met with the naacp today. leaders of the nations oldest civil rights organization's a threatening decline. the attorney said this week that scrutiny could cause officers to be less effective in crime-fighting. california governor jerry brown 'subts many of president trump policy proposals will come to pass. in an interview with bloomberg, governor brown says the president is fighting battles on too many fronts and will be forced to temper his plans. he said the proposals will not recordcalifornia's .rosperity the prime minister spoke at the scottish conservative conference in glasgow. >> there is no economic case for breaking up the united kingdom or reducing the ties which bind

us together, but the economics are only part of the story. mark: prime minister may accused the scottish prime minister of sacrificing the recent living standards in her pursuit of a break away from the u.k. may is trying to avert another independence referendum. china's president wants no drama at the annual national people's conference that kicks off this weekend. meeting that party takes place twice a decade, almost half of chinese senior leaders may be replaced, and she wants to win backing for his attempts to overhaul china's economy. global news to four hours a day powered by more than 2600 journalists in over 2100 countries. i'm mark crumpton. this is bloomberg.

are 30 minutes from the close of trading here in the u.s. u.s. equities barely moving. joe: the question is "what'd you miss?" scarlet: janet yellen on pace to hikes. the pace on right a big week ahead for election watchers. emmanuel macron overtaking marine le pen for the first time .n polling and how to engage with the trump administration. the ambassador of greece in washington joins us next on greece's debt yield and the fate of the euro.

joe: let's look at where the major averages stand as we head toward the close. abigail doolittle standing by. abigail: not a lot happening heading into the close. the dow, s&p, 500 all up ever so slightly after really slipping between small gains and losses on the day. this comes in the context of a pretty volatile week. we have the best rally for stocks on the year. yesterday, we had the worst pullback in more than a month, and now we have very little happening. it's worth noting a week again for all the averages. the s&p 500, the sixth of week in a row. clearly more bullish than not. where we have had movement today is the bloomberg dollar index, now down more than .6%, a big move for a currency, the worst drop since the end of january, initially taking a leg lower.

fed chair janet yellen did give a speech in chicago reiterating the fed is likely to raise rates. this is not necessarily the reaction you would expect, and interestingly, also at odds with what investors are expecting. this could be the story of the week -- despite the big rally, this is the movement up. world interest rate probability. now 96%., it's going into janet yellen's speech, it was 90%. investors are certain the fed will raise rates. 100% going into that rate hike. the second in a decade. really seems like investors are betting on this happening.

joe: thanks, abigail. let's talk more about the federal reserve because janet yellen gave a big speech in chicago. here are some highlights from the meeting. is a key 1 --is "at our meeting later this month, the committee will evaluate if employment and inflation are continuing to evolve in line with our expectations, in which case, a further adjustment of the federal funds rate will likely e appropriate." she's pretty much saying it's pretty much a go unless something happens in next week's jobs report. toshe saying they're going hike, but it's not going to be particularly fast. and one more key quote where she says the committee currently assesses the risks to the outlook to be roughly balanced, so she says they are probably going to hike. is still theual

plan, and this puts more of a focus on the jobs report friday. the consensus right now among afterss that was surveyed 227,000 jobs in january. janet yellen lowered the bar when it comes to expectations. she says the long-term labor force growth rate is about 75,000 to 120,000 a month, so a big gain is not necessarily needed for the fed to consider that ok to go ahead and hike rates. the international outlook is something else that i find really interesting. earlier in the year, last year, we were all saying the fed seemed to have this unofficial third mandate in a fish -- in addition to unemployment was the idea that the international developments needed to be stable, and that has changed. it is fairly stable. if you look at headline cpi, not

core, and china seems to be stable as well. joe: we are in this period where the global growth situation seems to be about as coordinated as it will be for a while. "what'd you miss?" greece and its creditors look poised to strike a deal that will 11 the nation to drawdown eight and avoid defaulting on in debts in july, the latest a long line of compromises meant to help the struggling nation controversy. the question -- is this the solution to greece's overwhelming debt level? ambassador, thank you very much for joining us. are you confident that your country is going to reach a deal and be able to continue with the existing bailout plan? >> good afternoon. very good to be with you. greece is doing its part in a long, protracted, and difficult negotiation with the

representatives of the creditors for quite some time now. but our goal is precisely to do all parts and reach a solution, reach an understanding which will enable grease to carry forward and continue along the track which has moved us finally last year after several years of .ecession back on growth for the first time in the year 2016, greece recorded positive growth. it was not spectacular, but it yearery positive, and this , the forecast, not only of the greek statistical bureau, but also of the statistical services of international organizations like the european union, like the imf and the oecd, are projecting growth of 2.7% and for next year, even above 3%.

