s. In terms of monetizing that space, they have more room to her. Grow. M to the mobile aspect of their search business has been the driver. Cost per click, the pricing down close to 20 or maybe a little bit more. You move from a desktop world to a mobile world, he sell a lot more as an automatic lowerpriced you sell a lot lowerds and seeell at a price point. Joe you talk about because i do quasiduopolyeen facebook and alphabet. They will bump into each other on online video. Alphabet is a major player with youtube. Nd mark with Mark Zuckerberg thinks one of the future areas of growth for the social media is presharing the video. The real source of digital ad spending is on online video. Alphabet is there with youtube and facebook is increasingly there. Julia this is the critical thing, you have to type this advertisement to content. When you look at the likes of netflix, putting so much dollars can driving content, you understand that from an advertising place, joe all the Traditional Media Companies in hollywood are trying to figure out how they should repurpose their content in a digital platform. Netflix has been the greatest disruptors in media space over the last 30 years and alphabet is right there, facebook is going to be right there. 21stcentury companies, how do they repurpose of their content. 75,600 workers now at alphabet, that is pretty significant when it was just last year over 66,000. Where are they adding the most people, where are they investing that they add nearly 10,000 people to their headcount . Engineers, scientists, the real technologist who drive that built this who drive that business. It is the fight in Silicon Valley to find qualified engineers to help them develop these products for their customers and for advertising as well. It is something investors focus on because only see has clout mayhead count go slow, it mean they julia they are managing to recruit the talent they need. Drivers, talk to me andt google ad synth artificial intelligence. At oneial intelligence, point, will be the driver of understanding what people want. That is where a lot of this engineering and Computer Science expertise is going. How does Virtual Reality fit in the digital world. We are seeing facebook and other Technology Companies focusing on ai and Virtual Reality. Mark zuckerberg said the future of facebook is a Virtual Reality experience. Goinger experience is there, that is where technology is going. When you think of the technology of content, entertainment, it makes the opportunity for a Rich Entertainment experience on a digital platform really interesting. When we had microsoft earnings last week, microsoft has done so well. We talked about their Cloud Business really kicking into gear. When we do amazon later this week were going to talk about aws. Irere is alphabet on the equivalent . What is the situation for alphabet . Alphabet is one of the players along with amazon and microsoft. It is a source of their Large Capital investment. They will continue to invest in the cloud. Snap, which recently became public, they have outsourced all of their cloud operations to alphabet. It is a capitalintensive business and a price of the business. Most of these the players are going for market share. This is still a profitable business. Amazon, there was Services Business has an operating product operating profit margin at 35 . Investors like the Cloud Business, it is growing and it is a profitable business at scale. Julia thank you so much for your wisdom on this. Let me reiterate them of these numbers we got from atbat. Consensuser than the expectation of 4. 46. Line, 25. 6ue click, expected, paid to higher by more than 50 . At 3venues coming in billion, google, other aspects of their business. Under a bit of pressure to 3 ine by some afterhours trading. Onch mcconnell was focusing President Trumps rallying cry, we gave that speech 20 minutes or so ago. He said the procedural vote on the Health Care Bill will be tomorrow. Mitch mcconnell said the quadrupling down on obamacare will not move forward. All of this rhetoric is not mean anything in less than they can get their holdout. Well have more of next from new york. This is bloomberg. President trump says Senate Republicans working on a bill to waste of the Affordable Care act replace the Affordable Care act are making progress but you need some help but needs some help from across the isle. We have zero help from the gimmick cracks, they are obstructionist. They arehe democrats, obstructionist. The European Union says it will be ready to retaliate against the u. S. According to people familiar with the matter, the eu Energy Supplies could be at stake. Sanctions would prohibit u. S. Businesses from the eu and stopping a plan 10 billion natural gas pipeline. The parents of critically ill baby charlie garter dropping their appeal to move their baby to the United States for a controversial treatment. The 11monthold suffered from a disorder. Ic i authorities in texas have charged a tractortrailer driver of transporting people into the u. S. Illegally, it resulted in the deaths of ten people. The charge carries the possibility of the death penalty. