amendments they want considered in the debate on immigration. >> senators have had plenty of time to prepare. there's no reason why we should not reach a bipartisan solution this week. but to do this, we need to get the debate started, look past making political points, and focus on actually making law. >> the republican proposal would provide a path to citizenship for 1.8 million immigrants living in the u.s. illegally as well as my $5 million for borders the ready which includes a border wall with mexico. secretary of state rex tillerson announced today that the u.s. would contribute an additional $200 million to help bring stabilization to iraq and syria. speaking at a gathering in kuwait, secretary seller -- tillerson also defended america's ongoing military operations in syria singing the central focus remains on defeating the islamic state and not on unseating president

bashir al-assad. tillerson: this observation that the u.s. has no leverage or role to play is false. we are working closely with russia who has the greatest influence on the assad regime and can bring a sod the regime to the negotiating table in geneva. secretary tillerson said that coalition forces of taken amount of thearge country's population and oil fields. it may have been the deadliest fight between citizens of the u.s. and russia since the cold war. according to people familiar with the matter, u.s. forces and syria killed between 100 and more than 200 mercenaries, mostly russians fighting on behalf of syrian president bashir al-assad. attack on a base

and a refinery. international community has led jordanian people down. ability told the russian news agency that a large migrant influx into jordan, many of them's. refugees, has made life difficult for his own citizens. there is a high price for shouldering a refugee burden and wishes the world would show them more sympathy. global news 24 hours a day powered by more than 2700 journalists and in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ live from bloomberg's world headquarters in new york. and we are 30 minutes from the close of trading here in the u.s.. stocks trading in the green with

the dollar slumping for a third day ahead of crucial cpi data. joe: the question is, what'd you miss? scarlet: a big business is helping develop small businesses. our exclusive interview with lloyd blankfein in just a few minutes from the goldman sachs 10,000 small businesses summit. inflation takes on new importance after last week's roller coaster ride. why investors are looking to tomorrow's cpi report for answers on recent jitters. and president trump's plan to upgrade public works is running into partisan roadblocks right out of the gate. bill shuster, chairman of the infrastructure committee joins us in the next hour. last week am a record outflows of $31 billion from etf's. it may be the active funds should be more worried than those guys. and eric,ing scarlet's partner in crime. etf analyst from princeton, new

jersey. eric, great to have you with us. outflows from etf's, pickup and volatility in the markets. making hay while there is sunshine? a lot of people alike, this is it. this is when it finally gets exposed and we all see this. i have been around and i've seen this happen many times. in a correction or a violent selloff, money comes out of everywhere. i would guess it is probably around the same amount. you have vanguard investors that are sticking with this. when you go back in, they are likely going to have all that money going with the's and index funds. overactive in sort of all of the flows.

passive gains strength in terms of the ratio between the flows at of active into passive. the things are bad for active. in one of the big things that's helping active is the market going up. that is offsetting the revenue losses. joe: one of the arguments you hear from active or people worried about passive is they are holding their hand and everyone is going to panic. is there any evidence that people who are in passive vehicles behave more impulsively or behave worse in general than people who are in more active management? eric: there are people that

behave badly in them. but if you look, vanguard and schwab, it kept coming in. it tells me that there are different types of investors. over 130 billion. and when it comes back again, it will go to passive. they stick with their existing investments, what is the distinction they're compared to, say, investors and blackrock or other etf's? eric: a lot of the money is an index funds and vanguard has spent a lot of time educating. they are very disciplined.

they saw net inflows every month the whole year. even when the market was down 17%, that is unimaginable to me. you also have to give the advisors credit. it those that use vanguard funds are usually pretty with it. the advisors who use vanguard and vanguard themselves. they are attracted to very low cost. blackrock and state street have products that are very liquid and they serve a purpose. it is reasonable of this sort of violent flows in and out in the liquid products. is there anything that changes this pattern if the active guys suddenly start to do better on a consistent basis? and they all agree to return. it is where the money is looking

at the options here. we will go at the ones they give us a great return. eric: the magellan fund is the same drop in the last two weeks. he has to ride the market. the hedge funds, they usually have a short position. inside asascinating always. a bloomberg etf analyst. and be sure to join eric and wednesday,rrow on for bloomberg etf iq at 12:30 p.m.

