hour to discuss north korea's latest missile test. you are looking at a live shot now. yesterday's rocket launch was their first intercontinental ballistic missile. annorth korea's launch of icbm was a clear and sharp military escalation. the north korean regime openly states that its missiles are intended to deliver nuclear weapons to strike cities in the united states. , south korea, and japan. and now it has greater capacity to do so. mark: north korea kim jong-il and bragged about sending more to president trump. they conducted a joint missable is to drill off the eastern coast of the korean peninsula. secretary of state >> kept -- rex tillerson called the actions escalation of the threat to u.s. and its allies. the president is likely to

receive friendly reception in poland. praise of russian president vladimir putin and his recent decision to pull the u.s. out of the paris climate accord. mr. trump arrives later today for a brief visit which will include a speech near the center of the 1944 warsaw uprising against the nazis. it avoided another crippling cyber attack after a police raid on an attack on a software company p or ukraine is still struggling to recover after hundreds of his nurses and government agencies were hit by a massive malware attack last month. minister says the cyber strike originated from servers at the same tax software company linked to the first hacking. presidentn authority visited french president emmanuel macron today to discuss the latest development in the middle east peace process. they are also expected to

discuss the next steps following the international peace conference hosted by macron's predecessor in january. he is hoping to gain support. israeli talks based on the principle of a two state solution. since the start of india's monsoon season, heavy rain have triggered floods and rent -- landslides which have killed at least 20 people. india has been hard hit. officials say nearly 400,000 people have enforced from their flooded homes. monsoon season in india runs from june through september. global news -- global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪

julia: live from bloomberg world headquarters in new york. joe: we are 30 minutes from the close of trading here in the u.s. energy stocks are the losers. joe: the question is, what did you miss? scarlet: president trump faces off against leaders from russia and china this week at the g-20 summit. north korea passes missile launch yesterday, we get perspective from stephen roach of yale university in just moments. and, and intensifying drought has caused huge swings in prices. why this could lead to a perfect storm in the agricultural market. ♪ atia: for now, let's look where the major averages stand as we head toward the close. abigail doolittle is standing by. are we areanks be looking at major gains for the

averages heading into the close. the dow fractionally higher. the s&p 500 slightly higher but look at the nasdaq up more than .6%. that is the clear winner on the day. a reversal of what we saw on monday when the dow was the big winner. the nasdaq had actually been down. but today is all about the nasdaq. day, the nasdaq had gone red with the s&p 500 and the dow, but really managing to pull through and at one point taking the nasdaq as -- of as much as .8%. strength for a sector that is really under heavy selling pressure since june 9. names. a lot of the big in fact, this is the well-known thing. facebook, amazon, netflix, it does not appear to be on anything fundamental. mentality,t of that overall, it is worth noting since june 9, the tech pullback did start these stocks, the sector overall, still down even

with these gains. it will be interesting to see whether this is re-for more selling ahead. time will tell you we're looking at a chart of that in a moment. the nasdaq even bigger if it were not for car related stocks. that, down 19%, on pace for its worst day ever since 1993 after the company, o'reilly automotive, put up 1% versus the guidance of 3-5%. cdo talking about overall challenges and tesla down 7% at session lows after the delivery of -- vehicle delivery number for the second quarter fail to deliver what was delivered in the first quarter. finally, let's look at the chart on the nasdaq's a best -- suggesting a pullback could continue. #btv 209. we do have the nasdaq, the lowest 50 day moving average in the blue there. a lot of uncertainty. if it breaks to the downside,

which it is starting to do, it could bring all in 7% shop from the top. there could be more bearishness ahead for the nasdaq julia: fascinating charts today. thank you. german chancellor angela merkel meeting with gg paying =- -- left byeadership gap u.s. president us his administration. joining us with more and what we can expect is noted expert stephen roach. great to have you on. we mention the european relationship therebetween the president and angela merkel. with the start changing relationship between president trump and xi.

relationship at the moment given that you have just returned from china? stephen roach: like all presidentips our forges, they change a lot a today an hour to hour. there was a bromance in mar-a-lago with the summit. there were expectations of a lot of progress on this 100 day trade plan. the quid pro quo from president trump was, you know, we will give you what you want economically and we will back off on these charges of currency manipulation, but you deal with north korea. obviously, china cannot or will not deal with north korea. and so the relationship has pivoted in a way that seems to be far more contentious than we thought just a couple of months ago. julia: do you think they misjudged each other? misjudged how

little he could get away with with north korea and president trump misjudged how much you give throw his weight around and get action from china? i don't know. misjudging hints that there was a deep calculation that both leaders made about the strategic opportunities one could provide the other. i don't think we took it that far in the united states and i think with respect president ggg -- that skepticism is pretty much borne out. julia: that has deepened. us --me, julia has told the gift of the panda bears with the zoo. they are bonding over shared goals of trade and curbing climate change. does that hurt the relationship?