meanwhile, greece was ahead of the target agreed for last year's budget primary surplus, whereas the goal was in the magnitude of 4.5%. greece actually managed to have growth of -- close to 2% of gdp as primary surplus, so this for the nearnd future and long-term. scarlet: how optimistic are you that an agreement can be made before the next election? >> there are eight series of very important elections in european countries between now and the fall. these are elections the outcome of which will be very important not only for the nations direct

concern but for the european continent as a whole and perhaps for the world. the stakes of these elections are far reaching, and i do not think that the state of the greek economy will be the determining factor for the outcome of these elections. however, to the extent that it does play a role and it does so in some countries more than others, this is something that greece cannot change. what we can do is to continue our part of the deal, continued the negotiation in good faith, development onod february 20, and now the goal, which is a realistic goal, is to have an agreement by march 20, so not very long down the road. joe: let's turn over to u.s. politics. obviously, we had to change in

presidents. i'm looking at a tweet from october 9, 2012, from donald trump. he said, "greece should get out of the euro and go back to their own currency. they are just wasting time." over four years later, you're still dealing with bailouts. how concerned are you over the fact that the obama administration was very pro-eu, and this new administration, trump has said greece's trying to stay in the euro was a waste of time and more generally seems hostilensiderably more towards the idea of the eu? more time to need see what the true intentions of the administration will be. what we have started as the to have ourf greece

first contacts with people of the international financial the eus body of president -- we are looking forward to having our first contact between the greek prime minister of finance and his counterpart, the eu secretary of treasury, and we are confident that we will be able to present and also to clearly highlight why we believe that it is in the interest of the united states to help greece with economic and financial stability, which in turn will translate to social, political stability in a volatile part of the globe. scarlet: you make clear what greece would want. likes to seemp himself as a dealmaker. what does greece specifically have you offered to the united states in your view? >> i'm a professional diplomat

decades have been dealing with negotiations, so diplomacy is another form of dealmaking. with this very uneasy new concept, as you describe it. i think that the foundations of the relationship between greece and the united states are very long and very deep. we have a long-standing extensive defensive corporation, which we are ready to further enhance. we have a formal alliance in the form of nato. we have a very strong greek diaspora here, which provides a human continuous bond between the nations, and also we have made some interesting proposals to the new administration. since there is a business component in the new

administration, i think they will understand very well our argument, which has been a long-standing argument, arguing for the element -- a strong element of growth in the package for the rescue of the greek economy and the package for the alleviation of our debt. , we have a system of structural reforms, which we are following. of economic growth was not fair. i think that the new administration would understand the logic and would help us to present our case more clearly to representatives of the institutions with which we are negotiating. scarlet: we thank you for your time. coming up, is the federal reserve turning over a new leaf? we will talk about that.

this is bloomberg. ♪

have breaking news -- deutsche bank confirming an earlier bloomberg report it is considering a fairly significant capital raise, 8 billion euros. that's $10.6 billion. earlier in the year, shares were really getting hammered and have come that considerably since then. let's take a look at what the stock is doing. it is still lower on the day. again, deutsche bank confirmed it is considering an 8 billion euro capital raise. scarlet: we are continuing to monitor these headlines for you. we reported earlier that

consideringk was getting rid of its retail business. that apparently is no longer on the table. "what'd you miss?" the bond market made a dramatic shift this week. the chief investment officer for as anincome as well alternative fixed income strategist for jb asset management spoke with jonathan. take a listen. >> the fed, obviously, is in a period of transition. fedjanet yellen uber-dovish we have lived with for a number of years has vacancies and will be a presumptive change with respect to who the chairman will be, so i don't know that we can make any long-term predictions about where the fed wants to take the rate environment. certainly as the chatter you put together three minutes ago in

the clip indicates, the belief has changed in the marketplace as it relates to the near term probability of a fed tightening, but i think the reality is the fed talk and awful lot and for years and years, we keep hearing the same thing out of them -- that they would love to raise rates when they reach their targets, and when they reach their targets, they redefine what those targets should be, so as it relates to what we are at is antly, certainly, there higher probability of the fed going at its next meeting in the middle of march. on the other hand, what you put forward a few moments ago also indicated what she said was singing. it does not mean march. it could mean may or june for could mean never. as i said, the fed has a very poor record of actually doing what they say they will do. i would say that not only does the fed have a very poor record of doing what they say they will, but in general,

