He was a senior treasury official in the Bush Administration and Erik Schatzker asked him back in 2015 what he thought about policy. I am all for transparency and i think the fed has that right. What is wrong is it continued it continues to believe it should not follow the rule. If you are going to be transparent, you have to be moral rulebased and what you are doing. Us now is Erik Schatzker who conducted the interview and also Michael Mckee , economics reporter on the fed. York bureau chief who knows a lot about randalls background. Like he is happy to do. He job and is qualified eric you get as much as you need into how he thinks and his appointment to the fed would be with the history of the financial legislation under the obama administration. He believes in a rulebased approach, much like what we heard at the House Financial Services committee p he also believes fannie and freddie should not exist and he believes rules should be he believes some of the things that were done in the post crisis period were poorly thought out and put a clean motivated and left us with a system that serves the institutions he would be responsible for regulating and ultimately the companies and consumers who were pop this is a break from passive ministrations. Past administrations. Under this administration, you would expect somebody who wants to do something about doddfrank to be appointed. The question is what they can do. And of that is legislative he is on record saying he will not overturn it even if President Trump would like to do that. So what can he do on a policy basis . We are not sure which parts he does like. Vocal rulealk of the needing to be adjusted. Regulations that cost money that sort of thing. Vonnie his opinions on Monetary Policy do not figure into the fed on monitor policy. As we understand it, he will be appointed the vice chair for supervision, created for doddfrank that never filled he will still be a member of the Monetary Policy committee of the fed, the open Market Committee and his views of policy are way outside the current fed mainstream or any fed mainstream up to this point. Nobody on the fed thinks rulesbased policy works. Interest rates at 3. 5 right now. So they say we cant do that because it does not take into account what happens in the economy in the meantime. Geely thing is the people running the fed now may not be running the fed next year. So he may be more in the mainstream on the monitor policy side. Vonnie what can we know about the private equity background . He was part of a group that at carlisle in 2008 and 2009 which swooped in perth post financial crisis when private equities were interested in buying banks. He had worked on the other side of the ledger looking at buying banks. Carlisle was one along with another member of the administration, another member of this administration who worked circling around successfully buying banks in the wake of the financial crisis he brings a different perspective, i think, than a lot of people who might otherwise be considered for the role. Julie you did ask him about doddfrank when you all talk. Twice, one with him at a conference and subsequently here at our studios in new york city and we did talk to him about doddfrank, what he thought was wrong with it and what he might change and here is what he had to think to say. Randal there are a lot of divisions in doddfrank that are not well designed. I think doddfrank was in some ways a failure of ambition and toother ways a concession inappropriate pressures. Understandable at the time. Randal but in some ways it was not enough. You could have responded with more aggressive restructuring of the financial right with tory structure in the country, without some of the particular provisions which are not well designed and were included for political rather than financial regulatory reasons. Erik he went on to say that it was one of those things and he did not say it but he suggested he was no fan of the Consumer Protection bureau and you can hear him say there he would probably want to at the very least rethink the overlapping regulatory structure. The occ and the treasury department, banks complain about it all the time. It is not to say that randal of the is a creature banking industry, but he looks at it through the lens of modern republican orthodoxy, which is very different from the people who currently sit on the fed board and who in most cases currently staff if not manage those regulatory bodies. Course he is not the only veteran of this industry or even his past firm to be potentially in the administration. The other folks in there, do we know much about their thinking on these issues . Is it similar . Will we get quite a dramatic move . It just going to be a function of who is theyre doing the job . It is interesting. Some of the people advising, we talked about Steve Mnuchin, and another player is steve switchman. Steve swordsman. Dining with the president of maralago two weeks ago. He is heading to the strategy and policy forum, a group of ceos is advising President Trump which met on tuesday, just last week. So he is really looking to these sorts offolks for all policy, whether it is trade, immigration, regulation. These are strong voices. Exactly how much power does he have in this position . Michael i think you go back to what i asked Steve Mnuchin in berlin last month. Michael i think you go back regulations in place. Overturning regulations takes time. It is not easy. You have to have new regulations in place the way the law is designed and he cannot repeal the law. That will probably be the bottom line. They will not be up to repeal doddfrank because they would need to get 60 votes to cut off a filibuster. They will not be up to do that. Elizabeth warren will hold the line. Something interesting he said to you and your interview, he insulted elizabeth warren. In 2015, they