.is cabinet eight former cap salon officials were jailed -- catalan officials were jailed. president trump will make a stop in hawaii to visit the pearl harbor memorial before boarding air force one on his trip to asia. he complained the justice department isn't doing enough to investigate hillary clinton. >> they should be looking at the democrats, podesta, and all of that dishonesty. they should be looking at a lot of things. a lot of people are disappointed in the justice department. including me. his comments come in the way of allegations that hillary clinton had control over the dnc strategy in finances before she clinched the nomination of the party. ueller estimates his

prosecutors will need three weeks of trial to present their case against x trump campaign officials, paul manafort and rick gates. they have pleaded not guilty to charges they violated federal monday -- money laundering and lobbying laws. they were placed on house arrest and released on multimillion dollar bonds. areecutors in south africa trying to convince a court to double the prison sentence for oscar pistorius. told the court that it overemphasized the olympian's the disability. he was sentenced to six years in prison for the 2013 murder of his girlfriend. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪

julia: live from bloomberg's world headquarters in new york, i am julia chatterley. scarlet: i am scarlet fu. joe: i am joe weisenthal. heading for the longest weekly gain since 2013. >> what you miss? >> the labor market is back from the hurricane effect. michael feroli for the analysis. congress came together long enough to unveil their tax reform bill, but there may be cracks in the unity. the biggest takeover of a chipmaker is set to be in the works. ♪ hyman has been

following the latest developments when it concerns qualcomm. we have a bloomberg exclusive headline coming out. julie: this is an exclusive scoop from the bloomberg news deals team. qualcomm shares are spiking when we got these headlines. they remained at the list -- at those levels, with a 14% game. broadcom is exploring the deal. it is considering $70 a share. at theres are 62.66 moment. we heard from someone in bloomberg intelligence who said this could be complicated in terms of domestic chores that would potentially -- investitu res that would potentially be necessary. into this could be a cultural fit -- and this could be an odd cultural fit for the two companies, who have been at

odds. broadcomm bought avago -- avgo -- one of many acquisitions the company has made. itsdcom is changing operations from singapore to the united states. there have also been headlines xpgarding an xp -- n semiconductors. qualcomm is attempting to buy nxp, but there has been resistance from shareholders. this might now be a deal that doesn't occur, if the other deal does. we have been -- hearing from various outlets the two companies are in talks. the two are aiming to finalize

details of the deal in december. a deal price could be significantly above $200 a share. es, we have been watching them in the wake of these headlines -- we are seeing a bit of a down movement, two thirds of 1%. it is interesting we could see two pretty sizable deals at the end of the year, when creating a market cap at about $200 billion, and the other we could see a deal price of over $60 billion, which would boost the value of this year significantly. scarlet: thank you. julia: what'd you miss? people resumed work after hurricanes harvey and irma in october. has been some debate about what is going on with wage growth. we will talk about how the fed will interpret the data.

is the chief u.s. economist at j.p. morgan securities. you have changed your forecast for the next year. >> we were leaning toward saw, the-- what we tomployment rates continues be below the forecast for this year and next year. we think that tightening in the labor market will keep the fed on track. scarlet: when are we going to see the wage gain? we should mitigate considerations. we had that comprehensive of employment cost earlier in the week, which shows more evidence of acceleration. scarlet: shouldn't be confirmed by the earnings? michael: there are compositional effects. unemployment rates are

falling faster than anyone expected. average hourly earnings -- there are some signs you can't dismiss, but they are not blowing the doors off. raise theat possibility that everyone is overestimating how close we are to full employment? had we know it is not 2.9% -- h ow do we know it is not 2.9%? michael: page growth is moderating. we are probably going to pass it pretty soon. acts, i think they are going to continue to lodge that rate. some of the thought leaders on the fed, they are emphasizing the tightening. we kind of see this looks curve ips curve- the phill

trashed, but that is still their framework. scarlet: what does that mean for how fed officials about the backsliding of inflation? michael: this is a puzzle. scarlet: however you want to phrase it. we do think it has confirming a little bit lately. these things do not turn on a dime, and the fed is not going to be too far behind the curve when they do. we have 3% in terms of the fund rate, and we don't want to be far away from your -- neutral we do get-- when that turn of inflation. julia: one of the other things we have been talking about when we talk about the fed raising rates is the financial , and talkingsing about balance sheet retraction.

do you think that feeds into the mindset, that these are a free hike if they going to december? theypoint do you think will get traction on financial conditions and that will catch up with them? michael: we have had the fed so far. marketave had the discount the fed so far. you will see prices react, but some fed officials have emphasized that hikes are 2-3 times a year. financial conditions looked easier than they did at this point last year. scarlet: you're looking at four increases in 2018. what do your clients say? fed started this

year with three hikes. it looks much like babel do that ==-- like they will do that. crazy -- alook little less crazy and they might move higher. joe: the transition from the fed from yellen to powell. comeentral bankers like to in and hike early on to establish -- to establish their tough credibility. there is this question of fed independence, which has been raised and that could be a way establish that powell is not going to be a trump lackey. michael: they are just going to try and look at the data and see how it evolves at the end of the day. scarlet: do they think powell will be a wuss? joe: supposedly, that is a thing. central bankers want to

