April and it is on the downside right now. Abigail the dow was down about 2030 points, but we can look at how it is doing for the week on friday. We are doing a bit at her. Better. As i mentioned, it is the end of the week and i do not want this to distract from the broader, better performance we have done. Take a look over here at the russell 2000 index. We saw some record highs earlier in the week in anticipation of the tax reform, because these small Domestic Companies will be the ones that would benefit from lower taxes. We can talk about stocks. Lets touch on the 10 year yield, just to be euro. Thorough. Moste unchanged for the part. Yields have been slightly higher, and we are up a bit from when. 17 we saw a week ago the geopolitical risk was flaring up. Mentionedcarlet you amazon in your open. Lets touch on that. They are one of the best performers in the nasdaq year to date, their unbroken year 20 year streak of doubledigit gains has nowhere but up to go. And google is benefiting from a they went briefly to an intraday high. Scarlet those tech names continue unabated, and we see the nasdaq just off its record high at the moment. Abigail . Abigail President Trump took a almost 100 days ago and was hoping to go to 4 economic growth. But it is said that trumps numbers are wrong. It could be, if you are wondering about cuts in social benefits, which would be required to fund almost 100 dayo the type of program he has put forward. Taxmber, it is not only a thing, it is also a military spending thing, because we were going through a moment in the last decade where the share of wasgoing into our military at the lowest level since 1940. We cannot maintain the president s presence that we are trying to maintain militarily unless we cut things. So the budget outlook is not only a tax question, but also a military question. Has said both. His arithmetic is the problem. We are going to get either tremendous reductions in some areas of the economy, for you are going to go to a large budget deficit. For you are going to go to a large budget deficit. But we are now showing a significant spike in the budget deficit. Ofhink that is the beginning the move that he will take. If it is critical to growth to have tax cuts but not increased deficit, is it only from entitlements that you will get the money you know about tax expenditures, because what i think people are wondering about is there are all sorts of inductions, loopholes, and exceptions, special interest things we could get out of the tax code and get real reduction rates, and broaden the base, and still not increased the deficit. Is that a good plan . This was a commission that tosident obama put together address this particular problem. They did precisely what you are suggesting. They lined up all the tax benefits,es and the and brought the deficit down to normal. It had bipartisan support for senatet the house and certainly passed it. To listendid not want to the commission that he put together. That was the worst mistake i think he made. , and looking forward to know what we have done is used up a lot of the goodies that were available to now we do not, so have the ability to do the same thing, but we should be doing Something Like that. While greenspan is wary of trumps arithmetic, he did have kind words for the efforts to boost the economy. He has to be doing something or you would be doing something. The reason why stock prices have has indicated what he wants to cut back on supervision regulation, which is to the holebitor outlook, in many respects whole outlook in many respects. [indiscernible] the chairman of finance for the house. He came out with a bill that thed marginally eliminate whole regulatory structure. Doddfrank . Doddfrank. I had been arguing for years that doddfrank was a disaster, and this is one thing i got right. Let abigail that was former fed chairman Alan Greenspan speaking with us in washington. Scarlet i have to say, it is realshing to see him use words. He said it was disappointing to see that we had used up the goodies and that doddfrank was a disaster. He is entered using words like a rational to describe something that he could not drive any value from that. Abigail interesting point, and this is the first time i have someone talk about the removal of doddfrank and the reason for the trump rally. Doddfrank. Something else that stood out is how we are going to pay for the potential tax cut and tying in the military . Scarlet this is something that has come up time and time again, because President Trump has made a big, big deal about how much more money he wanted to put into the military. In the first 100 days, he went on the air flight carriers and was able to talk about how he carriers ond more our oceans and beef up spending there. Abigail but how do you pay for that . This will be a big challenge for the administration. Lets check on the first world news. Signed annt trump executive order today to pay the way for new offshore oil and gas drilling, potentially adding thousands of jobs. Pres. Trump you have not seen anything like this. It is a false standard, 100 days, but i do not think anyone has done what we can do in 100 days. President trump says his executive order will bring wealth to the united states. Congress has given it all for one more week to agree on a spending measure to fund the government through september. Three 38230 houseboat house vote would shutdown,government extending the deadline by one more week. And focusing military assaults on International Coalition and Afghan Security forces. A taliban spokesman announced the launch of the offensive in a statement that boasted of taliban control over half of the