forces battle islamic state in mosul. iraq was originally included muslim majority countries whose nationals were temporarily banned from traveling to the u.s. order angered the country and prompted its parliament to reciprocal ban on americans entering iraq. a deal in europe today will continent's second largest auto maker. they have agreed to buy general brands, the deal is valued at $2.3 billion. spoke with volkswagen c.e.o. about what this means for competition in the european auto market. we had competition pujot and dealing with it. we respect them as competentors. we respect the new combination. this is not going to stop us to implement selves and

plans going forward, very confident. mark: he spoke with matt miller geneva international motor show where v.w. unveiled a luxury sedan. the former french prime minister ays he won't step in to be a replacement candidate for president. the republican party primary. he faces pressure to step aside implicated in a corruption scandal. dozens of republican party fficials have withdrawn their support. china is expanding efforts to reform the coal industry. authorities plan to shut smaller dirtier power plants as part of against pollution and industrial overcapacity. hina is the world's biggest emitter of fossil fuel pollution. lobal news 24 hours a day, powered by more than 2,600 journalists and analysts in over countries. i'm mark crumpton. this is bloomberg.

scarlet: live from bloomberg headquarters in new york. i'm scarlet fu. joe weisenhall. 30 minutes from the close of trading here in the u.s. the question is, what did you miss? newlet: is the president's irective, trump signing a skilledback travel plan. growth tting lower targets. warnings of protectionism on the rise. from dan, ctive c.e.o., he joins us for a half-hour at the close about and how conomic plans he plans to work with the some stration to achieve of their goals. joe: let's look at where the head averages stand as we

towards the close. bloomberg's abigail doolittle is standing by. looking at small declines for the major averages, modestly. this follows last week's gains, so it will be interesting to see it the week brings as trades on. investors are consolidating and a row, the s&p 500 as of last week up six weeks weekly , the best winning streak since november 2015. a little bit of a pause after bullish action. one of the worst sector drags, the financials. what makes this interesting, hen we hop into the bloomberg, this is a look at the world interest rate probability. vernight out of nowhere, the odds have shot up to 96% that the fed will raise rates by of 1% next wednesday. it had been closer to 30% a in on the but nearly 100% that we saw in the december

2016 rate hike, investors are banking on fact that the feds raise rates. the payroll report is later this week, this should be positive the banks and we're seeing a ittle more of sell the news action. he bloomberg dollar index, history suggests it's more buy the rumor, sell the news. a hugelar index is up in way, more than 10% into the december 2015 rate hike, then a bit of a pullback and rate hike, e 2016 it's been a bit bearish for the index. it may suggest we could see yields reverse back down, joe, is erhaps that's what weighing on the financials day. concerning some interesting market action here. thanks, abigail. winning nobel prize economist questioned whether anyone can identify market bubbles that end up causing

crashes. definition is an irrational strong price increase that has a predictable strong incline. esearchers say you can predict crashes in the equity market because they share common traits. authorsus is one of the of that study, a harvard business school professor of finance.and great to speak with you. eugene also said -- with you, be scarlet. scarlet: he wants a systemic way of identifying bubbles. to you, first off, is how hard is it to call a bubble? >> it's hard to call a bubble, but it's not impossible. in fact, we adopted the definition of a bubble which is increase.ge price we said let's try to focus on all of those episodes where you a demonstrable large price increase and see what happens next. four you identified characteristics that go into call, bubbles that you can

you said an increase in price volatility, increases in share issuance, you see companies selling shares into the bubble, a relative performance of new old firms, people excited about the new stuff and an steepening in slope of the rally. it has the famous bubble shape. it curves upward and goes up.ight is the key thing here that it's not just enough that prices go just enough that you have to have exuberance, certain behavioral aspects here love of new companies that are necessary for to say, ok, this is a bubble and not a strong run-up? >> joe, that's exactly it. in fact, that's why we wrote the is that if you look at the claim just looking at prices, price run-up, you can say almost nothing. n fact, about half of those episodes, you keep having an increase in prices and half of or a crash.decline what we noticed, if you read istory and you look at bubble

episodes there are all sorts of other things going on. speculation, of there is issuance, it's in the media, all of this kind of stuff. can we try to quantify systematically over time and use to sort of predict of a bubble, if you will. scarlet: when you do that, you focus on industries rather than overall market, rather than the s&p 500, why is that? one reason is because if you look at the market, you just don't have all of that many episodes. point to one or two big price run-ups every 20 years and have that much't statistical power. that's not the only reason. he other reason is that if you read accounts of bubbles, what industries play a huge role. n the 1920's for example, utilities and telecom stocks played a huge role. it's dotcom boom. each has this industry character.

