track all u.s. led coalition west of the euphrates. plane that shean was the first time the u.s. shut demand air in air to air combat in almost two decades israeli prime minister benjamin that is running iran against the threat that yahoo! says israel is caused the monitoring iran's activity and had one that do not written israel. his message came after iran's revolutionary guards sunday will launch a strikes. in france the third time is the chart -- the charm. claiming her first ever national post and the chance of clinging on to the party leadership alive third attempt at the security seepage lost to macron in the presidential runoff you in parts of the u.s. are

through heat. the report out of the university of hawaii says 30% of people globally ask.'s heat strong enough to be fatal. the study shows that figure could climb to 70% by the end of the century if climate change continues at current levels. news 24 hours per day powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ julia: live from bloomberg's world headquarters, i am julia. scarlet: i'm scarlet fu. joe: and we are 20 minutes from the close of trading in the u.s..

julia: it is the tech stocks that are the session winners. miss?"hat'd you -- scarlet:meters harvester theresa may's election defeat -- preparing for an amazon monopoly. amazon owned hold foods -- owned whole foods look like? we look at the latest on his four-year legal battle over fannie and freddie. julia: let's take a look at where the average media averages stampeded bloombergs abigail doolittle is standing by. abigail: we have the dow and s&p 500 and the nasdaq all trading higher. , both of those indexes on pace for their best

session since june 1. the nasdaq up one and one quarter percent. really nice there driven by technology. we will be taking a look at that. let's take a look at the haven assets. we have the 10 year yield higher by four basis points. we also have the yen trading lower against the dollar. not having much of an appetite for those haven assets. the banks standing at 3% since that tech selloff started. one we certainly not seeing today. many are talking about this as a sector rotation out of technology at the time into the banks. chief equity strategist here and bloomberg.

raising rates and certainly has helped this sector. there was a selloff they are but not today. we are looking at a nice rally. microsoft, facebook and amazon. 70% of the pullback we have seen. egg mentality.ne take a look at 516, this is a long-term chart in the s&p 500. and then much35% lower, close to 15%. that is why it is important to see whether the rebound can

continue. time will tell. miss? 'd you this is his administration tries to harness silicon valley's the innerto upgrade workings of the u.s. government. here with the latest and what to keep our eyes on in washington dc is chief washington correspondent kevin cirilli. start our conversation on the agenda of the administration that is tech week. what are we expecting? >> i spoke with a consultant lobbyist earlier this afternoon to get the lowdown on what exactly the silicon valley executives are going to be discussing with president trump area first on the agenda is going to be this the subprogram. silicon valley world has had its differences with the trump

administration, particularly on the issue of immigration. i don't anticipate there to be any age or announcement on the fund. notice what is happening in france in which the more centrist movement has been able to re-craft policy, particularly around workers. i think silicon valley has the same thing. would know jared kushner actually made his first remark is the inauguration of the president. he was a driving force behind this meeting. take a listen to what he told reporters. analyzing and auditing our current infrastructure. federal agencies currently operate 6100 data centers. the vast majority of which could be consolidated and migrated to the cloud, something a lot of

you know a lot about. what jared kushner is hoping to do is align the ceo and companies to help streamline and bring the government process up to speed. >> i want to interrupt because we have a headline that says the white house is said to consider a new role for sean spicer. no final decision has been made by the president, but according to two people familiar with the situation, they are said to be considering hiring a new press secretary. this is something we have been speculating on for quite a while now. tell us about what role sean spicer might move into. >> i can tell you i have spoken with several sport -- several sources who expressed

frustration with how he has been able to craft policy. defenders of sean spicer note it toincredibly difficult execute any type of communicative strategy when the president himself is going around that strategy and tweeting whatever he wants. he has done what he can in order notell the job, we should sean spicer somebody who is respected in washington. somebody who worked with reince priebus, the chief of staff when rice praised this -- when reince previous was chair of the rnc. if he is to assume a new role, we should note he would be able to fill craft communication policy, but to be able to do so without standing behind the podium, that is part of a larger

trend. who exactly they are looking at to bring in remains to be seen. business -- this is the latest in the development. sean spicer, no matter where he have a very important role to play in conservative politics. indicates heing may move into a senior strategy role. shakeupof a white house that has been in the air for a while. his name has been floated in the hot seat. we haven't seen anything significant. what is going on here? >> from the broader standpoint there is frustration amongst the

staff and amongst lobbyists. there are a lot of competing interests. there is information about strategy but it is the president who keeps tweeting. that is something they're are going to have to figure out. >> great to chat with you. hearing more about politics and technology with an exclusive interview with facebook ceo -- facebook coo. joe: senate democrats will begin a full press court to highlight efforts to overhaul health care. the protests are an effort to draw attention to how gop leaders are crafting a bill behind closed doors.