>> germany and china had a relationship for years. china, i gorts in to a lot of them. chinese manufacturing facilities are in large part made in germany. there is nothing all that new there. they continue to cement the and the u.s. pushing back and moving the other way, it allows an opportunity for the relationship to deepen. is the u.s.'s's next move? if china is disinterested or not inclined or not able to apply any pressure to north korea, could you foresee the u.s. applying further economic pressure to china as a bank shot on north korea? is a good think that

point. when i was in beijing last week, the chinese give you the normal copout that you americans overestimate our ability to control north korea. but if you look at the trade accountsi think china for more than 90% of total trade in and out of north korea. there is enormous leverage. fearful a long but instability in north korea, a threat to the mainland. those fears are something that certainly the u.s. could address and challenge. donald trump tweeted earlier today that trade between china and north korea grew almost 40% in the first quarter. so much for china working with us but we had to give it a shot -- a try. to the idea of perhaps underestimating the relationship that the history of north korea and china have. at times when they tasseled in

the past militarily, many died. i do not think, perhaps xi jinping try to explain the broader issues and the potential spillover affect here. stephen: there is a deep understanding in the u.s. policy -- foreign policy community the china is fearful there will be a and china,f refugees correctly or not, views north korea as a buffer between their country and the western forces strategically placed in south korea and feel strongly it needs to maintain that buffer. of perceptions are really dated in the u.s. could play a more forceful role in making the chinese re-think those key presumptions. julia: how? stephen: through joe's plan. joe has the plan. tightened economic measures from

the u.s. we have done some of that through sanctions on a small chinese -- dealing with north korea. we have upped the ante on sales to taiwan. was a contentious freedom of nato operations mission in the south china sea. the downgrading of china policies status and the global human trafficking report put out by the state department, which the chinese are really upset about. there are certainly ways to put pressure subtly and not so actionsn china and the of the trump administration recent weeks are indicative of that possibility. , yalet: stephen roach university school management senior lecturer. he will be staying with us and we will talk more about the power structure taking place on the global stage. from new york, this is bloomberg. ♪

scarlet: a vacuum in -- angela merkel and chinese president xi jinping are bonding over climate change. still with us, former chairman of morgan stanley asia, stephen theh, when we talk about u.s. be more concerned about what is going on domestically, if you were to's a china is the obvious answer, i look at -- china has money and lots of it and is prepared to spend it to gain influence. where should the country be spending the money? stephen: the notion of global

leadership, you know, you make it sound like one country passes the baton to another. if it were only that simple. clearly has much more of an inward looking strategy right now. you can use that to make a case for the u.s. beginning to advocate its role, but the u.s. still has great strength in terms of its economy, military capabilities, and i think it is overly simplistic to say we have walked away. china is the rising power. there is no question about it in terms of its defense budget, size, and growth with economy. is doing fine, thank you. maybe not by the standards and metrics we would use to judge economies in the west, but by chinese standards, the economy is on course. joe: what do you mean by that?

you were just in china on a recent trip. when we look at the chinese economy through a western lens, what are we getting wrong? stephen: bubbles, you name it. imbalances. the book that sort of changed my view forever on china was written in 1999 by former yellow professor jonathan spence. book, he examined western perceptions of china and found that we always got china wrong because we always looked at china through our lens. you are asking me to do the same thing again and i will not do it. they are a developing economy and they are developing in a style and with a strategy that is very different from anything we ever seen in the west. it does not in that it is bad. scarlet: just -- what does china want us to see at -- as its raining a combo schmidt question -- reigning combo

schmidt? --phen: they are all-- accomplishment? exports to a more services-based model, which ultimately will drive support for private consumption. the consumer story is starting to come through loud and clear. the share of the economy has risen i want to say nine percentage points in the last seven years alone. the big question, the idea of a big transition. say it is him roger and they are nowhere close, still massive capacity and inflation all at the margins. fundamentally, you just can't

have a huge transition without some sort of major lunch -- >> they just sort of based that on a long-standing negative view of a totalitarian, one-party -- , that they don't want joe: the economic collapse of the soviet union, he says that is a great example of an invest in german economy. it ultimately could not and it collapsed. stephen: i think it is more china with all due respect to my good friend michael. i picked up last week was the explosive growth in the digitization of consumer led china. ton i first started going china in the 1980's, all i saw were these old rusty bikes, no cars, then they got rid of the bikes and there were too many cars and now, guess what? and anabled bike sharing