of the things we found is if you look at the industry booms and busts, they coincide with periods when the market is doing extremely well. dotcom is an example. it happened during a period when the overall market was doing well.ely joe: are there any examples you in kite with a huge run-up the industry and everyone, all of the pundits were screaming bubble, but it didn't satisfy your characteristics and in fact it being vindicated? >> yes, my favorite example of healthcare ally stocks in the late 1970's. there was a massive run-up np stocks from 76 to 78. it was very fast. it looks like the dotcom bubble, if you will. year after that, they continued to go up by an a itional approximately 30% year. finally in 1981 or 1982, they and there elled off

was a mini crash. if you were looking at the had ll picture, if you tried to call it a bubble in say, 1978, you would have been off and you would have got out of that industry or shorted that industry, you would have lost a lot of money. other thing i would like to add, even in the cases where you were right and you were able to bubble, it turns out that it's very hard to get the timing right. cases where ose we're right, we're off in terms f calling the peak by an average of five months. scarlet: it can make a huge difference. ou draw a distinction between predicting a crash and predicting returns. what do you mean by that exactly? >> that's exactly the point get it right you and you predict the crash and we do that in a number of different episodes, if you actually want to earn a return from it, you only start earning at the moment when it actually crashes. so as i was saying earlier,

by an average of about five months. long holding y period if you want to time bubbles, if you will. f you're willing to wait two years, you have a two-year horizon, our paper basically that you the ingredients you would need to be a bubble timer. again, you need to have some patience to do it successfully. joe: real quickly, some of the haracteristics, a lot of them apply specifically to companies. are there tools that you have developed that could apply to a other asset classes that don't necessarily have hings like share issuance or new versus old companies? >> that's a great question. we're thinking about that, but one of the challenges when you research of this kind is you have to be able to compare istorical episodes in a systemic way. i'll just giffords you an example. run-up in 1920's utility stock similar to the run-up of dotcom stocks in the

1990's? we can describe that in very general terms, but once you get that, you have to ick a set of characteristics that you kind of pull some data on. so that's a challenge when you're talking about the that you just asked about, say, commodities or bonds, you have to pick a set of that you can s historicaliably on a basis. that's a challenge. research.inating professor, thank you. and coming up, we'll speak with served on the trump transition team, james jay heritage f the foundation. he'll weigh on the president's updated immigration order next. this is bloomberg. ♪

joe: after federal courts blocked the president's initial order barring people from seven ostly muslim nations from entering the u.s., now comes round two. his dent trump replaced january 27 order by dropping iraq from the list, but critics ay this revised version contains some of the same constitutional problems. bloomberg's white house editor joins us now from d.c. so how do people assess the this one will survive the court? there is some thinking even by people who are opposed may is order that this one in fact survive. for one thing, he, trump has limited the number of people who may have standing to sue. if you have been issued avisa, permissionen granted to come into the country, you aren't subject to the ban anymore. that wasn't the case under the ban. people who don't have permission to come into the country, are very difficult

to establish grounds to the government here. scarlet: of course, alex, as the government has preemptively filed to head off stop theency orders to revised travel ban if filed? alex: right, that is to get ahead of the state of washington folks that led the successful lawsuit last time. they haven't decided whether yet.'re going to sue the attorney general said that he was still examining the order and they'll make a decision later. for one thing, the order doesn't take effect until march 16. of not clear if the state washington would have grounds to sue before the thing is actually in effect. that changes il that iraq is no longer on the ist from which people are banned. is there a legal reason for that or more about politics? alex: there is a legal reason and there is also a political reason. caused some er blowback when former, at least translator .s. army

was prohibited from entering the country under the original ban. also, the government of iraq apparently approached the united and worked out some additional measures, they can assure the trump administration that people traveling here from that country to be a threat. those additional measures include some additional security screening there and also a romise by the iraqi government that they'll repatriot anybody in overstays their visa here the united states. scarlet: for more on this, i james jay come in carafano. on the home advisory counsel from 2012-2014. e supported the first immigration order saying it balances security and compassion. you to want to welcome the program. for supporters of the first executive order limiting immigration, the flawed

implementation caused a lot of pushback. the implementation left a lot to be desired. can you tell us, first of all, it is necessary for the white house to take this specific action on immigration? right, so first of all, it's not an immigration order because immigration, those are immigrating to the united states. this is just in part, either to isit the united states under avisa or a refugee process, a action which is different. why this order was created was o get ahead of the threat and so it's not about the present tourist threat which is a lot to homegrown tourism here, but extension of thousands of oreign fighters flow into iraq and syria. as isis loses control over question there is a of where do those foreign fighters go from there. the countries that are countries in the addition to iran which is a state sponsor of terrorism where most likelyfighters to go and what they wanted to