we are joined by bloomberg's congressional reporter, who joins us now from capitol hill. a lot of people pointing out it is pretty unusual, the level of secrecy that is being conducted in the drafting of this health care bill. are these accusations fair, would you categorize them as -- is it quite unusual? been extraordinarily secretive. no paper shared with the public. the senators are watching powerpoint presentations but none have handed the public or the press and actual document people can get their hands on and say this is how it's going to affect my health care. they are negotiating amongst themselves but there is a lot more attention now because they are getting close to the finish

line and you have a lot of senators who don't want to share the information until those final agreements are made. wind have a public chance to weigh in before a vote. >> the story of used to me. you can suggest that the democrats have been doing their best to keep all the accusations surrounding this focus ination in regards to the russian collusion investigation. is a realization that behind the scenes, republicans are furiously trying to come up with some kind of health care bill. force it out to because they know even that is incredibly unpopular two. can we suggest that is what is going on here? >> while there have been some senate republicans focusing on the russian investigation, most these republicans are in

closed-door meetings, trying to write this bill. to some degree they have had a reprieve. democrats want to stop talking about russia so much and talk much more about the health care bill, which could potentially be on the floor. this is go time here, the crunch time. are going to see democrats tonight put a pause button on senate business to get more attention on it area -- on it. >> the president was heard to be calling the house health care bill mean. does that mean changing the dynamics as they negotiate secretly on this? i think a moderate senate republican was to make the bill friendlier and not have as much of the tax cuts right away.

they have a little bit more ammunition. keep in mind a lot of senate republicans want those tax cuts and still want to have maximum flexibility to get rid of regulations for pre-existing conditions. they have to square that circle and it is not clear they are going to be able to get the 50 votes they need. >> bloomberg's congressional reporter on capitol hill. the white house's plan to privatize air traffic control. this is bloomberg.

time for a look at the biggest business stories in the news right now. chinese billionaire jack markell alibaba'stroit for gateway 17 conference. -- to learnevent how to succeed in china. to create one million jobs in the united states. a new investment valued at 5.7 ilion dollars. private equity firm invested $450 million in the producer program on everything from sports to their marijuana culture. -- to the marijuana culture. that is your bloomberg business flash. >> the trumps administrations plan that from bed ministers plan to privatize air control -- elaine chao spoke to bloomberg at the paris air show in defense

of the plan. for anyone who has experience congestion, they know why the president has made this historic decision to separate out air traffic control from the government. the faa is two parts. it is an air traffic control safetyd a regulatory part. in 60 other countries throughout the world, the operating unit is separated from the regulatory safety ask that. as part of the government, the air traffic control system is disadvantaged in being able to access the most up-to-date technologies. theme assure everyone american airspace is the safest in the world. but to maintain its competitiveness and efficiency, because we are going to have a

billion passengers by 2020. integrate newg to unmanned vehicles like flying drones. the airspace is increasingly congestion and we are experiencing delays in congestion right now. if we do not do something now to repair the system to be of a take it vantage of the new technology and ensure that the air traffic controllers, or working so hard to ensure that our system is safe get the best equipment that they can, we need to do that. it will be paid for by user fees. there traffic control system will be liberated from the constraints of government. they will be of access the most up-to-date technology. user fees will fund of the system as they do right now and great news is 100% of the user fees in this newly created

nonprofit cooperative would be pulled back into the system for further investment. piled backre not into the aviation system, it goes into the aviation trust fund. fees -- er >> nothing will change. there is no physical movement of assets. in the merely a change government structure and financial structure. the user fees are finding the system now. they will continue to fund it in the future. the advantage is 100% of the user fees will be able to be reinvested in the air traffic system, which currently it is not. defers and delayed is happening? we are still try to figure out what would happen with health care.