shared economy mentality from and anaring into airbnb e-commerce share of total chinese consumption that is double hours and it is rising and really shaping and reshaping consumer culture in ways that we do not really appreciate. julia: that will be exciting for the future. i want to bring it act to the short-term and what will happen in the fall of this year with the committee meeting. how important they are for president xi jinping. how things are shifting and the party's china is getting at this moment from president trump, is any of that embarrassing? at any point,-- he has to respond because he did his -- does not want to seem weak domestically? that is a fair question. i think the grip on political power, support from the military , is very strong. is congress coming up at

and youof the year, know certainly the strong conviction is that he will continue to have a powerful hold on the structure and economic capacity would be disturbing but the odds of that i think are seemingly low at this point. >> let's say president trump announces some form of trade restriction. he has tried the south china sea route. respond and how much further can they be pushed? couple of things, china is moving away from the trade driven model. i'm talked a lot and teaching courses at yale for seven years, on the transition to a good consumer led model. that is in part to adjust this. secondly, china plus his role as a next order has changed a lot.

it is now an active participant in supply chains doing components and parts, rather than fully assembled products. it can divvy up its export paralysis in a very different way than before. >> in the short-term, it would hurt. of the: that is a part story. this long and slow transformation from manufacturing led economy to consumer driven, what is the biggest risk? stephen: first of all, with all due respect, it is not long and slow. it has been going on for seven years. scarlet: some people say it has taken longer than expected. stephen: show me an economy that has taken the gdp from 43% to 50 in seven years, i challenge you to find one other example in history. so it is moving ahead very quickly.

one thing china is doing, to your earlier question on global leadership, is it is forging the new one road initiative, building a lot of china centric institutions to support it like aging infrastructure and domestic bank, the road fund, these do not necessarily mean that china is the new pain asian or even global leader. it is an indication of how committed china is to a more global role in the future than it has been in the past. , now yaletephen roach university senior lecturer, thank you so much. we are done now. .hank you so much from new york, this is bloomberg. ♪

>> it is time for a look at some of the biggest is the stories in the news right now. the main hedge fund -- hedge funds of-- -- 1.5% in june. macro hedge fund down within 5% for the year. since ite worst -- began trading back in 2003. subaru said it is weighing a minority stake in germany's bank according to people familiar with the matter, the private equity plan is considering purchasing the shares on the market. cut thousands of jobs and streamlined operations to improve profitability. that is your bloomberg business flash. scarlet: the market close is next. take a look at major indexes. we are looking little changed for the dow, the s&p 500 up .2%

and a nasdaq and ready to close out with a gain of .7%. from new york, this is bloomberg. ♪

♪ >> "what'd you miss?"

stocks in the green, gains in tech outweighing energy. scarlet: i am scarlet fu. joe: i am joe weisenthal. "what'd you miss?" twitter, weining on want to welcome you to our live coverage. scarlet: a flat day when you look at the dow jones industrial average. .2%, the00 higher by up led by technology and chipmakers. the three-day winning streak is the longest and more than five weeks. joe: that is surprising. when i look inside the s&p 500, forbearing groups higher, but by technology, up by better than 1%.

one group of weakness is in the communications are quick meant sector. -- communications equipment sector. energy shares losing almost 2% on the day. you can see for the most part that it is deep red in the energy sector. , the auto movers parts retailers, o'reilly automotive, a big drop, down by 19%. that looks like the biggest 2005,y drop since june pretty incredible move there. o'reilly automotive announced a sales missed, and that has negative repercussions for competitors. a lot of questions about auto sales and whether they have the or not. chipmakers leading the gains in

technology, macron, amd, nvidia snapping back sharply on the heels of steep losses in recent days as investors sold off some big winners. joe: let's look at the u.s. government bond market. not a kind of action. we got those fed minutes, but barely caused a ripple in markets. 10 year yield slipping a little bit. let's look at a six-month chart of the 10 year, still lower than we were earlier in the year. year inr 2.1% on the 10 the middle of june, and march from sohigher, 2.33% may be back some declines in yields. dollar-yen, euro-dollar,

kind of stuck in the range here. notgoverning council has discussed policy changes. you have another dove trying to counteract mario draghi. yen, perhapsvel in some risk aversion given north korea? nope. some weakness from canada and norway, the group underperforming with the deputy , you have tohan 4% expect some weakness they are, and that is what we got. dollar-rand, the political shenanigans, but a bit of confusion, the south african ruling party has proposed banks should be wholly state-owned rather than private shareholders. benow of alarm bells should

