bilateral relations between the two countries were prospering and in his words, we look forward to deepening them. president trump will meet with the philippine president on his next trip to asia next month. he has been criticized for a bloody crackdown on drug dealers. he threatened to cut ties with the u.s. and the european union when their ambassadors complained. the top lawyers for 19 states allergic federal judge today to force the trump administration to carry out the subsidies the president cut off this month. the state attorneys general offer the monthly payments are required under law and stopping that will harm consumers. the white house says the government cannot legally continue paying subsidies because there is no formal congressional authorization. leaders of two regions in the northern part of the country claim victory in referendum to demand more autonomy from the state. it could strengthen the anti-immigrant party going into

next year's national elections. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. on mark crumpton. -- i'm mark crumpton. this is bloomberg. ♪ julia: live from bloomberg would headquarters in new york, i'm julia chesley. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. julia: the little stocks are here. investors poised and ready ahead of the big news. joe: the question is, "what'd you miss?" scarlet: president trump says he is "very, very close" to naming a new fed chair. what each candidate brings to the table. a critical week for catalonia. separatists talk about mobilizing a human shield

to block efforts to as a control of the breakaway region. venezuela might be meeting the end of the credit road. the country faces two huge payments in coming days. ♪ julia: "what'd you miss?" in japan, shinzo abe's governing coalition has held onto the two thirds majority in yesterday's election. that was a gamble for abe who decided to capitalize on how he has been handling the north korean situation. stephen engle has more. >> japanese stocks again for a 15th consecutive session. shinzo utley's ruling coalition won a majority in snap lower house elections here in japan. now that the political uncertainty has been removed, we can move onto the agenda that mr. abe has put forward for perhaps the next four-year term. the agenda includes more abe-nomics, the cocktail of

fiscal spending and more monetary easing as well as fiscal stimulus, spending on social issues such as health care and daycare for the young. abe says he wants to govern in his next term with more humility but also wants to tackle a raising of the consumption tax in 2019, which here, as unpopular well as reviving the pacifist constitution in light of the growing threat from north korea. stephen engle, bloomberg news, tokyo. julia: now for more on what his victory means, let's bring in scott. great to have you on with us. clearly this is a divisive, decisive victory here for prime minister abe. just tell us what you think his top priorities are now domestically but also internationally. scott: so he definitely wants to use the victory to kind of put

additional momentum behind his effort to revise the constitution, although that is still a very controversial policy item, something he has close to his heart but that remains quite unpopular, so we will see him accelerate the progress they are making in kind of putting the plants together for that, but he will have to take a soft approach. on the economy, more abe-nomics. more monetary easing, more fiscal spending. the structural reforms are probably going to be relatively slow as they have been for the past few years. , hehe international front has president trump coming in at the beginning of november, and that is going to be a very big summit for him. joe: on the abe-nomics, obviously the package of monetary easing, easing structural reform, various aspects have been in place now for a number of years. is there anything going to

change, or is it more of a continuation of the status quo? that will beories accelerated or anything different to watch for in the new term? scott: so on the labor reform they have been kind of dragging their feet on that for a number of years. it is an issue that always has strong voices on either side of it, but he has talked about wanting to now move forward and try to loosen up the labor markets, make it a little easier for people to move from job to job and introduce some needed flexibility in what has been normally a pretty rigid workforce. honestly, i think that most people see this election as just a confirmation that we are going to see a lot more of what we have seen over the past four years. scarlet: does that mean we are going to see another delay of this consumption tax hike? that was one of his key campaign pledges, which i do not quite understand because it does not

mesh well with abe-nomics, this idea of easy spending and fiscal monetary policy. -- i: i'm alike to be able would love to be put to look into the crystal ball and see if he follows through on that pledge. we have seen two times in the past for he has decided to postpone it, arguing the economy is not strong enough to withstand that kind of shock. it is slightly unusual because he has been talking about fiscal spending and the tax revenue normally for a consumption tax has been planned to go into paying off the debt, but he has talked more recently about siphoning off some of that money and putting it in other places, boosting childcare and welfare programs. that is probably the way he is going to get a little more popular support behind the idea. scarlet: on the other side of abe-nomics his easy monetary policy. what is the likelihood abe will on asr the person to stay

the bank of japan as opposed to asking for someone new? scott: i think certainly mr. corona has the inside track. his second term to have if he wants it. i think the one wildcard is really nobody knows if he wants to continue or do something else. he is 73, maybe 74. even if he wants to spend another five years fighting with deflation at the bank, maybe other people around him, his family, maybe they have a different view, but at the end of the day, even if it is not him, it is someone who will have similar views on monetary policy. julia: about as far as the international profile? you see the u.s. and president trump stepping back from the asian region. japan clearly wants to be a great counterbalance to china in the region. how does that filter into their right to have a military and the tensions that would create within the coalition itself? scott: abe has long thought that