the administration is facing problems when it comes to the investigations taking place. is that acting as some sort of block to the things you want to get done? >> we have to work in partnership with the house and the senate. to assuage concerns of general aviation, who are concerned about user fees and access. we want everyone to be comfortable, so we work very hard with all the stakeholders to make sure that all of their concerns are addressed. a full partnership going ahead it would not be the best system. want to enhance safety, enhance the ability of hard-working men and women in the air traffic control system. in the past air traffic controllers union has endorsed

the concept of liberation from faa. and getting out of the government, so they could have the best equipment in the world to use, which is what they want. was secretary elaine chao, another member of the president's cabinet will be speaking tomorrow. at ain for steven mnuchin 7:00 a.m. hour. from new york this is bloomberg.

scrubbing how recent market moves have affected the sectors in the s&p 500. this is the relative rotation graph. i want to start with the leading quadrant. they are leading the market and not surprisingly on a they were the nasdaq is outperforming the index, it is far and away the leading sector here. we also have four other sectors. consumer staples and

discretionary. what has been weakening is financials. you can see other sectors including telecoms and energy companies. you have a story of growth tromping value. this plays out over the last 12 weeks, which is the equivalent of a quarter. we have real estate, real estate investment trust. and industrials as well. notable for many sectors, almost half of the s&p 500 in the leading sector as the s&p 500 continues to hover around record highs. >> we have also seen rotation into other parts of the world. if you look at the chart behind me, the yellow, china the white, purple is mexico, the red is greece. the blue is russia.

more than 20% in dollar terms year to date, but what you may not know if you are not an avid investor is that the yield curve are all inverted in these countries. we are talking long-term bond yields. the development would be a bit of a problem for equity markets. all been guys have pretty resilient, as you can see. i guess the question is if flat to mean economic contraction, perhaps we need to take a closer look at these markets in relation to the bond market. >> speaking of something that is not done well, the shipper announced a stock split. there have been so many reverse stock splits that one jurist trading of the equivalent of over $35 million per share because of all the stock splits. that is not a great performance. >> can expect more of those

perhaps. >> the market closes next. take a look at the major indexes. 1.4%, tech back on top.

>> fresh records for the dow and the s&p. joe: if you are tuning in live on twitter we want to welcome you to our closing bell coverage every weekday. scarlet: we begin with our market minutes. the s&p and the dow making fresh record highs. it was a green day inequities. and the interest rate tightening cycle would herald the economy if the fed were to do that for now. it was a risk on day. joe: it's like a distant memory. gainet: almost twice the of the smp end the dow. as i look at the sectors in the s&p 500, i look at the level two

of s&p 500. this breaks up into 24 industry groups. you will notice most of the best performers are technology. software and services, clearly the tech name dominating here. -- e posting ceos are gathering in washington dc, making their case to the washington white house. on the other end of the scale, youe look at the laggards, have energy off by 8/10 of 1%. the run proxy is falling. telecoms off by a quarter of 1%. none of them seeing a whole lot of pricing power as they undercut each other with better deals. and apple, as we mentioned up i almost 3%.

have qt, offde you by 9%. it will become the largest gas , holding $6.7 billion, clearly investors don't like that. >> let's take a look at the government on the markets. with the very fitting general risk on attitude seen in market. still pretty low for the perspective of the year. >> trading at the highest level of the day. saying the fed president he was confident the fed expansion has a long way to run. but he is seen as

generally being in line with janet yellen. can we see that with macron? note specs going into positioning for the first time in three years. brexit negotiations obviously staying in focused -- in focus for sterling and euros. i also want to mention on the recommending lawmakers change the mandate of the central bank to focus more on growth than price stability. >> on the commodities looking at oil and gold. ongoing anxiety about u.s. production stymie the efforts to limit the around -- limit the

amount of crude gold a little bit less than 1%. the treasury selloff and a risk on move. and i want to focus on the city the economy -- >> i wanted to focus on the state of the economy. the white line is gdp. the yellow line, the one that keeps going up is inflation. meantime the blue line is where the bank of england is. of course the cut rates right after the brexit referendum last june. the bank of england has raised interest rates since last june. is problem is wage growth sluggish.

the gdp shows signs of stalling out if not stagnating complete only. it creates a policy dilemma. challenging for mark kearney. >> and we saw the wage growth numbers. begun talks have finally in brussels. there was confusion over what the u.k. government wants from the divorce. the talks are starting on the backdrop of the mounting crisis in the u.k.. thank you for joining us. does that matter? does that uncertainty matter as we begin the first phase of this >> frankly speaking

it is hard to figure out what -- i going to stick to a -- are you going to stick to a failure? what we do know is the risk on the european side, continental europe has diminished. the french election was very important and i think we are learning that it was important for two reasons, eliminating tail risk, but we are learning it is also important and perhaps macron is the pro-european to getian that is needed some more dynamic in relation to germany. u.k. secretary had some comments, putting the best foot forward when talking about the next step for negotiation. today's -- today marks the start of a journey.

