are reporting pro forma numbers left right and center it to make them look as good as possible. some of that might be for the machines. scarlet: can you give us an example of where you see the most egregious of that? >> almost across the board. take a look at situations tor of point to, men deign companies of breakfast cereals, where they just add back everything every quarter. how many quarters has caterpillar taken restructure packages? i suspect if you have been doing it for 20 eight quarters in a row it may be -- 20 eight quarters in a row it may be recurrent. joe: there is an extra ordinary story around elon and

going to mars and the other things he is going to revolutionize. the broad numbers, the lack of profit, the math doesn't -- there is a huge mat gap between the math and the story. is there a similar gap between the math in the story, and it turned out the fundamentals did end up justifying the story? like tesla butt were debt driven companies. companies who had to refinance. we were short the stock down 80% and got run over because they were able to get out of there problems because the debt cycle turned. a lot less so on the conceptual ones.

the one that was painful for us was america online, which got bought out. there numbers made no sense. the term was higher than they were reporting. they were hit twice for accounting violations. it's seemingly did not matter because we have this tailwind of internet. everybody and the brother was going to subscribe to this in 1999. they lose money on every subscriber. they got bought out. average isting somewhere to-three. -- two out of three. one out of three, all sorts of horror stories. scarlet: you are a student of history. does the current economic, political investing environment remind you of anything we have seen?

>> we talked a little bit about china. less short china than we were a handful of years ago. we are more bearish on opportunities in the states. that does have to do with the fact that it is a debt driven bubble here. there are some area similarities in certain sectors. clearly some issues are going on in auto credit. it seems to be happening. we are seeing equity cash out financing in used cars. i've never seen that before. i have been following security stuff since the mid-80's. all kinds of questionable behavior the auto finance sector. .com 2.0 -- dotcom

2.0's. joe: do you think that the new political environment, possible rollback which has people excited will bring him in -- will bring in a new wave of targets? rollback which has people>> without naming names, i covered one of my biggest shorts, the corporate attorney became the chairman of the sec. it's time to move on. so, it is odd. ,ou dealt know how these things going back to our political discussion, you never know how these things flesh out. who would have thought, going back to our political that the people that went after corporate crime most aggressively was george w. bush. the only guys who put more corporate executives in jail was his father.

child.as the poster to theas a huge donor bush family. they were bulletproof. instead it worked against them and other corporate criminals. there was a public revolution. the department of justice went after corporate crime. s did not. inpolitical -- they paid 2016. i firmly believe that. you never really know. do with the public. i teach a course on the history of financial fraud. one of the themes is not only the the fraud cycle follow financial cycle with a lag but it is episodic as to when there is a backlash and when there is not. in the late 1930's after the

crash there was a backlash. sec, we suck chips -- seoul securities acts, we saw a glass-steagall. after the global financial enforcementw no law backlash. .e saw some legislation a political backlash that was delayed. they are all different. a lot just depends on the public and if the public puts pressure on lawmakers to do something. scarlet: thank you so much for your time. i want to hand things off to -- [applause] thingsto hold -- hand off to jason. jason: all right. >> that was a great conversation. you have been watching jim chain

of. asia.e to daybreak i'm betty liu in new york. >> we had some conversations out of the invest conference. we are expecting more. he says he is less sure on the country these days. more so he is saying more opportunities stateside. >> a wide-ranging conversation from the u.s. health care system to donald trump to the kidney dialysis world. they covered a lot of ground. we are going to cover more ground from the bloomberg invest conference. we are going to have bill gross. that is going to be later in the day in hong kong.