--ablish >> it is not unlike the first day in prison. julia: thank you. [laughter] scarlet: the biggest takeover of a chipmaker may be on the horizon. we will talk about.com -- broadc om's deal to acquire qualcomm. this is bloomberg. ♪

scarlet: broadcom is exploring a deal to acquire qualcomm and is said to offer $70 a share from the company, according to people familiar with the matter. this deal would be the biggest takeover of a chipmaker ever.

shares of qualcomm have jumped 17 percent. they rose as much as 14% today, the biggest one-day move since 2008. running is to discuss is the bloomberg gadfly columnist from the sutherland -- brooke sutherland. ceo is known to be a serial acquirer. looking into potential acquisitions is not a surprise for him. but why qualcomm? the stock has been under some pressure, which reflects the legal problems it faces. >> the deal makes a lot of sense. we have written before that is likely on the wish list of the ceo. broadcom would be getting $30 billion in revenue.

and it would be very strategic. both companies have a significant presence in smartphones. there is a major trend in smartphones to add more bandwidth. broadcom and qualcomm are both leaders in different technologies, which are both critical to adding more bandwidth. ke, you look at this announcement from president broadcom bringing their headquarters to the united states. that makes doing a deal like this easier. broadcom is still in the middle of trying to get a deal done and trying to buy brocade communications for $5.9 million. we thought this could have something to do with getting approval for the brocade deal. this is a company that is

extremely acquisitive, and chipmaking is very acquisitive. aty were looking opportunities in the united states and the growth prospects and thinking it would be a lot easier if we are a united states company. brooke: talking about all of this is aisitions, gigantic acquisition. doesn't create any integration or execution -- does it create any integration or execution risks? there is a saying about the broadcom ceo on the street. "in him we trust." he has a phenomenal track record. i followed him for more than 10 with his impeccable track record of integration. this would be the largest deal in the history of the company,

but i think the market would give him the benefit of the doubt. brooke: the one thing that would push back on dosh -- on, we don't know if we are talking about integrating brocade communications and nxp, which is integrating its own mass merger. that: we have to make point. this is a huge deal. brooke: piling on top of each other. julia: what happens if qualcomm loses? that point. issues and isst in a legal battle with apple. qualcomm may be directly under threat. what are we looking at? brooke: that has been some of the pushback from nxp shareholders -- qualcomm needs us a lot more than we need them. there has been resistance among nxp holders to push for a higher

value. is that this question, going to affect the ultimate value of qualcomm to ac quirers? >> what you think qualcomm shareholders would be saying to the board? romit: we are still looking at it. $30 has been reported as low. most are saying closer to 50%. i would say in terms of this whole acquisition -- we can very well see a scenario where broadcom buys qualcomm and nxpi. they broker an agreement with apple and qualcomm. broadcom has a close relationship with apple. as we have seen with prior deals, they spin off businesses,

like the licensing business at qualcomm, which was such a very big price tag and helped fund the purchase. if this goes through, i expect there to be a lot of moving pieces. scarlet: it unleashes a torrent of deals. it was bloomberg that reported $70 a deal for shares of qualcomm, potentially. talk about antitrust risk. if the regulators are looking carefully at broadcom and becade and nxp, there has to this issue at hand for broadcom and a qualcomm tie-up. romit: you are right. this is the risk for a merger between broadcom and qualcomm. it is not that broadcom or qualcomm has a monopoly on the product-based element of the smartphone, but there is a portfolio effect, whereby one supplier owns so many key

basebandgies -- the modem and licensing technologies that going to the phone -- it is not that one supplier has 100% of the shares, but you get a lot of power if you own all the key technologies as a supplier that the regulators would look at. a company like broadcom would have to get approval from some of the largest customers like samsung and apple to get this deal done. brooke forus go to some final comments. you had a lot of emotions going on in your face. brooke: my initial senses, are we reaching some sort of creepy mna? we have all of these deals building on top of each other. a number of these companies were trading at record prices. this paid off for nxp -- burt =-- but you have to

wonder where this is all going? rb reaching this frenzy moment -- are we reaching this frenzy moment? mna has been picking up. i don't know if it is tax form or what it is. it has to make you nervous. anda: brooke sutherland romit shaw. thank you. scarlet: trade will be at the center of president trump's trip to asia. he earlier called the trade deficit with china, embarrassing. from new york, this is bloomberg. ♪

scarlet: i am scarlet fu. what'd you miss? one of donald trump's favorite ways of keeping scores between

countries. this is the u.s. trade balance with china. the red bar japan. south korea, yellow. there are trade deficits with all three countries. them than wee from export to them. president trump will likely bring this up to his counterparts. why are these deficits so large and persistent? it is complicated and there are a host of reasons. one is that we have a stronger u.s. dollar, tweaks the u.s. more expensive -- which makes the u.s. more expensive overseas. the president prefers a weaker currency has accused others, notably china, of keeping their china hass weak, when been doing the opposite. a lot of this will come into play between president and his asian counterparts. julia: i will pick up on two things. one is imports and the other =