then the political risks, geopolitical risks in the region, whether it is north korea or the rise of china, it is really incumbent on him and japan to ensure that they have an independent capability to defend themselves. we are always going to be part of a very strong alliance with u.s., and we have seen them cooperate more even with south korea, which is a positive development, but he really feels like at the end of the day, if something happens, japan needs to be able to stand as much on its own as possible. scarlet: i want to go back to something we talked about earlier, which is abe's intent to revise the constitution. do vote is prioritized japan's ability to form a military as much as shinzo abe does? scott: no. that have generally shown over time, people have become more comfortable with the general idea of revising the constitution. it has not had anything changed it since it was first put

together after the war. it does need some updates, according to a lot of people. but they just do not see it as something that needs to be high-profile items. certainly not something that abe should be spending a lot of his capital and political energy on. joe: all the rhetoric surrounding north korea between has thed kim jong-un, head impact or play into japanese politics? scott: certainly. i think there is a lot more concern about north korea. as you know, north korea has been shooting missiles over japan. they are doing drills, which are making a lot of the population quite nervous. that has actually boosted abe's status. .e does well on the world stage he projects himself as a very strong leader on security and defense issues. ismany ways, kim jong-un partially responsible for the victory yesterday. scarlet: interesting take.

c., thank you for joining us. how will the ecb decision affect china, and are they possible to survive a possible recession? from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" the european central bank holds a policy meeting on thursday when it is expected to announce a stimulus plan for 2018 or what it does for stimulus at least. the senior economist discussed his protections for ecb policy with our mark barton. >> the miscommunication has been remarkably clear and consistent

for this future extension. does not mean there will not be any surprise, by the way. there could be some technical details that can be unveiled in december in terms of the modalities of the qe composition or investment policies that could all help to surprise the market, but the bulk of the decision we expect this week should indeed be consistent with the longer qe extension. even the books at the ecb seem to agree on that kind of extension, whether it is 25, 30 billion, even slightly more, 35. that can make a slight difference. mark: do they give an end date? how important is stipulating an end date? the survey suggests it comes to an end in september. if necessary, they can extend it further, but is it wise giving an end date? >> i think it is way too risky,

to be honest. it is not in mr. draghi's the innate to take such risk at this particular juncture. inflation, let's repeat that very clearly,: inflation is the measure the ecb is looking at more closely and just about 1%. it is too far away from the 2% target. dateu indeed call an end and commit to an end of the program now with the euro where it is, the euro is exactly at the level the ecb staff were expecting in september, but any further appreciation would put inflation outlook at risk. i think it is a mistake and a mistake the ecb will not make. mark: does the ecb have enough tools in its arsenal to fight the next recession? i am not suggesting that is going to happen anytime soon, but just looking ahead, does it happen of tools?

is it a well-equipped enough to fight the next recession? >> you are asking all the right questions, and this one is the most difficult one. it is maybe too early to say, but i think the past position for the ecb is to use the same tools at as before -- tool as before. for guidance on the reinvestment to keep the balance sheet at a constant sighs like the fed has been doing in previous years and guidance in terms of policy rate. that is the first response will be likely the tool the ecb will focus on to keep rates low. they cannot address the negative rates. but the main rate, which is currently at 0%, will likely remain low until well into 2019. believe, will be the first answer to potentially a

recession. scarlet: that was fredrik, senior economist, speaking with our mark barton earlier today on "bloomberg markets." julia: time for the bloomberg business flash, a look at the biggest business stories in the news right now. a big transaction in the insurance industry today. thanrice a little less $1.5 billion. .dding to earnings next year the shares fell by more than a year earlier today. allocatens over how to the revenue on wednesday. manchester united, arsenal, and chelsea own a large share of the $1.3 billion a year the league gets for overseas media rights. they want a structure that awards the first place team twice as much money as a clip that finishes last -- club that finishes last.