>> and the next day we will have paul singer. and david rubenstein. you don't want to miss those conversations happening tomorrow as well. ecb,e plenty of nerves, the u.k. election and the james comey testimony. you have to wonder what is going to have the biggest potential to affect the markets. it is a relatively risk off so far, stocks down. 71, 84 u.s. cents. australia, numbers coming out a lowon, we are expecting current coming up from the government. maybe even a contraction. futures pointing higher, a bit of a relief after the biggest one-day drop yesterday in two

months. the study. not as pretty in japan. futures lower with the yen surging past 110 overnight. 109. we are looking mixed but still following wall street with the vix, the yen. >> indeed. it has been curious. the bond market rally, the dollar softening. the equities rising. all of that, we have been talking about over the last several weeks. let's get to the first word news with more. treasure research after bloomberg was told china is preparing to increase holdings of u.s. government debt. thingces officials

treasuries are becoming more attack -- attractive than sovereign debt. the currency has climbed 2% against the dollar after plunging 6.5% in 2015. again.stocks fell oil and container ports across the middle east banned all vessels sailing to and from cutter -- from qatar. on imports, over 40% food enters through the land border with saudi arabia. president trump is claiming the credit for the saudi led isolation of qatar. he said it proves his trip to the middle east is already paying off. it also means washington is taking sides in a dispute between two key allies in the gulf.

the governor of california is warning the u.s. not to rest on its laurels amid competition from china. jerry brown is in china trying to forge new links following donald trumps decision to pull the united states out of the paris accord. the economy would be the world's six largest behind the u.k.. >> we are not going to make it a one-one trumped down china. when china puts its mind is something we persist and we get it done. those were the words that who is not looking inward. .etty: indian stocks fell ahead more economists expecting the central bank to stand back on rates despite slowing economic growth and record low inflation.

the governor urged rates reversed from 6% to five and three quarters while keeping the pinch mark study. later today, the indian finance minister join bloomberg daybreak america following the r.b.i. decision. we get his views at hong kong time in sydney. global news 24 hours a day, powered by 2700 journalists and analysts. this is bloomberg. >> bloomberg has been told a fired fbi director james comey will describe conversations with president trump but stop short of saying whether he thinks the president sought to obstruct justice. the latest now on the information, our sources familiar with comey. , chris strohm.

talk about this headline. this tip the scales in favor of the white house? >> no. the white house is going to have a hard time with the hearing when it happens. we are expecting a blockbuster hearing. trump is going to be front and center in terms of what kind of discussions he has with comey. he will stop short of making a charge of obstruction of justice. individualthe conversations which when you take them in the aggregate could paint a picture for federal prosecutors were congressional investigators to make a case against instruction of justice. to whatoes that compare happened initially, the leaks of this memo and these internal

memos that comey was taking. the fact that he is going to stop short of that. how is that possible when it was almost a given from those initial leaks that this was what happened. when trump was initially asked to drop the investigations of flynn or ask for his loyalty call me didn't view that specifically, those incidents as obstruction of justice. now that time has gone by we have seen more moments emerge, including trump actually firing comey. you have more and more examples of what could be construed as obstruction of justice. comey is going to say that it is not really for him to make that determination. he is a key witness now in the investigation being done by the special counsel. he is laying out the facts and the conversations that he has

before him while robert mueller will include that in his broader investigation. >> we are looking ahead to that hearing. intoapple's latest foray augmented reality have developers excited? you solve them clapping and sharing. whether the move will redefine the augmented reality seen. betty: how the gulf nations payute with tesla likely to -- play out in terms of asia's energy needs. ♪

>> this is daybreak asia. >> a big story unfolding in the middle east. qatar is the biggest lng exporter.

half is shipped to asian markets. let's take a look at how this could create this fallout in the gulf region. joining us now, the director of energy practice at frost and sullivan. let's bring up a chart. not sure if you can see a. -- a see it. give us a sense of the exports sent from qatar to the asian countries. very clearly on this chart you can see japan, south korea are two of the biggest importers. dispute that has just -- ted, >> nice to be on the show.

asia accounts for more than 50% of qatar's exports globally. many of these countries do have an economic and political clout to see things out of control. economic and political stakes here. >> what might their reaction be? what reaction might we expect? they have been neutral. most countries have not taken sides. again, the only issue with supply disruption is refueling carriers. flag if this continues for slightly

longer term the issues could be missionary and sky parts like for offshore fields. from theypically flown land. >> that raises the question of how much leverage the other are middle east countries actually have over qatar. issue thatit is an goes back 20 years in terms of regime change and qatar. definitely they will try to do what is possible. >> it's interesting because it's

different from the impact and pivotal --ble -- how i have a chart to throw out there, qatar is the number one customer is japan at the moment. nearly 20% of the country's gas. that has been seen following. saudi arabia supplies 40% of crude to japan. that has been steadily rising. you think that is still giving japanese utility companies and advantage here during this future renegotiation? >> i think that is a possibility. obviously they would look for long-term secure sources. with oil andawash gas.