try to appoint finance,secretary of and she blocked it and he said that was a very cynical move by her because she knew he would work at the treasury anyway, and there was no reason for it. He was extremely disappointed in her and twice he said it was a very cynical move. She will remember that when he goes up to the Banking Committee and presents his credentials to get confirmed. Onthe point mike made doddfrank, repealing doddfrank would be very challenging. As we heard several times from people coming into the administration, there are things you can do to the implementation of doddfrank. Can hitch is also where to put resources and change the way things are done. Process which also involves the permission the fed gives the banks to return capital to shareholders, is an and for the banking industry. Cannot stand to call it a black box. In theory, when you go into the stress testing and capital return process, nothing should go wrong. There should be no surprises. Randal quarles will tell you it should be transparent. Here are the rules, you follow the rules and here is what will happen. The person who occupy the role of vice chair, although technically that was not his job, banks were surprised all the time. It is pretty fair to say based on the comments Randal Quarles gave us two years ago, that was a process he would almost certainly overhaul and make more transparent and more predictable, more rulesbased if you would like. Thanks for giving all the angles of our story here p do not miss exclusive interviews with the fed president this week. Michael mckee will interview a fed president at 10 00 a. M. Eastern time on thursday. Schatzker, jason kelly, Michael Mckee, thank you very much, guys. Vonnie time now for bloomberg first word news. Here are your top headlines. Russia plans to hold talks on syria next week with the u. S. And the united nations. Those will be the first negotiations since President Trump to caucus took office. A missile strike on a syrian base for retaliation on for a chemical attack. Gaverkey, voters narrowly the president sweeping new powers in a referendum, Election Authority accepted ballots without official stance. Not bother challenging the legitimacy. Questions are being raised about how much influence china has a on kim jong un. Tensions mounted within the u. S. North korea ignored requests for meetings. Global news global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. Is your first word update for this hour. Lets get a check on the markets. A little more than 90 minutes into the trading day. Here is taylor riggs. The dow is up over 100 points i should say and the nasdaq is also leading those majors as you can see, up almost. 6 . First, netflix, they are reporting earnings this afternoon. Paul sweeney from Bloomberg Intelligence says he is looking at International Subscribers. They should eclipse u. S. Subscribers per we also spoke with the head of Global Equity strategy in u. S. He says he is a little cautious coming into momentum stocks, calling netflix a true innovator. Finally facebook and amazon are raising price targets. You are seeing gains there. Lets look at what is not gaining. Looking at drugmakers this morning. Inside aftere, and the arthritis drug was rejected. Saying additional Safety Measures are needed. Inspectedestors have expected those drugs revising earnings lower. Take a look at my chart 7802. Tradetalking about this we are seeing and continuing on that theme, youre seeing gold higher and dollar lower. Look at the diversions in the right hand side of the screen there. I should note the dollar is weaker. Some of the major currencies we look at including the euro and the pound. Julie thanks. That is something that was talked about in our future teen . 5 to third 13. 50 an ounce. Early signs that china will put more pressure on the regime of kim jong on. The latest from the white house is next. From new york, this is bloomberg. Live from bloomberg World Headquarters in new york, i am vonnie quinn. Julie this is Bloomberg Markets. Lets get to the latest on geopolitical tensions with north korea. Vice president mike pence visiting between north korea and south kore joining us now from the white house i to talk to us about it hence takee did during his visit and what did he communicate about what he learned there. . Tough words from the Vice President. He said the era of strategic patience is over and the u. S. Had run out of patience with north korea and the North Koreans should not test the resolve of the new u. S. President. We heard the Vice President today that President Trump is keeping all options on the table to respond to this threat from north korea and said the president would not typically and about what he might do but all options are on the Table Including a military option. We heard tough for us from the Vice President and now it will be up to the president to see if he will back that up with some kind of action. Why make this a little more concrete, it seems like doing this is going the North Koreans and we know mediumrange missiles are a problem for them. So why do this now . The Vice President was in some ways put in a little bit of a box. Korean try toth test another missile. He was forced to respond to that. Was a provocative action by the North Koreans and the Vice President was responding and made specific mention of that and said North Koreans should not test the resolve of the new president. I think that is part of the reason he had such tough words when he went to the border over the weekend. Indications are that it was a titfortat here, that the u. S. Did not label chinese china currency manipulator in return for some level of cooperation on the north korea issue. Do we know what that entails . Were hearing more and more from the administration that to solve ian to try the problem, using leverage whether we are talking about