we are off to a promising start. we are taken the first critical step together. now we have a shared responsibility to deliver quick and substantive progress. >> on what area should they focus if they can't figure out who's going to be leading the country. the uk's willing to cover my eyes and of the key demands. the key thing is these rules that pertain to labor. that was the key sticking point. to compromiseling or they have a very hard brexit. number come out in

cable versus the dollar saying ultimately it is going to be down 120. when we come out of the weekend, it seems to be -- two or three things together. >> in forecasting the dollar u.k. rate, i always forecast the euro-dollar rate. i think you have something positive going on in terms of political risk. we always talk about downside risk. we have tremendous political uncertainty. you want to keep in mind that that front, we have the whole optimism after the u.s. election area -- u.s. election.

down to a level where the whole dynamic has been unwound. whether they are going to go one or two or three times next year is a really big deal. we really have one high-priced for next year, and that's why some of these hawkish comments -- >> which is the more important dynamic? the outcome of the brexit talks or the stability of the u.k. as it gets to the brexit talks? >> those two things might be correlated. negotiating,a weak it might be good -- and might be difficult to get a good deal. i think those two things are correlated. if you look and you are a sterling over the last year or so are -- year or so.

backof the political videos from events. it's extraordinary. >> i have to bring up what is happening in the u.k. with random terrorist attacks. we are not surprised when we see these headlines crossing anymore. hacks see these repeated -- repeated acts of violence have a name -- having an impact on the pound? i think the way it does matter, i'm going to go back to .he macron, merkel, field that field needs to be about refugees. these taxes hard in the position of how many -- how many refugees should be accepted as a whole. that's how it impacts the liquid of getting an agreement. julia: what is the dominant force? we ended up talking about the fed. we have asked the exit question

and you said it looks and the politics are tough. is it u.s. monetary policy. or is a positive by in europe? guest: the good news is we could just have a robot doing -- had a very interesting juncture, because we have been used to monetary policy being ecdkey driver, and the shocks were the most important thing. -- youath that there is can see over the past couple of months, the euro has had a major move. scarlet: data founder and ceo staying with us. anyurope's labor market is guide, we could see mario draghi perhaps becoming more of a hawk, or sounding a hawkish tone.

we will take a look at what is next for monetary policy.

jessica: let's get to first word news this afternoon. we begin with developing story, sean spicer could be out as white house press secretary. with thee familiar situation say the white house is considering hiring a new press secretary. spicer could be moving to a new senior strategy role in the white house. president trump has yet to make a final decision area -- decision. nearly a year after the u.k. voted to leave the european union, talks begun in brussels today on the terms of the divorce. today marks the start of a journey for the united kingdom

and the european union. there is a long way to go, but we are offering a promising start. we have taken the first critical steps together. now we have a shared responsibility to deliver quick answer stance of -- quick and substantial progress. the japanese coast guard is investigating an apparent delay in reporting the deadly collision between a u.s. navy destroyer and philippine container ship. the coast guard now says the accident happened in our after the philippine crew reported it. the u.s. military would not comment on a potential delay. an israeli settlement building is soaring according to a report released by the central bureau of statistics. includeres do not disputed east jerusalem. some 600,000 israelis live in occupied territories.

per dayews 24 hours powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. former -- as formal brexit talks kickoff in brexit -- wage and inflation expectation. what is next for monetary policy? , exante ceo and data founder. still lots of slack, so no urgency for the ecb to hike. does the ecb have plenty of time before it starts tapping the brakes? guest: to have a fine balancing act in -- balancing act ahead of them. on the other hand on the inflation front they are not so confident.

they are trying to dial back the emergency stimulus they delivered. it is getting rid of some of the we have had some of the language changed. the next step is to taper the asset purchases. >> quite interesting if you look at the half of the acid rates, -- the asset rates, you can see the rate hike and rate cuts. you can see unemployment in the eurozone, let's talk about how higher unemployment is particularly among young people. if you look at previous history -- cannot argue things need to be tighter. i ate agree inflation needs to

be a concern. guest: you can find members of the government counsel in that way. i think draghi is keen to not make a mistake like in 2011. there is also a view that these unorthodox easing measures have cost associated with them. there is removal of deflation risk. >> one of the things characterizing all developing economies is the relationship between unemployment and where it economists would think inflation would go -- those models don't seem to be particularly robust. does that give draghi some space? >> it remains a great mystery. that relationship is passing a lot of central banks.

we have massive forecast errors because we have been relying on the relationship. that is the dilemma a lot of central banks are phasing -- are facing. they say they are willing to focus on growth. we had it in canada last week. this is what is tricky for market. that waiting is subjective. joe: stay with us. will the fourth time be the charm? we preview tomorrow's verdict next. this is bloomberg.