we are dedicated to exchange traded products. etf, etp, etn, all of that. this is bloomberg. go, these close of conversation with goldman sachs chairman and ceo lloyd blankfein coming up in just moments from the 10,000 small businesses summit in d.c. julia: definitely last but not least. in new york, this is bloomberg. ♪

scarlet: what did you miss? the goldman sachs 10,000 businesses small summit kicked off today in washington dc it highlighted small business,

helping businesses chart a path for growth. are going to send it to david westin who is standing by with the various guest. david, i will send it over to you. last. save the best for the chief of goldman sachs, lloyd blankfein. i am glad to be here but thank you for being here at the conference. david: i want to start their because i've been around all day long. and there is an atmosphere here that i don't often see, certainly in business gatherings. i go to gatherings were people are a little bit jaded. there is enthusiasm and passion here that i don't see every day. honest,kfein: i will be i don't see it everyday day and i don't see it any day. it is absolutely terrific. we brought back 2300 small business graduates that came here on their own steam and pave

the their way to come here. the most important thing to network with each other and make a declaration of how enthusiastic we can be. it is absolutely terrific. it was 500in: million dollars? -- david: it was $500 million? mr. blankfein: there is a hard reason for doing it. place first lace -- first , small business is the backbone of the usa. the success of goldman sachs, and gdp. making it better for small business people and growing with it.

that's the kind of rationale you here. you also have to have an ethic in the belief. keep going to pharmaceuticals and maybe make a living. part of abeing process that helps cure people. in construction, you have to want to build things. if you are in finance, you have the have a core belief in the value and the efficiency and capitalistss of the system. people work there to try to make a profit. not because they want to win everything but because they want to make enough money so that it is self-sustaining. where you have to keep asking people for help. people go out and make the product, they hire people, they get paid. we give them a wonderful cycle

in the country. veryt to do that on a short scale. but the scale is so large, it's not a human scale. don't get to see that operating on a human level. we will show the effectiveness of overdue by investing small businessman. education, programs that help them. negotiate, how to ask for financing, etc. we marry them up with financing ,n some cases and in some cases we marry them with an advisor from goldman sachs. david: so you said it is the backbone of the economy. that is generally accepted to be true whether it is job growth or the economy.

at the same time, the rate of origination of new business going down in this country is a long-term decline. what is wrong echo that says something about the economy that doesn't sound very encouraging. people haven: noticed it and people are trying to address it. part of this is trying to help us teach small business people. they have responded teaching us. we are trying to gather. they talkedhings about, it is red tape in difficulties starting a business. in some respects, it is a similar problem that large businesses have. people.tting qualified these are all things. red tape has been increasing. they have gotten a little bit worse and worse in this country.

regulation has gotten it worse. it is interesting to hear. these are people that have overcome that. and for every person that has overcome that, there is a want to be that got caught up in the red tape, the failure to get financing, or the possibility of difficulty finding qualified people. david: we have think about how washington is affecting that environment. on the one hand, red tape regulation. reducing regulation that should be good for small business. the cost of capital, getting the loans at an affordable interest rate. a bitnow, we are concerned about it given the level of deficit spending and the level of darling. is that a real cause for concern? the possibility,

and probability, likelihood of higher interest rates is going to be problematic. bad ins good and there's that in the near term. the shock of higher interest rates would be the immediate negative in the long-term success of the economy will be just that. long-term success. but you had to take both of those things together. i have been critical of some of the things that have happened at the national level. but i give credit. i think movement is lower. elements of the tax bill that have lowered taxes for people who are in this group, the small business group, things like the pass-through, media depreciation, there have been very helpful. a lot of the burdens, some call it the national level.

of also the inconsistency .he red tape that has occurred it from jurisdiction to jurisdiction, varying not just by state, but city, village, town. i have thousands of people that help me deal with this. if you are a small business, you don't have thousands of people. it all comes out at a time to invest in your business. and what goldman sachs did, it was a big concern. mr. blankfein: that's right. just like the time you spend, you want to have a simplified tax. he spend more hours on tax building than you do on your business. but in filling out the forms. goes on, things get more complex, layered, and if we lucky, somebody comes along and cuts through the wax buildup. david: there could be different

reasons for higher interest rates. of have access to a lot information. as you look at it right now, is it more because of anticipation of growth which is a, which would be a good thing. as opposed to a supply and demand, the government and -- mr. blankfein: i think it is both of those and kind of a related thought is inflation that can also reflect supply and demand. look. and i said,rowth quick, tell me, where our interest rates? you would not say short-term interest rates are up 1.25%. you would say they were substantially higher. and is a lot of reasons why interest rates of been low for a long time and a lot of it has to do with military policy which i don't knock anybody four.

balance, having to work that back to normalcy. normal isink the new radically different from the old normal. and i think policy has affected it. while we are trying to get away from interest rates that are so low relative to the growth in the economy, we are trying to undo those methods to bring rates high. don't forget qe. and on top of it, national policy just added to the deficit. so you saw the tax revenues going down, spinning as a result of the new budget deal is going to go up. maybe even more if there is a bill for the infrastructure. and that has to be funded. so before any of that, you say that deficit is going to be more bonds that have to be issued.