if we look at any investor who has tried to predict the directionality of rates, doing that is an absolutely failed prophecy. i find it comical that we are calling this move early. the fed has essentially been interpreting the same stream of constructive economic data is really, depending on where market sentiment has been, so it's really hard to call this .ove early yes, butatively early, is the fed behind the curve to some extent already? way the fedhe defines it, even the way the fed defines it, they are probably somewhat behind the curve, but the way i think it should be properly defined, which is to say not just a focus on inflation and growth but rather a focus on the amount of leverage in the system, the amount of financial excess that

has gone on during these years, i think you could make the case that they are years behind the curve as it relates to having normalized rates. probably or perhaps going back to 2013. joe: you can catch "bloomberg real yield" every friday at 12:00 p.m. new york time. time for a look at some of the biggest business stories in the news right now. aterpillar being sued by shareholder for alleged deception the day after federal officials raided its headquarters in illinois. the companies accused of making false and misleading statements and failing to disclose that it used foreign subsidiaries to avoid paying billions of dollars in taxes. bloomberg news obtained copies electronics and files.

almost no comparable fund in the country has matched a return on pimco interest funds. investor money is pouring in any pace unseen by any other actively managed stock or bond fund. and that is your bloomberg business flash. we just want to reiterate the breaking news that joe had broken earlier, which is that deutsche bank is considering a capital raise of 8 billion euros, about $8.5 billion, slightly less than what our reporting indicated earlier, which was as much as $10.6 billion. this is one of several strategic measures that might include an ipo of its minority stake in its asset management business. you can see that intraday trading prices at session lows. trading bank shares

down. this is bloomberg.

scarlet: and all this week we have say in bonds sell off and rates rise. the 10-year are ones we looked at carefully. the 10-year here is the white line, and we started off the week at around 2.3% where it closed on friday, but if you look at where it is that now, just below the 2.5%, that is a 17 to 18-basis-point move. that is a dramatic move. thaturse, still far from 3% level we reached in early 2014. b blue line much more sensitive to the fed, now at its highest since june 2 thousand nine. a yellow vertical line shows when janet yellen began

speaking, and it came back a little bit. for the week, a huge move and rates. joe: the fed was obviously the huge story this week. this white line is a chart depicting every time a story on the bloomberg mentioned the federal reserve. you can see it is really high all these years, then look here in the last couple of months. zoom in. this white line plunged in the couple of months after the election. people still talk about the fed, but everyone else has moved on. the orange line is stories mentioning the term fiscal stimulus. nothing happening on that front for a long time. at the end of 2016, it absolutely took off. this chart nicely demonstrates the changes in the theme. no one talks about the fed anymore. we still talk about the

fed. joe: i'm exaggerating. scarlet: it's true that in the global consciousness, the fed is no longer going to come in and save everything. the dow off once again by three points. this is bloomberg. ♪

♪ scarlet: we are moments away

from the closing bell. "what'd you miss?" u.s. stocks heading for the first two days slide. fu.scarlet rosenthal.oe begin with our markets, and when we say a two day decline, it is not really a decline. 500 little changed. the nasdaq barely budging higher. joe: a quiet end to a busy week. everyone had to digest the fed officials talking up the prospect of a rate hike on march 15. it began with john williams of the san francisco fed, then bill dudley, robert kaplan earlier,

and today was the main event with janet yellen. moved so much on the other ones, and she is so smooth. she never creates volatility. scarlet: we did see big gains and snap. it followed up yesterday's 44% 20 percent much as today. it came back there. article says short interest $1 billion reach within a week because of this rally. in terms of sectors under pressure today, retailers under pain. costco retreating from record pressured on gross margins because of higher gas prices.

the good news is the increase in membership fees. reports thating on it is not in talks with hudson bay. urban outfitters reclining for fourth time this week. joe: bond yields ending up unchanged for the day. a lot of action earlier in the week as we got hawkish comments from the fed. but even with janet yellen speaking, no change. we never talk about long term indian rates, but there was a huge rally in government l bonds. and finally, french 10 year yields. this is the chart to watch. coming in on from middle of the that macoople assess

n's odds of winning are on the rise. interesting that the dollar continued to sink a lower. scarlet: the dollar giving back recent games. weekd a big run-up this during a five-day advance as fed officials sounded hawkish notes. the mexican peso is the best-performing currency versus the dollar after comments by wilbur ross, saying the peso afterrecover quite a lot nafta renegotiation. it has been a big recovery since depreciating to a record low. also sitting around its 200 day moving average, so it might be stuck here a bit.