>> tomorrow the decision on whether to add mainland shares to its benchmark index. investors are hedging their bets on which securities stand to gain the most from the inclusion. 31 on the bloomberg, i'm showing you the run-up we have seen before this decision. i should mention before the break, fourth time lucky they will be. they have honed in on 100 629 large, which is set to make the inclusion more likely this time around. we try to be more specific in terms of how many shares or stocks out of the thousands that in the indices are available. what are we thinking on this one, positive for china? it is definitely positive. it fits with what china wants.

they won't people participating in their bond market. the problem is the long-term strategy of opening china's capital markets, at the same time we have had problems with the currency. they have imposed severe capital controls. it is a conflict of story. >> the question is when we saw the tightening edgers and saw there are reasons for being more positive on the outlook, because of the capital controls. how in recent weeks -- to track this as real-time as possible. i think the message is the

control's are working to a degree with a can keep the currency very limited intervention. stable -- weely had a relatively stable currency. that's because the control is over there. that is the big shift they have been willing to go down that path. joe: explain how they have different. we have seen some surprising strength this year. a tighter clamp down on the ability to get money out? guest: i think they literally have gone through all the line blonde -- fdi and and bond flow. those controls were put in place

or you had to fill out a lot of forms to get it done. market equilibrium, but it is working in terms of stopping the drawdown. >> absolutely. scoping that brings me to my next point. absolutely, that brings me to my next point. they want to make sure everything looks good up and till that point. -- up until that point. do the dynamics change? guest: on the currency front you have to think about what do they want and can they get their? the chinese currency from a trade perspective is not an expensive currency. currency thatd a is massively cheaper from a trade perspective. the problem is there has been such a wave of capital flows that is hard to keep it stable.

the question is can they generate those capital outflow pressures to become less aggressive? when i think about the outlook, they want a stable currency, they have the tools. there'sever know if going to be a huge turnaround in the economy where everything changes. assume things carry on as they are as far as the economy is concerned, how long are they going to have to stabilityo maintain as they have them right now and the tightening we see? >> that is the tricky bit. once you have taken that step it is often very difficult to reverse it. this is something that could be with us for quite some time. focus ona lot of

currency manipulation. in asia overall there is a lot of change in terms of how much intervention is happening. i think it's another reason to keep the currency very stable and not get labeled as a currency manipulator. >> great to get your insight. -- julie of a great to get your insight. -- julia: great to get your insight. founder and ceo. joe: this is from earlier in the show. market minutes, click on charts and see what they have to say. this is from the boe. question,nd us a anything you want. check it out, it is the future of tv. julia: center complaints directed to joe. joe: from new york, this is bloomberg. ♪

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it all adds up to our most reliable network ever. one that keeps you connected to what matters most. the first word news this afternoon. hundreds of people are taking to the streets of london today, marching in honor of the m's of that massive building -- the victims of that massive building fire. they want authorities to do more to make sure a similar tragedy never happens. the death toll was raised to at least 79. it's now the deadliest fire in mainland britain since record-keeping began in the early 20th century. for the first time since becoming a presidential adviser, jared kushner is speaking in public. he spoke at a meeting with business leaders about modernizing government operations. >> we began by analyzing and

auditing our current infrastructure. it turned out that federal agencies collectively operate 6 ,100 data centers. the vast majority of which could be consolidated and migrated to the cloud, something a lot of you know a lot about. >> kushner traveled to the middle east on wednesday to try to jumpstart israeli-palestinian peace talks. an al qaeda-linked group has claimed responsibility for a terror attack in mali. the death toll at a popular resort in the west african nation has been raised to five. government officials say security forces killed off the talk to extremists who stormed the resorts and took dozens of people hostage. and the supreme court has ruled muslim men detained after the 9/11 attacks cannot do top u.s. law enforcement -- cannot sue top u.s. law enforcement officials. group was detained for months at a brooklyn jail, following the attacks.