-- why kim jong-un has been so quiet in recent weeks? this is a chart that looks at what goes on in north korean imports when we see that and forth between the united states and north korea. corn is what i am looking at. we are looking at spikes going back to 2009. north korea imported far more corn from china during these periods, and tracked missile tests between north korea. on2017, we saw a spike going between june and august. then they fell back. we think that north korea is stockpiling for imports -- corn imports in case we see more sanctions. brooke: this is my new --

joe: this is my new favorite thing. we have unemployment data out today. something is changing about it. this blue line is the unemployment rate. down for .1%. the white line is the annual deficit of non-denomination gdp. for years, they track each other. -- they tracked each other. it was a perfectly cyclical indicator, the size of the deficit. when the economy is good, tax revenue goes down, spending goes up. we have seen this divergence in the last two years and we may be heading to an era of structurally higher deficit. even as unemployment is going itn, we haven't seen deficits in the share of gdp fall.

there had been mandatory outlays, retirements, not going down the strengthening of the economy. scarlet: just in time for publicans. -- for republicans. this is bloomberg. ♪ who knew that phones would start doing everything?

entertaining us, getting us back on track, and finding us dates. phones really have changed. so why hasn't the way we pay for them? introducing xfinity mobile. you only pay for data and can easily switch between pay per gig and unlimited. no one else lets you do that.

see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit or go to xfinitymobile.com. >> "what'd you miss?," stocks at

record highs, the dollar rising after the jobs report. i am julia chesley. liveif you are tuning in on twitter, we want to welcome you to our closing bell coverage every weekday from 4:00 to 5:00. >> julia talked about record highs. it looks like a tale of two markets. the dow is barely higher. the laggards, ibm, financial names. the s&p in the nasdaq are up. the nasdaq the big winner as we've got word of more potential megamergers between some big chip companies. at aould mention the vix record low. 9.02, round about it session lows. could we see a change to the

vix? joe: it could happen monday morning. torlet: let's get you individual names. i mentioned the megamerger deal. bloomberg is reporting that broadcom is interested in qualcomm for $70 a share. qualcomm is just under $62. broadcom $273. to move theing corporate headquarters back to the united states. a lot going on for broadcom. shares moving higher, three percent, on reports cbs may buy a health insurer. this is according to lawyers. at now would be valued at $200 a share. the interesting thing, in addition to the reporting the deal could be as early as december, we have not heard a response yet. julia: still waiting. scarlet: pandora shares are down

by a quarter after four caret -- forecasting a loss for the fourth quarter. deficiencies are being highlighted. joe: let's take a look at government bonds. not a lot of action today. of course the headline was be jobs report. we will talk about it more later. weird numbers here in there. it did not change the narrative much. bigid see a selloff in some em, turkish five-year, showing higher rates. some anxiety there. the big mover, coming to my terminal, anything having to do with venezuelan bonds. venezuelanook at the bond going from last night, 48 cents on the dollar, $.30 on the dollar on those comments last the heck out of

traders. talking about a restructuring of the debt. we will talk about it more later on the show. a big selloff in venezuelan assets today. julia: i'm showing you the dollar he index year to date, on to another game. snapping back after falling earlier. some confusion a little bit from what we can glean that given the hurricane damage from previous months. saying it has tipped the balance coming from the fed in 2018. what we did see is the stronger dollar hitting the highest currencies in the session today. that is what i want to show you. lira, the the turkish dollar brazil rate, the dollar is higher by 2% or more versus

the turkish lira and gains across the board versus the other two. let me give you a sense of what the returns are at these currencies across the emerging markets year to date. the turkish lira more than 10% gains returned in 2017. all of those guys got hit today. joe: on commodities, not much action. crude continuing to gain. this is one of the big stories lately, some real momentum in oil. over the last few weeks with texas oil nearing $56 a barrel, gold is selling off and those are today's market notes. thelet: "what'd you miss?," longest string of weekly gains since 2013. to go over the market moves, let's go to michael regan. i go back to the vix because it is at a record low. it is about to dip into the

eight handle. we talk about how we are late in the market. is there no fear or are we not seeing it? intraday, we briefly dipped below four. if you can bring it up. eight point 99. we can see the red line at the bottom. scarlet: it happened. joe: maybe we will still get there. >> nothing is going on. the vix is a function, implied volatility is an implied function of historical volatility. everyone believes in mean reversion. it is down to snap back. no one can say when. it happens on its own time. are right no one is expecting any shocker. joe: one extraordinary thing about this, there was political , all fed news, tax news