joe: gold and oil up a little bit. cold catching a slight bit, oil up 1%. let's look at a one-month chart of gold. you can see the reversal. it had been higher, selling off lately on this general safety trait selloff, the same reason treasuries are selling off. those are today's market minutes. we want to take a deep dive into the bloomberg. at the most at miserable countries according to the misery index. it is calculated by adding inflation and unemployment forecast. the higher the score, the more miserable a country is. venezuela is leading emerging south africahere

and argentina increasing in misery. greece up there as well. they are still trying to figure out the next tranche of their imf bailout. misery numbers are based on specific statistics. it is a nice way of looking at it. let's look at the flip side. these are the countries where we are seeing declining misery, hong kong, south korea, israel, denmark, taiwan. here is the common denominator, rations of stability. these are countries you associate with well run, functioning governments, not much unemployment, not much inflation. switzerland, singapore, thailand doing well. scarlet: there is a unique way

of calculating unemployment in thailand, but it is notable that asian economies makeup six out of the least 10 miserable places. denmark, switzerland, iceland, all right. joe: "what'd you miss?" been tryings have to jawbone traders into pricing in the next move. in other words, job done. joining me done is bloomberg's macro strategist. an extraordinary week for the markets. it is hard to remember the last time the fed was a major actor like this week. what is it you learn this week? >> that they will hike rates. scarlet: the second big thing? more than theed market pricing a march hike to get the bonds and dollar out of

their range. closed last week with 10 year yields and the u.s. at the bottom of the range. we ended this week with 10 year yields at the top of the range, but guess what? we are still in the range. washe same time, the market pricing a relatively small chance of a hike in march at the beginning the week, and now 90% at the end of the week, so the issue is not whether the fed goes in march or not, but will scale, scope, and magnitude of the tightening cycle? what is so compelling to me is how quickly the odds of the rate increase moved up this week. scarlet: it is now more than 90 percent. , let me pull that up to her. we can do that on the bloomberg.

hike, it wasrate 100% for three weeks leading up to that fomc meeting. we are not there yet. will they continue to talk this up? >> know, the blackout starts tomorrow. scarlet: is that a reason to push it higher? 100%, i would say no because we still have the payroll number on friday. even if they could speak, they would want that. payrolls-100,000 on and unemployment goes to 5.1%, they would look stupid. thatyou pointed out everything sold off yesterday, and that caught my eye. today, nothing really happened, or not as significant, but was yesterday a significant day, or

there is concern that the fed could make a mistake? >> i would not characterize it like that to be honest with you. was it a day that saw a tightening of financial conditions? but given the steady drumbeat of hawkish talk from the fed, you are supposed when the tightening fed tightens rates, so to that --ent, i don't take it was it was notable without being extraordinary. you also have to think about it in terms of the market risk physicians. the market is long equities, but the speculative market is short text income, so bond selling off was happy, and the speculative market is long dollar, also happy for speculators. so even though the screen was a sea of red, red can be a good

thing. ,carlet: you write in live and you included to bring charts today. janet yellen made a reference about how the risk is roughly balance, right? the balance of risk is roughly balanced, and actually let's pull up the chart, upside risk to upside risk. if you break it down, there is something not quite balance there. >> it is hard to know whether she was referencing the february or whether she is previewing the march statement. my guess is that that was more of a repetition of the february statement rather than opening the door and giving us a peek into the march statement. what we have here is a piece of work i did where i went back and looked at the minutes for every fed meeting with a mate

forecasts, since they started publishing their forecast in 2011. in the minutes, they tell you where each of the aggregate sees the risks for growth, unemployment, and inflation are , and i created these indices. what you can see clearly, and i flipped the unemployment rate so we can think of it in terms of employment. what you can see as they have all gone up sharply, the balance of risks for growth, employment, and inflation over the last couple of meetings, and the summer meeting was the first meeting ever since they have been publishing these forecast with a thought on aggregate that the risks to growth were on the upside brother than the downside , so it is disingenuous for them to say it is in balance.

the nuance there. thank you very much. you can find his writing on the bloomberg. john cochraneto of the hoover institution and stanford university will be joining us. this is bloomberg. ♪

for first word news. president trump visited a private religious school in florida today, signaling his education agenda will focus on school choice. in orlando by education secretary betsy devos.