ringing on this one given concerns about taking back the independence of the central bank. you also have shareholders in japan and switzerland, a legacy and south africa going back to 1921. you is just whether or not have investors or shareholders in central banks. investors are nervous given some of the noises we have heard around central bank independence in the country. interesting. joe: on commodities, let's look at oil, down over 4%. oil had been rallying, but russia disinclined to pursue deeper cuts for opec really slamming that market. barrel,right at $45 a gold futures picking up a little bit, and were talking about wheat -- i'm looking at winter

wheat. it has been on a surge, up 26% in the last month. scarlet: one of the pricier sections of the market right now is technology. here with a look at why is oliver renick. technology led the way today. all the discussion, you still can see tech names moving up. oliver: whether the market is going up or down, this is the leader in either direction recently. what we have seen is volatility. a chart that has probably circulated, but worth bringing

up. this is where you have volatility and the nasdaq going beyond what we have seen in the rest of the market. the top panel, blue is the s&p ,olatility versus the white , the has broken away spread on the bottom shows you s is in thelatility i nasdaq. you live by the sword, you die by the sword. whether that volatility bleeds into the market is important. joe: you see people betting on if techead narrowing, plunges, the rest of the market will start,. oliver: absolutely. we have seen training recommendations based on this, usually through options, tech what you think of in

terms of a pair trade. gapsee a normal sort of between the two and you bet on the reversion. is a going to be tech or a subduing of the tech volatility. julia: what about fundamentals? oliver: we have a chart for fundamentals. a big part of earnings will come from tech. we are looking at a lot of growth baked into technology. is story where what happening with tech is emblematic of the market. this is showing you percent year-over-year change for eps, 20% gain line with a in earnings relative to a year ago. that is quite a bit. even when you look at the s&p,

tech is twice that, so you're looking at big expectations. answer risk of disappointment? oliver: exactly. these estimates do come down, but this year, that has not happened until now. you have tosaid think about where those estimates are going to come into play as people start ratcheting goes down. scarlet: also making a point pickup in economic data. oliver: yes, this is something that has circulated a lot. this is not exclusive to anybody. scarlet: you give him credit. oliver: i do. as you are trying to assess what has happened in tech, questions about semiconductors and that is a cyclical read through on the market.

the turnover in the economic surprise index in white has been astonishing. that explains what you have seen in some of these cyclical sectors and the week by week rotation in the market that has been puzzling for a lot of people. there is something curious that has happened. namesf the cyclical tech have weekend, but you have not seen a rush into the value stuff , staples, utilities, not front and center when you see that economic rollover, so it brings up a question whether that will pick up or something else will give. scarlet: oliver renick, thank you. the un security council meeting as we speak discussing the threat posed by north korea's missile tests to we will have more analysis. from new york, this is bloomberg. ♪

>> it is time now for first word news. reckless and you're responsible is how nikki haley describes yesterday's test launch by north korea of an icbm. haley told an emergency session of the un security council that pr yang's action made the world a more dangerous place. action made the world a more dangerous place. >> only the scale could become different. that is why yesterday's escalation is so army. --the meso fell into the sea missile fell into the sea. meantime, south korea and the nine states announced today they conducted a joint ballistic

missile drill in waters off the eastern coast of the korean peninsula. president trump spoke about the dispute in a phone call with egypt's president. egypt is part of the saudi-led coalition that has isolated qatar claiming the country is supporting terrorism. president trump said both sides should negotiate constructively and follow on commitments to curb extremism. government supporters entered venezuela's opposition controlled national assembly by force today. several opposition lawmakers were reported injured in the melee. said asident was military parade marking the anniversary of venezuela's independence from spain. president criticize opposition lawmakers, saying the national assembly should defend the flag and call out those who betray the country's ideals. any suspects in the downing of malaysian airliner over ukraine will be prosecuted by the dutch

government. that decision was made by the country's investigating the disaster. the flight was from amsterdam to kuala lumpur three years ago this month when it was shot down. there are no suspects so far. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. i am mark crumpton. julia: "what'd you miss?" faces rising global tensions as north korea launched a paradigm changing missile. the un security council is meeting right now, and here with formerelliott abrams, deputy national security adviser under resident george w. bush and now senior fellow at the council of foreign relations. he joins us now from washington. the difference in what we heard from the u.s. passenger to the