kinds of stuff. this was one of the biggest news weeks in a while. it is the same story. >> earnings news. and obviously tech blowing past everyone this week on apple and off for that and amazon earnings. bigyone was braced for a swing and we got more of the same. slow grind higher. the tax reform, a lot of the macro beneficial elements of the tax reform were priced in. now it is getting into the weeds and figuring out -- not everyone is a winner. there is definitely some losers. you try to handicap what part of it survives to reach the president. to me, i've got to wonder about the mortgage interest deduction cap and property tax caps nationalhat

association of realtors are coming out saying, they said this before the bill, based on the framework of the bill, saying this could cause a 10% drop in housing prices. everyone remembers 2008 and the knock on effect from that has to make you wonder if these things will stick in the bill. scarlet: i believe they said we are going to fight this tooth and nail. julia: i want to bring it back and talk about in terms of earnings season because we were talking about the fact the reaction in stocks tended to be weighted to the downside. what are we seeing in the earnings season so far? has the mood changed in terms of the vix? michael: i think that is true. miss, you're getting

punished. you have to beat by a decent amount to beat your stock. it is interesting. the initial reaction is not always what you think. facebook has blown away earnings estimates consistently. the stock is priced into it. when it comes to facebook, that was one of the more highly anticipated reports this week, especially with the russian investigation. if you're going to double your security staff, what kind of effect to that would have. beating on the news their margins were under pressure. long-term, it is a blip in the growth potential they have. dip and i would not expect it to last. scarlet: what do you make of the deal news we have been getting? we've been reporting that broadcom is considering a bid for qualcomm at $70 a share.

deals wese supersized thought weren't going to happen and there is a flurry of them. aetna as well. is this animal spirits? of 2007 it reminds me when i came to bloomberg. stocks rise on takeover speculation. there is a big difference. this is a strategic acquisition. you have broadcom, one of the best performing chip stocks. they have been doing great. broadcom is doing great. qualcomm is not doing so well. and you have a strategic acquisition that is going to be paid for in stock, it is a different scenario than in 2007. very robust credit market right before it fell off a cliff. deals,t with these two aetna and qualcomm, there is a

different story with acquisitions. scarlet: animal spirits is the answer. [laughter] michael regan, thank you for that. julia: quiet whispers and dissent. the gop trying to show a united taxt when they announce cuts. perhaps a different story underneath. we will go to capitol hill for more details. this is bloomberg. ♪

time for first word news. president trump is off on a trip to asia. he will stop hawaii where he will face the uss arizona

memorial and then off to china, beijing, and vietnam. the final stop will be the philippines. trade will be the big issue and so will north korea and its nuclear weapons program. gary cohen said the president made the right choice to pick jerome powell to leave the federal reserve. he spoke to bloomberg tv today and said an announcement about the number two official won't take long. >> the president made a great selection yesterday. we are going to meet with jay and get some input from him on vice-chairman. the president has been working on picking out vice-chairman and you will hear something this year. term janet yellen's expires february 3. has not beennation confirmed. president trump tweeted a ruling that bowe bergdahl should not serve prison time for walking

off his post in afghanistan is " a complete and total disgrace to our country and our military." he was captured by the taliban and held for five years. the judge gave a dishonorable .im dish -- discharge prosecutors have recommended a 14 year prison term. espn reports several owners and officials will give depositions and the s2 turn over cell phone records and emails relating to colin kaepernick's case against the league. he alleged collusion against signing him to a contract based on his protests during the national anthem. jerry jones and another owner are reportedly among those being deposed. global news 24 hours a day powered by more than 2700 journalists in over 120 countries. i am mark crumpton. this is bloomberg.

julia: scarlet:, -- "what'd you miss?," an article from the ways and means committee. the more we drive wages where we can finally see some growth in the country. the quicker we get middle income haveuts, more consumers more disposable income. that is important for us. we need those rates to kick in. >> it is going to be a shot in businesses andll corporations, working families. they will see their paychecks go up. i'm convinced we get it done before thanksgiving. economic growth is to increase productivity. what does that through increasing investment. that is the core of some of the business tax reforms in this plan. julia: a lot of enthusiasm there. not everyone is on board. lawmakers and trade groups have come out against the tax bill.