country. The taliban dove this years offensive operation montessori monsuri. Pope francis is in egypt, where he was received by the Prime Minister and top christian clerics. He is presenting a united christianmuslim front come up following recent violence. He will also meet with the president , who will participate in an International Peace conference. Bloomberg. Abigail, scarlet . Scarlet thank you, mark. Coming up, we heard how Alan Greenspan told the called the doddfrank regulation a disaster. We are live in boston with the top security cop in massachusetts, and the president at an nrag in georgia event. You can catch is full remarks on the bloomberg. Pres. Trump four months, i was hearing that. Abigail this is bloomberg i am abigail doolittle. Scarlet and i am scarlet fu. And during trumps first 100 this plan was touted to overhaul doddfrank. This proposal targets that the judiciary role, which would allow clients to acting within their targets best interest. We have the top securities cop in massachusetts, home to one of the worlds most big it Asset Managers biggest Asset Managers. A have called this bill direct threat to Important Police powers that allow the states to protect their citizens against fraud and abuse, and tot will enable the states become havens for fraud. How does the bill diminish securities regulation power at the state level. Isthe most important feature basically, at the same time as reducing the securities and authority, it says the states must ordinate their enforcement activities with the securities and exchange commission. So it subordinates the state and state laws to the securities and exchange commission. The history is very clear. The states have been effective in protecting our citizens when we see fraud. Assisted the sec in identifying these problems. So this is a wish list. They do not like having the cop on the beat at the state level, whether it is massachusetts or alabama or any other state. They do not want anybody, truth be told. And another part of the bill that as bad is the bad act provision, which would prevent it prevent certain institutional entities from automatically taking advantage of certain status. This would be effectively done away with. So the protection average investors would have from bad actors would be done away with, and with diminished ability of the states to collect fees or fines where they find inappropriate activity. This is all about taking care of the people in securities industry, and putting individuals and investors at risk. Thank you so much for joining us. I spent more than 10 years on in mytreet, and experience, it made all the sense in the world to protect our clients. But one part was around the world of 401 k s, and that investments in fighters were investments bankers were excited because they would not be able to have that relationship. You think that is a relationship with that 5. 5 trillion market . Absolutely. This almost if i is reality. Reality is when there is money on the table and the market to be serviced, it will be serviced. The amazing thing about this role, it is such a simple, fast simple thing. You have to put your client first. And the fact that so many people are ready to adapt and go forward does not mean it was a huge burden. It means the industry does not want something that is going to tell customers how much something should cost. Is for nonsophisticated or unsophisticated investors. This is very important that this be preserved. Scarlet you have been waging this public battle on fiduciary role. Have you been able to speak with the man who introduced it or his office at any point . No. They are not interested in speaking. Most of the people lined up at the interview yesterday were industry people. Toy did permit Maxine Waters conduct hearing today, which shows some of the advocates were able to speak at, but they are not interested. We have had this battle before. I think this is an important point to make. I have spoken to a number of republicans to our securities administrators and our secure aboutt are concerned this bill, because this means they cannot protect themselves. For keppel, the secretary of state in mississippi, he is concerned about the bill. Other administrators were not positive at all. They are concerned about the bill. This is a gift to the industry at the expense of investors, nothing less. Abigail i want to bring up something we were told, that the root director Richard Cordray should be fired because what happened at wells fargo. There are two major Consumer Protection laws on the books. We would have an agency that is totally devoted to in enforcing the law. A cop on the beat. Was basicargo, it fraud that has been around since the dog don of man. Scarlet now, you know something about pursuing fraudulent activity. Does he have a point about Richard Cordray not doing his job when he goes to wells fargo . I have read about this extensively. It was a deliberate fraud on the part of individuals who created false accounts. Have spoken with people who were investors at wells fargo. Was had no idea that this happening. When you have an entity going out of their way to do fraud on a massive scale, you cannot expect immediately to hear about it. I findly reinforces interesting, you talk about the cop on the beat. We are the cop on the beat. People can call people like me and others in the states and get reaction promptly. To diminish our authority to the benefit of the industry, i think that is inconsistent with the attitude that he is suggesting. Abigail very interesting stuff. Have a great weekend. Thank you for joining us. Ofing up next, one washingtons most watched investors discusses the