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Julia whatd you miss . Earlier today, Jared Kushner, President Trumps soninlaw and Senior Adviser face questions from congress. I did not collude with russia nor do i know anyone else in the campaign who did so. I had no improper contacts. I have not relied on russian funds for my businesses and i have been fully transparent in providing all requested information. Julia here with the latest is kevin whitelaw. He covers congressional coverage. , atch in speaking there him speaking there, where do we go from here . There is no presumption he is telling the whole truth, it is said. Kushner isow jared going to go back to capitol hill tomorrow morning for another close the door meeting with the House Intelligence Committee, certainly with the staffers and lawmakers. A number of senators, particularly democrats have said they do want to see him in public. The statement he made today raises more questions than it answers. Democrats will not be satisfied until he per peers until he appears in public. Are that the democrats saying the statement is raising more questions than answers, that is one of the cliches people always say. Is there anything in the statement that stood out that politicians ought thought they should understand more about. He doestatement that not rely on russian money. Is that something that was a wording choice . Democrats would like to say they would like to ask you more about it. These panels to do a lot of their information gathering ahead of time, they look at the documents, intelligence information and they want to go in armed with as many facts as they can. Private questions in and at some point they do it in public. Julia one of the things that stood out was the part about the private communication, the back channel. He used his inquiry about that as a reason for defense. He said effectively had i needed a back channel, how could i have been colluding. Deepening that would have been something people would have picked up on, is trying to use something that is a criticism as a form of defense . That does raise some different questions and i think that is a different avenue a number of senators are going to explore. There are questions about what these meeting were, want to some of them, what happened. Of them, took some what happened. There are questions about that but it back channel, is that precise wording, is that something that means what it is he means . People that watch this casually want to hear a little bit more from. The statement he read at the white house was taken from his written statement. Well have to see if and when we see him in public. Faith. We will watch this phase. With opecrviews secretary. This is bloomberg. Julia whatd you miss . Opec has a grip on the Global Supply and demand. Secretarygeneral spoke with bloomberg after a meeting with other oil is 40 nations oil exporting nations. This is based on voluntary oftiatives of contributions southern countries of sovereign countries who decided to join the cooperation in order to restore stability to the market. All participating countries, the oil industry and the global on a panele agreed tooversight and mechanism ensure we all fully comply to the perspective obligations and the process is working very well. Today for the meeting the first time we had a conference of ministers all with the attention to what the data is showing. The challenges of they are facing and how they intend to overcome the challenges in the possible time. In terms of monitoring exports, how is that going to change the game . We look at different decision ofut the her production of production what was decided today by the committee is to look at other parameters because of the changing dynamics of the market. Sometimes, depending on the structure of the market, it may not be relevant. Factors and disruptive prices, it becomes material. Andre adapting to changes are trying to be ahead of the curve. Julia that was opec secretary general mohammed barkindo. Joe we want to give you a wrap of alphabet earnings. Destocked down in afterhours earning. Concerns, down 23 a there was the ec fine. There have been some interesting concerns. We will have more on those earnings after the break. This is bloomberg. Whoooo. I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices from over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. Jessica lets get the first word news this afternoon. President donald trump soninlaw Jared Kushner said he did not collude with russia. Speaking to reporters today, he told reporters he wanted to be very clear. I did not collude with russia, nor do i know of anyone else in the campaign who did so. Had no improper contacts. I have not relied on russian funds for my businesses. I have been fully had no impropn providing all requested information. Kushner spokeer, to Staff Members of the House Intelligence Committee for nearly three hours. About russian meddling in the election. In a single tweet, President Trump took shots at congress, Hillary Clinton and jeff sessions. He tweeted why arent the committees and investigators and of the a. G. Looking into crooked hillarys crimes and russian relations . Faced offuterte with protesters at his annual state of the state address. He grew angry after he was interrupted several times. He halted preliminary peace talks with communist rebels after a rebel attack on security forces. Theres new hope for a cure for hiv. According to a new study, a south African Child has