global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. scarlet: -- julia: let's give you a recap of today's market action in the u.s. the dow and s&p 500, ending the session on the high. fresh records for both the dow and the s&p. the nasdaq higher by 1.4%. that gives you a real indication of what the driver was today, the tech sector higher. the s&p 500 -- three sectors in the red. telco, utilities, and energy stocks underwater. we do have wti crude trading below $45 per barrel. joe: "what'd you miss?" bruce berkowitz made his name as one of the greatest value investors of all time, but his performance in recent years has been nothing short of awful thanks to stocks that so far have turned out to be dogs -- sears, fannie mae, freddie mac.

the markets are not cheap. sort of drivenen by a handful of companies. usual, i'm invested in that which is hated or deemed to fail. that's where i like to be, but as you rightly point out, it has been a long period of time. i believe that shareholders are going to see whether or not i'm right in the not-too-distant future. >> i'm curious. when you look at the must-own facebookhe fang's, come amazon, apple, netflix, amazon,- facebook, apple, netflix, google, or some other highfliers, what do you see? a great, rosy

future, people will do well. a couple of problems, and it's going to be difficult for investors to recover over a period of time. erik: your holdings right now are concentrated into three groups, sears, and what i will call the sears extended family, fannie mae and freddie mac, and st. joe. if i described that portfolio as a bet on three things, retail, gse reform, and northwest florida real estate, would i be right or would i be wrong? bruce: i think you would be right, but my focus from the start has been on the real as ae, the physical world, margin of safety in the businesses. i'm not a retailer. i have great love for sears, and i think it is an iconic brand, company. i want to see the company

transform as a retailer. but sears has many businesses. sears, kmart, kenmore brand, ard,tsman brand, dieh there's an insurance company. there's over 100 million square feet of real estate. there are many parts to sears, and it's a tremendous asset base. erik: right now, all of those things are priced at seven dollars per share, roughly speaking. what do you figure it's worth? fairholme, our internal valuation of the assets $100 is between $90 and per share. that our people at fairholme have been doing this for many years now. sadly, our valuations have come

down significantly because of the operating losses in retail, but there is still tremendous, tremendous value with sears. erik: sears is, as i'm sure you know, the most shorted stock in the russell 3000. what do you see there that so many other people don't see? bruce: that's exactly what the united states treasury once asked me about aig. i said, i don't know. you will have to ask everybody else. i've studied aig for decades, and i understand the franchise, the global franchise. sears.e same with i can't explain it. the math is there. it's a psychology that the company is not capable of transforming. i believe the company is going to prove to speculators who are proveng the company -- speculators who are shorting the company wrong.

as you see today with amazon taking over whole foods, there is value in the physical world. there's -- all the different channels merging together. this on the channel presence -- this omnichannel presence. everyone is going to have to merge into this ecosystem. erik: if there was one mistake you made on sears, what was it? bruce: my mistake with sears is the same mistake i've made with almost every investment in my life. i've suffered from severe premature accumulation. erik: [laughter] bruce: i may have set the record with the sears investment, st. joe. it's been 10 years. erik: let me ask you about saint joe. i see saint joe as bruce berkowitz's field of dreams. "if you build it, they will come." is that right? bruce: what i see is the last great open place between the

gulf coast and a brand-new airport, with a company that has been titled is to build 120,000 homes and tens of millions of square feet in a very tax-friendly state, where it would be a great place for jobs, community. and it's happening. erik: your investors and the market looks at the stock where it is today. $17, $18. what it costs you to buy, something in the high $20's. what's the catalyst going to be to get it back up its in the -- back up into the $20's? can you see it in the near term? bruce: what i do see is a company building value. people have to decide for themselves what they think the exact value of saint joe is. erik: what's the endgame for fannie mae and freddie mac? is and recap and a release as a

concept -- isn't recap and release as a concept dead on arrival? bruce: this notion that these companies have costs the american public -- cost the american public a lot of money -- it has been the opposite. erik: if the government doesn't resolve this issue with fannie and freddie -- bruce: we go to the supreme court, absolutely. when you go back and think about it, there are issues of breach of contract. there are constitutional issues. how you create an agency that oversees fannie and freddie that doesn't answer to any branch of government. how did you let an acting director run the place for three years and then decide on a net wash sweep, and the person