united nations today was they are threatening to shut off trade with countries that trade with north korea, a.k.a. china. do you think that is the right way to bring china to the table and do something greater about the north korean threat? >> basically, yes. the chinese have talked a good game for a long time, but have put little serious economic pressure on north korea. we will have to make them pay a price for them to do it, otherwise nothing will happen. the trump administration about a week ago sanctioned one bank, one chinese bank. that is the kind of thing you do, but you have to do it more, and try to change how the chinese see the north korean picture. they see it as a problem for the u.s. we need to make it for china too. talking about the

idea of codependency between the united states and china in terms of the economic relationship. how much leverage can president trump push and portray now with china? you mentioned the specific example there. there is taiwan, the south china sea escalation. trump is trying to gain iferage, but i'm wondering president xi jinping says we will not be pushed or threatened? >> he may well say that, but the question would be whether president trump follows through, and how the chinese react. this is a game here to see which of them will actually go through with what he says. the other question is how important is this to president trump. there is a story that in his first meeting with president obama from the newly elected trump was told this is the problem you will face and that

will define your administration. trump has said we were not let them get a nuclear tipped icbm. are those just words are he will make this is top priority? scarlet: i wonder what you make of the argument by some analysts that may be one way to deal with north korea is except it has nuclear weapons and focus on limiting the proliferation of it and the risks it presents. be theefits would country gets to downsize its conventional military and divert resources to helping its own people come and bring it back to the negotiating table. what do you make of that argument? >> i don't buy it. the obama administration accepted iran as a potential .uclear power if the trump administration says north korea is next.

can beriah regime accepted as a nuclear power, how can any country that would not be accepted as a nuclear power? i don't think he should do a given what we know about the nature of that regime. that would be the last country on earth you would want to except as a nuclear power. some lives and shots here of air force one preparing for takeoff. i just want to come back to on this point in particular. the other key player in this negotiation is russia. the russian ambassador to the nine states is saying this is not the answer, that sanctions are not the answer here. i can hear you laughing. what is the solution. china and russia do have veto power at the 90 nations. i wonder what the risk of unilateral action is.

>> the russian and the chinese have a plan, which may or may not include the united nations. states united into negotiations with north korea under which they freeze nuclear testing for the moment and we freeze all our exercises with south korea. they have been trying to detach the american-south korean military alliance for decades. we should not agree to this. it would not only destabilize south korea, it would destabilize japan as well. i don't think the russians are going to do anything particularly helpful on north korea, but we don't need russian sanctions. we can begin, the united states can begin to create a coalition of the willing. we had one during the bush years , countries really willing to bear down on north korean

finances, north korean commerce in nuclear goods, and put the north korean economy and put sanctions on companies that are dealing with north korea, commercial companies, especially financial companies. we can do that. if the question is accessed to western -- access to western markets are north korea, that is pretty easy. when you look at the perspective of north korea, they iraq,vastation in afghanistan, syria, countries that don't have nuclear weapons, saying we have to rush to get them or that will be our fate eventually. do theyt wars, encourage countries to accelerate their nuclear plans? >> well, there is this view that the united states took nuclear regime in libya and the

went down, so it is sensible to keep a nuclear weapons. i agree with that in this sense. trying to states is get him to give up his nuclear weapons, and from his point of view, that is not sensible, and he will not do it. what we should be driving for is a multiyear plan that would ultimately result in the collapse of the regime. i don't think you will get this , to say jong-un here you go, here are the weapons. debtor to look at in the wave that we look to the soviet union or romania, just lots of pressure and ultimately the crumbling of the regime. scarlet: thank you so much. the problem is the crumbling of the regime is what china fears. scarlet: good point. this is a live shot of air force

polandiving in warsaw, on the first leg of his most recent trip to europe ahead of his trip to hamburg for the g-20 summit. has opento the plane and we expect him to disembark shortly. ism new york, this bloomberg. ♪

scarlet: this is a live shot of air force one, this time with the stairs. the president will be exiting the plane soon. he is making a quick stop in the city, the first stop he is making as he travels to hamburg to attend the g-20 summit. he will be speaking tomorrow as well.