ave in place was a means to ensure that foreign fighters wouldn't travel from there, either in the refugee flow or avisa to try to come to the united states to do a terrorist act. art of that concern was emanated by we have seen foreign ighters and terrorists use the refugee flow and visas to get into western europe to do attacks. joe: james, what is the clear argument on the safety? ninth circuit struck down the original e.o., they no real evidence that this e.o. did anything to further public safety. is your response to that or what is the response to the one? circuit on this james: first of all, i'm not a lawyer. i can't talk to the legal arguments. talk to the efficacy of it. people said there is no threat here. that missed the point. whole idea is to get ahead of the threat and be pre-emptive. at where are we

seeing terrorist threats emanate from now, well, one, you would of our terrorist threats are homegrown. islamist d 94 terrorist plots since 20111. the foreign links, the overwhelming preponderance are pakistan, between 40 to 60% of foreign-linked terrorist some kind of link to pakistan. what this was trying to do is where do we d say see the threat coming from. very clearly it's from migrating fighters. i didn't understand the argument that says, well, you're not dealing with a threat. happened yet.n't i never quite followed that logic. obviously part of this has to do with refugee flow and the oncerns that foreign fighters would slip into refugees and take advantage of that. say there is already very intense vetting of refugees. his idea that they're just being let in is false.

what do you see is the gaps in the current refugee vetting need to be addressed? james: so the department of security stated that the f.b.i. has at least 300 of refugees currently in he united states for being investigated for terrorist-related activities. that could be a terrorist it could be material support. this could include cases of many, es who came here many years ago. the concern is we have seen isis particular try to put people into the refugee flow with the a a of getting them into country to do terrorist attacks. administration, the perspective was we want to make sure that everything is in place to make sure there is vetting. i think the concern was, under the bama administration, overwhelming goal is what's the maximum number of people we can ush through the system to get the biggest number of refugees

in the country that we can. what is the highest level of we can have that people are being screened appropriately. it was a difference in priorities. through the numbers versus making sure that the was seen to the fullest extent. scarlet: i appreciate your gettingion for how it's ahead of potential problems. why do we presume, though, that we will start to see terrorists as refugees as has been the case in europe? will be propose that the same formula in the united states? james: two things. foreigne know where the fighters are most likely to go, so that's why these countries identified. i think the other reason is this s a tactic that we have seen before. it becomes a more important isis for isis because as is defeated in the field, it's very important for them to do to orist activities

demonstrate that they are still a force to be reckoned with and still in the fight. currently what isis is doing in putting out a net call saying go out and do a terrorist attack. that's not osing, good enough for them. they actually have to deliver. they're going to try to be, we ould guess, being more proactive in terms of actually organizing terrorist attacks. to the want to go back question of refugee vetting. i didn't hear specific details versus how it now we should do it. the administration is interested n taking in large number of refugees, but what do we have to the vetting? james: i'm not going into a lot of that. most of the information i know that is government stuff that i'm not going to talk about. joe: thank you very much. carafano, heritage foundation vice president of foreign and defense. up next, the s&p like most

with the s fared well trump bump. how well to other indexes? we'll look at the data. this is bloomberg.

scarlet: i'm scarlet fu, what you missed? 500, you're looking at the 14-day relative strength index. &p 500 going back to the 1990's. 70, a red line, is usually the overbuy.t signals it's a sell signal, last week, t topped 75, the yellow horizontal line, pretty areas you see here. ari from to oppenheimer, that's a bullish sign. the reading comes during early stages of a new advance. he crunched the numbers and rises 929, the s&p 500 above 75r.s.i. about 5% of the time. 7% r that, the s&p gains over the next six months versus all other during

six-month periods. we could be seeing the start a period.rbought joe: another way of looking at u.s. markets, this is one of my favorite measures. don't even know why, i just really like it. it's the ratio of the dow jones to the s&p 500. like a see it take off ocket after the election peaking in exactly the end of the year, since trump became demarcated from the blue to the red, it's been taking off again. has ow actually historically overperformed the s&p 500 during republican administrations. it makes sense, more industrial and financial. it's kind of interesting this ratio is back at its high. don't think about comparing the two because they're both generally moving in the same direction, but kind of a fun watch, this ratio at new high. scarlet: i love this chart. t's so simple and tells the story so well. the market closes next, take a major indexes, less than four minutes to go before the close.

insteadly, thety dow down 38 points, 20,966. from new york, this is bloomberg. ♪ . .