remained free from the virus after more than eight years after treatment. That suggested it may be controllable in some ways other than lifelong use of drugs. Day innews 24 hours a more than 120 countries. Im jessica summers. Julia lets get a recap on todays market action. Im jessicawe have a lot going l to come with the fed Rate Division at these big tech earnings. Also, amazon wanting to watch later on in the week. Nasdaq outperforming by 5 10 of 1 . A record low for the vic. Joe it just bears worth repeating that every time we are ready to declare the story is dead, there you see at the bottom facebook and amazon at record highs today. Lets go back to out of it to alphabet. The stock falling a little bit after afterhours tradings. Revenue also coming in ahead of expectations. There are still a few concerns. One possible cold print, the 23 drop. Eventually that does not help. Versus 2. 14 billion so the spending is ramping up. Solid quarter but some of these trends are not ideal. Julia click is very important and that is effectively advertisers paying less to do click. Lets go to San Francisco for bloomberg tech anchors speaking with ruth. What did he have to say about those numbers . Emily you guys were talking about paid clicks up 52 . He highlighted the strengths of the ad business, saying they are continuing to see momentum. They are in mobile search and youtube. They are seeing strengthen the cloud, in play, hardware. Huge area ofia opportunity for google although they are competing with amazon and microsoft. When it comes to others, everything that is not google proper, we are seeing revenue go up. This is why he was brought in to make sure spending is more disciplined. Revenue is going up to 248 m illion. Losses going down. Nest, fiber and verily driving that. Thee numbers account for 2. 7 billion fine levied by the eu to alphabet. We are wondering if they are bracing for more fines. There are other investigations the European Competition commission is conducting. It is still early in the analysis of their decision. It is an ongoing legal matter and alphabet is Still Deciding whether to appeal the ruling or not. , after ant to mention big times investigation earlier extremist a number of videos on youtube were found to be linked to major advertisers, ad campaigns around the globe actually pulled their campaigns. Analysts are saying that has mostly blown over and they have moved there campaign from q 1 to q2. We asked her about that and she reiterated that sites revenue was strong. They continue to take this issue very seriously and doing all they can to protect the ecosystem of the ad product. Joe obviously, ongoing concerns aboutwe costs specifically. That is part of the reason investors like porat so much. We saw a jump and significant losses on the other bets. Where are they in terms of their cost and expenditures plan . Emily importantly, the amount they are spending on these other debts are going down, down from 855 million last year to 772 million that is the operating loss. Part of that is a bit of a pause they have been taking when it fiber. O google this is a very hard problem getting it across the country. And importantly, revenue from the category is picking up, driven by nest, fiber and verily. I think increasingly you are seeing in becoming a smaller piece of the overall pie. Google is doubling down on cloud and the original Google Business search and youtube. Julia great work on that call as well. That was emily chang. Whatd you miss . As we work into the heart of tech earnings amazon. There is a great fear the giant can dominate any industry. Our next guest says that amazon might one day get broken up. It . N alphabet compete with with us now is scott galloway. Joe thank you for joining us. It seems to be this fascinating phenomenon, amazon thinking about entering a new business and then shares of the other businesses collapsed. What about the other big tech giants . Does alphabet itself have to fear that one day it will run into the amazon juggernaut . Scott performing a Jedi Mind Trick and putting out a press release. If they said tomorrow, if jeff bezos says if they can go into overnight delivery, immediately hl, upsllion million of d going to amazon. They could emasculate 90 of Corporate America with press releases at this point because they have such ian incredibly strong story with execution. Ibet, facebook, apple would argue in every area of then diagram overlap, they are beating every other Company Including apple. What was the innovating piece . Apple watch . No, alexa. By 2016, 50 5 of searches began on amazon. Streaming, 2 in 2015 and now 4 . In every area, they are coming up against apple, facebook they are winning. Joe with this extraordinary market power, uf warned that some point the company would have to fear some kind of breakup. It is interesting because trump is tweeting about the amazon, washington post. You have the democrats with a new Party Platform that puts a lot of attention on mergers and corporate strengths. How seriously should investors be taking this risk . Scott i think it is already happening. I thought amazon would hit 1 trillion in thing about breaking it up. People will Start Connecting the dots between job loss, and you cannot protect jobs and only people, so we need to retrain the people. These Companies Generally