supposed to be appointed by the president and approved by the senate, and it never happened? joe: that was erik schatzker talking to bruce berkowitz, fair home -- fairholme capital founder and ceo. scarlet: coming up, we have an exclusive conversation with sheryl sandberg on technology and politics. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" foodszon acquires whole as it has done, how much will it shake up the growth surge? a tweet, "if closes, whole foods will be to amazon what instagram

was to facebook." for more context, let's bring in a professor, joining us by phone. professor, great to speak with you again. you had predicted this back in may, that perhaps amazon would buy whole foods, saying that just because of the urban locations, this would be worth it. they could close them down, the stores, and turn them into warehouses, and i think they could justify the price. how do you see this deal working? >> good to be with you. i think this is a game changer. you're effectively going to have amazon in the wealthiest, most affluent households not once every other week, but twice a week now. this threatens not only retailers, but it potentially disrupts cbg companies. conspiringzon is with consumers and investors to give it almost infinitely cheap capital -- about potentially

disruption in the media market, as shopper and in-store marketing gets challenged by what amazon is going to do with their technology to let people big on in-store marketing -- this is really, i believe this is going to make the facebook acquisition of instagram the second best acquisition of the decade, and this will be number one. joe: when you mentioned the threat to cvg companies -- cpg companies, consumer packaged goods, are you suggesting we will walk into a whole foods and it will be filled with amazon private-label goods and all these companies' margins are going to have to chase down amazon? >> that's exactly right. it will not only be by the label, but amazon will put their algorithms and bots to work. the moment those brands are no longer the best value, they get kicked out. where you see growth in the cpg and in the consumer market is in the long-tail.

in tech, you see growth in the short-tail. in consumer, you see the long tail growing. whole foods has relationships with best brands. amazon knows how to bring life to them. it all spells trouble for cpg brands. 90 of the largest 100 cpg brands in america lost share last year. 60% of them lost revenue. this is ugly, not just for retailers, but for some of the biggest cpg companies in the world. julia: your kind of suggesting that whole foods him of the brand, -- you're kind of suggesting that whole foods, the brand, very quickly won't exist. they have kept on the management of whole foods. the ceo is pretty feisty about what he sees as his baby here. how long does brand whole foods within this last? >> it's an outstanding brand, and i think it's going to be their grocery brand, if you will, but, over time, there will

be one brand here, and it will be amazon, or it will be a sub-brand. whole foods and amazon company. it's an incredible brand, but let me get to the next point. i think there were several board meetings this weekend, and i don't have the inside information from retail companies and cpg companies who did the math on the scenario planning and decided -- i bet they all came to one conclusion. we cannot let this happen. i think you're going to see other bids here. scarlet: you think we are going to see other bids. if you look at whole foods shares, they are above $42 and .losing at $43.22 of course, the deal price was $42. going forward, what kind of big can these companies put together -- of bid can these companies put together to prevent an amazon takeover? >> the bad news is they probably can't prevent it, because they are competing against the company with infinitely cheap capital. there's not a lot to lose by

putting a competitive bid on the table, because this acquisition does make sense. this is a great company that has been beaten down. this isn't a crazy price. and if they don't get it, they have made it more expensive for amazon. what might be interesting here, i think this might inspire a consortium bid. i think some players might actually get together. if you look at what happened to retailer stocks in the grocery and retail market, the market has basically said, you could have owned this for free if you had bought it yourself. because you didn't, we have punished you greater than the combined valuation of what this thing is being acquired for. the market has said to these guys for not buying it and letting amazon do it, you screwed up, and we are making it free for amazon and making you wish you had bid on it. joe: what are the dynamics -- one of the dynamics you mentioned that seems very powerful is this idea that with amazon's incredible data and understanding about consumer trends, they will be able to stock the shelves with a long-tail cbg products -- cpg

products that are hot at the moment. assuming this deal closes, is there any way traditional grocery retail will be able to match that, given that they don't have access to the data that amazon has? >> i think it's going to be really ugly. i think that amazon is going to own the most affluent households in america. if you look at where all the income growth is, it's in the top 10%. amazon will be the cable type of stuff into their house. traditional retailers will leak a lot of value, but what i think people are missing is cpg companies are going to beginning to leak value to amazon. you're going to see a lot of people here start to leak value. amazon media group has tripled the size of snapchat. it's going to likely be better than -- bigger than twitter. it's about to put its real-time bidding and technology in place