maybe the grinch that stole christma. it is leading to late nights for workers of fans rushing for the biggest realtor a change in a decade. the head of currency trading says it can ruin some people's christmas. that is your bloomberg business flash. scarlet: it is time now to return to our stock of the hour, and we are focused on hasbro, the worst performer in the s&p 500. shares falling sharply today, off by mor. abigail doolittle has been checking out the damage. a lot of pain here. abigail: yes, there is. the shares have fallen off a cliff. the team is good at managing expectations. it is the outlook for the fourth quarter. a growth of 4.7%. analysts had been looking for 11%. anything below that equates to the miss so this could be a

reset. they manage lots of the could be setting the bar low. toys "r" us in bankruptcy. this is really pretty interesting because toys "r" us is a big customer for them. here is hasbro. these are the suppliers on this site. walmart of top. 18%, walmart really taking over the world along with amazon. target, 9% equaling toys "r" us at 9%.there is amazon relatively small at 3% . for the rest being in bankruptcy hasbro is delaying shipment. toys "r" us being in bankruptcy, hasbro wants to make sure they get paid. joe: even though toys "r" us is nothing like his former self and bankruptcy and all that, it is a huge part of the toy industry ecosystem in a way that the other companies like walmart and target just are not. it is interesting about

toys was because it is not they what is ahead. they are saying this will impact the fourth quarter results, but it could lead into 2018. toys "r" us has a huge real estate footprint. what if they cut stores, reduce the size of the stores? it is not entirely clear how that will impact, but the potential for lower customers can certainly affect the shares. a long-term chart may suggest there can be hiccups again even on the company is we setting the bar here. this is 1039 in the bloomberg, a longer term chart. we have a nice uptrend here. buyers are in control. back in 2011, when the u.s. debt rating was cut and there were ripples, it has not consolidated to the long-term uptrend in a while. right here, this pockettells us investors got very excited. the fact that it is starting to reverse those as investors are reconsidering that initial position if the entire area reverses back down.

it happens to me the uptrend, suggesting there could be declines ahead for the shares. julia: what are they doing to try to mitigate that, diversify? abigail: that is a great question. we had a picture of my little pony there. so cute. wars, theyony, star are really going to their online and entertainment brands and trying to build this out. the interesting thing about that higher-margin,'s amazon, walmart, target, they are other big companies, big customers. they know they are getting hit to some degree by toys "r" us. that an impact margins. lots of moving pieces here. nobody really knows the changing landscape of retail in the toy space. julia: toys "r" us is still operating. scarlet: it is going to be operating over the holiday season because that is where they will try to make their money back. thank you so much. coming up, the sign of your real

estate slump in china. why the trend could be welcome news for president she's ping. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" seems like everyone wants to be in emerging markets these days. we got this global synchronous narrative.r t -- that is a bunch of etf's track the emerging markets. this one, however, this is the ishares core. iemg is the youngest and the favorite as well because since it began trading five years ago, it has not seen a single day of net outflows.

all inflows. go to 2017 and take a look at what has been happening of late. $15 billion. year, which is the vwo, largest emerging market etf issued by vanguard. as for the differences between these different etf's, ietm, more than 2600 large and mid count names. this gives you a broader exposure. brawl in the etf wars. they are all cannibalizing each other. scarlet: different when you look under the hood. joe: good point on that and remarkable surges lately. let's talk about china because they came out with their latest data on how many cities are seeing real estate prices gain and lost. the fewest number of cities are seeing real estate, price increases just over 40.

that is the lowest since january 2016. if we go back to really of this year come over 60 major cities were seeing price increases. this is important contacts. there have been efforts throughout the year and in recent years trying to tap down as speculation in real estate. we also heard during the recent part in congress the mantra or idea that real estate is for ,iving in, not for speculation so it is a theme they keep trying to hammer, and you get these periods were real estate takes off and they try to tamp it down and it takes off again. speculation seems to have cooled a little bit. julia: the question is, does the pollution have anything to do with what you are moving if you are living in china? have you heard of the caqi, the china air quality index? it is not talk related by the chinese. it is calculated by the u.s. the epa.

what it does is it caught deletes the five major air pollutants regulated by the clean air act. ozone, particle pollution, carbo carbon dioxide. on the right-hand side, you can see the ratings. 50 is good. 51 to 100 is moderate. unhealthy above 100, which is here. the top line is 200 and we had when you are at 300. you can see where china is on a daily basis here. look at the december readings. they spike. the highest level on their index is 300. if you look at these ones, this is around 600 or approaching 600. level, double beyond the where the pollution levels in china are deemed unhealthy. joe: go to instagram and look at beijing photos. you will see how much smog there

is. scarlet: the little masks people where will not do anything. julia: no. you cannot see 10 feet ahead of you. incredible. scarlet: take a look at the major indexes. this is bloomberg. ♪

♪ julia: "what'd you miss?"