trade or diplomatic relations. We are seeing the administration wants to use china to solve the problem and we are putting all options on the table, including the issue of labeling china a currency manipulator. We saw the tweet from the president over the weekend saying why what i label china a current the manipulator when i need their help on north korea. It seems like the president is linking the trade issue with this issue, trying to move on putting pressure on north korea so the north Korean Nuclear threat is resolved. Vonnie what can china do very coldovoking relations or worse, and does donald trump really want to back china into a corner like this . It is a very difficult question and we heard from the president over the last couple of days say he originally thought that china could solve the problem just by flipping a switch but it is actually much more difficult and complex than that and he said in his talks with the chinese president down at maralago a couple of weeks ago, he learned a little more about why it is more difficult and the chinese why the chinese are in a bind trying to rein in their rogue neighbor. The president is showing some patients with the chinese, saying he believed the chinese want to do the right thing, but it is more complicated than justs just flipping a switch. Were seeing the president learn and grow in this role a little bit. All right. We appreciate it. Vonnie still ahead, we will hear from the turkey Prime Minister following the victory in that referendum. His comments on military policy in turkey and whether the Death Penalty will be reimplemented. This is bloomberg. Julie this is Bloomberg Markets. Im julie hyman. Quinn. Im vonnie to bring back the Death Penalty, which would kill turkey policies inclusion in the european union. The turkey deputy Prime Minister addressed that issue. Issue earlier today. There is a debate and no decision has been made. The president was talking about [indiscernible] no decision has been made. Even if the decision is made, [indiscernible] make decisions in the sense that it has not been , whether orn agenda not parliament would approve it is a second issue. It, if Parliament Approves whether or not is a separate issue. Lets notations, overdo it. , you havel question always maintained the central bank is independent regulator. Mind, what was your initial reaction to expectations that there might be some moving in turkish Monetary Policy immediately after the referendum now that some of the uncertainties are behind us . I usually dont comment on Monetary Policy, however, it is clear we have a problem to attend. Price stability is a critical objective of my government. The central bank has responded to rising inflation by tightening Monetary Policy significantly. They made it clear they would take further steps to tighten policy if needed. Lets just be very clear there. My government believes in price stability. We have benefited. The reason why growth is higher is because we have had inflation to single digits. Admittedly, high single digits. Remember turkey has had 34 decades of triple digit inflation experience. That macroeconomic backdrop was the main reason for poor macro performance. Turkish economy is resilient soundercause thanks to macroeconomic policies but also price stability as well as i thinkal reforms, turkey will achieve stability. Had 65 governments in 94 years. That era is behind us. Turkeys deputy Prime Minister simsek. About one quarter percent stronger. Conversation up, a with carson block of muddy waters. This is bloomberg. Ive spent my life planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. Ways wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Live from bloomberg World Headquarters im vonnie quinn. Julie and im julie hyman. Lets start with the news of the hour. Here are the top stories were following. In the u. S. The u. S. Supreme court has rejected an appeal from detained immigrant mothers and their children who claim they will be persecuted if they return to their latin america homeland. The Lower Court Ruling said they the mothers and children were arrested in texas soon after crossing the border illegally. Immigration officials rejected their asylum claims. Political polarization appears to be good for fundraising. Donors to both parties gave a record 96 million to house of representatives campaigns in the first quarter. Thats 45 more than the previous record set two years ago. In asia, the stage has been set for the corruption trial south koreas ousted president. He has been indicted on charges of bribery and abuse of power. Shes also accused of coercion and leaking state secrets. Park has been in jail since last month. Another was indicted on giving 6 million in bribes to park and a confident. In the u. K. , prince harry disclosed he sought counseling after the death of his mother led to what he called two years of total chaos. The prince told the telegraph he shut down all his emotions for almost two decades after Princess Diana was killed. He said he was close to a complete breakdown numerous times. Global news 24 hours a day powered more than 2,600 journalists and analysts in more than 120 countries. Vonnie. Ito reversing the higher as the trading day goes on. The medical device maker failed fully erly investigate defected defibrilators. St. Jude required by abbott in the meantime. Carson, welcome and thank you. Your position is now neutral. You dont have a position obviously in st. Jude more do you have one in abbott but you still contend your revelations about st. Jude are valid. Theyre clitely different from the subsequent sort of admissions on the part of st. Jude or abbott. Maybe youd explain what you still believe about st. Jude . Carson well, actually what the f. D. A. And the continue have validated or have stated validates part of what we said. So its really they validated a subset of