now there will be even more bonds that have to be issued. as the fed try to undo its balance sheet, it is also going to sell treasuries into the market. that is another competitor so someone looking at this and saying, do i want to buy a 10 year treasury and get 2.8% interest? 2.5% interest? i may want a little bit more and that is something that's going to happen. as you put that altogether, is it worth it? we as a country have just bought something. $300 billion over the next two years. was it a good trade? was it a good purchase for us? we will be issuing more treasury bills, more treasury bonds at a time when the fed is reducing the balance sheet.

is this not going to be positive for the country? scarlet: i would rather second-guess. thingk it's a very bold to kind of throw a little bit more lighter fluid on a fire that was already going, and i will take the other side from the administration point of view. has beeneve the limit reached and a think it will grow higher. could it possibly work? i think it is a risky thing. i probably wouldn't have done it. i say theof people jury is out. do i think crazy?

no? wrong, we will see. i would rather be good at .orecasting david: is it safe to assume that goldman was planning for that contingency? mr. blankfein: i thought you were going to ask me about the goldman sachs closet.

they never retreat, and there's no way it will be that way in our lifetime. things are going to happen. a company will go under, there will be cyber attacks, war,

pestilence. things that will happen it will cause all the relationships from one asset to another to readjust against each other. my own best guess is when i write dissertations down the road and i look back, at one point in time because of kiwi and central banks around the world buying risky assets, as much as they could get, they bought them. but probably kept things low. i think they will see more volatility. is your job, but a contingency. a planning for the possibility of. is it fair to infer the goldman is doing well right now? with commodities, fixed income,

and trading? we have heard that the problem with treating really was a lack of volatility. >> this is a much better environment. we sell insurance to people. we take risk away from each other. if there hasn't been a hurricane on the east coast for years, people stopped buying insurance. and those the buy insurance don't want to pay a lot. hurricanes like the euro could treat a, the next year, everybody buys insurance and they pay whatever you ask them to pay. not that the risks have changed that much. but the sentiment has changed, the anxiety is changed, and it's a much better environment for our client franchise. at any given day, we could be positioned wrong and we have the position inventory based on the best guess as to what the clients will want the next day.

we deal with illiquidity. we may not work right every day but the environment is good and it makes is valuable to our clients. david: for those of us that are not traders, give me a sense that when you look at the environment, does it distribute evenly across commodities and fixed income? do some things get benefited more? of anythinges change, it is like the butterfly effect. the relationship of everything else has to change. think what happened when housing prices went up. it must be limited to real estate. people borrow against their real estate. the people who borrow against real estate suffered a wealth reversal. knock on effects, knock on effect, knock on effect. as interest rates go up, the value of things is the cash flow.

as interest rates go up, the value of assets go down. not just bonds, but real estate prices. other prices. we think solid and stable real .state prices david: back to you, scarlet. scarlet: david westin speaking with lloyd blankfein at the goldman sachs 10,000 small businesses event in washington, d.c. the comment that struck me, of course, was what they said about this environment. in a game changer. julia: more volatility makes

money for the trading desk. scarlet: u.s. stocks closing in the green the last couple of days. the height they got in terms of the index levels was .6% for the s&p 500. it is the swings we saw yesterday. let's begin with market minutes, stocks finishing in the green here. the bloomberg terminal here, the group ranked returns. those are your home retailers and automakers.

the energy stocks suffering here and the best performer in general overall. let's take a look at the government bond market action today. in theing, more of that two-year yield. -- no, i dod up that backwards. two-year yield up to 2.1%. the 10 year yield down to 2.8 percent, which is why we had this risk on move. this lately, they are opposite of equities. julia: let's he was going on the currency land. at the dollar-yen, the one your

chart here to give you some perspective. we are trading at 107-81. the game's not going unnoticed by officials as well. telling reporters that he's monitoring act of it he -- activity involved at this stage. cake, theinto the dollar weakness that we have seen in the flight to quality trade here. when you have the dollar weakness, we have seen it consistency -- consistently. the element that we will talk about very shortly, we will show you the six month here. the biggest rally we have seen the past month, the biggest since the u.k. brexit referendum.

i just want to give you some perspective here. they said that just this last month. they keep foreign-exchange traders busy. i think that chart says it all.

joe: gold going up a little bit and cement comment weather in argentina. scarlet: so you look at the dollar versus the yen, and it goes strength to strength here. about whether this is a good gauge for going across markets or if this is specific to that and the dollar's weakness? >> the idiosyncratic flow, something specific going to the market that created a very quick move.