factors describing credit markets, and his dots on investing. This is bloomberg his thoughts on investing. This is scarlet this is bloomberg markets, i am scarlet fu. Bigaill and im aa doolittle. Speaking about where a Credit Investor could hernandez returns it without more returnsd earn without a limited downside three you have to buy better each market in the hope that you can get them at a decent yield. But you cant. It is very tough. If you cannot get both, and it is hard, which do you emphasize . Better credits are good yield . More important to emphasize the better credits. And you sacrifice return. Exactly. I wrote a memo about 15 years ago, in which i said the market is what it is, the environment. You can invest in it, you can invest in it, but you cannot say you want a different environment, because that is not going to happen. We are stuck with this one, it is a low return world, and an investor functions in a low return world with some challenges. Particularly after listening to your colleagues yesterday, when they use the word harvest on a number of occasions. Oaktree totime for harvest. Who is on the other side of those trades . Who would bely, dumb enough to take market risk and credit right now . In credit right now . Talk about market risk. We sold an asset this week, as you know. Strategic. Was they do not care about the market price of that asset in three years. Strategic buyers have been very good buyers lately. That is one example. But some people have lower cost of capital than others. In america, we have a high cost of capital, pension funds, you could make a percent. That is their hurdle. I was talking with somebody yesterday who was approached by a Foreign Pension Fund with a 4 cost of capital. For them, some abuse investments are more attractive. Going back to the baseball analogy, as much as i know you do not like it, we are in the eighth inning. And there is still a full inning left for this game to play out in regulation. What is going to drive the market . What factors underpin higher prices for credit assets right now . I would say primarily, the quest for returns. It isthe point is not fundamentals. There is no fundamental argument for higher credit valuations. Valuations are assets in general. Assets are in high valuation territory. Abigail that was the cochairman howard marks with an exclusive interview with Erik Schatzker this morning. Scarlet it is time for the business flash, taking a big look at some of the stories in the news right now. This is cap into your battle of a culmination to complete the merger of the two biggest u. S. Health insurers. According washington held up a Lower Court Ruling by a 21 vote issued today. And ticker clb are shares were placed at 15 each, waving 225 Million Dollars that will go towards working capital, and other corporate purposes. They are backed by intel, which will retain a 19 stake in the company. Airbnb is looking for professionals starting on monday. Searchers can use a new tool to post or find apartments. Abigail and commodities coming to a close, we will take a look at oil and energy. This is bloomberg. Scarlet we have Commodity Markets closing in new york, celebs get started with sugar, which is higher today, but down for a 12th straight week, the longest losing streak since data on the contract began in 1961. Been agers have because of market surplus. Meantime, oil prices gaining. They give up some of their earlier advance after President Trump signed an order to expand offshore drilling. We will have more on that in just a moment. Worse, lets look at earnings in the Energy Sector first, lets look at earnings in the Energy Sector. Earnings are driving the Energy Sector higher, as we will be looking at with exxon and chevron. If you take a look at my terminal, you will see that energy is one of the few greens on the screen. That is a good relief there, besides from some overall broad losses. Lets take a look at what is driving that, and that is chevron and exxon. This is exxons best a this month. Back 6 million shares in the First Quarter, which is certainly sharding are shares higher. Chevron is cutting their way to 6 million in shares in the First Quarter, which is certainly moving their shares higher. Chevron is cutting their way to the top as well. On the monthly chart, because we are at the end of the month, we can put this into perspective. Oil is on its fourth losing its fourth monthly losing streak, its longest since february 2016. There are a few price dynamics when it comes to oil. You have opec trying to cut u. S. Toduction opec trying cut, u. S. Production higher than normal, all of this when it comes to oil. Scarlet great stuff on oil. Lets get more on President Trumps order to expand offshore drilling. He signed that memo at an event at the white house earlier today, and they are also reconsidering safety rules that were implemented after the deepwater horizon disaster. Much oil does he want to drill for . According to the white house, it is about 90 billion barrels of oil, but that includes the gulf of mexico areas that are already being drilled on. At this, youre talking at something more about 40 billion barrels, which is still a substantial amount. Oil production in the gulf of mexico is booming. The yellow bars indicating gulf production, the others indicating alaska oil production. Is there something that needed to be done through an executive , because there was a big ceremonial signing of each action he gets ready to take . This is a president who loves tosign orders that allow him review things. It is asking for a review, not setting in the thing anything in motion right away. This would take a couple of