racingstart of the week to record highs. i'm scarlet fu. joe: i'm joe weisenthal. if you are tuning in live on twitter, we want to welcome you to our closing bell coverage every weekday from 4:00 to 5:00 p.m. eastern. scarlet: let's begin with our market minute. so much for record highs at least for the start of this week kumal which will be critical when it comes to earnings. lots of companies reporting, including quartet of big names on thursday. the dow closing down. points, andng up 10 the nasdaq losing two thirds of 1%. joe: you know, not a huge selloff, but my recent standards, still pretty shocking to see these kinds of numbers. scarlet: the dow gave up earlier gains as well. let's get you to some of the bigger names that are putting a drag on the index. general electric all i 6.3%.

the earnings report came out friday and was disappointing as a big miss in every way possible. yet, the company recovered off of its lows mainly on the strength of john flannery and how he framed his efforts to put the company on a better footing. nevertheless, much of analysts cut their target and downgraded their ratings on the stock. ge down by 6.3%. under armour with its worst day since august. the brand is trying to restore its sales growth. a sabbatical according to someone not being identified. considering exiting some categories, including tennis and fishing. speaking of the consumer names to hasbro down by almost 9%. the outlook is what disappointed investors, and of course you have the bankruptcy up to his arrest, which has a lot of people worried about what

happened to sales and hasbro. 13%.te up by almost it told investors it expects access to new technology that is eating into its main business. joe: now listing a look at the government bond market starting with the u.s. where the yields were a little lower across the board today. we have the slight risk off by inequities that often translate into lower yields. not a ton action today so yields are holding up. 10 year yield down to 2.37. let's take a look at czech republic five-year yields. they had an election. a little bit of increased yields and higher rates in the czech republic. i want to go to the terminal. we will be talking about venezuela later on the show. it has some major debt payments over the next few weeks. you can see shooting higher and higher.

not the specific bond in question, but we will talk about that. 36% yield on venezuela 10 year. julia: looking for to talk about that later. in currency land, we have the dollar trading close to its two-week high. and you'll focus on the yen and the euro overnight. as you can see, very little change. 2/10 of a percent lower. his his big victory -- abe, big victory. it expects to continue his abe-nomics program and tackling reform. still have the ongoing confusion over what happens between staying and catalonia, but it is the ecb as well this week expected to offer more insight on its plans for tapering the program. right now, six to nine month

extension. billion --t $60 currently at 60 billion euros a month. dollarow, we have the versus turkey and mexico, so ongoing weakness for emerging markets right now. now let's take a look at commodities starting with oil and gold. basically nothing happening in either one of these. they are basically at the same place they have been forever. it's going to my terminal and look at lumber, which is at a 13 year high rising by the limit. strong demand and trade tensions with canada. scarlet: china, too. joe: somehow. lumber at a 13 year high. you have to feel for the home builders a little it with the

labor shortages, lumber prices, higher cost for that for sure. those are today's market minutes. scarlet: there is some inflation as well. let's bring in mark chandler for more on what we are seeing in the markets. it seems like a quiet start to the week. a pivotal week because a lot of earnings. ecb meeting pivotal as well on thursday. >> the calm before the storm. the gdp numbers for both the u.s. and the u.k. are coming out. historical, but that will help shape the inventories for q4. joe: what do you say when clients ask you about low volatility? it seems to be in of session. so many different ways you measure it, cut it, slice it. whether it is at tech space, equities facing with volatility despite all of the headlines and

stuff so how do you reconcile that for clients? >> a foundation little volatility but also very high bond prices and low yields. the japanese stock market, 15 days in a row. is probably the biggest in more than three weeks, too. what is happening across the world is one cause. most people would say it is something like activity buying these bonds. for me it is not the issue. we have slow growth and low inflation, and those conditions alone justify low yields. when it comes down to business. andave more oil-producing people demand for oil, the price falls. supply and demand. most of our reluctant to use the same tool for interest rates and the cost of money. my paradigm, i would say the

reason interest rates are low and volatility is low is because we have too much capital, too much money. business is not eating as much capital to build factories. julia: it is not central bank stimulus, everybody stimulus. everybody's stimulus. marc: just like when farmers grow too much soy or corn, they have to buy it and warehouse it. what the ecb did is they are buying bonds and warehouse-ing them. same way we warehouse corn. scarlet: why do you think people are reluctant to acknowledge this? marc: the idea of having too much money is mind-boggling. most of us cannot understand a situation with too much capital. this is not my idea. this idea goes bac.