♪ scarlet: where moments away from

the closing bell -- we are moments away from the closing bell. neartors price in a certain interest rate increase next week by the fed. i am scarlet fu. joe: i am joe weisenthal. if you are tuning in live on twitter, we want to welcome you every weekday from 4:00 to 5:00 p.m. eastern. scarlet: we begin with our market minutes. after closing little changed on friday, stocks retreating but off the lows of the session. the dow losing 50 points. the s&p losing .3%. joe: it had been lower earlier. not a huge loss. 22% not nothing. scarlet: it is still a broad decline. i'm looking at the group rate of returns for the first level of the s&p 500. it is split into 11 industry groups. ienergy the only group to gain. materials, financials, health care the biggest laggards.

although none falling by more than .6%. doesrs declining, airlines not figure into the 11 industry groups. we saw delta cutting its forecast for passenger revenue. felt us that it will be flat is quarter versus an earlier outlook that it would rise as much as 2%. you are seeing declines in at least 2.4% for other major carriers. snapted to highlight falling for the first time since its ipo last week. five out of seven analysts with a sell rating on the company. unusual for a company that has just gone public. go-pro off by 7.9%. goldman sachs cutting that stock to a sell. the comparison to snap is interesting because it is selling itself is a camera company and go-pro tried to market itself as a media company. at the end of the day, it was a camera company. joe: let's look at the government bond market starting in the u.s. not a lot of action today

two-year yield unchanged. there was so much action in short-term rates last week as the march rate hike came into play. not much going on today in the two-year or 10 year yields. looking at french 10-year, it is higher on the day. people thought maybe he was going to drop out or be replaced. that is not happening. he is staying in the race. some nervousness back on the table. scarlet: in terms of currencies, the u.s. dollar is firmer, it recouped some of friday's losses when janet yellen all the confirmed a rate increase will take place next week. the trading float fairly thin before the e.c.b. meeting on thursday. th no change expected there. is at a six week low versus the euro.

the exchequer getting ready to prevent the best present a new budget statement. they will be debating potential amendments. joe: i'm looking at precious metals. interesting action the last few days. platinum the big loser down 1.3%. one thing we saw at the end of last week was a big selloff in these combo precious metals. we are seeing that more and platinum. silver rebounding a little bit. gold not doing anything, in line with other safe havens not moving. it is interesting the weakness lately in platinum and silver which have hybrid industrial precious metals. scarlet: those are today's market minutes. joe: let's take a deep dive into the bloomberg. can find all of these charts on the function of the bottom of your screen. i'm going to start looking at the peso. and thethe mexican peso 200-day moving average and blue

-- in blue. scarlet: there we go. joe: my keyboard is acting weird. when it goes down, that is a sign of strength because this is dollar/peso. this is hitting a key bullish level on the peso. maybe we should skip to your chart. the peso is doing well. scarlet: and has has a -- it has had a huge comeback since its record low in january. comments last week perhaps the pace of could be ready for rebound. this is what i am looking at. it as a sizable division in the outlook for u.s. rate. the white bars are asset managers positioning on the 10 year treasury note futures. they are long. it is the largest position in a year. speculatorss are holding record net short positions through the end of february. there is a caveat. recent positioning in the last

two or three days might be different given that officials signaled the rate increase will come in march. you have the fed's immediate policy and more importantly the long-term implications for potential fiscal policy inflationary boost. we do not have details to sort that out yet. all we have is rhetoric for the moment. investors are waiting for some kind of update on that. joe: it will be interesting to see what happens with this friday job report going into the next fed meeting. see if this stuff gets scrambled. "what'd you miss?" are the stock markets reflecting the consumer economy? our next guest says maybe not so much. dan arbess managed $3.2 billion. he is a member of the council on foreign relations. he founded "no labels." welcome to the program. a rising stock market does not necessarily mean an improving economy. this is something long-term

investors stress. to what extent is that the fed's interpretation and assumption? >> i am a little worried about the fed. i am a little worried about the fed conflating strong equity markets and what they call financial stability with fundamental progress in the economy. the fed has been watching the stock market for at least eight years now as an indication because the original idea behind the extraordinary monetary policies was you had to reflate financial assets to restore confidence in the financial system. they have slipped over into equating what is happening in stock markets with what is happening in the real economy. reallynflation is not the problem. it is compilation that is the problem -- consolation -- confl