your succumbed to fruition, and if you are expanding drilling, not all of those states will welcome oil rigs off their beaches. On the other hand abigail on the other hand, who hates this . X mental groups really hate it. They are the reason obama decided against this twice. You are talking about the coast of california, obviously, and some of the southeastern united states, those are beaches that people like to go to on vacation. Do not want drillers or tankers going back and forth. And this is early on in the process, looking to review the regulations that are in place. In the state stop this if they want to . There are some rights under the coastal bill Management Act heat es them some lead way, but i think some places will go first. California will be a hard sell, and they said they will listen to say. Localities have in places like georgia, the carolinas, they were very supportive of exploring for oil, so it will see if that is still we will see if that is still the case. Trump, part oft his rationale has been great wealth, great jobs. Is there a reason to think that this could be true, and at the cost of another potential disaster . The numbers i cited earlier, 40 billion barrels, this is 30 years old. We do not know how much oil is really out there, and i think the first and may are asking to do, and something the secretary is going to review, is how to get a seismic activity out there so they can test and see how much the resource might actually be. If it is a sizable amount, and you could see a big swing in virginia as the next louisiana. It would be interesting. Manyil do we know how jobs are linked to one offshore oil rig . Is there a way to figure that out . It depends on the resource. What type or break you would use, obviously there would be a lot of Jobs Associated with chilling drilling, and the manning the platform. There are not quite so many jobs on the actual rate. Scarlet thank you so much. Thembergs editor for Energy Commodities in the americas. The firstets check world news this hour first word news this morning with mark crumpton. Rex tillerson called upon other nations to call dutch cut diplomatic and economic ties with north korea. Secretary tillerson also outlined a renewed u. S. Effort to compel pyongyang to give up its Nuclear Weapons and Ballistic Missile programs after decades of defiance. South koreas foreign minister also discussed the threat posed by the north. In a nutshell, is korea still has the capability, and the intent to axially actually use them. It is no wonder that some experts say the world is facing its greatest Nuclear Emergency since the cuban missile crisis. Secretary tillerson also called upon tougher action from china, north koreas main trading partner. Rangers news, two army in afghanistan could have been the victims of friendly fire. The u. S. Military is investigating a raid on an Islamic State compound. Part in theers took assault, which lasted about three hours. In france, the president ial election is a week from sunday, and a menu omicron and Marine Le Pen are trying to expand beyond their own Emmanuelle Krohn and Marine Le Pen are trying to expand beyond their own political base. Macron promised not to interpret votes from others as a blank check. Disrupted aney active terror plot with rates in london and southeastern england. One woman was shot and seriously wounded as heavily armed counterterrorism officers stormed a house on a residential street. Six suspects were arrested on terror related charges. Counterterrorism police say 13 beential attacks have prevented in the last four years. Day, news, 24 hours a powered by more than 2600 journalists and analysts in over 120 countries. This is bloomberg. Scarlet . Scarlet thanks, mark. Coming up, as we approach President Trumps 100 day in office 100th day in office, we will talk about how much impact this has had on the tech industry. From new york, this is bloomberg. Scarlet this is bloomberg markets, i am scarlet fu. Abigail and i am abigail doolittle. A time to look at some of the biggest business stories in the news right now. Business better than expected at s on mobile. Exxon mobil. Prices were offset by higher priced oil outside the country. Meanwhile, chevron posted the highest profit in three years thanks to Rising Oil Prices and more cost cuts. And shares in Time Magazine plunged today after the company decided to not sell. Time has been struggling to digital world. Magazine,s trademark time publishes sports illustrated, people, and fortune. When President Trump was first elected, many spoke out strongly against him. Afterdo things stand now the proposals on the h one B Visa Program and Net Neutrality . We are joined by Caroline Hyde in san francisco. Great to see you here. Caroline what a week and what a 100 days it has been. Lets get over to our tech team from bloomberg technology. Thank you much, gentlemen. Rope that theype executive is walking. On one side, you have had immigration and Net Neutrality concerns, but on the other side, the tax cut is rather nice. When President Trump was elected, there was all this concern about what is he going to do . Will the be retribution for all of the support for Hillary Clinton . You shaw some shifting and incks saw some shifting stocks out of technology into other sectors. But one thing after another has been shown to not be that big of a threat. For keppel, immigration. For example, immigration. The government has rained trump in on that rained in hand rained him in on that. Also, there will still be expectation that will be that we will see reform from tax code. I do not a how similar it will be to the one we saw from the oval office. If all goes to