the original research that we published. Now, unfortunately they havent gotten to the security vulnerabilities that we think are even more serious and that have yet to be fixed. But i mean so far everything thats come out of the government is validation and vindication of the research that we published. Vito and julie and carson, we do want to mention abbotts comments on this f. D. A. Warning letter to st. Jude. Just wanted to read this quote. At abbott Patient Safety come first. We take these matters seriously, continue to make progress on our corrective actions. Well closely review the f. D. A. s warning letter and address the f. D. A. s concerns. Now, as you mention, the f. D. A. Letter does not have to do with sort of cyberskiret issues. It has to due with other issues with these devices. Do you think that abbott is indeed doing what it needs to do in order to now fix the situation . Carson sure. Well, half the f. D. A. Letter deals with these related problems with the implantable defibrillators but the other half has to deal with cybersecurity vulnerabilities. So whats interesting in this f. D. A. Letter about cybersecurity vulnerabilities is it points out or states what we have suspected. So to back up, there have been a lot of questions asked since we went public in august about our decisionmaking progress. Why did you go public . Shouldnt you have gone to the Company First . And we assessed that it was ighly likely that abbott st. Jude knew for years about certain of these cybersecurity vulnerabilities so the f. D. A. s letter that they just published on thursday actually states that in 2014 st. Jude had a Third Party Company do a comprehensive cybersecurity evaluation but st. Jude, now abbott, chose to ignore many of these key recommendations, including by not addressing this universal back door to all of the implattables that is a threedigit back door. So weve been our suspicion there has actually been shown to be correct. They did know and they did not make any substantive changes for at least twoplus years before we came out. Vonnie if you still believe in your thesis and clearly st. Jude is a lot smaller of a company than abbott, but would by ot be at least tempted abbott . Carson sure. Whats important now this f. D. A. Letter has come out, there are three possibilities with respect to abbotts acquisition of st. Jude. Number one, abbott did the Due Diligence, saw all of these issues and didnt care, didnt try to adjust the purchase price, made the roughly 25 billion regardless. Number two, abbott didnt do the Due Diligence and yet still allowed insiders to make hundreds of millions of dollars off of the sale to abbott. Or number three, st. Jude covered things up internally. Any of these three items is potentially interesting from a short perspective. But abbott has a lot more moving parts than st. Jude. Now, if the f. D. A. Loses its patience, which clearly from this letter the f. D. A. Is not giving abbott and st. Jude a pat on the back, if the f. D. A. Loses its patience and comes to the point where it agrees with us that st. Judes devices have to be pulled from the market until the communication protocol is reengineered that could be about half of st. Judes revenue gone for a period that might be about two years while they reengineer the protocol. So that would obvious be material to app ott. But at this point its very tough to place a bet on what the f. D. A. Is going to do. Julie well, and carson, that sort of illustrates one of the challenges with deciding whether youre going to short a company which is external forces. I mean, presumably the st. Jude short bet was a money losing one since abbott did swoop in and buy the company. Whether you were right or not on the defibrillators was almost irrelevant in this particular case, right . Carson yeah. Im fond of saying would you rather be right or make money . We have a business and the point is we have to make money so this is one where the downside was capped initially because of the acquisition but, yeah, we think that abbott at the very least reduce the price it was willing to pay. I think normally i dont like regulatory shorts. This was different in that we thought if there were one agency of the government that really would act adverse to a company, thats a Large Company and presumably lobbies a lot, it would be the f. D. A. Unfortunately, these events have not strengthened my belief in our institutions, particularly regulators, but, look, theres still this might play out. Vonnie you seem to have said this is isolated to this particular company. Are there other companies you are looking at that are vulnerable in this area . Carson so we didnt do the research on those vulnerabilities. Those were discovered by Cybersecurity Research Company Called medsec. They looked at the three other major manufacturers of these implattable devices and they felt that st. Judes stood out for poor security. So, yeah, its possible there will be more cybersecurity related shortcomings along but unfortunately what the state of play seems to be there is a tremendous amount of complacency in our society about cyber vulnerabilities including in medical devices. So i would have to really think hard about doing something cybersecurity related again. Not to say i wouldnt, but the complacency is certainly an issue. Julie carson, i want to switch gears a little bit because you are wellknown to being an activist when it comes to corporations. Less known being an activist when it comes to government. You did write a piece for Bloomberg View raising the alarm on the debt ceiling which certainly has ban issue for markets and for the country in the past. Has not gotten as much attention this time. Why should it be . Carson well, look, the there is a real chance that the United States will default, as i wrote in the my view piece. Thats not base Case Scenario but i think