what are the selling and sticking points? we are joined by anna. great to have you with us. twolawmakers i can see, from new york and new jersey. talk about the level of resistance we are seeing from lawmakers and the trade groups. this is the stuff we know about. >> right. applicants want to get on board with this. they know they need a legislative win with the midterm election in 2018. that representatives from new york and new jersey oppose this because of the use state and local deduction. there's other things like the provisions, some members are concerned about the provisions indestructibility. they are trying to comb through those and talk to members and get feedback and make sure they make any adjustments they need to be for this goes to before. joe: anna, we played a string of

feelingt lawmakers pretty good. generally speaking, is the republican party happy about the first 24 hours? representatives may be against it. are they thinking this is to be expected? anna: the news is positive. that is compared to the less smooth rollout of their health care bill. compared to that, they think yesterday went great. there was positive reaction. aey have their eyes on lobbying group. one we just saw that come out is a group representing charities, which was surprising. they try to sell this as a boon for charitable giving. this is just a draft from the house. the senate has to come up with its version and reconcile that. likely is this version going

to get through the senate? anna: it will definitely change. even today we saw some changes, an amendment from kevin likely g to get through the senate? brady. probably even more changes before the markup next week. there probably will not be substantial things. we are going to see what the senate does. it will be the same. some provisions could be, could have different elements bradyemphasized. and december, if both chambers are able to approve their versions, december will be for reconciling those versions and making sure they can work reconciling those versions and making sure they can work through their differences so they can vote on the final version of the bill and get it to the president before the end of the year. scarlet: got it. setting theyou for scene for us and giving us a wrapup. for more on how corporate america and individuals are reacting, we are joined by elda di re from ernst & young.

when you spoke with your clients, there was questions. they bombarded you with questions about what was surprising. what did they find the most surprising? elda: this is a large package. we had what we had been hearing about, but we have everything but the kitchen sink, which is a good thing. if you have the opportunity for tax reform, fixing things that don't work. maybe they did not get publicity. i would say some of the biggest it,rises in looking through when you sell your principle, you get gains. you have to show you have lived in it for a certain amount of amounthich is a greater of time, five out of the last eight years. added to that, if you are a high income taxpayer, you don't get

the exclusion. that begins day one. $250,000,e more than you lose the benefit, which changes the market for expensive homes. total surprise. julia: it gets more expensive to sell your house. buying youro is house if you lower the amount you can borrow and the duck to the interest -- deduct the interest, you've got a double whammy. both are hurt. prices go down. joe: and a lot of the most expensive homes are in california, new york, new jersey, connecticut, all of these places that are getting hit. is there a situation in which there are professionals whose companies might do well under a lower tax plan? elda: like me?

[laughter] whether it is people who are highly paid and living in these high taxed and high cost restrictions or even professionals. you would say aren't you getting that 25% tax? in meant to apply professional services. 20% corporate rate. that was promised. here we have it. lower income and middle income getting tax breaks. it's about middle-class, it's not about protecting the wealthier in any way. they should pay more. elda: it's a question of what is middle class in what part of the country. if you look at somebody making a certain amount in one state, it is different what the impact is for another state. joe: one of the things that

makes it hard is that even if , a lot of people get a cut, there are these little things people care about. we were talking to anna about how a charitable group is against it because there may be less of a compelling reason to donate to charity in light of the new tax regime. there is the adoption tax credit. most people don't adopt. those who do feel strongly about this. taken together, it could put an obstacle to this. elda: everyone's got special interests. there are small repeals for those. that is what tax reform is supposed to do. clean it up. anything where you sent to your clients we need to react? this will stay and it will be bad for you? of,: there's a question does this get past or not?

state and local tax is the biggest. in some get picked up later bill. you have to read the tea leaves y, what do i change? julia: probability that it passes? elda: i think there is a good chance. there will be changes. scarlet: they call the tax reform and not tax cuts for a long time. the president changed his wording as well. there's 400 pages there. this is reform. of client, partner services. we've got breaking news. berkshire hathaway reporting earnings. we have the operating share missing estimates. 04 dollars. the estimate was more than that.

they had an operating loss of $1.4 billion. that might be one reason why it is weaker than expected. joe: berkshire is not in the of tying some number two warren buffett. julia: they are attributing it to three major hurricanes. painful natural catastrophes. scarlet: from new york, this is bloomberg. ♪

scarlet: it is time to look at some of the biggest is the stories in the news right now. to finalizeking deal terms according to reuters,

which cited people familiar with the matter. they deal would value aetna more than 200 dollars per share. twitter says it has implemented safeguards to prevent future deactivation's after president trump's account was taken down on thursday evening, anch twitter attributed to exiting employee. the company tweeted we won't be able to share all details about our investigation or updates, but we take it seriously and our teams are on it. another apple making headlines, the arctic apple. non-browning fruit is headed to grocery stores this month. it is banking that convenience will trump concerns. it joins the only other biotech , a virushe market resistant papaya. that is your business flash update. i know you're excited about those apples. julia: i can't wait. means it'sbs report

friday. this is bloomberg. ♪

mark: it is time now for first word news. a spanish judge today issued international search and rest of and arrest warrants for weeks t a man and his aides. he was removed from office last week for declaring catalonia's independence from spain. 8 former cattle and officials were jailed on thursday. the associated press reports congresspeople are coming for words with sexual harassment from someone in the house representatives. a former chromosome and tells the ap she endured suggestive comments for years from the