we will have live coverage. joe: sometimes one must admit that these international , but theree a snooze does seem to be a lot on the table, north korea, whatever happens between president trump , variousmir putin reasons why this meeting seems to be getting more attention. julia: this is a conservative nationalist government. very similar views in terms of orration, the importance non-importance of climate change as well, so i think you can expect a warm welcome that will resonate back home. there is that highly anticipated meeting with vladimir putin as well. once again, president trump's plane landing in warsaw. tomorrow, he will meet with the polish president and hold a news

conference. this is the first leg of his most recent trip to europe where he will head on to hamburg to summit, meet up with xi jinping and vladimir putin. let's take a deep dive into some charts we have been looking at that capture the moment. been saying that risk assets are ripe for a correction. the first way to find that out is looking for outflows from emerging market assets. this tracks flows into and out of emerging-market bonds. b, in etf for emerging-market ons. you was see is a lot of outflows. cumulativeulled out $777 million from emerging-market lawns. -- bonds. we have images of president

on then the first lady ground in warsaw, poland, the first stop on his foreign-policy trip. i guess they will go to hamburg next, but this is the first stop here on the tarmac in poland. scarlet: greeting the dignitaries in poland. there is the red carpet. the news conference will be interesting. there is a lot in common between the polish president and the u.s. president. julia: they are very much on the same page. we do like the fashion watch. i want to point out that green coat. that looks very good. news flow around the news comes on those who support him heading into challenging meetings at the g-20. that meeting with vladimir putin very much in focus.

we will be discussing this further. from new york, this is bloomberg. ♪

arrivingsident trump in poland. you are looking at a live shot of the presidential motorcade leaving the airport. the president and mrs. trump and the boarding. the president is in poland for a visit that includes his speech new the center. they haveirlines say now been exempted from a u.s. ban on laptops. the airlines satisfied american security concerns. in march, the u.s. banned

laptops on flights from 10 airports because of fears that the devices could contain bombs. the new york city police officer shot to death this morning was ambushed inside a command post rv by a next convict who authorities say had ranted on line about his treatment in prison and police getting away with killing people. the gunman was killed by officers of block away. one sergeant called the killing of the officer and "clear assassination." the mother of three spent her 12 year career in the bronx precinct where she worked the midnight shift. one u.s. army soldier was killed, two wounded after an attack in southern afghanistan. the soldiers were working with their afghan partners outside their base when they were hit by a mortar. the wounded are being treated at a coalition medical facility. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

i am mark crumpton. julia: breaking news crossing the bloomberg. adjusted epsnings of $.27 come the estimate $.27, in line with estimates. second quarter comparative sales at plus 3%, the estimate 2.4%, so slightly better on that line. down, so investors definitely disliking something in the details. we will bring you more as soon as we get headlines crossing. scarlet: rising tensions abroad and partisanship at home equal a vigorous debate for attendees of the aspen ideas festival. joining us with highlights is a true renaissance man, walter , president of the aspen

institute, former chairman and president of cnn. he has just completed his next book due out in october. he joins us now from aspen, colorado. great to speak with you. leonardo da vinci is a great renaissance man. we will get to him and a moment, but i want to set the scene for the aspen ideas festival. you will be moving on to tulane university. talk about the political divide in the country. the stark reactions to president trump's every word and tweet underscores that divide. year onet even through right now. when it comes to the summit and how we propose solution to many problems we face, how do you see that divide manifesting itself? >> the problem is in washington and because we have an enormous fretting divide, every

every hour about each tweet or what happens, the good thing about coming to aspen is people of good faith talk about civility, working across the aisles, whether it is health care climate, or any other issue, the theme of this conference was if reasonable people got together, you could find reasonable solutions. certainly that is true of health care, which should never have been done on partisan lines, and should not be done on partisan lines now, but if you bring people together, tommy thompson, the governor of wisconsin working with kathleen sibelius, the governor of kansas, and it was easy to see how you could have a really good health care plan that did not have to be partisan. to bring in at quote i read of the weekend, an op ad from a radio director in rural iowa.

for all the outrage over president trump and his administration, clearly no big deal and much of the heartland. "even if the investigation on ties with russia turns up clear evidence of presidential misconduct, i believe it would be impossible for the republican party to consider impeachment without fox's support. the first republicans to even mention impeachment would probably be vilified by fox and find themselves facing an angry constituent areas -- constituency and a primary opponent next election. if fox turns, it's inevitable. " i know you have thought a lot about the fracturing of journalism. talk to us about the role of fox in smoothing the divide or exacerbating them. that thes deathly true divides in our country have been exacerbated by all forms of media. people are getting more and more partisan. i do think that if people can

step back from that, put everybody in the category, including all of us, that we can step back from knee-jerk artisan elections come that would be good. as for the quote you read, i think that is probably true. one of the fingers in the wind is you are starting to see fox news hosts have tougher questions about trump, and i'm sure there are people on the conservative side of the spectrum who might think mike pence would be a more stable force, so eventually that could happen, but you would need a reason. , we have not finished any of the investigations. that people can come to aspen and talk to each other in good faith, people of different perspectives, on politics, but going back to the sea in an example, it seems like