mean japan, the fuel for the automobile sector is affected. that would have an effect in terms of blackouts. japan will stay neutral. definitely a risk the asian countries may not be willing to take. live from singapore, coming up next. more than 20 people sacked at uber for harassment claims. this is bloomberg. ♪

>> more trouble at uber. they have fired 20 people over investigations into harassment claims.

that is on top of a separate investigation commissioned by uber being led by eric holder. the latest now from our tech reporter who broke the story and joins us now. what do the investigations find? >> basically these were the people, it wasn't just sexual retaliation, this investigation was about those incidents that occurred at uber. they fired 20 people. some got final warnings. than 50e more investigations still ongoing. this is the direct response from the software engineer who worked at uber who said that there had been these instances of sexual harassment. a lot of people were terminated.

>> they are taking steps to address the matter. this is separate from the eric holder investigation. what is the latest on that? week,expect sometime next the actual result of his investigation has been given to the board. thatna huffington has said uber would release the findings. it is looking like they will release their recommendations. we expect that sometime next week. i expect uber to take some public actions along with that that we don't know exactly what it will be. >> we have seen this revolving door against executives leaving uber. it has been awash with these investigations. have these recent firings fit in with the departures we have

been seeing? >> we have seen the head of engineering resign after he had allegations come out that he had sexual harassment claims the alphabet that he denied. stone left. the head of finance left. the head of growth left. in number of executives have gone. there has just been in a lot of turnover. they have hired two new executives fear they are looking for more. >> we appreciate your insight. coming up next, chinaexecutivesg for more. is coming. brownt to hear from jerry just ahead.

the countdown to the open in seoul, and tokyo. the japanese yen breaking the 7:30 wednesday.

it looks to be a pretty good day . we are 30 minutes away from asia's first major open. gorgeous indeed. >> not so much here in new york. a chili supper day. -- a chilly summer day. the s&p down for a second day in a row. i'm betty liu in new york. >> you're watching daybreak, asia. first word news. >> goldman sachs lloyd blankfein

and is killing -- echoing calls for the u.s. to spend more on infrastructure. he tweeted always impressed by the condition of the roads, cell phone service. to keep up.eds apple ceo 10 cook says any tax on u.s. companies overseas earnings should be mandatory with the proceeds spent upgrading infrastructure. apple has two other $57 billion in cash returns parked outside of the u.s.. he supports the campaign proposal for a one-time 10% levy on offshore income which is less than a third of the u.s. corporate tax rate. >> in our view it should be a danger -- a repatriation. it should be a required tax. you're not asking people that

have had earnings from the international subsidiaries if they would like to bring back money. -- saying you must pay the government now or over some time. >> the u.k. prime minister theresa may said she would tear up human rights legislation to hike best help the fight against terrorism. may said she wants the power to deport foreign suspects and limit the freedoms of people deemed a threat but who cannot be prosecuted. on called the election brexit. american international group ensures that last month they hired their seventh ceo have the outlook cut. that's after higher than expected claims. the reduction came because aig's recent track record of delivering on strategic goals

has been subpar. to fall in continued japan. by 51% in fourd years. and oh socko they are up by nearly half. games.iving the tokyo office prices are at their highest since 1994. global news 24 hours a day powered by 2700 journalists and analysts. this is bloomberg. >> thank you. we are counting down the opens in the asia-pacific. let's get to add them. -- let's get to adam. even ahead of these thursday decisions, policy

that list as well. >> a lot to make you nervous, if you have a look at this chart, volatility is certainly back. they want to hedge that. you are seeing the calls on the vix. pretty much back to the highest levels since october or so. that shows people are expecting to place bets on an increase of the vax to hedge against any fallout. the market is not really expecting any huge correction at this point. what they are wanting to hedge against is incremental moves

down as we had this huge global equity rally. it is pushing things up and making people anxious. >> it is going to be a big thursday. what should investments be looking out for? >> some of the key traits we are looking at bring up the chair on the terminal here. we can see the key ones in focus. the euro is certainly key. aroundnd and trades places like brazil and mexico. i think on the euro traded and the bullish european trade aroud places like brazil and, which we have spoken plenty about, people are incrementally feeling more positive.