plan, you will see that Tech Companies can bring back billions of dollars from overseas at a much, much lower tax rate. That will result in dividends, buybacks, m a, possibly executive compensation. This means the Tech Companies are eager to have them. Seen things with facebook, amazon, netflix, google, all outperforming looking at the stock prices. Mean fors it not the smaller players as well . Sucking is a giant sound in Silicon Valley when it comes to smaller companies. These Big Companies are doing so well, and they have businesses. This morning there was a natural monopoly, that more customers gets more spending . Theres a very powerful influence, and it is the same in politics. When you get to the Net Neutrality debate, flex netflix shrugged his shoulders but the startups are screaming. Have the we do stockholders trying to put a lesson a letter toward the fcc saying why they do not want to see Net Neutrality repealed. At the first underperformer, twitter did not spark as much as about revenue. But they certainly did in terms of numbers of users. User growth was key for twitter this time around. That is the thing that has been getting them quarter, quarter after order quarter. We saw that hey, they moved the needle in the right direction. We are not seeing profitability, we have questions about that. Questions about revenue growth, but users are back, and what the hope is for investors, once you get the users, you get the advertisers to come in. Hey, we think this is a way to reach a new segment of the audience. We saw twitter talking about people who are politically engaged. There is a lot to talk about. When donald trump tweets, people pay attention. It is even his name. But certainly, people and new users are coming to twitter to have conversations about things that matter to them, and that made a difference on their numbers. Caroline and we saw they are coming off near a record low. Meanwhile, health that an amazon keep spring boarding from their record highs. That is right. Also that and amazon keep spring boarding all for that bet and amazon keep springing from record highs. These companies are so huge. That is like a twitter every quarter. Atoline when we are looking the bar being set high and flying over that far, we have had so much about flying vehicles this week as well. That has been a laughable facts, but it seems to becoming a reality, also coming from alph abet, funded by larry page. He actually took to the skies this past week. It is a product that is starting for rich people who live on a lake, by the look of the video. But longterm, they have had ofcess with terms transportation, making it more efficient. Hoping to segued into a commuter device and 1015 years. Carolyn that caroline and this has also been ubers moonshot caroline, and this has also been ubers moonshot, testing flying cars in dallas this week. Ex uber is trying to be an innovation a leader when it comes to transportation. Driverless, big advances there. Some of them have gotten them in trouble with google and waymo, anotherng vehicles is one. I think it is a little bit further off. You also have to think about the other ways that we are going to change transportation in Silicon Valley. Aboutve elon musk talking his subterranean tunnels. He has got the whole that he is digging. He is digging. The hyperloop out there, so a lot of people are thinking about our commute. Caroline great insights from and the a week wrapup hundred day wrap up when it comes to trump and tech. Abigail and scarlet . Abigail up next, our segment in the u. S. Womens team won the gold medal, but they brought home a lot more, including a win for a pay. This is bloomberg equal pay. This is bloomberg. Abigail this is bloomberg im abigail doolittle. Scarlet and i and scarlet fu. Mayusa womens hockey team have won the championship, but it was also a win for equal pay. Financialwanted support that included training outside the olympic series, improved travel, and the formation of a committee to develop youth hockey for girls. Talk, is walk the spoke with a partner who represented them. Deal really focused on three primary areas, as did the 15 month negotiation process. Includeree areas compensation for the include compensation for the players, increased years where they were playing only nine games the year. That second category is increased programs, and the third is increased play that pr for the players, raising their pr as a group, not just for girls but for market hockey in the united states, so more girls could happen or access have access to the team or dream about being members of the team as well. We have said from the beginning that raising the profile of this team really elevates the sport ofhockey for everyone. In retrospect, what was the dicey as part of the negotiation . Certainly, i would say the uncertainty of it all. Cheated down the stretch their. As mentioned, this has been going for 14, 15 months quietly behind closed doors and professionally with usa hockey. That we dohe point not feel at we had made significant progress, so the crucial next step was to put the World Championship on the line. As gutwrenching as that was for us, it went to show how passionate we were. I wonder what kind of feedback you got during the process . Organizationsrent were offering her support, actively and passively. Absolutely. Outreach and support from everyone was incredibly, positively overwhelming. Hearing from the likes of Billie Jean King and a ton of other famous professional athletes. The nhl pa as well as all the , the player associations and all professional sports. Not to mention young girls and young female and male hockey players across the whole country that really stood by us throughout his negotiation processes. Scarlet so in what ways is the u. S. Hockey industry investing in womens hockey, and the pair to mens hockey. With the mens program, there are two points of comparison. The Mens National team, and that of the team that is primarily comprised of nhl players. 