tensions are rising between the white house, cnn, and other media figures, driving things to more entrenched partisan views. house, team white cnn, or team what ever media. do you see any forces in the world that could dissipate these forces and copings back in. >> i think you are exactly right. a lot of people have a team mentality now. president obama could have suggested apple pie for everybody. trump could have suggested cherry pie for everybody, and immediately a lot of people on talk radio or cable tv would have divided and said, that is pretty horrible. i think we have to get out of that. if you're looking for forces in the world, this will break. we have seen it before, the mccarthy years or other times

when there was a great divisiveness, it is a global budapest, from brexit, birmingham, england and birmingham, alabama. you are starting to see it in being ans france example of what happens if you have a sensible, centrist, pragmatic person as you have with emmanuel macron. people start hungering for that. when will that have been in the united states? two,or the next year or but in the next 3-5 years, things will change. people say, wait a minute, let's have somebody like emmanuel macron, somebody who is more of open inte, temperate, thinking, and we will say, yeah, we went through a time of poison and divisiveness, so let's try being sensible again. a lot of candidates in both parties are of that ilk.

my own personal belief is the country is not quite there yet. i know we will see it in the next 4-6 years. julia: something that has been pivotal in many of these election campaigns is the use of social media and technology. i want to ask you about artificial intelligence. i know that was talked about as a theme. i want to get your views on whether we are talking about algorithms, autonomous driving, big data. how do think ceos need to adapt to embrace this technology, and is there an inbuilt reluctance to appreciate the impact from a positive or negative point of view? questions such a good and it reminds me that we have spent a lot of time in the past couple of weeks talking about it. these are the types of questions our country should be addressing instead of the poisonous partisan things we are. the main question for our future

is what will jobs look like in the future? what technology destroy jobs or create jobs? we have seen this for 150 years since the invention of the loom or the industrial revolution. every time we have a new form of technology, we have created new education systems, even in the .ivil war abraham lincoln decided to create land-grant colleges. around 1900 when we had a new technological revolution with cars and everything else, internal combustion engines, you have the people say, ok, we will make high school universal and free. that is the kind of thing we should be talking about that is nonpartisan, which is technology is not going to save us or kill us. we will save ourselves or hurt our economy by how we react to the new technologies and whether or not we have new ways of looking at how to educate people for the jobs of the future. scarlet: let's reassert our

technology and robots dominance. you love writing about interesting people. your upcoming book is on leonardo da vinci, so explain to us why you chose him of all people. the books i have done, i've looked at people who are kind of genius is almost, but it isn't because they were smart. smart people are a time a dozen. what makes somebody a genius is being creative. .hat was true of steve jobs that was true of einstein, who could not get his doctoral dissertation excepted. what were these people like? they stood at the intersection of the sciences and the humanities viewed you talk about the divides in our society, our society has been divided between those who love the humanities

and those who love the sciences. if you're going to be creative, you have to do what steve jobs at intersection between the humanities and technology. i was looking for the person in history who was the most creative genius in all of history, and he stood at that intersection, and that is leonardo da vinci. he was a great painter and a great engineer, a great scientist, but also a great artist. even if you look at his , that is drawing , ouranding in our earth cause must as a piece of part, as a piece of technology, so i wanted to inspire people to think you can be like leonardo da vinci. he was not endowed with superhuman intelligence the way isaac newton was. he was passionately curious and paused every moment of the day to be curious about the things he saw and observed them

carefully and indulge his imagination. these are things we can do in our own lives and even more importantly, we can nurture them in our children, so that was the point of picking the ananda da vinci. -- picking leonardo da vinci. julia: who is the modern event she then? -- modern leonardo da vinci then? we are short of people who can understand the humanities, love arts, but also love science and anatomy and all sorts of things. i do think steve jobs was able to stand at that intersection, and that is what made him special and creative. he cared about design. when he was grading the ipod, he wanted every curve of the case, every move of the interface on the track wheel to be beautiful. beauty mattered, even the

circuit board inside. he wanted it to be beautiful, but he loved electronics and technology. can is anike inspiration, and that helped to inspire me to want to do the own not a da vinci. walter isaacson, president and ceo of the aspen institute and author of the upcoming book, leonardo da vinci, thank you for your time today. julia: is rising consumer debt a threat to the u.s. economy? we will be exploring the issue. from new york, this is bloomberg. ♪

joe: "what'd you miss?" is rising consumer leverage a threat to stability? it certainly looks that way on