such that you cannot only by media on amazon.com, but you will be able to buy media, shelf placement, and in-store shopper marketing, and caps, etc. -- endcaps, etc., in the store. that's a huge business, and it's about to be amazon. julia: i want to ask you about, for the online grocery market, kind of in line with what you are saying there and what the .isk is of an amazon-opoly here blue apron is a meal kit delivery company. they recently filed for an ipo. if you are an investor looking at this, do you want to be buying into an ipo of the company that does premium delivery of the ingredients, lets you make something for yourself, given amazon about to come into the market with the whole foods products and the potential dominance that they have? would you be buying into that ipo? scott: i think blue apron does a great job. there's going to be

opportunities for niche companies. at the end of the day, and i don't think this is a good thing. this is fantastic for amazon, good for whole foods shareholders. it's bad for everybody else. it's hard to see a scenario where the little players can compete against a big company that doesn't need to make money. imagine whole foods, how fantastic the offering is -- i get the sense that you guys have probably shopped at whole foods. imagine whole foods at prices 20% to 30% less than they are now. imagine a mercedes at the price of a toyota. that's what you're about to get in whole foods. scarlet: scott galloway, nyu stern school of business, professor of marketing. from new york, this is bloomberg. ♪

scarlet: it's time for a look at some of the biggest business stories in the news right now. kroger took a big hit last week, losing more than $7 billion in market value over two days. it slid following a weak earnings report. kroger is the biggest u.s. supermarket chain. india's tata group is considering a jaguar land rover ipo. executives have been holding discussions about the potential listing on an international stock exchange. it is said to be weighing london and new york as possible venues. senator elizabeth once again urged the federal reserve to remove 12 wells fargo board members. they held their posts when the bank allegedly set up million of fake customer accounts. warren says the board did "nothing to stop the rampant misconduct." julia: "what'd you miss?"

democrats are eager to loosen the republican great on power in washington. i'm talking goldman sachs. for more, i bring in max. perhaps a natural route for republicans, less so for democrats. talk about archie parnell. max: the big thing going on in the united states tomorrow is a hugelyd -- ossof, popular race in georgia. not too far away in south carolina, archie parnell is up in a different congressional race. there aren't that many special elections this year, only, like, half a dozen big elections left. if archie parnell can pull it off, it will be huge. it's the seat that belonged to mick mulvaney. it's the seat that belong to

frank underwood on "house of cards." julia: how well are these guys going to do? what is it about goldman sachs means there is a natural path to washington for them? max: i'm not sure archie parnell's biggest problem is golden snacks -- goldman sachs. north carolina voted for democrats for a full century until mick mulvaney come -- came along. they redrew it, some people call it gerrymandering, so it's harder to win now. go to as why goldmanites washington, not only do have gary cohn, steven mnuchin, and gary powell working for trump, don't forget that bill clinton had a treasury secretary from goldman sachs, just like george w. bush did. it's either something in the water or goldman sachs executives are taught that public service matters, not only

to these people's personal lives, but also to the firm's bottom line. julia: very quickly, do you think it's going to help with things between parties if we do have at least a group of people that come from the same area, let's say? max: what an interesting question. there would finally be bipartisan unity because everyone is from goldman sachs? that would be an amazing bipartisanship. julia: thank you for your insight. tomorrow, an interview with treasury secretary steve mnuchin. this is bloomberg. ♪

scarlet: don't miss this. bank of england governor mark carney and the new k chancellor of the x -- the u.k. chancellor of the attacker tomorrow. julia: an exclusive interview with sheryl sandberg. joe: that's all for "what'd you miss?" have a great evening. this is bloomberg. ♪

>> you are watching "bloomberg technology." let's start with a check of your "first word news." otto warmbier has died.

his family said he died this afternoon. he spent a year and a half in prison after ripping down a propaganda signed in north korea. the u.s. strongly condemned today's deadly terror attack at a london mosque. a van rammed into a crowd of ramadan worshipers last night, killing one person and injuring several others. the u.s. says it will provide any assistance britain should deem necessary. the suspect is under arrest. sean spicer could be out as white house press secretary. two people familiar with the situation tell bloomberg the white house is considering hiring a successor. spicer could be moved into a senior strategy role at the white house. japan is investigating an alleged delay in reporting the deadly collision between a u.s. navy destroyer and a philippine container ship. seven american sailors were killed in the crash. japan's coast guard now says the accident happened about an hour before the philippine crew reported it. global news, 24 hours a day,