if you haven't participated in that rally there are a few wanting to just pull back some of those positions we are speaking to wells fargo. they just pulled money out of european equities. having said that there are still some big bowls out there. -- bulls out there. they think the euro is undervalued. adding to exposure and european equities. plenty to play for. we have the ecb decision. >> thank you so much. california governor jerry brown says the u.s. losing markets to the governor spoke for a china correspondent in beijing following talks with president xi jinping.

what else did jerry brown have to say? he had strong messages coming up from the u.s.. >> that he did. clearly this was a trick plan. governor brown visited where he xi. he met president he was here to push cooperation. governor brown really said there was a risk now, a very strong risk the innovation, the competitive edge u.s. companies have had in terms of green technology, a lot of those businesses focused in california could be lost because of this decision by the white house. take a listen.

, americampetitive gain cannot rest on its laurels. investment, investment in the public sector. we are going to lose out. that is where i think washington is going. >> he has been championing energy, warning about climate change. 1977, households in california. he knows the issues inside out. from the the situation u.s. to what we are seeing in china.

it's the largest wind and solar market. he thinks it is going to be a key issue and key topic of debate around the midterm elections. governor turned into this de facto ambassador for the u.s. what are the implications here for business when it comes to these ties? he thinks there's going to be growing business ties, three and a half trillion dollars. that businessg and those business ties to increase. california set itself a target

of getting emissions down to 40% byrenewable energy to 40% 20:30. electric vehicles, you have tesla, based in california. he's looking to see if there could be joint partnerships. greater innovation, pushing down the prices, greater competition. >> we can't reduce our carbon footprint. do that is we can with clean cars. they are not just going to come out of california. they are going to come out of china other parts of the world. >> governor brown also saying he welcomes chinese investments in

california. .e said we need the money he said as well there is a high-speed rail link between los angeles and san francisco. there is some chinese interest there. the california's are working with the chinese on a cap and trade program. california is advising the chinese on the carbon emissions trading system and on quotas is to encourage automakers to increase and produce more electric vehicles. havet's see if we could china california cap and trade like we see. that could be interesting as well. ahead,om beijing, still apple push and do augmented reality has game producers seeing the world differently. this is bloomberg. ♪

>> ok. let's take a look at how tokyo is trading just ahead of the open. opene nikkei, a lower their in japan. down 1/10 of 1%. no supplies given the softer close we had. this is daybreak asia. made headlines at the annual developer conference. there was plenty of talk about augmented reality or ar. they rolled out a kit for augmented reality in its apps. let's bring in sergon. he joins us live from tokyo. great to see you.

talk to me about the significance of apple joining the ar industry. surged to the top? has a big apple advantage over the other companies out there. apple controls the camera, they control the operating system. the control the distribution. they have control over the entire stack. this is a level of control the other companies don't have when it comes to ar. apple really changed the game overnight. a bit of ancome overnight success. so far it is still quite new. we have only been familiar with things like pokémon go.

is there a broader use of this technology? is it going to be different than the vr path that we have seen? , for gamesook at vr and other applications, it's been a disappointment at this time. everybody is looking at the next big thing. a lot of people are betting on ar to be that next thing. you talk i think about two main segments, games and non-games. you mentioned pokémon go. that was the first time for many consumers they realized the devices they were having in their pockets for a long time now are capable of this technology. with apple rolling out ar kits a few days ago this adoption will only accelerate. the ar kit appears to be very developer friendly.