paper. our next guest says those fears are overblown. professor at the university of oregon, he wrote a paper arguing this point. he joins us now. great to have you back on the show. private sector debt, household debt, always people concerned about it. you are not concerned. what is the key thing people are missing? , as aouple of things percentage of disposable income, it's not growing quickly relative to the recession. on face for you, it is not a problem, but there are other reasons. joe: before you get to them, i want to point out to gears that we are looking at a chart that is crucial to your argument. percentage of disposable

personal income, you make the point and this chart shows a, we are still deleveraging. >> right. that is more key. it is the relative amount, especially a nominal variable like this. joe: people like to hone in on this pacific aspects of household debt or consumer debt. talk about this in your piece, student debt. we have been hearing about a student debt ballooned since the crisis, but let's start here. at least from a macro standpoint, why is this not as egg of a deal? -- as big of a deal? >> from a macro standpoint it is hard to see where the crisis is coming from. can't see where the counterparty is that is going to really be impacted i widespread delinquencies or widespread , recognizing widespread

defaults are difficult in the space given that for all intents and purposes that student debt can't be discharged by bankruptcy and the government has the ability to garnish wages if needed. i think we are not seeing the same kind of dynamic that we would see in the case of the housing bubble. joe: another slice of consumer that has gotten more attention is auto debt, subprime auto debt, delinquencies rising on car loans. how concerned should we be here? >> here is another space that is not as large of a problem, certainly not in the housing you look atwhen this subprime auto debt, i agree in the last year to a year and a

half that we have been reaching a little bit and we have been pushing auto sales higher than we would expect, but the numbers are smaller, and if you default leehis, the asset is easy -- easily recoverable and mobile. it's not like a house. not see the same kinds of dynamics that we saw during the housing bubble. joe: going back to the student debt question, you make a compelling case that there is an a macro financial stability risk . what about from the demand side? this idea that a generation of students are coming into the workforce with these big debt overhangs and delays their purchase of a new home and things like that and is depressing growth? >> this is something of a concern. we do know that college purchase with debt

homes at a lower rate than those without debt, but college graduates with debt purchase homes at a high rate than noncollege graduates. if we did not have this financing, we might be worse off than we think. point that a reader mentioned to me was that during the housing bubble, a lot of education financing was from the mortgage market, so it's not like there was an student debt, it was in a different form. joe: very interesting. great stuff. thank you for joining us. you should check out his piece on the bloomberg and bloomberg.com. from new york, this is bloomberg. ♪

scarlet: it is time for the bloomberg business flash. sharply shares falling after second-quarter deliveries missed targets, prompting speculation of a slowdown. model s an x are plateauing and the goals are "aggressive." the model three is scheduled for a july 28 introduction. british airways announced reichs, walking out demanding better pay. they at least cruise to operate some flights during the strike

the union claims that breaches european regulations. it plans on charging the british government's approval of that lease. amazon will create 1500 jobs at its all lake city fulfillment -- center. it will allow customers to pick, pack, and ship items this would he amazon's first facility in utah. martin shkreli's lawyer discussing a guilty plea. he is a former pharmaceuticals executive facing criminal charges for securities fraud. that is your bloomberg business flash update. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: "what'd you miss?" the nasdaq leading the way, up

.6%. president trump arriving in a speech innd for the capital tomorrow at 7:00 a.m. eastern time. trump meets angela merkel in berlin in the run-up to the g-20 summit happening this friday, take two. at the adp jobs report tomorrow at 8:15 a.m. followed by trade balance and initial claims at 8:30 in the run up to friday's jobs report. scarlet: that does it for "what'd you miss?" julia: bloomberg technology is up next. joe: have a great evening. this is bloomberg.

alisa: i'm alisa parenti from washington, and you are watching "bloomberg technology." let's start with a check of your "first word news." president trump has arrived in poland where he could receive a rockstar welcome.

the white house was reportedly promised a reception of cheering crowds as part of its invitation. mr. trump travels later to germany for the g20 summit. the visit to warsaw also comes before a high-profile meeting with russian president vladimir putin. there are some concerns about mr. trump's relative inexperience with global affairs ahead of his extended meeting with the former kgb spy master. u.n. ambassador nikki haley condemned north korea's icbm launch today as reckless and irresponsible and a move that would make the world a dangerous place. the missile ended in the sea between the korean peninsula and japan. the security council has been emergency session to discuss the launch. hasemily peggy -- the nypd identify the killer of a 12-year veteran. officials say he shot the officer in an unprovoked attack this morning. global news, 24 ho