>> you can have idiosyncratic flow very big. , if you haveagers a market like the current one where the everyone is a little bit on edge and nobody was to take the other side. it generates bigger moves. the fx market has been surprised . interest rates continue to grow higher.

julia: the yen story versus the dollar story overall. >> if you look at the euro and the yen, still within the range over the last couple of months. there is no massive breakout there. dollara little bit of recovery time. the big picture, if you look at it over the last two months is that the dollar is having a very poor time and that is important to keep in mind. we look in the futures market and see there is still an overhang. it's a little bit perplexing. joe: can we see a lot of

volatility in the equity markets. we haven't seen it to the same degree on other asset classes. currencies once more subdued than we have seen during the other spikes. >> we see the pronounced moves. and they didn't really see that. so there is an incredible resilience. there is relief in the global growth traded. the stick to a fundamental view. the one thing that is a little bit special about this is the extremely concentrated equities it is not like systemic

tension where credit and markets collapse. all of the plumbing was in question. >> and the investors are sticking to the view. bring up thent to cpi report tomorrow because people are looking ahead and anticipating. it bloomberg strategist was saying the data point was skewed to be negative for equities. and that will lead to some off and destruction as well. >> they have been worried about the inflation part of the mandate. they have been not meaning that. , it isave high inflation

incredibly important. they don't normally forecast cpi. we have an excess focus on this event and sometimes it generates bizarre price action because you have people over position for this event and we might get -- it might beat expectations. it is going to be something like very unusual. we came back to the story of why we haven't seen more inflation, globalization, the amazon affect. exactly. if it was slightly stronger, it would be either way.

>> think it is very dangerous. , lloyd the big issue blankfein touched on it as well, and extremely unusual situation with very significant fiscal stimulus. the real inflation tesla be the second half of this year. that is the key point. what we get real pressure on prices their? -- there? scarlet: that will definitely get done by the end of the year. of exotic and founder data, thank you very much. the choppiness we have seen from markets, wire investors looking for tomorrow's cpi numbers to help explain. even though they probably shouldn't be, as you just heard. from new york, this is bloomberg. ♪

mark: i'm mark quantum with first word news. president trump warned today that it is now or never when it comes to extending protections for young immigrants, the dreamers, while senate majority leader mitch mcconnell threw his weight behind legislation based on the presidents priorities. illinois democrat dick durbin reminded his colleagues that the clock is ticking on daca. >> the program officially on march 5, a few weeks away, that means young people will be subject to deportation and no longer allowed to work in the united states. president trump challenged

congress to do something about it. to pass a law. more than five months have passed and we haven't done that. mark: senator durbin said olympic gold-medal is the story of immigration in america. from south korea to the united states in 1982 with just a couple hundred dollars. chloe won a gold medal for the u.s. today in the half pipe. former white house communications director anthony scaramucci says president champs -- trumps chief of staff john kelly should step down after the fbi revealed it notified the white house in july about domestic violence allegations against former white house staff secretary rob porter. scaramucci wrote that general kelly almost certainly knew about credible allegations against porter at least six months ago and forced others to lie about that timeline. inexcusable. kelly must resign.

in a televised address, benjamin netanyahu today said that police recommendations to indict him on corruption charges "will end with nothing." authority say they found evidence netanyahu traded influence for favors, a nonbinding conclusion that israel's attorney general will have two way as he seeks to file charges against the sitting premier for the first time. investigators say sunday's crash over russian passenger planes may have been caused by human error. the pilots did not turn on the heating unit for equipment that measures the planes pressure that could result in an accurate speed data. killing all 71 people on board. global news 24 hours a day powered by more than 2700 journalists and. -- 2700 crumpton in 120ists and analysts

countries. i'm mark crumpton. julia: this is one of the most closely watched consumer reports in recent months. year over year. bloomberg'ss international economics and policy correspondent michael mckee. are precisely what we are expecting and we will talk about potential price action to follow. >> we are expecting it to fall back a little. it doesn't help because your show is on after it out. there has been a lot of talk about it. you can see what happened last month. people got all excited over a .1% rise in core cpi. that is expected to fall back, a

slightly lower rate of inflation in the month of january. so maybe all the hype will disappear. julia: and oil prices were lower. >> the reason we are talking about this is really excited. tell us about how much anticipation there is. julia: i feel like he's talking you into it here. >> i don't think its height. we haven't had this in a long time. and a big part of the reason is the market really does need some direction. a week and a half ago off that wage number, we know that there are inflation pressures building in this economy. we see the employment, the fiscal stimulus, and we see it. we have this report showing small businesses. going to show up in the official briefed tomorrow, and do i need to panic?

shouldat what data point they be taking direction if they think it is giving them direction. >> i don't know if they should, but they are. we have seen actions today with people setting up, looking for some sort of direction on treasury yields and where they might go based on this reading. and we're seeing hand of a narrower price action as a lot of people are sitting and waiting. or do we retreat a little bit? it is a casino and we will bet on up or down tomorrow. month of data and probably will fall back for a number of reasons. reason, #btv 8754. biggest rise in cpi, .5%.