teachers unions were quick to criticize the trip, saying it shows the president's hostility towards public schools. in his address to congress this week, the president called education the "civil rights issue of our time" and asked lawmakers to fund the bill for school choice. angela merkel heads to washington for her first face-to-face meeting with president trump. the german government said it would not tonight u.s. media reports that the chancellor plans to meet the president on march 14 at the white house. the german leader met vice president pence and munich to bring weeks ago. thousands of civilians are l -- fleeing mosul. troops reportedly are close to militarizedith the middle o police force advancing along the tigris river.

the associated press quotes a yuan spokesman who says that over 28,000 people have left since military operations began, and 750 thousand people remain trapped inside the area. the united nations humanitarian chief says he is confident the united states will step up and donate to aid appeals, despite concerns of possible cuts by the trump administration. the u.s. is the world's top humanitarian donor and pledge nothing last week at a conference on nigeria's humanitarian crisis. stephen o'brien said today the u.s. has indicated it is "very ready to donate." global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg.

i am mark crumpton. scarlet: thank you so much. "what'd you miss?" yellen capped a week of rising expectations about her rate increase by explicitly supporting a hike if economic progress persists. and next guest says that more interesting question is whether the federal bank should keep a big balance sheet or sell off its assets. joining us now is john cochran, senior fellow at hoover institute. has been floated as a potential replacement to janet yellen when her term comes up. thank you for joining us today. is the fed in the position right now to begin winding down its balance sheet? >> they can if they want to. i like a bigents, balance sheet. they did too much advertising of how stimulative it was in the past and causing them some

trouble now, but a big balance sheet is doing a lot of good. there is no lack of liquidity and the markets, so i hope they keep the big balance sheet. joe: what if they said we will notr run it down, actively sell it off, but is there any rush? they bought some mortgage-backed securities, which i am not a big fan of. what they are doing is buying treasuries and issuing reserves on which they pay interest, think of the fed is a giant money market fund, and money market funds are a good thing. it is not causing any damage to the economy, and there is a lot of liquidity and financial stability benefits to it. say the fed's begins winding down its balance sheet. what is the biggest risk of doing so? areeems like politicians

urging the fed to start normalizing its balance sheet and operations. what is the biggest risk to do so? >> i object to that word normalizing come up because it pretends that what we used to do in the past was normal and good. i think we have discovered something in the past eight run a big fed can balance sheet and not cause any inflation, so let's call it go back to the way we used to do it. so long as they don't do it precipitously. if they tried to sell $3 trillion in bonds and a night there might be a are scum no one is talking about that. slowly wind down and then people will be holding treasuries directly. time to startgood a money market mutual fund that holds treasuries. it would not be a disaster. i hope they don't go back to the old days of tiny reserves that don't pay interest. scarlet: i want to point

debtyone's attention to death . and china, thean red and purple lines, their holdings have decreased. ireland's holdings have increased. there are other options here, the united kingdom, taiwan. very interesting. .et's turn to current policy the fed speakers signaling a rate hike is imminent as soon as march 15, what do you think about the currency policies stand? is this the right time, the right approach to tightening policy as we come out of this long slump? certainly it is the natural approach as we come out of a slump, especially as inflation heats up. we expect the fed to start

raising rates come in until something happens, and let's not forget something might happen sooner or later. to 4%, we are going back 5%, 6% right, it is doubtful we will get that high. seemsal rate of interest to be quite low, and unless the economy starts truly booming or the government gets into real problems with its debts, i would not look forward to it going that high. asrlet: we introduced you someone whose name has been floated to replace janet yellen. has anybody approached you to take a role on the fed? and if so, would you be fed chair? >> you know i wouldn't talk about anything like that. then let's talk hypothetically. what would you like to see the fed do if you were in charge of the fed? how would you proceed? >> i think the biggest question to the fed right now are the

structural questions. do they keep the big talents sheet? the fed's role is as the big dodd-frank regulator, so where will they go with that, how will they implement monetary policy tools. issues.e bigger interest rates come you kind of know what will happen. interest rates will slowly rise as long as output keeps chugging and inflation stays bounded, until the next recession, and wish they will be cut back to zero again. talk about regulation. there is a lot of enthusiasm that trump may roll back dodd-frank regulations. do you think there is a case to was too onerous and dodd-frank needs to be pulled back in some way? >> there is a huge case to be made. just more is not jus or less.