i did a book about one of the thinkers that used to work at idea builders had this 1911-1912. saying that the problem with capitalism is too much capital, not enough places to put it. julia: going to continue for a while. banks?ask about central looking at potentially talking about the retraction of policy, and that is the ecb. i have seen a lot of people making comparisons with the forward trends between germany and france and some of the peripherals. a six to nine month extension of qe but shopping and half. would you agree that is in the price? marc: that is the consensus view now. a month ago, most people looking for a move of 60 billion euros in one month to 40 billion euros and a six-month extension, but the forward guidance from

unnamed sources has been getting the markets to a nine-month extension and a smaller amount. that is a trade-off between the length of the program and the size of the monthly amount, and the crisis, the monthly amount was more important, but now it seems the longer the program is, what they tell people like me is the longer the program is, the lender we have to wait for the ecb to raise interest rates because we know sequentially they will finish the qe and raise interest rates. the longer they do the qe, the longer it will take to raise interest rates. so that is why i think in the current environment, talk about ecb tapering is negative for the euro. julia: they can change their minds. they could still be deciding to buy fewer. why are we making this automatic associate at a nic nine-month window will be one they follow through on? marc: the ecb is very much about transparency. along the way, they tried to guide market expectations.

what they want to do is avoid disruptions to the market by having small buying continuing well into next year. for me, that means the divergence continues. the balance sheet will shrink by 30 billion this quarter. it will shrink by about 150 billion the first half of next year. the ecb balance sheet will expand by 180 billion euros this quarter. at 30 in six months billion, that is 180 billion to expand by while the fed is shrinking. of: what do you make persistence of low-level political risk in europe? obviously we have the czech republic election. not a huge country on most people's radar, but then electing a eurosceptic populist, the issues in catalonia not going away, looks like it will be an explosive week potentially there. we have elections coming up early next year in which the five-star movement and the northerly appeared to be doing well.

scarlet: do not forget brexit, too. joe: end the ongoing mess with brexit. the economy seems to be going back, but this is not going away. marc: they seem to be mostly localized. think about where we were at the end of last year. people said brexit, trump equals populism and nationalism in europe. last year, foreigners sold about $100 billion worth of european stocks. that do not come to pass. april 24, a monday, that is when it became clear that le penn was going to lose in france. we have not looked back. macron put in the bottom for the euro, and brutal as election in september put in the top for the euro. -- and angela merkel's election in september but in the top for the euro. all of these things .2 high level of anti- -- point to anti-elitist voting.

they need to worry when it becomes systemic. it is not a eurozone whole thing. we can largely play a down. -- play it down. julia: you are saying the dollar goes higher and that is part of the financial reasons, those two things tiny into that. where do you see the dollar going? is that kind of strength going to be a problem when we talk about that much strength? marc: the reason is not because of the dollar per se but u.s. interest rates and the thought of the fed raising rates. where is the euro going to go? i am looking at a chart pattern. earlier,t lows we saw and the months earlier this month, we have a down move this year. we have to wait and see what happens next season. we get tax reform. emerging markets, everybody i think to, the still

the only way to make money is to buy high-risk assets. a pullback is a new buying opportunity. that psychology has not been broken yet. julia: interesting. marc chandler is sticking with us. coming up, the search for the next fed chair. meetingesident trump's with current fed chair yellen have changed? scarlet: he said he liked her. julia: really likes her. we will get a decision very, very soon.very exciting . from new york, this is bloomberg. ♪

mark: it is time now for first word news.

the chairman of the joint chiefs of staff general joseph dunford is holding a press conference at the pentagon at this hour. he told reporters "we over the american people and the families transparency about what happened in niger, when four u.s. killed."n were briefing comes as the controversy continues about details of the operation where the servicemen were killed and president trump's condolence calls to the widow of one of the soldiers. secretary of state rex tillerson made an unannounced trip to iraq today just hours after returning on a similar surprise trip to of guinness in. -- trip to afghanistan. he said america's commitment to afghanistan is not unlimited. >> but i think if you consider the current situation in afghanistan, we were talking about this a few minutes ago, and you look a few years in the

past what the circumstances were, afghanistan has come quite a distance already in terms of trading a much more vibrant population, much more vibrant government. mark: secretary tillerson added there are opportunities to create what he calls a prosperous afghanistan society. the trump campaign's digital director is scheduled to appear privately before the house intelligence committee this week.this is according to people familiar with the matter who say the appearance is part of the investigation into 2016an meddling in the presidential election. has been referred to as a key figure in the election probe but says he was unaware of russian involvement in the digital and data operations of the presidential campaign. in california, 5000 firefighters are still battling 10 active wildfires, one of the deadliest blazes in the state's history. fires began october 8. at his feet more than two

does a large blazes were being fought -- dozen large blazes were being fought. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. julia: "what'd you miss?" turning out to the race for the next fed chair. president trump said earlier close" tovery, very announcing. sorry, trying to be enthusiastic about this. john taylor and jake powell are considered for the top job. janet yellen remains in the race . . marc chandler is still with us. as down as with something new -- astound us with something new. marc: it might not make much of a difference. you think about the fed job, it is not ideological position. you're given a mandate, full employment, financial stability, and price stability. you go to a job.