it is already out of beta. apple baked into other software. so far at this early point in time they have done a good job in positioning themselves in the ar field for the next month and maybe even years. >> what has the response been for these developers? we saw the capabilities of what it can do. what are they saying now as a potential market opportunity? japan, they have one of the biggest gaming markets on the planet especially when it comes to mobile games. interestingly japan has always been on the forefront of virtual-reality. for the last two or three years. there's a good chance that this

might repeat itself with ar because the competition and mobile game front etc. has also been japan. a lot of game developers are looking at ar to be the next platform in japan but also outside of japan because it levels the playing field for many game developers. 50 mobile games. we have a bunch of scale developers in the country that could and will make use of apple's ar tech going forward. >> what do you think took apple so long? it's been around for a wild. google is a big competitor here. why did it take so long? neededbig reason was ar the pokémon go moment. map ande put ar on the

in the minds of many consumers. it was a wake-up call for companies, for the business side. ar as a technology is not simple. it is complex. this is the reason why apple is trying to make it as easy as possible for developers to create an ar experience. >> we know what pokémon go was. we know the potential of that. what is most exciting to you that we could apply ar into our practical lives? >> so i think we will see more games that utilize ar. games, that ar people were expecting to come after pokémon go, it didn't really come. applek that ar kit from

is going to pave the way for more ar-based games. i think that you will see much .ore experiences using ar people are talking things like coming out of the train station, you don't know which buildings you have a meeting at, instead of looking at the map and trying to see where you are you hold of the camera and the camera shows you which building you have to go to. i think you will see more applications like this going forward. >> all of this stuff takes a while. then suddenly everyone adopts it. earlier ased google the biggest competitor here. what are we likely to see from them? >> google has already its own augmented reality platform called tango. the problem is that tango is

rangenabled for a limited of android devices. apple did one big thing with their ar kit platform. they enabled it for pretty much all of the ios devices out there. it is a completely different approach. iphones going after the out there, where google has a limited approach to ar so far. i think that google is a competitor. another is snapchat. ar.her big company using the most recent is probably instagram and facebook is preparing a push into alternate reality. they have a studio they make available -- available. it is a big rush at the moment.

like certainly a different kind of gold rush. -- a gold rush nonetheless. that story at anything else you need, service can go to bb be go on their terminals. you can customize settings so you only get the news on the industries that you care about. this is bloomberg. ♪

>> this is daybreak asia. i'm betty liu in new york. uncertain seesays following trump's policies is making investors cautious. the washington is treating beijing as an ally.

that could soon change at any time. >> one of the interesting things, china was the bogeyman in 2016 in the campaign. following one visit to mar-a-lago the president and xi jinping seem to be best buddies. this is i think one of the things that has caused geopolitics. people,ot macro disclosure and caviar as i always do -- this policy could change tomorrow. that has a lot of people uncertain. you had this currency manipulator. you had trade problems. the administration is focused on trade. now china is our best friend in the western pacific. so, i don't know.

clearly people are focused on north korea. the south china sea is still being developed by china. you have the chinese currency stabilizing. which probably is a good thing. we will have to see. this is an administration that seems to make it up as they go along. what the policy is going to be six months or a year from now, i have no idea. >> i don't know that a trade war with china -- anything that will bring tariffs is a dumb idea. , thatfree trade guy but will extend beyond china. that will extend to our partners in north america, europe, we seem to be picking lots of fights these days. china seems to be, we seem to be

concerning a lot of trade partners. tariffsal, a rise in would have to be bad news i think. >> that was scarlet fu and joe with jiml's interview chanos. certainly a wide-ranging one. he says he has plenty of their shorts in the u.s.. he's finding a lot of opportunities. i don't know how good it is for the bulls here. >> given where the equity markets have been there is an opportunity for short-sellers to china wave. not just in but across the world. let's get to sophie to see -- let's -- the market opens in tokyo and sydney. we have seen caution leading up to the big thursday events. well as. election as

the jim comey testimony.