banks need to be regulator, but an approach that favors and almost amounts of capital as opposed to an army of regulators that go into make sure the banks don't lose money again, i think that is the right, smart approach. i think we have discovered that banks can get by with lots and lots more capital. ,hey are betting their money not depositors money, not the government's money, so they can lose substantial money without imperiling the financial system. that is a robust structure that would get us away from financial crises, too big to fail, and this army of regulators out there. joe: great conversation. john cochrane, senior fellow at the hoover institution and stanford university. thank you very much. as the candidacy of french presidential candidates, could

an old rival come back to claim the conservative nomination? this is bloomberg. ♪

scarlet: i am scarlet fu. "what'd you miss?" a deep dive into the bloomberg. chile,to focus on business confidence has taken a deep dive. people are trying to figure out what it was. taxes, labor reform, or government incompetence? actually it is simple. copper prices are driving confidence because copper prices in blue have made a nice uptick,

and confidence has returned as well. is the leading exporter of copper for the last half-century. joe: you have to love a clean comparison chart like that. crazyench election is so and changing all the time. look at this chart. the white line is the odds that alain juppe is the next president of france. he is not even in the race. ,e is ahead of francois fillon who is currently the republican nominee, down to 9%, dog with scandal. people may think he will drop out and alain juppe can take his place as the republican standardbearer. that is how crazy things are. is not officially in the race. maybe things will change this weekend? coming up next, we look at the intersection of green conglomerates and politics. this is bloomberg. ♪

mark: time now for first word news. president trump easing regulations on another industry. this time it is the airlines. the trump administration is suspending a proposal to require transparency in airfares. beennes generate four dollars a year in baggage fees, and the obama administration sought to make them disclose those fees when people purchase their tickets. a man has been arrested in connection with threats made to a to jewish communities centers nationwide and the anti-defamation league headquarters in new york city. federal authorities say he is accused of making the threats to

harass a next girlfriend. he allegedly used the victim's name while making some of those threats. the united nations envoy to syria says he wants the government and opposition to pursue what he calls a framework agreement outlining a political transition process. he spoke at the end of the latest round of diplomacy between the two sides in serious six-year long civil war. the un security council set out what he called a timetable to draft a new constitution for syria and 12 months and hold free and fair elections under united nations supervision within a gear and a half. has overtakenn marine le pen and france's presidential race for the first time. the new paul has emmanuel macron with 27%, leading marine le pen by less than two points. a poll also shows that alain juppe would lead if he entered the race.

he lost the republican primary to francois fillon. francois fillon is under pressure to step aside after being caught in a corruption investigation. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. . am mark crumpton thanks. let's get a recap of today's market action, and after a fairly active week, basically nothing at all. look at those single digit moves, less than 3% on the dow. nothing happened today. extraordinarily eventful week. the big event was march coming into view as a possible rate hike. janet confirmed that with her speech today. scarlet: there is still that jobs report next friday. "what'd you miss?" will stand samsung

trial over accusations he participated in bribes in exchange for government favors. what does his arrest mean for the conglomerates that run south koreans economy? great to see you. thank you for joining us. why is samsung specifically being singled out here? the government did look to talk , hyundai, lg,ds when trying to figure out how far this corruption scandal spread. attention attracted because the largest amount was aboutated with samsung, 37 million dollars, specifically $3 million went to an affiliate of the woman associated with president parker, so that is where the question is raised and whether they traded off

nod by therom a national pension service. these wealth clans are extremely influential, gigantic businesses like samsung and others. for people toge see their power diminish? >> the top five represent 55% of south korean gdp. 20% of accounts for exports, so a tremendous influence, but the call and where the fracture is people want to see more equity, more small and medium enterprise development. 90% of southabout koreans, so a lot of this is a tug and pull about normalization of the economy and a more equitable level. scarlet: how much government protection do they get? how much are they shielded from

foreign competition by the government? joe: they have always received preferential reality. >> the question rises, will there be an altered business model in north korea -- south korea? however, the call is for a more equitable balance. it was a huge issue in the 2012 elections and will be in the elections this year. joe: are we seeing any sen significant ramifications in terms of samsung's business? small fall offfe in the stock price, but there is the diversification aspect. ofa lot of the business samsung is in different areas, about 37 different groups. i wonder if there is soured support of these conglomerates. did that play a role and the start of the diminishment of

these companies in the country's mind? part of that economic dynamism is what pulled south korea out first among the major players, so there are positives and negatives. while there is tremendous concern about the equities issue, samsung, and this trial, but there is a healthy feeling about samsung for consumers. joe: in october, there was a big scandal that erected with south korea's president. where do things stand with the government right now? >> the decision about her in peach meant from the supreme court in south korea should take place around march 13, so we should know very soon what her fate is. then, you have elections in the next 60 days, a new president comes in. if they don't uphold the national assembly impeachment, elections will be in december.