i think many of the candidates will tell you not to decide things all that different than janet yellen decided. a different personality, but a little arbitrary between her and powell and taylor, who distance himself from following his own rules. julia: you are talking 50 basis points max different? marc: i think we should expect no matter who gets the job that the fed raises rates once in december. i am seeing them raise rates to three times next year. thone full hike next year and a little bit more. joe: let's talk about taylor a little bit because the crude way people think about him, unsophisticated way is taylor is a hawk and he called for a gigantic rate hike and the market is not ready for that. what is the problem with that simplistic plan? marc: no official has come out and said, i want to turn

monetary policy over to this rule. especially on the start of the financial crisis, discretion is important. judgment calls are important.the level of interest rates needed now are beginning to expand. the fed is not just raising interest rate, but the balance sheet is shrinking. the next fed chair, even if it is janet yellen, will continue the cautious approach of raising rates when able to when the economy is strong enough and pulling back when you don't have to. the last time we had a cycle, greenspan was raising rates five basis points every meeting. we are far from that. regardless of who is the chair, i don't think we go back to that kind of aggressiveness. scarlet: you mentioned in janet yellen stays, everything you said would argue for janet yellen's because it would not make much of a difference, but for political reasons, the president may want to signal a shift here. using janet yellen is a hawk or a don't -- do you think janet

yellen is a hawk or eighta dove? marc: the middle. the fed is the center. the hawks and doves are relative to her. as far as other people can have this job or could have had the job before her. i think because of the economic ,onditions, lower inflation maybe a little bit of a trend, but not taking off. we are not seeing the kind of wage growth many of us thought we would see. because of that, we are stuck the matter who is the chair. a very cautious type of approach . julia: we had comments and hypothesizing whether or not policy would look like if he were the fed chief. do you think there is even a possibility, even a small possibility of someone else stepping up and being the chair beyond the candidates currently being discussed? my second question, say something about tax reform and how that changes the game for the markets going forward?

marc: what are the chances we get a complete outsider? julia: yes. marc: pretty slim. it may not be important to trump, but it is important to the people around him. it is an institutional memory. when janet yellen leaves, who is on the federal reserve with experience who knows that he was how we do things and why? julia: have with the market react to someone like that? marc: the markets might like that because it is one of their own, but on the other hand, it is not clear. no track record. a very inexperienced person. will they have the clout to put together these moving or alliances dilutions of the willing? will a hammer out the consensus? that is the kind of leadership yellen has provided. no government has dissented from her decisions. i think she has an a great job of pulling the fed together. think about which he has done, the tapering, the rate hikes and now the balance sheet deductions. i cannot imagine anybody else having done this without so much

fanfare. julia: donald trump would like the candidate to be positive for markets. scarlet: marc chandler, thank you so much for joining us today. coming up, the crisis in catalonia reaches its tipping point. have separatist leaders encountered a crackdown from madrid? from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" a critical week. catalan separatists are plotting their response to a central government crackdown. spanish prime minister prepares to strip power from the regional government. leadersnd the

of catalonia still have one card to play, immediate decoration of independence. more now from madrid. >> the government is studying how to get back to madrid after the government finally enacted article 155. we now know the government in madrid is seeking to dismiss the entire regional government as well as get a new power such as a veto over the catalan region parliament also calling new elections with them next month. presidentn regional is hoping to address the parliament on thursday and potentially explain his measures. still on the table is the declaration of independence. having said that, we are now the catalan regional leader may be considering coming to madrid to explain his case before the senate. this is relevant because the article 155 gets voted by the senate before the end of the week. this can be seen as perhaps the

original president trying to reengage with madrid for a very final time. meanwhile, we are hearing in madrid the central government says the senate will have to have the final say on the -- and the timetable on that has been set. we can finally expect to have a final vote by friday. we will know the cabinet will meet after the vote is held to explain related matters. joe: let's take a closer look at what promises to be a critical week for catalonia. you see the schedule coming up here. wednesday, speaking of parliament. friday, spain senate will vote on invoking article 155. bloomberg reporting earlier about plans to have a human shield block out the national government in madrid. pretty fascinating stuff to watch. julia: potentially unilateral demolition of independence from

the calends. up next, the default in venezuela. this is bloomberg. ♪ retail.