ation that is the problem now. ready to raise rates when it is not fully wanted to i was ok with raising a 25 basis points because in my view it is a declaration there is nothing more monetary policy can achieve. but starting more aggressively seems to be risking misinterpreting what is going on in the economy which is facing serious headwinds. joe: when you look at the real economy, what do you see that concerns you? that youou see think that that might be missing? >> back on financial markets for a moment, the bond markets are not telling you the same thing as the stock markets, just focusing on the market environment for a moment. the 10 year treasury is trading at 3.6%. when you subtract the inflation the of around 2% from that,

neutral rate is about 1.5%. that is not very bullish. 10 long-term average for the year is 5.5%. the bond market is telling you to hold on a second. everything is not particularly great. my view is there are real structural problems in the economy. you have an aging demographic. you have baby boomers going into retirement and making claims on the social safety -- social security network. you have the lion share of budgetary outlays for the social safety net, social security and medical care. and most importantly, as i continue to say on every occasion, there are very fundamental headwinds to job growth in the economy being introduced by efficiency ,reating software technologies

data analytics, and all kinds of technology. robotics are displacing job opportunities, whole categories of employment. while at the same time reducing costs and improving profitability, which tends to be interpreted as a bullish sign by the equity markets because you are seeing higher profits but you are not necessarily seeing sustainably higher revenues, which is what is much more important. image mentioned fundamental concerns about the u.s. economy. your personal savings and real earnings declining. you mentioned your concern is less about inflation and more about conflation. the narrative is not convincing investors, is it? >> no, that is reflected in the 10-year at 3.6% relative to 5.5%.

bond investors are not buying the bullish narrative. stock investors are buying it maybee valuations are full but not in bubble territory relative to earnings. but earnings growth is being driven by margin improvement from technology, which is also displacing labor, displacing consumers. scarlet: and a boost or stabilization in commodity prices. >> for the moment. joe: what would cause the stock market rally to end or turnaround? everyone is trying to gauge sentiment. in your view, what would cause a turnaround and perhaps start to reflect concerns you see in the real economy? >> i think it could happen anytime. it may already be starting to happen. the equity markets are pricing in a lot of positive developments. and equity markets tend to move very quickly now because they

are driven on the margin by algorithms that pick up signals from core investment decisions and amplify them very quickly. when president trump was elected, the markets dipped in the futures overnight, immediately rebounded, and have rallied 11% higher since that time on the assumption that you're going to have the regulation, dramatic -- deregulation, dramatic tax reductions, $1 billion in infrastructure spending. all of that will be harder to accomplish than meets the eye. scarlet: i understand structure distorts the price action. how will it distort it on the downside? >> which structure? scarlet: the market structure and which algorithms are driving everything? >> the same way it distorts on the upside. in other words, people will eventually start to calm down on recognizetrades and

trump investments will take a long time and maybe not be as robust fully implement it as people are assuming. the algorithms will pick up the signal and the pendulum will swing in the other direction. this is a structural flaw in the markets i am very concerned about and frankly was part of the reason why i personally exited the hedge fund business a couple of years ago. joe: dan arbess. don't go anywhere. it will stay with us as we talk about infrastructure promises and realities next. this is bloomberg. ♪

mark: i am mark crumpton. president trump signed a reworked version of his travel ban today looking to withstand court challenges while still barring new leases for citizens from six muslim majority countries and temporally shutting down america's refugee program. it leaves iraq off the list but still affects visitors and immigrants from iran, syria, somalia, sudan, and libya. the president privately signed the new order while the homeland security and jeff sessions formally unveiled the new edict. a group of 20 finance chiefs plan to drop language pledging to resist protectionism while still promising open trade according to a draft seen by bloomberg news. they meet in germany march 17 where it will be negotiated. in july, finance ministries and central bankers promised to

resist all forms of protectionism. but since then, president trump has strained the global trade outlook by pledging to prioritize national interests. the u.s. supreme court is scheduled to have a showdown over the bathroom rights of transgender students in public schools. justice is the case back to a lower court. setderal appeals court is he virginia schools probably violating civil rights law by observing the boys bathrooms for biological males. that ruling was based on an obama administration policy that the trump administration reworked last month. news 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. joe? joe: "what'd you miss?" promised toump's rebuild america included a $1 trillion infrastructure plan that aims to fix highways,

airports, and schools. it is an idea as american as apple pie. everybody likes infrastructure. the trickier part is how you execute and implement it. we are back with dan arbess, using geopolitical analyst who knows the landscape well. this is one of those things everybody medically -- theoretically agrees on. everybody likes new bridges and roads. it never really seems to happen. what needs to happen to deliver this? the president's speech before congress last week was a very good step forward, but it was a political speech. topicsaid out a range of . it is very hard to disagree with his budgetary priorities. we would not like lower taxes, stronger defense, and better infrastructure, not to mention sustainable social safety net? the issue is the mathematics