>> investors are cautious about what may be a chaotic week. thate white house says doha should do more to tackle terror. >> prices are rising.

what happened with inflation? where is it? live are coming to you from headquarters. here and wer 8:00 inflation andr are not finding it here in the united states. you see the treasury rally and the dollar falling. ande is firmer footing nobody is talk about a major correction of the market. ecb was not expecting too much, what they think that this will take a position. we do not know what will come out of the james comey testimony

and we could see some potential fireworks. that around the corner, we see the risk assessment. way to see this at the gate and the pressure with the relief drop oner the big tuesday and investors are playing catch-up and the cost is falling. the aussie dollar breaks and it stood pat and we are waiting on rbiupdate and we have the to announce here.

here and it is water with the oversupply concerns and we are andng the stockpile decline i will show you this trend we and i will pull up this with gold at a seven-month high and thisd break out of a slump and and gold is climbing china is ramping up gold. rally andd up the the is as they are set for

stabilization and we will get the latest on the reserve and census uptick. thisdeclined and there is end we are waiting to hear about and we are putting hedge fund managers on notice. >> thank you for letting us know about how things are shaping up. increasing the holding of government debt and they say treasuries are becoming more

tractive. after the biggest decline in more than two decades. isolationudi-led qatar relies almost completely on imports. most of which enter through a land border of saudi arabia. thisesident trump called "just punishment" for the support of terrorist groups. -- r

the president faces court debates on whether he took illegal financing in the campaign and could lose the mandate. he has been under rising pressure after the corruption allegations of last month. more economists unexpected raising and the benchmark kobe cap steady. joinedoday, we will be after the r.b.i. decision. news 24 hours a day in

more than 120 countries. >> thank you. is pouringed source fuel into the bond market rally. to get more ready treasuries? china and you for remember that they were doing this to boost the currency. and you see athis white line that is the chinese right,s and, at the far the chinese were selling bonds

and you can see that there are holding a little less and you can see how it shifted. we know what they were buying as part of their operation and they are now saying it is time to get some of the bonds back. thisct, you can see reflected with the chinese you talk about this more globalized currents see this is the 10 year to thend you get down it is no wonder

the chinese say they should get sovereign debt. we learned that china increased the holdings and that is the shiftnd is definitely a from one side to another. >> there is a big treasure rally -- treasury rally and there was and thenflation numbers is quickly back breakdownn see the and, if you are a tech nation,

i've assure you are watching that closely. put upance sheet could >>pressure and -- and one that is a great way to ask our next guest about the situation. -- is a non-executive think that china may get more treasuries? >> sure. if you purchase treasuries, you and there isrket another buyer in the market and i think that an amp orton point here is that china must feel

more comfortable about the economy and the support needed and i think there is a number out to confirm that and that is a very different story with the economy in china than what we is abeen reading and there fair amount of support that says that this will happen in the economic growth in china. >> it is great to have you. this all theith the and they engineer what is the chance misstep?icy

>> they don't want that to change. and therecrucial time dynamics that of and thereally relate situation in the south china sea with north korea, china has inherited or assumes the dominant position in asia and situation in north say, what does that have to do with the chinese on market and it is a whole lot. the currency is declining.

does it project strength or weakness? is critical and it ties into that weolitical desire and willbe cheering this help? and they are geopolitics is far more important than the market. you of the later joined from our new

york headquarters this evening and this is bloomberg.

>> this is daybreak. the -- us is let's talk about the united youes and i want to show this chart that we have been i wanted to pull you this on how much treasuries and the dollar

have tracked each other. and theree yield rise but the dollar is following along with the yield. what do you make of this? dollarar as that falling is not a sign of ofength and it is a sign perception of weakness. if you put it into what happened , you can legitimately say that this is a technical correction

ralliedabout how it iser the election and if it a continuation of a trend. why are the yield coming down? fed's has been supportive of the rising rates, but the talk getbeen to get ready and you say you understand, decliningurrency is all of the things being equal -- >> that is the point and they

doubt that and the dollar seems to be taking a lead from the treasury market. and thehike in june inflation is still soft. >> could there be something else involved? which is the chicken and which is the edge? either directly or thee international confidence in the dollar and i realized what people are expressing and the u.s. dollar should be strong with the strength of the u.s. economy and nation.ed states as a

different tune coming out of washington and their andd be less of an interest you come back to the earlier perceptionhere is a of currencies across asia. dotsu are connecting the on the budget with so many things and there are a lot of people who will pull back on their sense of what the fed is at least there one more increase and you say that the economy is strong enough that the federal reserve needs to move on that path.

mandate is a domestic , you haveday's world to look around the world and where theysituation talk about complicating life for yieldrld and you up that and it takes the strength away they see that currency theseing and you can turn conclusion and the conclusion i have had is a

more freedom and rates and, to raise people feel of the government is not print it will, should the central bank be? way need signs of strength and the fed could shake in and do that. this will have more after commercial break. we would like to bring to your seention this and you can dives into this and you can become part of the conversation. this is bloomberg.