scarlet: can we presume who ever have theset will groups on their side in order to keep the economy going? is the political reality. it will probably be more progressive government. that government will be attentive to small and medium enterprise development and find a way to break the general hold, but we will see. back to jay y.go lee, 48 years old. he has been impressive. if the president is impeached, what happens to him? is he still at risk of ending up in jail? starts march 9 and will take place over three months. that is separate. there is a lot going in terms of what the special prosecutor wants to do. there is a lot of sensationalism around it.

scarlet: how much of this is a distraction from the rest of government? you have a rising china, north korea across the border, how much of this is a distraction where they can focus on the bigger issues? distraction. what happens is the international community, the united states in particular, would like to see stability because of china, north korea, and political unrest and a finding ahreat, so solution to this presidential crisis to get a more stable administration and to try to resolve some of these issues with business leaders will be high on the agenda. joe: thank you very much. the korea director of society an adjunct associate professor at columbia university. lotng up, snaps ipo true a of attention, but there is always the other side of the trade. we explained next. this is bloomberg. ♪

scarlet: "what'd you miss?" love for snaps ipo is sure to draw skeptics. short interest in the disappearing photo app maker could reach $1 billion within a week. based on how bearish bets evolved and other ipos. joining us now is our guests. let's start with you. snap followed up yesterday's 44% pop with as much as 20% today. highs.not close at it why is this setting up the argument that the skeptics were short the stock? >> we have had this conversation again and again about the exuberance of over the ipo and

the long-term financial health of this company. of the ipo will be shorted did in the first week of trading. the is a hefty amount of 200 million dollars in shares sold. tosee and investors who want ride the initial climb. if you look at the volume of shares that have been trading, 200 million shares exchanged hands yesterday. 150 million today, so there is a lot of activity going on, and the folks who wanted to ride the out have probably exited at this point. joe: everyone knows what the bear case is on this company, expenses.ey, massive it may already be slowing growth, so what is the ball case it is worth $31 billion and more? >> hope springs eternal. .t is all about the millennials

there is the fear of missing out argument, that this could be the next facebook, the whatever, some stock that despite losing that it willmoney keep going up and you don't want to miss out. there is the attractiveness of the users. advertisers really want to get at this generation because they are about to pick the brands they will stick with for their lives. if you are a deal to an maker, you want to get to them when they are deciding what deodorant they want to use for the rest of their life. the notion that the revenue per user is so low at snapchat that it can only go up once they get more ads in front of their users, but the glass half full folks are loving that. scarlet: i will take the opposite side. what is interesting here is you on the company.

you never see that, three for a company that just went public. buys, two holds. again, there is talk -- a good word, the exuberance around the current situation. come that that is they can continue to draw in advertisers and can basically all dollars from tv ads, because that is where the big money is, but it has been a bumpy road for them. tv advertisers are used to horizontal video. to makesaying you have something exactly for us if you wanted to be a video or make a custom filter. that will be a hurdle they have to get over to see that ball case play itself out. market capitalization of

$30 billion, facebook? 396 billion dollars, so 13 times the market cap. it seems as if they could converge in some way. >> potentially, yes. -- want towant us to stay stand-alone -- joe: i mean if snap becomes one of the main social platforms in the world, it could be closer to facebook. >> that's what i hear from a lot of folks on the silicon valley side. they are going early and hoping to grow up in the public market, unlike the big private companies we are seeing these days, so some hopefulness there that we see some of the ipo backlog clear it self through, but the trusting and

managements vision and hoping they don't slip up too much as they try to figure out the next iteration of snap or snapchat. growing upd part of means you have to host earnings calls as well. corey, i know you look through night on the weekends, digging for nuggets that you can tell us about. what did you learn from the s-1 filing for snap? >> tons. it is a fascinating document. one of the most important numbers in this business as how they will grow users. i think they are warning that they will not grow them a lot in the first quarter. they said seasonal growth typically carries through the first quarter, meaning the rate of net additional daily active users to be impacted by short-term holiday seasonality. it seems like they are saying

don't look for a big pop and users and the first quarter either. on the heels of slow growth in the third and fourth quarter, that would be bad news for this company going forward. i think you need to see an acceleration of users. to joe's point about the differential between the snapchat they wish and in the facebook valuation amid there is no reason they have to converge and one has to come down and one goes up. in technology, you usually see at massive difference between the industry leader and the number two leader. two player.umber cisco is so much bigger than what juniper is, and that is all about the network effect. a great point. one interesting aspect is i remember when mark zuckerberg did his roadshow for facebook and he was criticized for wearing a hoodie. there is a lot of faith in evan