when you see inflation rise, it usually moves by a couple of basis points, if that, per month. it will be some time. that 2.9% hourly wages number. it has statistical reasons it might fall back. watching the fed if you are repositioning, the fed will look past all this. scarlet: there is the core cpi and they pay attention to the pce. that is the data point they are looking at. >> it tends to move in parallel but it moves below the cpi. we get the data out 830.

he will look at the headline. what is the next thing you're going to look at? when you start to dive into the .uts, there are a million ways what is the next thing you will be curious to give some sort of a next her read? >> you will see what moved in an outsized manner. apparel prices declined and when you think they might be rising because there is more demand for the holidays. if they go up, seasonal factors will expect them to go down in that might push them up higher than you would otherwise expect. rose during the month of january when they should be going down. that might lead to a bit of an outsized move. you have to look for something that might move more than expected and not just be kind of a one-off. look at the details as

well here. talks me about volatility because those markets earlier, and we were told that given the prices correlation and what has come back, he could see a further four or five weeks of choppiness, volatility, and uncertainty. >> it is a confidence game right now. you have seen the volatility on the equity side. back, i think people are really looking at the long-term trends here. the fed's preferred measure and where it has come over the past year or so. there is concern there. i don't know if this will be enough to take the market. but i think it is another piece of the puzzle. scarlet: given the confusion we

have had over the last week, a lot of volatility should be expected. international policy ,orrespondent, thank you both gentlemen. renaissance technology tumbling 5.4% this month after warning of a correction. we will explain, next. this is bloomberg. ♪

scarlet: renaissance technologies, a hedge fund in january, warned of a significant risk of correction and lost five point percent.

>> we know in december, they told investors that they were expecting some sort of decline. it is a little bit hard to know why they left money, because to buye a fun that goes and sell. it is a little bit unusual for them to make a market call in the first place. julia: a been talking about this significant correction. but they don't get to pick and choose. >> it is very strange because generally they don't send out notes to their clients saying it . that they are sort of at a macro view. for as it that unusual fun to have a bad month from time to time, but the characterization of the renaissance is the extraordinary ability throughout the years within any market condition. talk to us a bit about the numbers they have put up historically and the degree to which it stands out.

>> it is a little bit different from the flagship fund, and that fund is extraordinary. it averaged about 30% a year and in every market. this fund is much more pedestrian. it is just supposed to be outperforming the s&p by 4% to 6%. it is down when the market is down. scarlet: how much does renaissance manage now? have been markets slowly rising higher with very little volatility. >> there was a point of years ago when they lost a lot of assets. and now i think they are up. it is them very well over the last few years. julia: we have accelerated

global growth. we're just not sure whether or not it justifies current .aluation julia: congress bill shuster at the house transportation and of the structure committee joins us with the next apps. from new york, this is bloomberg. ♪

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mark: i'm mark crumpton with first word news. a terrorist who set off bombs in new york and new jersey in september of 2016 has been sentenced to multiple terms of life in prison. won one of30 people his bombs exploded in manhattan's chelsea neighborhood. federal prosecutors say he has not shown remorse and is trying to radicalize fellow inmates. he is a naturalized u.s. citizen who was born in afghanistan. in sweden, a trial is underway in the case of a man who confessed to ramming a stolen truck into a crowd in downtown stockholm. the april 2017 attack killed five and injured 14.

the man is charged with their related murder and attempted murder. he told officials he wanted to punish sweden for taking part in the fight against the islamic state. the prosecution is asking for a life sentence.a washington examiner report says that substance sent to the office of barack obama was harmless. a spokesperson said the substance turned out to be baby powder. the incident follows one here in new york that some president brieflydaughter-in-law hospitalized yesterday after handling a letter containing a white powdery substance, which was also not hazardous. fbi director christopher wray is providing new details that call into question the white house timeline leading up to the departure of former staff porter, who left in the trump administration last week following domestic an abuse allegations from two ex-wives. director wray appeared today

before the senate intelligence committee. >> i would say the background process involves a very elaborate set of standards, guidelines, protocols, agreements, etc. that have been in place for 20 something years. i am quite confident that in this particular instance, the fbi followed the established protocols. mark: he declined to elaborate on what information was passed on to the white house. 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. scarlet: we've got some breaking news crossing the bloomberg. the search engine giant of china reporting fourth-quarter results adjusted pocket of $2.29. analysts were looking for $2.12. in terms of what it sees for this quarter, the first quarter, revenue will be anywhere from