>> this is daybreak. the final thoughts from new york. thank you for sticking around. you mentioned the fed as a beacon of hope and i guess that a lot of this depends on china and we see the input and the out put dropping sharply and do you this getting pronounced later in the year? critical year and this is going to be good.

it has to be a good environment for the committee and the structure there. i think that there will be a time where this follows and i anticipate the good news on china, to the degree that you thinkntrol that and i most people understand that and they want that. there is the treasury line and the yen is strengthening. does that make the chinese bond market more attractive? risk,you can handle that and itnds on the mandate

has to be very specific. you have the emerging markets mandate. couple of days a trips. expensive and we have mandates for that part of the world and we were getting the japanese treasuries relative to the u.s. and the japanese people are getting treasuries and hedging, depending on the cost. >> thank you for joining us. also, thank you to kathleen hays for joining us. towards thursday with much more ahead and a

policy,hat confounds the search for inflation. this is bloomberg.

you are watching daybreak. let's get to the news with rosalind chin. calling for the u.s. to spend more on infrastructure. they were impressed by the condition of the airport and cell phone service. warning that spending it is damaging american growth.

the proceeds spent on infrastructure. apple has cash reserves outside there is a proposal of a one-time 10% levy on the corporate tax rate. be a our view, it should repatriation and it should be required and you are not asking people who have had the earning from the subsidiaries if they want to bring it back and you thisaying that you must do over a certain span of time. security continues to andnate ahead of the vote

on called the election brexit and recent attacks as a switch of the focus. the outlook was cut to negative. led to thelaim costs underwriting losses, the reduction came because of a delivering of strategic goals. and, land values continue to rise in japan. the district has jumped and is up by nearly half. the shopping centers and apartments are driving the gain, financed by the record lending.

i am rosalind chin and this is bloomberg. we're looking at the latest. the yen is like anding in the 109 territory the bank stocks are the biggest drag in the red today. the she had no paper reports little doubt on the shares, which are off by 2.4%.

we are looking at the japanese the paneling and shiftingsaid to be with the new strategy to be in the works for later this month. banking on this have the shares down by a third of a percent today. biggest gainers is six points and i want to show you what is going on and we have the second straight day with the trading volume above the 30 day average and we have the energy

stocks following. >> thank you so much. stressed that and he saysortant that they will watch what beijing does on currency manipulation. said that steve mnuchin is terrific as a treasury secretary. said that it was an important relationship and he said that the currency manipulations are very important theys they will watch and have their counterparts in china

and they seem to be very content. ande had this discussion they used the reserves and, anything going in the other direction would help our something but this is that we will be vigilant about on this part. this and to show you with theorrelation reserves and they have been anding and they were up 3.02 trillionhe dollar mark. the dollar that has been happening as china has been

drying down and it has been and they will be and china saysnt and hell open the market talked about the growth slowing down, but it is better than the united states. it is said to be held by the determination. issuet was another discussed and how are these linked? committee on foreign

investment in the united states taking the product and no outgoing barack obama administration doing and firm involved a in semiconductive manufacturing. saidthat said firm, mr. mnuchin that he wants to expand the chair with he is the the technical changes and he wants to keep it as a national security review and deal with the economic issues separately here.

he said that they purview should be expanded to include the joint think of softe i love my cat help but think it is owned with -- there is a possible chinese clout in influencing culture. >> thank you. investors are trying to answer the question of why inflation is so low and we will put that to our economics correspondent.

what is the disconnect? in the forecasts are being of important thats dim.opes are starting to take infrastructure they factory prices have been important? the disconnect has been the factory prices doing well in the united states and china. the factory prices are doing well in the eurozone. is. is where the disconnect trump? about president

as china rings in the , there is not quite what was anticipated with the tax reform and it appears to be more of aittle bit there is ampulse and time when china is cruising to this. >> thank you so much. this to like to bring

you canention and become part of the conversation by sending instant messages during our shows. this is bloomberg.