behind all of that, the compromises that will have to be made. on the infrastructure side, i can tell you, i just can back from two weeks abroad. i have been out of the country 4.5 weeks so far this year, almost half or better than half. the infrastructure in europe is miles ahead of the infrastructure in the united states. the airports are clean. the roads are paved. needy would question the for infrastructure upgrades here. $1 trillion is a lot of money. it is 20 times the amount of the budget increase for defense, which frankly i am not sure is necessary. we will talk about that if you like in a second. i think we need more money and nondefense, winning the peace resources, diplomatic resources, then in winning the war. our military is three times the size of the second largest in the world.

we have the world's greatest military. that is not an issue. on the infrastructure side, president trump's language has changed and become more specific, which i think is a constructive part of what is going on here. the evolution of the language, of the narrative, of the concepts from the campaign into the government -- governing, what president trump is now talking about is enabling $1 trillion of infrastructure investment, not necessarily investing it all from the government's resources. to have an open door signal public/private partnerships which will bring in private capital infrastructure investment. and the government's share of thisontribution to seed infrastructure, a decent amount can come from the repatriation tax on overseas profits to bring them back to the united states. so i actually think it is

starting to shape up in a way that could potentially be viable. my view is infrastructure should become a significant priority, even though it is way behind the social security, social safety net. scarlet: that may be the case. we have seen the previous administration put a lot of focus on infrastructure as well with the shovel ready campaign. so difficult to funnel the money to the project that needs to get built right away. why is it so difficult for folks to identify the right project and complete it? throughn you are going government appropriation and contracting, it is always slow. you are going through bureaucracy. you are going through politics. if you do this through public-private partnerships, i believe it will happen much more quickly. if you engage the private sector in the infrastructure and development process and have the government seed projects and

priority, i think there is a real potential for some momentum to take place here. it will be great. trumpism has various components. a clear component is the immigration clearly defined natural boundaries, who is american and who is not. we saw a new rollout of the executive order today on the travel restrictions. what do you make of this second attempt at it and how do you see it playing into the economy with a more restrictive immigration stance? dan: more broadly, i think it is really important that we try to stop ourselves from jumping to conclusions about large things. there is a real effort in this world of ubiquitous media and onial media for people

hundred 40 characters of twitter feed to jump from one conclusion to another. president trump has been vilified. on the other hand, president obama was nominated to win a nobel peace prize 11 days after he entered office. and look what happened to his achievements in the foreign policy agreement, pretty poor. i think president trump is in the process of what i would call anchor and adjust. the first anchor is let's show everybody we mean business with security threats and screening refugees and immigrants into the country. so he whips up this executive order. i think he understood it was not fully thought through. the new iteration of this subtracts one country, iraq entirely, and is much more thoughtful and focused and much more narrowly focused and

calibrated. that is the right direction. whatever one thinks about trump, trumpism, and labels, i believe we make progress by transcending labels and moving forward with specific purposes and goals we can try to create consensus around. what is their purpose and do we agree on how we will implement it? scarlet: i like how you put it, anchor and adjust. do you see the president adjusting to this more moderate effort or restrained attempt to get people on board? dan: yes, because in my own experience, and i read the same things you do, i don't see president trump as being a radical. i see him being a moderate in his history. he was a democrat. now he is a republican. i believe president trump has the potential to become a solid centrist president. no guarantee.

and i think there is a decent possibility if we give the guy a chance. scarlet: dan arbess. stick around. we will talk about china's slowing growth. we apply the power of our data and analysis to the financial and political challenge. this is bloomberg. ♪

>> we are back with the ceo of private investments. what are you looking at with private markets? opportunitylot of with what we just discussed. i am a little conscious about

american markets and i think there is an opportunity looming. the asian market has been limited and institutions are coming in with a $7.5 trillion market and 2900 companies listed. isyou think about it, there of athan five hedge funds size larger than $1 billion. think about it. aside from our rhythms, hedge funds have been buying -- al gorithms, hedge funds have been buying and selling. >> we look forward to more specific calls from you. thank you for joining us. speakingt, we will be to someone behind strategies for

one of the biggest falls in stocks. this is bloomberg.