12 weeks outther of the year to compete, which is unlike the womens team, which is although they have the opportunity in a nonolympic year to compete in nine games, they are required to report to various Training Camps throughout the year, several times he year. Those Training Camps might be 5, 6, 7 days, so that obligation really hindered the players ability to hold down permanent jobs, we would have to take those kind of breaks throughout the year. It is hard to pursue a professional career outside of hockey. Also, many of the players decided not to pursue advanced degrees and advanced education because it was nearly impossible to balance whether it is the second or third job they had to make ends meet with having to train every day, report to camp, and compete periodically. There was a lot the women had to bring to the table, even outside of when they were reporting to camps and competing. Scarlet have you heard from prospective corporate sponsors . Have, actually. A few definitely stepped up and reached out, and wanted to help. They got behind us, and as we started the conversation. I think the negotiations in general really raised the awareness of womens hockey in our country, which is uber thertant, but also raised within u. S. Mindset hockey as far as how they treat the players in the program. Scarlet do you think this made some of the sponsorships more lucrative as well . Absolutely. And i hope they keep wanting to engage in conversation, and they want to support the womens team even more. Interesteds that are , please reach out and try to get involved, because i think i have said a few times being a female athlete right now in the u. S. Is an incredible time. My interview with the and womens team captain one of the partners from firm representing them. They had a fairytale ending in their last game, an overtime win over canada. Abigail great stuff. Much more ahead out of washington on markets and possibly policy, but keep an meeting, withis steve mnuchin, the ceo, and much more. Covered starting monday, 10 00 a. M. Eastern. This is bloomberg. Abigail i am abigail doolittle. Scarlet and im scarlet fu. Welcome to bloomberg markets. We are live over the next hour, and here are the top stories we are covering on the bloomberg and around the world. In markets, one hour left in the trading day and stocks and bonds are falling. Abigail so what could this mean for trumps economic agenda as he wraps up his first 100 days in office . In politics, why President Trumps tax plan could turn everyone into an llc . At plans being offered to partnerships and corporations. And in energy, President Trump signs an executive order to expand offshore drilling in both the atlantic and pacific. We react to these controversial plans with an exclusive interview later this hour. We are one hour from the close of trading, lets get a check on the market. Bearished out with a roar and now we are looking at a bullish winter whimper. 2 on theown about dow and s p. The nasdaq is doing a little bit the smallt much, and caps down over 1 . But it is the end of the week, so lets look at the s p on a weekly scale, so that will help but some of this in perspective. The s p is looking at its best weekly gain since february 17. I want to note that here, we were at our best weekly gain since january 6, but since our losses have accelerated today, we are looking at the best weekly gain since february 17. But not all these are bad news. Withoutt talk about tax mentioning amazon. They are the best performer was looking at nasdaq. An unbroken twentyyear streak of doubledigit growth that continues, and google seeing a benefit that has come from clicks on those mobile phone apps. Not all news is good news, so i will wrap up here with qualcomm. We have all seen this legal battle, but it continues to play out. Their shares coming down to. 3 here. Apple pulling back on the licensing for qualcomm until settled,l dispute is so a bit of a downturn was at these tech numbers. Thank you so much. Will President Trumps tax plan lead to explosive growth or more tax deficits . Alan greenspan says it might be the latter . Consumer spending was only up 3 10 of 1 . 3 . Withll discuss this several of our correspondents. Cameron, let me start with you. Politicians talk about it all the time. To what extent does the market really care about the deficit whether it is expanding, narrowing, exploding, not read when youre talking when it you are talking about weekly trading . Generally speaking, it does not. If you are talking a current account deficit, a definite deficit with the rest of the world problem withave a your microphone, we will fix that. On traders show up certainly, but do you see that ins traders ins traders asset trader s. This is the differential between two year and 30year treasuries. This shows what you are talking about. Higher deficit means Slower Growth Going Forward. I think i am back. On a daytoday basis of doesnt really matter. There is a saying that the macros cannot matter until they matter. If the market narrative revolves around it, it will matter. Generally speaking, never will be a small minority. Consumerturning to credit, i saw a great article today that this might be the great time to talk about credit. There is an analyst at financial his longterm reason is that he thinks Consumer Credit will go down the tubes