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mark: it is time for first alert news. a purchase for boeing aircraft was signed. willilateral relations prosper and he says he looks forward to deepening them. the european commission president says that talks on a future relationship with the united kingdom are on hold until the rights of citizens are insured and a financial settlement is reached. aside media reports that theresa may was desperate

for help at the meeting. the trumpered administration to pay health care subsidies the trump administration cut out this month and they argued that stopping them will harm consumers and said the government cannot continue paying the subsidy because there is no formal congressional authorization. regions, leaders in two of the northern part of the movery claim victory in a for more autonomy from the state and this could strengthen the anti-immigrant party going into the election. , powered byws journalists and 120 countries. .countr crumpton

this is bloomberg. see that analysts cut the price target and downgraded the rating a day after this came out. >> a weird reaction. host: everybody was impressed with how they handled this and they are taking stock of how this will take -- how long this will take to rebuild the company. >> a race against the clock on friday and the government-operated oil and gas company will have to pay anothers as part of $1.2 billion due next week. proving andnt is religious to call nightmare for the nation that is isolated by u.s. sanctions. partner.ined now by a

great to have you on the show. we have called it race mention. is that what is going on? >> the funds are in short supply and have been for 12 months. the government has demonstrated that the first priority is the servicing of the debt. there are some legitimate technical issues. >> interest payments. they are in a grace period. >> one of the effects of the sanctions is that the trustees are a little spooked and the signatories are on the sanctions list. there are some legitimate technical issues. obviously, the country is in a dire economic strait. makeif they wanted to these payments, it could be tricky.

what creates the challenge of getting the money from venezuela into a bondholder's hand? they don't actually have to make the payment. they would have to intervene to stop the payment. it is sort of an escrow. my senses, even though the price action has an volatile and you can have tempers and in a few 10% in aou can have few days. there is trouble. act going balancing on in venezuela. i think what is interesting about the regime is that these guys are a lot smarter than many of the investors give them credit for. they are learning how the system works. this is a balancing act and it

is political and economical. >> this prioritizes paying back foreign debt. ?hy is that you have a humanitarian crisis on the ground. ?hy is it prioritizing that >> many venezuelans are invested in the bonds and that tends to happen. are paymentsthese for the petroleum companies. disrupting the cash flow that comes from oil would be pretty dangerous for the economy. is not in a good economic situation, there are times where the cash situation is not as bad as it was three or four months ago and, if the oil prices trend up a little bit, they could be in a better situation.

,he default, if it makes sense is short to medium term. if they could find a way to not pay him put it into the country without having the repercussions those securitized shares. getting into disruption, if they choose to default. >> they are making sure the cash cow is available. >> the country does not function without the oil company. >> politically, he is gaining or maintaining market access and .hat has been important what about the social costs? you pointed out the humanitarian crisis going on in the country. would there be pushed back, if

the headline said that the country defaulted on some of the debt? >> for those of us in the market, you start to see the national character around debt and, if you go way back, venezuela and mexico were always the countries that seems to t and other countries were like, let's see what happened. they never outright defaulted. >> you can borrow from the chinese and the russians. >> the chinese and the russians are in this with the rest of us. detail with this, it will take two hours. >> a venezuela was to default do thein the future, how technical challenges complicate

the recovery? >> all right. there are two scenarios. r assessment, this will get paid, this week and next. they don't have the debt servicing to get over. inevitably, they will get into a cash crunch and they want to do some sort of that-management exercise. management exercise. e.sume the fx rat look at the secondary market price. still been servicing and you can work with something there, in the worst case. worth what oil is

worth, in the long term. if there is a transition, there will be a flood of money coming back into the country. it is one of the best growth stories and it will make argentina pale insignificance. >> would you buy it? >> listen, that is our business. i am not going to chase a compression spread. you know, you are going to make 10%. there ist it wrong, the upside and downside probability. i would probably put a bid out t here. i will put a bid out there. >> we pinned him down. >> what did you miss? depicting rocky

balboa was unfurled in istanbul. shares of the soccer team plunged because the prime minister of turkey ordered the unestigation to see if the gulanistf this was a plot. the banner said rise up. they want to figure out how this was unfurled and what it means. 5% on theplunged news. one of the strangest stories. question cannot talk about philadelphia or pennsylvania

without these associations. what about the match? >> it ended in a 0-0 tie. >> for a soccer fan, that is exciting. how will this impact silicon valley and wall street? this is bloomberg.