>> this is daybreak. in the merchant marine is the they carriedry and more containers than the year earlier. busiest route,d followed by cosco and apple.

a capital with a potential offer. the capital level will be the bid. with an unlikely ally i in the battle with anonymous analytics offering -- they suspended the trade. they say that the stock could jump 36%. three communication companies

with noe the last close andainty of a formal bid they named credit suisse and goldman sachs as advisors. jerry brown says that the decision to pull out of the climate agreement diminishes america's role in the world and he says that he is keen to partner with china and has discussedhat he has with the president. thee discussed and he wanted a general spirit of getting things done in collaboration.

>> you signed this agreement on >> certainly, the trade all of it isnd affected, including the tech knowledge he and we need more effective batteries for california to meet the technology goals. we cannot reduce our carbon footprint without dealing with transportation. the only way we can do this is with clean cars.

i have to say that china is a with innovation in that endeavor, otherwise we will not be able to achieve our climate goals. is ledmuch do you think in california and across the united states? that with the climate accord? reducednk it has been because the paris accord and i would say that the chinese are on the move and they are a arising power. it may be slowing down a bit and

they are facing competitive pressure. at the same time, they are very divided and we have a lot of issues about identity and politics. the republicans are divided from the democrats and we need to find national unity to maintain leadership. billion and they are investing. the energy investment on weapons are the best and china is so much bigger and are a command economy, along with the market economy. it is a powerful combination and we will have to find diversity

unity orrit of greater we're going to lose the markets. >> that was cheery brown in beijing and you can get a roundup of the stories into days and it is available on your smart phone. good school here. this is bloomberg.

>> this is daybreak. check on the latest headlines. salenstitutional share 540 shares.ound share will help the ratios. >> the general motors shareholders have sided with the einhorn bid to end the month-long battle of wills and

sought to divide shares. >> we value all of the input from the shareholders and we have thoroughly and objectively analyze the ideas and assessed this approach on creation on a regular basis and, after the careful consideration, we concluded the proposal was not in the best interest of our investors. >> shareholders voted against reelection each year. the shares extended the record highs and investors will meet where the model three is due next month. to $439. has gone incredible.

incredible. u.k.so incredible is the election and the comey testimony. we were talking about what would affect the markets. 9183 and this seems to have a little more sway on where people are going with the option market. yellow line is there and we are seeing most of the risk down and this is a very binary investorsd people and may put their money there. thet is easier to price results of what this might be

and this is likely why you saw the movement there and we did see that one brexit happened. bake uncertain how to the testimony of james comey into the market and it is esoteric and it is about how sentiment ands the outlook. thursday will be a big deal. >> it is the super bowl of washington. that is what some are calling it. it is time for a quick look at the next few hours. the gdp numbers are going to be key here. >> what we are expecting here is placeftening that takes in we will be joined to look at .he numbers a little bit

>> to you think we will see a contraction? is that it isus going down. even if there is growth, it will be a low quality growth. there is an inventory buildup and wage measures are continuing. that is what he is thinking and advertisers will join us in about an hour. >> you are talking about the corporate governance of japan. >> yes. it is something for the markets. what is going on with corporate governance and there are a lot of shareholders try to get more inclusive and probing.

andre looking also at this they call themselves the uber of the language universe. we will find out what they do. i could not work it out either. >> it sounds good. daybreak.s it for dar standby for bloomberg markets. this is bloomberg.

♪ it is 9:00 a.m. in hong kong, 9:00 p.m. in new york. i'm haidi lun. rishaad" i am rishaad salamat coming to you from bloomberg's asia headquarters in hong kong. this is "bloomberg markets: asia." >> investors are increasingly cautious in what could be a dramatically. treasuries searching on indications of a