do not pay taxes. We have to come to grips with the fact that these companies are destroying jobs we can create them. At the same time, if you think of citizens paying their fair thee of taxes i think state office will see the clear is line to the Governors Mansion is to go after one of these companies and wake up and go after amazon. Amazon at 1 trillion could effectively be the end of amazon as we know it. While. That could take a give it a time frame on this. Scott i dont know. Julia does it have to be 1 trillion . Scott yeah, yea. H. Julia you are saying someone can wipe out the huge chunk of the shared value by putting out a statement, that is power already. Scott we have to reshape the way we think about things. It is good for the consumer, we leave them alone. Atgive it a time frame on this. Amazon, there is no getting around that. At some point, if the consumer cannot afford to consume, we have to look at other things. Google created 10,000 jobs and increase the revenue 20 billion. 2 million for additional employee. If people they are taking jobs from in retail, substantially more people. We added 10,000 jobs at google, we are probably going to lose 100,000 100,000 jobs in media. Julia they are not necessarily best for the consumer. It is best for the consumer that can afford the services. Is there a misalignment for companies trying to maximize profits and not do best for the public . Mail Delivery Service it may be lucrative in certain areas and not in others. Thats why the regulators go maybe these companies can do it better and cheaper in certain areas. In the overall public good, they are not serving. Scott i think you make a compelling amen, sister. [laughter] scott what we are dealing with the traditional american shell of what is good for the consumer is good for the society may not be the case. Joe your concern extends beyond amazon. That investors of facebook, alphabet, all of them given their market power and political advantages of going after some companies, this is notl just a risk for amazon. Scott we have become fanatically obsessed with these companies. We worship the character class as opposed to kindness. We let them get away with things we ordinarily would not allow typical companies, and the result is aits is a much more difficult environment for medium and small companies. It becomes a winner take all economy. You win the lottery and you say well done and you double and triple your winnings. Its great to own real estate in San Francisco, it is great to own facebook but is a good for society . Julia we will continue to explore this. Scott galloway, nyu school of business. Coming up, do you have empty amazon boxes at your own . What about amazon luxuries . We will look at amazons push into consumer goods and what this means. This is bloomberg. Julia the real price in amazons acquisition of whole foods Closing Locations or products on its shelves with price . The amazon has been pushing its brand and whole foods gives it a place for expansion. We are now joined by our Bloomberg Economist in atlanta. Joe thank you for joining us. You wrote a column after the announcement of the hopeful to merger. We saw the grocery companys stock fall when that was announced but the consumer packaged goods companies, campbells, procter gamble, campbells falling you believe they could be squeezed by amazons latest push. This is one area were amazon is late to the party rather than dictating it. You had cosco brand like kirkwood as the lower margin products with popular niches. Amazon seems to be jumping onto this trend. And that seems to be the nearterm thing rather than some crazy futuristic thing. Joe when we talked to you the day it was announced, you honed in on the issue but on a slightly different angle. Basically that this was the one area where there is this long tail of new brands and the catalogs of the world and amazon will have more data on who Consumers Want to buy than anyone else. 10tt seven of the top Beauty Brands are brands you likely never heard of. You likely dont have to defer to the large red, our favorite brand is what amazon tells us is our favorite brand. We went to chobani and now the yogurt that beyonce is eating on instagram. Nowmarket chair last year, 50 and that we present taken by smaller brands. Julia is that true . We tell amazon what we want and they taylor that tailor that. It is a twopart process rather than then telling us what we want and we tell them. Scott that is exactly right. Amazon is a Search Engine with a warehouse. The best hotel in london and they will tell you what it is for you. Joe people like to put together lists of companies that are mauled by amazon and the retailers are the classic roadkill standing in front of them company. In general, it sounds like brands in general may be a risky proposition. The idea that brands dont have the lock in effect they used to. Onor i think the way we interact and perceived brands has changed. It used to be a Grocery Store had a monopoly on brands because shelf space was a limited commodity and now if beyonce has something on into the grand, that is a new way to get to the brand. Julia you are saying they have increased the number of outlets, whether it is stores in terms of whole foods, the online they had is another wayxa of them pushing products. Conor there is this commoditized