host: i am mark crumpton. it is time for first word news. president trump has signed a revised order on travel that will restrict travel to the united states from six predominantly muslim countries, with a notable exception. rex tillerson and jeff sessions .iscussed the change today >> these efforts are focused on ally inn important the fight against isis. says that theon

state department will allow readmission for refugees when it is determined they do not pose a risk to security or welfare in the united states. a white house spokesperson spoke netanyahu to discuss security challenges and he said that mr. netanyahu think the president for his strong stance on anti-semitism. the call came after the israeli defense minister said that annexing the west bank would not and would cause a crisis in relations. will improves security. that was from peter navarro, who are you that china and other trading partners use proceeds

from export sales to reduce american self-reliance. allocate 670d will $4 million to boost innovation and technology. andarea includes robotics artificial intelligence and they will lay out a plan to approve next generation wireless networks. 24 hours a day, powered by journalists and analysts in over 120 countries. crumpton. this is bloomberg. scarlet: stocks fell today after the worst level. the dow jones lost 51 points and the s&p lost .3%. everybody is looking at the jobs will tell us

whether or not the fed will go along with the rate increase. made itdent trump has clear that tax reform is part of his domestic agenda. barney frank co-author the current banking rules and was in congress the last time the lawmakers overhauled the tax code. that was in 1986. earlier, he sat down for an exclusive interview on whether tax reform legislation is plausible. >> they have to hatch a plan. .hat means, orrin hatch if they can hatch it, in that sense, it is not clear. i think you have the same problem you have always had. it is easy to reduce rates in some areas and it is hard to do away with some of the wrinkles. the big money, to reduce rates

deductions, it is charitable deductions and home mortgage interest reductions. i would not have it, but it is built into the equity of people. the biggest asset a lot of people have is the home. if you take away the ability to pass on being home mortgage interest induction, you devalue that asset. the question is, do they just schmefict.", people say, why don't you just pay the bill that you past two years ago? is an issue this for them and they have to be reform.h tax

they either raise them in some will say they do not care about the deficit. they will cut other things and never come close enough. the president does not want to cut social security and medicare and he is right about that. it is a great thing that we did. i don't know. i don't think they can find the revenue offsets. the question is, are they prepared to say there are not concerned about the deficit. -- deficit? i don't know. >> up next, we will speak with tom lee. this is bloomberg.

host: what did you miss? ull is now a big bear. the target is lower than the strategists surveyed by bloomberg. this is at a record high. more.e joins us now for you have had an extraordinary run and people say it will not go higher and you have proved them all right. bearish, butively not massively. why are you skeptical?

term.r is a relative i think that investors should focus more on factors with the groupsevels and some and resources have only been outperforming for one or two years. thean you tell me to what craft sector is? >> it is an acronym. there is energy and basic materials. t is telecoms. net neutrality could help.

>> i don't get it. >> phone carriers. >> you have to make the acronym work. >> the market has done extraordinarily well and what did you miss? high missed 23 as a new and i think we thought the market would have a tough time in the first half, but it did great. of this miss and investor confidence to rejuvenate a rising market for eight years. seen extraordinary surveys, whether consumer good or others. ,hen you see elevated readings

what does that tell you about where the stock market is going? >> it is interesting and we have talked about it in our latest report. consumer confidence is at the highest level we have seen at any time other than the late 1990's and what you have is small businesses and consumers as optimistic as they have ever been and it is only twice in history that both have been confident at the same time. one was august of 1987. a point where the .arket had discounted that >> you could see that plateau in the coming months. >> we don't think that is the base case, but it could be down in the next months.

>> there will be opportunities. you said that you focused on what else are you looking at, other than the acronym? energy prices are finally stable. a generational bottom. if you look at the last 90 years, whenever returns hit a level that is inflected, that is and passed bonds have i think it is a no-brainer. nobody wanted to touch the banks, but they were making gains. pitch.led energy a

was there something else that you saw with the fundamentals of energy? bei think investors should excited about the pricing environment and this is the equivalent of high-altitude training and i think you will see a big margin supply story. unless you think that that demand for gasoline will collapse, it will play out like history and it may be a single-decision group. >> how much are they dependent on oil prices staying at this level? do at those levels. -- levels? help does not destroy or the case.

if the market comes into balance, i would say that oil is not a stable commodity. downll either trend up or and we think that it will trend up. >> what is it about this category that you find appealing? >> it is the first expansion since the 1950's where we used labor supply before capital assets. there were other highs and you started using up labor. the labor utilization was high .nd you turned to utilization this was a golden age for technology. in the 1950's, the labor supply shrank because of the world wars. i think that this is a great time to be looking at old

technology, software, hardware. >> does that mean there will be more mergers and acquisitions? you cannot do that without making sure the growth is consistent. criticismember the with too much invested capital in the space. blue-chip has ability. talentt they need the from overseas to continue in the meeting? >> that is right. it is an industry that can afford to pay up. it is the highest of any sector and wage inflation is not negative for the tech sector. side.'s look at the flip

what are the sectors that you think are stretched? >> a simple way to think of it marketearly part of the being anchored with consumer staples and i think that it is harder to argue that they can be thinkductal digits and i there are earnings stories coming out. >> we talked with robin greenwood about whether you can identify market bubbles. do think there is a definition they can agree on? >> don't you wish there was a shoeshine guy like rockefeller?