federal lawmaker who still serves in congress. the women who have come forward say the incident occurred years or even decades ago, usually when they were newcomers to congress. california congresswoman linda sanchez and former california senator also spoke on the record. the former great finance ek finance- gre minister discussed the future of your in an interview with bloomberg television. he said that in the wake of germany's symptom and 24 election, chancellor angela merkel is in political trouble. extremelymerkel is an weakened leader at the moment because she has the form a government with a political party whose number one and maybe only promised to its electorate is that they will stop emmanuel having accepted by angela merkel of the proposition

that leads us to a common budget. the frenchferenced president emmanuel macron. he said he believes what ails the european union can be fixed by a common budget. california governor jerry brown and his fellow state lawmakers billion infor $7.4 federal funding to help with wildfire recovery efforts. governor brown said his state needs the money for cleanup and programs to support housing, transportation, agriculture, and other services for those affected. blazes that began last month killed at least 43 people and destroyed nearly 9000 structures. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. julia: "what'd you miss?" feltjobs data this morning .o its lowest since 2000

we have light shedding on the data. great to have you on, matt. i like this chart. talk us through it. matt: that's right. a big story over the past two years now at this point has been that even though the unemployment rate has fallen in there are a lot fewer people unemployed, employers are still able to go outside the labor force basically to people who do not say they are even looking for work and are pulling them back in and hiring them. that is what this chart shows. the blue line is women, and the emperor line is men -- amber line is men. the ratio of people getting hired every month from outside the labor force to the way sheila people getting hired from the unemployed pool. both of these are well above historical levels. employers are going outside the labor force a lot more now

relative to the unemployed pool than they ever used to. for women, that number hit a record high over the last 12 months.it is pretty close for men as well . joe: strongly suggesting there people, the decline of labor force participation, there is a significant abrupt people out there who are not in the labor force but theoretically can be enticed to come back in. matthew: correct. not only theoretically, but in actuality, they are. scarlet: there is the slack. matthew: it just goes to show you that all of the discounting of the unemployment rate we have been doing because it is not a perfect measure, this really highlights that. employment to population is still fairly depressed. it coming back, and that is what we see in that chart. joe: interestingly, while there is a big flow of people from not in the labor force into the labor force as usual in this chart, there is a spike in people who are employed to exiting the labor force, like the other side of the coin. matthew: the exact opposite flow.

in october, almost 3.5% of people who had jobs exited the labor force. joe: wow. matthew: this is something you kind of think of as a proxy for retirement, for example. but interesting thing is this october.ord high in you can see the monthly change is the blue line at the bottom . the monthly change was also a record high. this is why the labor force participation rate fell so much in october. look at thatave to chart and wonder, is that going to last, or is it something that will reverse? joe: could this be a number that got skewed by fluky things with the hurricane? matthew: we were kicking that a round a little bit today, but i think that is an open question because this is from the household survey that has the unemployment rate and labor force participation rate and that was not specific to as heavily by the hurricanes so it is not clear what is going on here. this is something to philly to watch next month to see if it is continuing or a

one-off. scarlet: the eci showed one thing, but today's average hourly earnings came in softer than what we wanted to see, given that september's number was higher. average hourly earnings never versus wade who is interesting if you look at it on a sector basis. are you can see is there three or four sectors responsible for the deceleration in wage growth we have seen this year. in december, way to go to cycle high of 2.9%. since then, we have seen three or four sectors that count for the drag or deceleration, those are leisure and hospitality at that is a restaurant story, and we have manufacturing as the amber line. accelerating wage gains in 2015 and 2016 have now been decelerating. green is the retail sector, which we now has all sorts of problems. it has been picking up a bit, but red is linked to manufacturing.

manufacturing and wholesale trade are seeing employment growth accelerates. you hear all about the booming manufacturing sector. that is actually coinciding with the deceleration in wages. that suggests for that part of the economy, we are not close to full employment necessarily because we are not seeing the typical dynamic you would associate. with restaurants and retail, we see a deceleration in which growth there, but those sectors are also struggling. joe: earlier we were talking to j.p. morgan's michael thoroughly was not predicting 4 -- now predicting 4 hikes. we are not at full employment yet. we have to be hitting it really fast because it is coming down really hard. on the flipside as you point out, the unemployment rate may have masked a weaker economy than has always been the case and maybe it was never that strong. this report, what does it tell you overall about how much slack