channel where we have private labels like amazon basic, kirkland and then more aspirational brands pitched why celebrities or people we want to be. Mustfacebook and alphabet have pretty incredible insight into some of these longtailed brands, like whatever the yogurt that everyone is suddenly eating, will they be able to partner up with existing stores toin grocery help them compete with amazon . Scott it means extracting more of their marketing budget. Amazon has conspired with 500 million consumers, cheap capital provided by fanatical investors, are devotional intelligence and now voice. Starch the margin from brands and give it back to the consumer. We are seeing two thirds of the largest cgp brands in america lost revenue and 90 lost shares. This is in the space of category growth. Don draper is not only dead but he has been drawn and quartered. Joe this is in the space of caty image. Ivid it sounds like it would be one of those dream sequences. This is not just yoga grants but it could go all the way up to the rocksolid brands like nike or apparel. Scott the way to describe this economy is in technology, the short sale is fattening. Fewer players with more spoil. In the consumer, the longtail has new life. The consumer wants something exactly right. They go to a Ferndale Hotel or the crosby because of that is the exact hotel at that exact moment. They have Due Diligence of amazon, google or trip advisor so there will have to defer to the brand. The lowendidea of and high and and the gap in the middle. Scottigeigh in on what was saying because i heard you laughing about the drawn and quartered. Conor we will see which categories have more than others. I live in atlanta where cocacola is the undisputed heavyweight of the world. You mentioned this idea of highend travelers, picking the exact boutique hotel. Not everyone is a highend consumer. You mentioned this idea of there are people that want to shop on price. What about the walmarts of this world . Where do they fit in . Scott walmart has done a good job of stealing from amazon and putting out a press release about an acquisition. The core confidence is storytelling. Try to paint your future of being bright and get returns that provides you with the cheap capital to build that digital future. Walmart has gotten very aggressive, taking a note out of amazons playbook. There is not much overlap between amazon and wal mart. Amazon services the wealthy urban market and Walmart Services everyone else. Joe you heard what professor galloway said about walmart. You have written about the future of bigbox and retail and malls. Where do you see that space going . Conor we were talking a few years ago, netflix trying to become hbo before hbo can become netflix and analogy comes walmart is trying to become amazon before amazon could become walmart. They have the talent and trying to acquire a portfolio to niche the brands and trying to compete on that serve rather than the commoditized turf that amazon is winning. Julia it is really great to get your insights. Thank you so much for that. Scott galloway, nyu professor and conor sen. In the lastto come few moments. We will take you through some of our top stories. Stay with us and we will get you set up the next day ahead in trading. Julia now time for the Bloomberg Business flash with the biggest business stories. More fallout from brexit. Deutsche bank considering whether to move around 50 billion in assets for new balance sheets. We are talking about 1 5 of the size of their balance sheet. That is according to people familiar with the issue. It should go live in september 2018. The asset going over until march of 2019. Aving the company with a 29 billion Million Dollars severance package. According to bloomberg analysts, came from the top shareholder to appoint the fourth ceo in less than four years. That is your business flash update. Joe coming up, what you need to know for tomorrows trading day. This is bloomberg. Julia record high for the nasdaq, record low for the vix volatility index after earnings in numbers in afterhours trading. Dont miss general motors, at t. Joe i will be looking at u. S. Consumer confidence data that comes out 10 a. M. Eastern tomorrow. Trump attends a rally in youngstown. Bloomberg technology is up next. Joe have a great evening. This is bloomberg. Alisa i am Alisa Parenti in washington and you are watching bloomberg technology. President trump says Senate Republicans working on a bill to replace the Affordable Care act are making progress but could use help from their colleagues across the aisle. President trump the senate is very close to votes it needs to pass a replacement. The problem is we have zero help from the democrats. They are obstructionists. That is all they are good at, obstruction. Alisa meantime, Senate Majority leader Mitch Mcconnell is pressing dissenting senators to back the Health Care Bill in a threshold vote tomorrow when they go to debate the g. O. P. Legislation. It is unclear which version the chamber will consider. Jared kushner denies any collision with russia. Soninlaw spoke today after meeting with Senate Investigators are probing russian meddling. He spoke with the House Intelligence Committee for nearly three hours. House Minority Leader Nancy Pelosi and Chuck Schumer are offering a bejeweled message for democrats,