in 2018 and create a problem. This week was the little one. They all have a lot of credit card receivables they are looking at. The reported higher losses than they had been expecting. With capital one and synchrony. You saw them putting aside more money than analysts had expected. This is concerning at a time when you have the economy supposedly growing. What you have unemployment going down, it should be a good time. The fact that people are failing to pay the cards at the fastest pace in six years is a problem. The u. S. Consumer debt outstanding is the most ever relative to the Gross Domestic Product of the u. S. At 20 . That is an record. Did they learn anything from the financial crisis . It makes you wonder. Scarlet i have a chart here. That is the white line, the percentage of gdp. From this point until now, that is a 20 increase. The blue line is mortgage debt and that has come down from the financial crisis. It seems to have found a bottom. And of that mortgage debt and i know that mortgage debt and some bread margaret mortgage on its own was not the problem, it is the way people were betting on it. Does Consumer Debt pose a problem to the system . Things like auto loans, which lisa has written about, are one example of a large swath of Consumer Debt started to go sour. To gof that starting sour. The hurdle to the Systemic Risk is much higher. I tend to think it is not systemic, but with low levels of volatility and high levels of asset prices, it doesnt have to be systemic to her. Abigail something that has been standing out to me is the fact that we have haven assets such as gold and the yen higher, even with stocks making alltime highs. Similar to what happened in 2007. This chart shows gold is up 9 from 2010. We emailed members of our team on the yen. It is higher on the year as well. Is this a haven tell on some sort of response event . Bit of aold is a confusing asset. It is not purely a haven play. With higher inflation, people will go into gold because it holds its value. When it comes to the yen, people are really concerned about instability, even in some developed market nations that are getting a little bit more risky. Abigail are we looking in a mirror right now . Maybe a little bit. I dont know. [laughter] there are two slightly different stories. I would take a slightly different view. I would say both the yen and gold are reflective in the level of interest rates. If you regress the dollaryet yield, the correlation is high. What we see is a rally in the bond market which has naturally andto a rally in the yen gold as well. The larger question of why a 10year rally, some of it is a little bit of a disappointment. We enter the year with the market aggressively. Scarlet your colleague in singapore argues we are up do an an uptick due for uptick in optimism, that donald trump will not achieve any policy success anytime soon. I find it close to credit that when we are close to equities in the u. S. And in germany. You could argue we are due for an uptick in pessimism. Scarlet Cameron Christ and lisa abramowicz, thank you for joining us. Lets get you the headlines this afternoon. Trump signed an executive order aimed at allowing more offshore drilling, a move he believes would benefit the country. It reverses the previous leasingrations arctic ban and directs the secretary to allow responsible development of offshore areas that will bring revenue to the treasury, and jobs to our works. Mark the order includes the review of the atlantic and Pacific Coast for leasing of drilling rights. Secretary of state tillerson warns north korea is pushing secretary of state Rex Tillerson warns that north korea is pushing the u. S. Closer to a military strike. He says that the u. S. Goal is not regime change. He has been sworn in as President Trumps labor secretary. Immigrants isan the nations 27th labor secretary. It was confirmed yesterday, filling out the president s cabinet as he approaches his 100th day in office. Union leaders are ready to show that they are united when it comes to brexit. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. It may be the most popular loophole if the trump tax plan gets through. The battle over passthrough income. Scarlet monday we will bring you interviews with david hunt, harry duffy, and the head of dow chemical. That is monday starting at 3 00 p. M. Eastern. More markets ahead. This is bloomberg. Scarlet this is bloomberg markets. I am scarlet fu. Abigail i am abigail doolittle. Lawyers may be getting busy if tax reform goes through. Experts in the trump raposo proposal could result in a stamp of individual filers trying to reclassify themselves as businesses. This is pretty amazing. Some are saying that the motivation was to simulate growth. It willre saying that help the wealthy, including President Trump. Ask. Depends who you toranges from Grocery Stores hedge funds, to lawyers, to private equity funds. They are currently taxed at ordinary income tax rates. Plan is proposing to do is to cut that rate to 15 . It is a big reduction and the question is, will be see a rush of people looking to requalify themselves. Is it easy to train yourself into an llc . Could scarlet fu become scarlet fu llc . It depends who you ask, but you want to be careful because the irs may come after you. They have been dealing with reduced resources over the past decade and audit classifications are down. You would want to be careful that the irs would not come knocking at your door. Could this lead to a 1. 5 trillion deficit over the next several years . Where would the revenue come from . The cost of it is important to the text of eight. Under senate rules, if you want tax changes to be permanent you have to offset them. If you would be taxed at the higher corporate rate it will cost 1. 