$3.05 billion to $3.22 billion, slightly lighter than what analysts had been looking for. they anticipated $3.8 million. profit for the quarter that ended was higher than anticipated, but the revenue outlook for this current quarter looks to be a bit shy of the average analysts's estimates. julia: "what'd you miss?" president donald trump infrastructure plan can be running into potholes already. just hours after releasing the $200 billion plan to upgrade works, the white house was already fighting back complaints from democrats over funding. joining us now is congressman bill shuster. he is the chairman of the house transportation and infrastructure committee. great to have you with us. thank you for joining us. i know you have been urging some of your colleagues to increase the federal gas tax in order to help the financing element of this. i just wonder, do you have support from senior republicans? speaker ryan for example? is. shuster: i think it

important to note it will be difficult to do anything with revenue in this town, but we have to address this situation. i applaud the president for putting forth an infrastructure plan and bringing it front and center to the problem we face in america. it needs to be a bipartisan bill, but it we need to be fiscally responsible. the highway fund will run out of money in 2020. american people know we have crumbling infrastructure so we have to address this. i am open to any revenue solution put on the table. i think the president is open to that also. we have not touched the gas tax in 25 years. it is a simple efficient way to collect gas tax, and it can put the kind of real investment in infrastructure we need today. julia: the bottom line is it will not pass through congress. what else can we used to finance this? rep. shuster: the president has said he wants to spend $200 billion. i am not quite sure where those dollars a coming from but we ought to have an open and honest discussion. it takes presidential leadership done. this

the president has stepped forward and put a plan forward and it is the beginning of a process. let's work through the process and see where it ends up. manyet: congressman, economists that we talked to save you time for the infrastructure bill and spending is long gone. it should have been done earlier. the economy is growing robustly. we are near full implement. wages are starting to pick up. more spending and the kind we are talking about risk higher inflation and higher interest rates. do you worry a massive infrastructure bill will overheat the economy and perhaps blow a hole in the economy? rep. shuster: i don't think so. if you fix the trust fund, you will not be adding to the deficit. deficits are macaws interest rates and inflation when you are borrowing and printing money, but if you put it in the trust fund, the trust fund what you pay at the pump is a user fee. as a conservative, a principle of mine is if you use it, you pay for it. the money that goes in that you pay at the pump goes into the highway trust fund. 100% of it is spent on the infrastructure of this country.

this does not cause a problem if you pay for it. the way we are going now, we will spend more dollars in deficit spending so we have to be fiscally responsible. is a conservative principle. if you use something, you ought to pay for it. joe: what areas of the infrastructure do you think need to be addressed most urgently? rep. shuster: well, the highway system and bridges. we have over 50,000 deficient bridges in this country and we this.o address this is a national system also not just for one state to do and not another. i-81 is arict, four-lane interstate highway that runs from new york to tennessee. it is a highway in bad need of two more lanes. traffic, the frightful increased increase by 40% over the next 15 years. we need to expand it. it is a national, regional highway that is important to the economy of the united states. scarlet: you can coming -- julia: you give coming back to the sustainability of the highway trust fund. are you afraid of that in 55 pages of this infrastructure

proposal, that was not addressed? the financing of that was not addressed. nor was it when the president proposes budget for 2019 on monday. rep. shuster: this is the beginning of a process. the president put forward a plan. some of the press was outstanding. for instance, reducing the time to get permits done. it can take up to 14 years to do a major road or bridge project in this country, which is ridiculous. so i :00 the president for putting this forward and he said he is open to looking at different ways for revenue. tomorrow we are going to the white house in a bipartisan group of us to talk to the president about it. scarlet: my question is why didn't republicans address and tackle infrastructure first? you could have started the president trump era with a bipartisan win, something democrats would be on board with, and then ss the budget to see what kind of room that was for tax cuts, spending increases. instead, the gop win for obamacare and the repeal of that first, and we know where that ended up.

do you regret your party's legislative priorities? rep. shuster: not necessarily because that is what we campaign on, repealing obamacare, reducing taxes, and the president brought to the forefront infrastructure spending, something i have been talking about for years. it is what it is. here we are today and now we have to do with the situation because if we do not today, it worse. going to get we will spend more deficits to fund the highway projects in this country. if you look at the electric cars in the next 20 years or so, about a third of them will be on the highways.not only do we need to subsidize them, but they don't they pay a nickel. we have to deal with this today. scarlet: congressman bill shuster, thank you so much, chairman of the house transportation and infrastructure committee. we have got some breaking news out of chipotle. it has named taco bell's brian nickel as the ceo, as its next ceo. chipotle shares moving in the after-hours. let's take a look. 277.45.