>> i saw a photo that someone driver.of their uber >> you know, i think that the bubble is in pessimism. everybody likes to be pessimistic. i don't know if there is a stock market bubble, but it doesn't preclude the market from having a bad six-month time span. >> all right. awesome stuff. great to have you on. >> thank you so much for joining us. >> great to see you guys. hunter harrison has asked for $200 million. figureorth the nine payday? this is bloomberg.

host: a tentative agreement has been reached that would make on, the ceo, even richer. worth a nine figure salary? let's bring in our executive compensation reporter. how unusual is it for a ceo to be asking for this kind of money? are tim cook, steve jobs, or a markets giant, it is unusual, especially for a railroad company. nine figures is not something we have seen before. >> what does he believe he possesses that makes him create

this much value for shareholders that would theoretically be worth $200 million? guest: he is seen as the lebron james of the industry and has been with three different railroad companies. he has a method for operating that makes them more efficient than they have been in the past. >> i find it interesting that this is even public knowledge. where the situation ceo agrees on everything and they make an announcement. this is being adjudicated in public. csx sent this letter and said that these are the demands they heard about and what was asked for. this $200 million would begin airing teed, not stock compensation that would theoretically kick in -- would

, not stocked compensation that would theoretically kick in. guest: that is correct. be inlk of this would equity. is only based on what the investment company has told us. that would only have value if they shares rise in the future. >> how much resistance is there from investors? guest: it does not seem like it will get ugly. 's company hasn the shares up i a third. this is a lot of money, but he may be worth it. use: this is a function you

commonly, pay-go. -paidan see the highest executive here. so, this puts hunter harrison at number two. there have been reports that the agreement has been reached, but not officially announced yet. we do not know yet. csx look at the history of has alreadyp and he made the shareholders over $11 billion. the $200 million is like nothing. >> you hear some people say that this is reasonable and that $200 million is not that much, compared to the market value he adds.

host: he has a point. thank you very much. >> this is tvgo. one-stop shopping for all the information about our guests. there is live data and a chart. this is open on one monitor. >> put it right there on your itnchpad and you can start right there with live television, charts, headlines. >> you can even message our producers. in the meantime, let's get you businessoomberg flash. president trump congratulated exxon mobil for expanding operations across the gulf coast. it will total $20 million over a 10 year period.

the president called it "a true american success story." a deal to ease $5 billion of debt. the luxury department store chain has $988 million in borrowing capacity that could fund and exchange offer for unsecured bonds. rating deeperedit last month. standard life has agreed to a deal that would create the largest active money manager in the united kingdom. at $4.7 be valued billion. witheen has been hurt reductions and they have had to cut costs. flash --or business that is your business flash

update. from new york, this is bloomberg.

. . scarlet: "what'd you miss?" stocks faltering on this monday. everybody is looking ahead to the jobs report on friday. joe: that is the big event this week. scarlet: don't miss this. china announcing its foreign reserves overnight.

joe: i will be looking at the australian -- reserve bank of australia rate decision at 10:30 p.m. eastern. scarlet: britain's house of lords holds the final debate on the brexit bill. a vote is expected later in the day. it all begins at 6:00 eastern. all reports out tomorrow. still some earnings coming in. scarlet: consumer companies no less. that does it for "what'd you miss?" thanks for watching. joe: have a great evening. this is bloomberg. ♪

emily: i am mark crumpton. you are watching "bloomberg technology." let's begin with a check of your first word news. president trump has signed a revised executive order on travel. it restricts entry into the u.s. by people from six predominantly

muslim countries with one notable exception -. rex tillerson was joined by john kelly and u.s. attorney general jeff sessions as they discussed the revisions today in washington. >>'s early efforts were concentrated on iraq. iraq is an important ally in the fight to defeat isis. with their brave soldiers fighting in close coordination with america's men and women in uniform. 20 finance chiefs plan to drop language pledging to resist protectionism according to a draft seen by bloomberg news. they meet in germany march 17. in july, finance ministers and central bankers promised to resist all forms of protectionism. that was before president trump strained the global trade outlook by pledging to prioritize national interests. hasu.s. supreme court canceled a scheduled