we are going to be closer to that default scenario than we have been in prior in the past. And the problem, though, is that because the market is still ignoring this were in this really strange situation where investors and the public in general are so focused on just what has happened today or what might happen today that were not even thinking a week ahead when it comes to politics. And so if we got down to the wire, if there were default, whats really worrying me is theres no real mental preparation in the market for this. That it might come as a complete surprise. And thats when your chance for some sort of dislocation that results from it is greatest, if were not expecting this. If were not considering this as a real possibility. Julie carson, there are a lot of events, whether its geopolitical, whether its political that are risks to the markets. Is this debt ceiling risk a more acute one than some of these others or is it a matter of its not on the radar like a north korea at the moment, for example . Carson well, sure. Its hard to argue these geopolitical risks arent important but the problem is if ou get if you get a default of the u. S. Debt the market is not going to think we are not capable of paying our debt but it would really call into question everybodys assumptions about safety of financial assets, the way things are supposed to work. I think the more preparation the market has for this possibility the less that the less of a shock it will be, the less it will be called into question. But, yeah, thats this is something that we really do need to start a dialogue about and thats what i attempted to do. Vonnie the China Economy was rewarded 6. 9 g. D. P. Growth overnight. You invest a lot in china. Do you believe this figure the China Economy back on track . Carson look, i never believed the g. D. P. Figures and i think its theyre pretty well established reasons why not to believe them. Lets say directionally there was an improvement but my view, china is a massive asset bubble and credit bubble. So you pour on more credit, increase your fixed asset investment, you get a little bit more economic growth. The question is, how does this unwind . And i dont they kept it going for a long time. Im not going to sit here and tell you a hard unwind is imminent. But a hard unwind in my view is inevitable. It just maybe its years away. I mean, we are definitely in unchartered territory here. Vonnie are you continuing to build up trades in china . Are you looking in the u. S. In any particular trades that might be attractive at the moment, particularly credit like retailers, for example . Carson sure. So were not thematic mostly. Were mostly focused on looking for dysfunction at a companybycompany level, where somebody in management has done something wrong even if its not illegal. So chinas always there for us because as im fond of saying, china is the stock fraud as Silicon Valley is to technology. We like the short frauds so were always looking at chinarelated companies. We are looking at some things in the u. S. But were very global. Looking at things in europe. So, yeah, very tough for me to tell you from a geography perspective where well be next, but were a lot of Different Industries and lots of dysfunction in this world for us to look at. Julie carson, very quick question here. Back to the debt ceiling question. If there is an unexpected rusk for the market, is that investable . Do you go out and short the s p 500, for example . Carson yeah. I really spent a lot of time trying to think about what the trade is. And to back up, internally what i say our mandate is, when we think about this is, first to manage risk. What can go wrong for our clients, their assets if theres a default or if we get close . Ironically i think we end up owning treasuries which is really strange that might be the defaulted security. But in terms of the trade, yeah. C. D. S. Protection on treasuries might actually be a smart trade. Its very chief. Its very cheap and its hard to lose much money on that. Julie carson block, thanks for your time. Founder of muddy waters research. Vonnie the stock has been soaring in trading today, can the netflix run continue . This is bloomberg. Julie from new york im julie hyman. Vonnie and im vonnie quinn. This is Bloomberg Markets. Netflix may have a tough build on the strong momentum where they reported Fourth Quarter earnings. For more on what to look for, heres Bloomberg Media analyst paul sweeney with us. Paul, netflix has been on a tear but others have been nipping at its heels including ulu and, you know, various broadcasters. How does netflix hold on . Paul the advantage netflix has had is they have the tremendous brand identity. Netflix, its like the kleenex of streamer. They have mover advantage certainly here in the u. S. And many of the european markets. Third thing is they have a very large checkbook. They are able to buy and or develop a tremendous amount of original programming and high Quality Programming and thats kind have been their calling card. But it really has been a race for subscribers globally. They are approaching 100 million subscribers globally, about half in the u. S. , half outside the u. S. So they have established a dominant position. But youre right. There are a lot of competitors out there. There is more and more every day. Its not just the hulus of the world. Its also the Cable Companies and many going to direct to streaming. There are options out there but netflix has disrupted the Television Business and have dominant position. Julie we are showing the subscriber estimates. Usually thats what the stock moves on when it reports so what kind of estimates are we looking for for the there we go. We have domestic versus international. What kind of expectations are there . Paul whats interesting, for the last several quarters the International Story has