it had closed at 251. gain, shortlyig getting a boost after naming the taco bell ceo brian nickel as the new ceo. coming up, the end of the road. why the possible loss of truck drivers may represent one of the most worrisome constraints on gdp. this is bloomberg. ♪

scarlet: "what'd you miss?" in the debate over how close the u.s. is too full implement, there is less discussion on constraints in the labor market. there should be because the u.s. economy is in need of more truck drivers. joining us now to discuss is connor.

explain why truck drivers matter in a different way from shortages in other workers like construction workers. connor: well, truck drivers move about 70% of freight around the u.s.. so without trucks, america does not move almost literally. what we have seen so far this earnings season is freight really bit into the profit margins are a lot of countries. we saw everywhere from clorox to hershey to a food company. it is not just a theoretical. we are seeing it in the company bottom lines. that poses a threat for the next several years. joe: tell us a little bit more specifically about what you learned from reading through conference calls where they sided very many -- many ceos cited how big of an issueit. is this right now -- many ceos cited it. how big of an issue is this?

conor: the number of truck drivers is not increasing also any productivity growth or another way to move freight, say by rail. joe: are self driving trucks going to be the savior? you hear about this. conor: they are coming someday. everybody working on it has an incentive coming tomorrow or five or 10 years from now. in terms of 2018, 2019, 2020, we're not going to see help in the near term. julia: why? what is going on here? the construction industry, and you used this example, has been complaining about not being able to find enough people. you look at the staff and they eventually find the right people and there is some kind of supply demand a pull me and push you thing like any other market. they are actually hiring for rate and -- freight and truck drivers not moving for 2.5

years. why? conor: i think it gets to the nature of what a truck driving job is all about. you are away from home a lot, not something a lot of people want to do. i had a lot of truck drivers respond saying even though freight rates are going up, the pay is not. the kind of things we are hearing in the broader economy where the brokers are not passing on the increases to the drivers so it is a wage issue to some extent. one factor that comes into play in the next couple months is the electronic logging new regulation that some people have been talking about where you can no longer write your hours on paper.you have to do it electronically , which caps how lucky can drive. if you think about it -- how much you can drive. if you think about it, the computer says you are in violation even though you are stuck waiting somewhere overnight. it is a disaster for a lot of truckers. scarlet: that make that a lot less appealing for anyone else to want that job. julia: i cannot agree more. talk about the growth we can see

as a result of this. you make a great point about all of the potential investment we have coming from corporate. you want to build a factory somewhere, but if you cannot get the logistics in line, perhaps a different in choices or do not invest that all. conor: right. think about a ridesharing service on new year's eve where for a wild things get a little more expensive and then a lot more expensive and then there are no cars. that is what we can see in the extreme case. walmart and the big companies will paid to make sure they get the trucks they need, but they may companies, say we need a truck and countries are saying to pay 50% up or you cannot get a truck. julia: this is critical. great article. thank you for joining us. some breaking news. scarlet: we have some breaking news. is set to ber among the contenders for fed vice chair. this is according to "the wall street journal," which cites

people familiar with the matter. the white house interviewed several other economists for the position, but we do know according to this report that loretta mester is one of the candidates. just to give you a recap of the other breaking news, chipotle naming talk about ceo brian niccol as the next ceo. at stocks in after hour trainings, it is up more than 11% so people liking this news. julia: steve is going to be moving into an executive chairman position. you have to wonder how much autonomy they will have if the founder is still going to be very much in the hot seat as executive chairman. we will be discussing later on in the show. scarlet: this is bloomberg. ♪

joe: "what'd you miss?"

bit connect with a cryptocurrency platform that used what some people called multilevel marketing. others call it a ponzi scheme. shut down the exchange last month, but some disgruntled investors are on the hunt for the last money. rob joins us now. thank you for joining us. people call all kinds of cryptocurrencies scams and ponzi schemes, all of them, but what was it about this one specifically the structure here that made it different? rob: multilevel marketing. the basic idea is you have to recruit new people. that is where the money comes from. they have a lending program.they promised 10% return per week, 40% per month. joe: walk through the mechanics. people would buy it with bitcoin and then what would happen? rob: they had their own currency. bit connect had its own currency. they would take those and recruit other people to take out similar sort of loans, and it

would just go on. they call it a pyramid scheme because that is essentially the structure. joe: so it all collapsed and now people are try to get the money back. from whom are they trying to collect? rob: a group of people who said they lost a lot of money have put together a group called crypto watchdogs. mainly they are focused on the people who were essentially just one level up from them, the promoters of the thing. they had youtube channels and all ways of selling it. obviously they are targeting the people at the top, but who those people are and where they are is not at all clear. joe: that is one of the fallings of all of the currency stuff -- cryptocurrency stuff. where were the regulators where signentity was saying people up and you will get more and more? was anyone paying attention to this? rob: apparently, regulators were not paying much attention. it was state regulators that actually shut it down.in texas and north carolina