spiegel. he is held in high regard as a product visionary. in that sense, people feel good about the management of the company. >> i think the ipo itself supported that. they headed over to goldman sachs and were on the floor at goldman sachs around the guy who executes the traits on day one because he wanted to see what was going on because he cared about the investors. he did not want the pomp and circumstance of talking to her lovely folks like us. he wanted to be there to see the action of his actual trading. scarlet: thank you so much for joining us. we were just talking about snap analysts. aboutunster talks short-term and long-term prospects of the apple are. app are. joe: and you can watch all of this on tv . you can see the charts on the

right side, headlines, interactive. it is the future of tv. real yield is on every friday afternoon. check it out on the bloomberg at tv . this is bloomberg. ♪

joe: "what'd you miss?" now the snap is trading on the nyse, what can we expect from the stock? spoke to bloomberg daybreak: americas earlier today. take a listen. keep expectations low, and unfortunately for snap, the expectations have front up dramatically, and so to put that into perspective if they win out and said they will do about $1

billion in 2017, that is just up from $400 million in 2016, and now investors are thinking that number will because her to $1.1 billion, but that is one of our pieces of advice, keep expectations low. $1can you come up with billion is a plausible number for revenue? pu growth.s down to r that is how they get to a higher number. they can get there, but it will take some work. >> i'm sure the whole world knows what that means, average revenue per user, right? key areas one of the they are going after. they are not talking about growing their base. facebook wanted to connect all the people in the world. snapchat's goal is being a camera company. they create features and charge

advertisers for that, so growing rpu is the way to do that. >> in your old job, what would you have rated this company at? how would you play the company and what would you do? it rateld probably have it a neutral at this point. it is easy to say that because it is up so dramatically, but history would say when these lockups come off in about six that isanticipation of not good for these ipo stocks. talkedely as we just about, expectations despite management's efforts have accelerated out of what they would probably go comfortable about, so what you set up is that this next year will be a roller coaster for shares and there is no urgency to own it today. that would be the neutral part.

i do want to say that beyond a year, i think snapped is uniquely positioned to be one of the winners in tech because of the vision of a focus on a camera. the camera is the future of communication. we have moved away from text and are now moving towards photo and videos, and that piece of augmented reality will benefit the company. it would be a neutral reading with a positive longer-term bias. on: that was gene munster bloomberg daybreak america's this morning. scarlet: it is time for the bloomberg business flash. u.s. prosecutors are examining the prices of skin treatments made by several companies as part of a sweeping criminal investigation by the doj into potential collusion in the generic drug business. other companies are no fought us -- novartis and others.

saudi arabia leads opec's efforts to cut production and try up the oil glut bloomberg crunched the numbers and found the saudi's lowered supply by 90,000 barrels a day in february. it was the second month in a row that the world's biggest oil exporter pumped less than 10 million barrels a day. opec is only 70% of the way towards the reduction level. businessour bloomberg flash update. coming up, which you need to know to gear up for next week's trading. this is bloomberg. ♪

scarlet: "what'd you miss?" if you look at how the dow and s&p closed, not a lot today. it bonds a sold off big time. joe: top of the range on rates.

clearly putting march in the table. week, china's national people's congress convenes. the premier presents the proposed key economic targets for the new year. at thewill be looking ecb, whether it will change its interest rates thursday. scarlet: u.s. jobs data friday morning. this could be the key on whether the fed moves ahead with a rate hike. joe: the white house might issue a new executive order on immigration next week. scarlet: it is with the lawyers right now. that is all for global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. joe: have a great weekend. th

alisa: i am alisa parenti and you are watching "bloomberg technology." let's start with a check of your first word news. president trump visited a religious school in florida signaling his education agenda will focus on school choice. theegan the tour of

catholic school in orlando with a visit to a fourth-grade classroom. teachers unions criticized the visit saying it shows trump's hostility towards public schools. federal authorities have arrested a man in connection with threats made to at least eight jewish community centers nationwide and the anti-defamation league's headquarters in new york city. he appeared in federal court in missouri today. attorney general jeff sessions met with the head of the naacp today after sessions suggested the justice department would limit federal investigations of troubled police departments. and a place if he sessions' policy -- naacp say sessions' policy signals a troubling decline. vice president mike pence used i his personal email as governor.