really been the story that investors are focusing on. In fact, youll probably see 2 1 2 to three times as Many International subs added. Probably sometime this year there will be more International Subs at netflix than domestic subs. The International Growth is really the next leg of this story. That is where the penetration levels are much lower. Thats where the company has more room to add subscrishese. In the u. S. Its 50 penetrated. Its a saturated market. The International Market are the source of growth. If you look at this company, they have over 14 billion of longterm program liabilities that they have to satisfy going forward. How do you pay for those programming liabilities . You continue to add somebody scrubers and those subscribers drive revenue and cash flow and the cash flow pays for the programming. Its a virtuous circle if it works for the company but to date it has in fact worked for the company. Join one thing about hastings is hes learned his mistakes along the way. It was blockbuster originally, right . They know when things die. So how does he continue to keep the subscriber rates that he has . Is it by raising the fees and continue to provide great content or not raising the fees and going into more debt . Paul number one, theyll continue to invest in content. Ted, who is the content person at netflix, is arguably the most popular person in hollywood because he has a very big checkbook and he will buy anything from anybody if he thinks it will work on the service. They are making huge investments in programming. Some investments that a lot of their competitors cannot match. And that is really kind of driving their subscriber growth. But theyve also had some success raising prices. They do it modestly and they do it over time. But their churn, the amount of people leaving the service after a price increase, has generally been acceptable. The company has a little bit of Pricing Power but the strategy for growth right now continues to focus on lets invest in programming. That programming will in turn help us to drive more subscriber growth which will generate more profits and cash low to support our programming efforts. Vonnie what about amazon prime . Paul talk about a big checkbook there but its a Side Business for amazon. Whereas for netflix this is what they do. Vonnie all right. Bloomberg Intelligence Analyst paul sweeney. This is what he does. Well be watching netflix after the bell today. Not necessarily but netflix earnings. Well, i might be. Battle of the charts. Its u. S. Tax day tomorrow. The cost of tax preparation will square off against treasury yields. This is bloomberg. Vonnie we take a look at some of the telling charts of the day and you can access these charts on bloomberg. Kicking things off today its all u. S. Today taylor riggs. Taylor when in doubt go back to fixed income. 10year treasury minus the twoyear treasury and the spread on that. So we have the election as we know. The big reflakes trade sprayeding out and look what has been slowly coming down. Dont let this little fool you. Were still down to the lowest since the election. A few things going on. We have some of the geopolitical risks we saw last week. North Korea Tensions flaring up. Russia tensions flaring up. But finally what struck out to me this morning, scott at guggenheim tweeted out this morning saying he expects a 2 2 , 20. 0year where a. 5 on the a 1 10year. What im hearing is flatter, flatter. Vonnie taylor, thank you for alerting us to that. Julie. Julie weighty for the markets and weighty for people individually and their pocketbook. As we talk about this big tax reform issue its important to note the cost of preparing your taxes is rising. And the Labor Department actually tracks this as part of the Consumer Price index. It breaks it down into a lot of specific components. One of them is tax preparation. Were actually seeing a record cost for tax preparation right now. Thats the chart on the top here. The chart on the bottom is the rate of change. We saw the Third Largest gain ever year over year in tax preparation. We got a lot of these various h r block, tub other tax. Simplifying the tax code, thats something the Trump Administration has talked about doing through tax reform. This is one of the reasons why its important because not only are people are writing a big check to the government for their federal taxes, they are also paying someone to decipher the tax code for them. So that sort of creates a double whammy situation. His chart by the way, g btv 7823. Vonnie i was thinking its more expensive. I wondered why. Did you file . Julie i filed. A lot of people have this year. Vonnie i noticed that. For that reason i am going to give the crown today to julie. Of course, taylor, your charts are very, very welcomed. Julie, youre the winner. Julie thanks. Appreciate it. Vonnie more Bloomberg Markets ahead. Tomorrow, dont miss two exclusive interview with the fed president at 10 00. Kansas city president george. Thursday, robert of the dallas fed. Another big fed speaker week. This is bloomberg. Ed ifed if vonnie im vonnie quinn. Welcome to Bloomberg Markets. From bloomberg World Headquarters in new york we are going to take from you washington, d. C. To San Francisco and istanbul. In markets the u. S. Stocks rebounding from a weekly decline. The s p 500 riding the most in two weeks. Trading is light today with many key markets, particularly in europe, still closed for the easter holiday. Meanwhile, the 10year is holding near a november low. And Vice President mike pence encouraging china to take action against north korea hile he met with troops. This come after the north korean failed missile test. And the Vice President saying they will act without china if necessary. And reports. The company may find it tough to build on last years record
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