, they sent cease and desist orders. they call it a fraud. they said it was a fraudulent scheme. i only learned in doing this aory that when you register company in the u.k., you don't have to give your name. watchdogs,up, crypto they are now venturing into areas that i think are potentially also risky and a little bit worrying. joe: what do you mean by that? rob: for example, they are targeting people who were promoters of this scheme. people have joined in.it has become this bounty hunt .they are going to issue their own coin .they are going to call it just is going . joe: the people who lost money went out to pursue a blue they claim over them money have issued their own coin. rob: they are planning to. it has not happened yet. one of the ways to get his there will be a bounty. they will be asking for evidence, information about certain people.

i personally think it can be a little concerning the people are going out there trying to track down the promoters of this thing sort of on their own. joe: so the attempt is because they don't really know who is behind it, the attempt right now is to find the people. rob: they say they have 350 evidence files. they have sent letters to the people they are targeting. the first line of the letter is "this is not an extortion letter." it is seeking settlement. there is also a couple of lawsuits, but the lawyers themselves say the law does not have a provision for reclaiming your last bitcoin. joe: this sounds like absolutely wild stuff. fascinating report. bloomberg finance reporter, thank you very much. rob: thanks. scarlet: [breaking news that crossed a couple of minutes ago. chipotle naming a new ceo, talk about ceo brianniccol as the chief -- taco bell ceo brian niccol as the new ceo.

the stock is surging. brian niccol, what is the intended to do here? circle the wagons and make sure to public and make sure chipotle can deliver on the vision they have not been able to so far? >> as we know, this has been a very difficult come back.this was a highflying brand that manager trouble with the safety stuff. theol is respected in industry and has been running taco bell for three to four years. they have done well with marketing. a little bit of a culture change. aaa thought of itself as better fast food, but this is what need. think they someone who knows the industry, knows the day-to-day operations of how restaurants need to run. he managed 6500 restaurants at taco bell. julia: get down to the nitty-gritty as far as the company is concerned. the founder will move into an executive chairman position. how much autonomy is brian going to have here ultimately? the founder in the executive chairman position lookin overlooking him and looking over

his shoulder. craig: something that was brought to us about, what this job when you have the visionary, the guy that founded in looming over you? i believe he was made comfortable enough to accept the position. you have to think it would be pressure from other board members to let brian niccol do what he knows to do, which is to run a restaurant. scarlet: have the trends gotten better at all? craig: not really. a couple of good months and then somebody gets sick with nora virus and the stock goes back down. they need quiet months. 9 months of nothing happening, but they have had a difficult time getting people back in. shares are trading now about as low as they have been in five years so it has been very difficult for them to come back. scarlet: they tried to come back with new products. queso for instance, which did not anywhere. craig: it was heavily criticized on social media. it is ok, but the idea it was going to save the company was

overblown.people coming to the restaurant are buying it but it is not many new people in . julia: did not taste right. not like real cheese. do we need a fundamental shift in strategy? is in a case of executing now on what is there? craig: they have had a very simple model. that is what made them successful. just a few ingredients. you walk through and see people make it. they were thrown off by this. you talk about a restaurant getting people sick, that gets to the heart of what they did. we will see further down the line if a strategy shift is in order, but right now with a neat, focus, and turned around. scarlet: no more scandals. chipotle shares charging. bloomberg's craig, thank you so much. coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: "what'd you miss?" u.s. stocks finishing in the green. a bit of a quiet day compared to what we have seen of late. we have the big report tomorrow so that may be why. also coming up tomorrow, don't miss this. euro area gdp for the fourth quarter due out as well. joe: as scarlet mentioned,

economic data report, the most anticipated in at least a decade. for real. plus, retail sales at 8:30 a.m. julia: we have some expiry's as well. scarlet: that does it for "what'd you miss?" julia: "bloomberg technology" his next. joe: have a great evening. this is bloomberg. ♪

>> i'm alisa parenti in washington, and you are watching "bloomberg technology." let's start with a check of your first word news. fbi director christopher wray is providing new details that call into question the white house timeline leading up to the

departure of former staff secretary rob porter. >> i would say that the back avestigation process involves fairly elaborate set of standards, guidelines, and protocols, agreements, etc., that have been in place for 20 plus years, and i am quite confident that in this particular instance, the fbi followed established protocols. alisa: porter left of the ministration following domestic abuse allegations from two ex-wives. a new u.s. intelligence report out today for dates russia will meddle in this year's midterm election. the world economic forum's global test report says it is likely russia will try to interfere as it pursues boulder cyber operations and false information campaigns against america and its allies. a terrorist to set off bombs in new york and new jersey in september of 2016 has been sentenced to multiple terms of life in prison. he injured 30 people with his bombs exploding in manhattan's