host: the rise of automation and artificial intelligence is causing fear. it will cause downward pressure and leave people unemployed in the next decade.

joining me now is a ceo. about the time i contacted at&t and needed a new sim card and was able to do a chat function and you invented that. >> yes. i invented that technology. >> you are saying that bots will take over that job. >> you are asking a question that is similar and we can get a bot to answer those questions. humans, buteed for there will definitely be automation that happens in this area. announced an initiative and my take was that bots are not very good and it doesn't seem like they are that

satisfying and the responses seem a little hand. technology the improving? good and we are getting positive hit rates. west ande the wild ts and are throwing up bo they sometimes work and sometimes do not. these are guys who do it on a different scale. on, despite the iteraction, and how does affect things? >> the majority have to be answered through interaction. we have chats and messages on

our platform and we see these conversations. 80% of the conversation will be automated and 20% will be a human being. botave a human and a working side-by-side and that seems to be off a more. 80% ofare saying that the people in call centers won't be there anymore. >> i think it is different. they will transform the business and they are answering a lot of questions over and over. that is not high-value. they are stuck and they are not happy. the agents are not happy. you call a call center and you experience what the agent feels. what a it matter customer wants? when i -- ed

>> what we know is that we do messaging and you can use your mobile device. now, we want to implement that and nobody wants the call. they are forced to call. more importantly, we are put on hold and we lose viable time. the pivot that is happening will change our lives. >> why do you think there is so much anxiety? this talk of robots replacing the jobs of humans, there is very little evidence of this. you would expect productivity to be surging.

why do you think there is intense anxiety right now? i'm looking around. the reality is that jobs become automated. you guys are here talking. about this anxiety and a lot of hype about this. somebody who is behind the camera has a job somewhere else. someone is doing something else that is high-value in the organization. things will shift and you cannot stop it. with customer care, it is happening very quickly. >> we talk about elon musk and mark zuckerberg and you are very ,unchy about steve mnuchin

saying he is naïve about the impact of ai. word, it isar that like saying, i don't know what we are talking about. everybody throws everything underneath artificial intelligence. automation, about it is what automation can we get done where we do not need a human. when i talked to hr and i have to find out about benefits, do i really need to talk to an hr person? the reality is that things will get automated through natural language processing and that is happening in our enterprises. i think things like the irs and asking the government's questions, you could automate that and we, as consumers, we

decide what we want to do. if we want automation to preserve time and get through basic tasks and have help, we will take it. we will drive the change. no one will stop us. up next, -- >> up next, we will talk about tax reform. you are skeptical. are you?

host: despite the uncertainty &a has not, global m slowed down. robert chandler stepped down earlier today. alex asked him about the competition for the market share. >> it is clear that we are the dominant franchise and we were number one in the u.s. by a large measure and we have now become number one globally. it is always a battle between us. the taking away point and we have not seen a lot of big deals. you look at the pipeline moving forward. does that change over the next few months? guest: who knows? you are right.

what has happened is that the deals are down. we have some things in the pipeline. you can never tell. i have been surprised by the activity. japan andne deals in it has been a lot busier. >> what made you think it would not be? >> there was so much uncertainty with taxes. if you do not know the repatriation rate or the corporate tax rate, it is hard to do deals and people are still doing deals. uncertainty of figuring out valuations. the other thing is that the ceos, is high and

didn't think they would feel compelled to do deals as much as before and things were going fairly well. you had some things go flat on the market and you had discovery communications buying strips. you don't know the taxes or the market reaction and it has been surprising. >> coming up, what you need to know for the trading day. this is bloomberg. .

host: stocks declining today to kickoff a big week of earnings and do not forget about the ecb. hass a reason the dow declined. >> i will be looking at earnings. at&t, gm, and mcdonald's report results tomorrow. it will be a is he week. busy week.ll be a

>> don't miss the goldman sachs fromdent joining alex live the annual meeting and washington, d.c. >> lots to ask about. bloomberg technology is next. >> have a good evening. this is bloomberg.

host: you are watching bloomberg technology. check the news. trump and joseph dunford said peoplee families of the

killed in niger deserve answers. was with trump singapore's prime minister for a contract with boeing to be some. the prime minister said that the relations between the countries are prospering. trump meets with the philippines president next month. te has been criticized on drug dealers and cutting ties with the u.s. and eu. meeting with the leaders as he eeks to pursue the strategy