is left or how much room there may be to keep hiring? matthew: the chart i like to show you guys that we did not look at this month is the prime age employment to population ratio. that is the number of people between the ages of 25 and 54 who are working. that actually went down a little bit. i don't think we really made a lot of progress on the slack dimension this month, but certainly overall, the picture is continued steady job growth and reduction of slack. joe: i have that chart if we want to bring it up, the 25 to 55-year-old employment to population ratio going down just a little bit. and not a huge drop or anything, you are saying when this goes up, that is a sign of the slack diminishing. matthew: this number would suggest we still have millions of people we can we absorb back in the labor force if we are going to get to levels consistent with previous expansion. as far as wage growth goes, but we will need to see is either up the slack

what we are seeing deceleration in the sectors we mentioned. julia: that is the thing with these charts is the slack is still out there and why do we keep going on about the lack of inflation issues? there is the reason why. matthew: absolutely. the interesting thing about this entire expansion is about how one sector over the other over the years counted for the acceleration or deceleration in growth to keep the economy on an even keel. not something we have seen. scarlet: like passing a baton, right? matthew: exactly. scarlet: thank you so much. still ahead, one day after president nicolas maduro left his chief debt, negotiator only added to the confusion. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" president clinton was maduro of venezuela has left people puzzled by pledging to refinance the country's foreign bonds. country's vice president used another term today, renegotiate, to describe the country's plan while simultaneously saying on payments would continue to be made. us. thanks for joining obviously, the last couple of weeks have been used for venezuela. people wondering if it will make payments, last night, maduro goes on tv to announce a historic statement about bond payments, and everyone is scratching their head. what actually did he announce on tv? >> he simultaneously announced refinancing and restructuring of the nation's debt. those are two very different things.

refinancing is a routine thing that everyone does. restructuring was the default, right? president, who is leading the restructuring efforts, so-called restructuring efforts, introduced the word renegotiate, which is like, that sounds more like a restructuring, but either way, neither of these things can happen because current u.s. sanctions prohibit u.s. investors from accepting new -- eitherthat would refinancing or restructuring, that cannot happen, and the restructuring efforts is the target of treasury sanctions. he has been accused of having connections with narcotraffickers and protecting them, so not someone that the u.s. is going to be ok with investors in gauging and signing contracts with. julia: what is the importance of making the payments?

you got rocky recently and the market reacted. i am showing you some of the pdv sa bonds. you can see the price coming down now trading around $76, so immediately action here for investors. what do you think he was trying to achieve here? i get the confusion, but it sounds like something sneaky about putting someone in charge of these negotiations that simply cannot negotiate. we have they cannot negotiate because they are under financial sanctions. is this about pressure on the u.s. because he made this dramatic announcement about it and was blaming the u.s. and their sanctions for the situation? katia: i think if you take a look at the way populist leaders have made announcements in the past, they end up being pretty huge announcements. they always tried to prepare and blame others. that is what we saw last night. there was a lot of preparation of the people, explaining when

you go to the store, you go and try to pay for your food and then you go to the bank and ask for the bank to rule over your debt and the bank rolls over your debt, but the bank is not rolling over our debt. he is making it personal and blaming the u.s. because the u.s. prohibits a refinancing. there have been more sinister interpretations of this. for example, maybe they are trying to drive the prices down so they can buy them back apache prices. -- up at cheap prices. there have been accusations that his cronies are in debt and they will not default on them or the ones they own, they want to buy more. it is difficult to trust them. of course, there is the issue could just be preparing everybody to say, well, i invited you all to negotiate with me. you did not show up. this is what you get. scarlet: there is a lot of conspiracy theories floating around here.

when you talk to investors, what are they telling you? what are you hearing? katia: it is interesting because we say this is the default foretold, but today, i have seen a lot of polarization between investors, something that people are not taking this seriously enough and this is a seductive default in a couple weeks. others saying there is no way they are going to default. joe: if they do default, what the oilassets that company has that investors can most easily claim legally? katia: so it is not as easy as people make it seem. there are some bonds that are collateralized by citgo. the reason why they are trading at $76, the thought you brought them, they are senior secured.most bonds fell to $.30, $.25 today. some will collateralized, which

will complicate things. that interesa really sick will l has been created that separates between cisco petroleum, which has gas stations throughout the u.s., and the sovereign, so you have to pierce all of these different levels. so it'll be a real endeavor, and there is a question of bankruptcy court. how does this work? if they are still under sanction, will a u.s. court acknowledged a venezuelan bankruptcy? there are so many questions and so little answers. julia: it is a buying opportunity, we were told. scarlet: has been saying that for a while. julia: we will see. scarlet: great to have you on. julia: thank you. scarlet: next, president trump is off to asia with an ambitious economic agenda. what to expect from his trip? we will discuss it. this is bloomberg. ♪

julia: "what'd you miss?" president donald trump is leaving one pressure cooker, washington, d.c., to join another. the president left today on a through asia,ur his longest foreign trip yet, where he will confront some of the most significant tests of his economic agenda on one of his punching bags, china. joining us is meredith sumpter. meredith, also its of avenues to potentialre and tension points that can be created. what are you most worried about as we head into this trip? meredith: certainly the white house is fully aware that they are going to have to message clearly to the region and not just china, but to the region that this new president, the