3 trillion and you have find out where you will pay for that in other places. You mentioned that Something Like this in kansas. Give us the lay of the land. It . Did they try to address there was a change in kansas where passthroughs no longer had to pay state income taxes. The expectation was this would be to job hiring and economic growth, but you had a rush of people looking to qualify as passthroughs. Proposal,itial tax some are saying there are no details. What is your gut, can this be passed . That is the 1 million question. We are written to see if something happens, will it be temporary or permanent and how will it be paid for . That is the question we are waiting to see. Carlet the other question is, does President Trump and his family stand to benefit . The Trump Organization is a passthrough entity. It would qualify for the lower 15 rate. We have to point out that the Trump Organization is controlled by his two older sons. This week, when there was an was a question about that, sean spicer said he thought more americans were concerned with their own tax bills than the president. Scarlet maybe that was the case earlier this month. What is the trumpet ministration going to do to prevent a rush what is the Trump Administration going to do to prevent a rush of people turning them cells into llcs . Turning themselves into llcs . They do have a plan for that. There are several things you can do. You can set restrictions around how big you are. You could also set your target or have a set percentage to ensure that certain income is taxed at the ordinary income tax rate. Abigail sure this is just the beginning and we will be talking to you in the future. The way she wrote the headline is that you and your dog can be an llc. Barclays has become the latest European Bank to report disappointing fourthquarter trading results. We had a very strong First Quarter last year. On a quarter to quarter comparison, we did not have the up tick that a number of u. S. Banks did, but in part thats because we had a Strong Quarter in the First Quarter of 2016. We are couple with how we came. Ut we feel pretty good about the quarter. Scarlet he went on to say that the firm still has records from investors and directions directors. Ubs reported First Quarter profits that rose 80 , beating estimates. Clients added billions of dollars in new money. Goldman sachs getting ready for brexit. Next year the staff will start moving londonbased staff and operations to offices in the european union. People willow many go where. That is your business flash update. Alphabets soaring earnings. This is bloomberg. Scarlet i am scarlet fu. It is time for options insight. With abigail doolittle. Abigail in chicago is joe today, investor and advisor at equity armor investment. Thank you for taking the time. It has been a bit of a mixed bag. Lead thes this reflation trade . Looking out there this morning, we have the gdp numbers coming out, we have inflation looking stronger. That is telling me that two things can happen. The Central Banks across the world can keep rates low. That will keep inflation Going Forward for the summer. Abigail the vix right now on that big rally, down 25 , the worst year since 2009. Are the Options Markets getting it right or wrong . If you look what happened on friday, the vix was above 15. We actually got it after that. Traders are likely to remember that when they see the vix high, it typically comes back lower. When it is mean reverting like now it usually goes back higher. The first president ial election, the second run is coming back. What is the chatter . Is there a potential risk event or nothing . Right now, they are not paying a lot of attention. Poll come out after the debate, i think we will see volatility pick up. Today we had some great earnings reports from some of the internet giants, amazon and alphabet. Facebook is next week. What is your take . Buy am recommending doing a right on facebook. Facebook is up almost 2 today. It is really flying high. It really would be this one. We are at alltime highs. The market has a tendency to come back lower. Facebook is a great trade in particular to take some off the table. They are anticipating a good report out of facebook. Strike. At the may 1 50 you will be able to collect 360 against that long stock. Joe taking some chips off the table and talking about a big cell and may set up. Still ahead, we have an exclusive interview with a billionaire political activist. The founder of next chen climate next gen climate. As we had to break, a quick check on the markets. 37 points, theby s p 500 losing 1 5 of 1 . The nasdaq just about 6000. From new york, this is bloomberg. Mark it is time for first word news. President trump has moved a step closer to allowing Power Producers to use coal or fossil fuels. They showed lawsuits against the clean power plant which was produced by the obama administration, though no final decision has been made. A limiting that plan will make it more difficult for u. S. Companies to comply with International Greenhouse gas restrictions agreed upon at the 2015 paris climate summit. Emmanuel macron and Marine Le Pen are trying to expand beyond the political basis. Pen did mention a plan to pull from the euro, an appeal to conservative voters by saying that macron lacked french values. He promised not to turn from backers of other parties as a blank check. Pope francis arrived in egypt where he was received at cairo airport by the entrys Prime Minister and top christian clerics
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