america first president, also has a staying power and a commitment to the region's economic security. this is coming on the heels, of course, of the u.s. president withdrawing from tpp, expressing skepticism about multilateral trade, and preferring instead to focus on renegotiating bilateral trade deals, several of them with southeast asian countries. scarlet: so that is a lot on his to do list. there is a lot of questions about how effective this trip will be in terms of getting things taken care of. i look at the itinerary, and he is visiting japan first. we know he is cozy with shinzo abe. how much of president trump's asia strategy is aligned with japan? how much is he borrowing from abe's playbook when it comes to dealing with china and the rest of asia? meredith: president trump and this white house has their own playbook with regards to china, and we should go there next, but in terms of the relationship

with abe, this is perhaps his most positive and important relationship in the region. both leaders are in lockstep as they say on north korea.we expect that much of that visit will be focused on what they can be doing to further cooperation northchet up pressure on kore korea, anything that will get carry through in south korea and china. julia: to talk about china in terms of their relationship, they seem to get on, the two leaders, what they met at mar-a-lago. we have had high points and low points and the trade tensions as well, the north korean issue. what actually comes out of this meeting, the you think? meredith: so the china stop is a really important stuff, perhaps one that will feature the most attention, and we look at that meeting as being one of circumstance.

you are right that the amicable and constructive relationship between the two leaders is seen as a stabilizer in a bilateral relationship that is leading to more tension on both trade and economicsa, but on specifically, president trump has been very clear in his previous two sitdown meetings with president she jinping. is expectation that china is to take structural economic reforms to create more opportunity or fair opportunity for u.s. companies is a tall ask for the chinese president given that the industrial and economic policies that president trump is focusing on are the very policies that president xi believes are critical to transitioning successfully china's own economic modernization. specifically for this sitdown meeting, when you expect the president trump to once again lay out his expectations for chinese actions, and the chinese will likely engage him on those topics that will make no

commitments, and they will be no outcomes. julia: what we normally see on these kinds of trips is deals announced as well. are we going to get any deals announced? i was in china last weekend, and my sense from the discussions were the chinese were trying to organize the o's and really struggling to get the united states on board. meredith: certainly the commerce secretary in washington has aligned with u.s. companies, and we do expect it will be a series of deals announced perhaps at a signing ceremony with the u.s. andchinese presidents u.s. chinese ceos, but that is separate from what is the core that is goingnent to propel u.s.-china relations or tensions moving forward. the deals are separate from the u.s. president's focus on which is, how do you get the chinese to move on these critical structural reforms that have

eluded all of the past u.s. presidents? joe: let's talk about the north korea situation. ,hen he goes to south korea there has been some ambivalence or maybe more than ever let's from south korea leadership about the saber rattling and the safety concerns in south korea , further provocation. is there any prospect of trump and south korea leadership getting more on the same page without a deal with that situation? meredith: i was a actually that president trump and the president of south korea are pretty much on the same page in terms of meeting to increase pressure on kim jong-un to compel him back to the negotiating table. and president trump will make an important speech at korea's parliament, where he is going to look to convince some skeptics in the audience, some lawmakers that are nervous about the u.s. potentially looking at military options to deal with north korea

should the diplomatic solution fail. scarlet: we will see how that goes and whether he goes off script in any way. meredith sumpter, thank you for joining us. julia: see cucumber. scarlet: i do not think he would eat that. joe: that would be the big test. scarlet: he is not going to touch it. joe: coming up, what you need to know for the week ahead. this is bloomberg. ♪

scarlet: coming up, do not miss this. president trump goes to japan on his first official trip to east asia. joe: i will be watching for the oil outlet unveiled at a press conference 8:30 a.m. on tuesday. julia: bringing global ceos together. scarlet: that does it for "what'd you miss?" julia: "bloomberg technology" his next. joe: have a great weekend. this is bloomberg. ♪

>> in washington, you're watching "bloomberg technology." let's start with a check of your first word news. president trump is embarking on his second overseas trip as president in a tour that takes him to fight asian nations.

the president addressed reporters before boarding air force one. he said he was disappointed in the justice department for not investigating hillary clinton and the democrats after allegations in a memoir inx dnc chair that the clinton chairman of the leader the party. president trump criticized the judge's decision to die that sergeant bowe bergdahl will serve no prison time. lessresidential earmarks than one hour after the white house declined to comment on the ruling. bergdahl walked off of his post not get a stand and fellow soldiers were wounded in the search for that sergeant. nancy pelosi continues her criticism of the gop tax plan. the house minority leader spoke at a press conference in washington today. >> yesterday, as you know, republicans unveiled a terrible assault on opportunity for the middle class in america. republicans want you to believe they are coming taxes on the middle