syria. government and russian forces have been bombing rebel held towns and areas outside damascus for most of today. the u.n. security council met today to hear about conditions in syria as the country enters the eighth year of conflict. sweden's ambassador to the u.n. told reporters it could escalate even further if the security council fails to act. >> there are reports about a lot the east.fleeing from the point of that is strong for haveat the solution we adopted unanimously is about humanitarian access. it is not evacuation of civilian s or forcing people to run away. mark: the swedish prime minister

said his country could act as a mediator in improving relations between north korea and the international community. this from speculation about a meeting in sweden about -- between president trump and kim jong-un. the swedish prime minister said it was important for sweden and the rest of the world that tensions do not escalate between the countries. nancy pelosi has taken to twitter following the death of her friend and colleague. her tweet reads in part she benefited from her friendship and wise counsel for 30 years. her loss will be deeply felt. the 88-year-old slaughter who represented western new york died in a washington hospital. she was being treated after a fall last week in her home.

global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪ julie: i am julie hyman. am scarlet fu. joe: i am joe weisenthal. what youquestion is miss? larry kudlow was named president trump's talk -- top economic advisor. -- vladimirtin putin is expected to sail into a new term but international

pressure could isolate the nation. 10 years ago today jpmorgan buy bear it would stearns after toxic mortgages sunk the bank. they take the pulse of the housing market. with the ousting of rex cohn the and gary trump presidency is becoming a presidency of one. who is next? our white house editor is in washington. who is next? we had a lot of speculation. there were reports it would be h.r. mcmaster. the turnover is not done. alex: no one is getting fired today although the day is not a very at. -- not over yet.

worrying told to quit about this stuff and asked anybody to calm down. it has been a lot of bremmer running around the white house itself because of the president. about who is going to be next, a lot of worry that they will, every staffer is worrying he will be the next to go. has been a significant amount of turnover but it feels a good has gotten more high-end lately. catalyzedfically has this, why are we at a heightened state of alert? alex: donald trump has decided he knows best and he is tired of people telling him no or slowing down his agenda. obstructing, there was daylight between donald trump and rex tillerson. be anyhould never

daylight between the secretary of state and the president. obama,resident barack hillary clinton and john kerry, there was never any daylight between them and the president. if the president feels like the secretary of state or other top officials are not acting out his agenda, it is within his right to fire them. mentioned john kelly. there is concern he could be shown the door as well. abouts the chatter like trump from thet house -- white house the way he did his own company. replace would probably him with mick mulvaney. i think john kelly is safer now. the wall street journal had a report it was a meeting between

kelly and trump yesterday and they smote things out. -- smooth things out. john kelly has strengthened his hand in the white house. he won a battle with jared kushner over classifications. that is pretty huge for john kelly. generally nobody wins when they get crosswise with jared kushner. the jeff sessions would be big one. the vi secretary leaves and replaced by someone. if jeff sessions would be different. bex: sessions would earthshaking. it would precipitate a political crisis. really around the country. possiblystep would be firing bob barr and ending the russian investigation. that would be a big one.

that is a big reason trump has not pulled the trigger on firing jeff sessions because he understands the damaging politics of that. julie: we learned today that we will be seeing an interview with stormy daniels on march 25. should we care about this, said we seriously care? for its impactshould we care abd on the white house. alex: it is much more important than a prurient side issue. according to the wall street aurnal and other reporting, $130,000 payment was made to stormy daniels to keep her quiet . a month before the election. important piece of news if accurate. furtherarrants

investigation. it wants the white house being forced to address it. be evil there will watching closely this weekend. in the weeks coming ahead. blocking andrnment acquisition of qualcomm. what about the company trident? this is bloomberg. ♪

scarlet: jay powell will kick off his meeting on tuesday. a panel weighed in on whether or not a old he locks

economy is just a fairy tale. >> we had a pretty good fourth consumern terms of sui spending. we are seeing the normal retrenchment that you see. a lot of credit card debt was run up so there is a tendency to recoup. the economy still looks pretty good. job growth looks good in that is what drives it. >> things seem ok but are they as good as people expected them to be this year? >> things are awesome right now. i love the current environment. 70%.ity is up to look at small business optimism. it posted the second highest rating in history. the highest reading was september 1983. that was during the reagan reform years. you look at wage gains, they are picking up and you look at the central banks, they are being slow and gradual and normalizing at this glacial pace that we in .he markets can easily absorb

>> people are looking in the wrong place for inflation. we do not have much consumer price inflation or core pce. the inflation has been in asset prices. everyone thinks that is a great thing. a you defined goldilocks as boy and economy which i agree we not only have a buoyant economy and in the u.s., we have a buoyant economy globally and we have very little pressure is on consumer prices but we have asset prices that are robust. >> this is what is so great. central banks see the asset price inflation. why are we fighting this, why don't we embrace the ecb? they have a moderate growth, moderate inflation, asset prices inflating, why change interest rates? let us enjoy the asset price inflation until it spells over into the real economy and you see and inflation surge. >> hundred that work for japan and the 1980's, 1990's? did not work out very well.

>> they have the asset price inflation going. they half off to mount yield curve control. they traded and killed the market. >> it was -- >> is that a good thing? inflation reaches a point where it is dangerous. it is a bubble that pops. timing that. how high does the fed funds rate have to go to get there? the rate of inflation so it is easy conditions right now. >> the fed has a long way to go. i am interested to see where the out,ry of projections come they are behind the curve. it is a negative real yield but they are not interested in asked --ng at a volker

at the pace. >> if i bring up the short tradition -- positions, if you put that against the yield i remember -- wonder if a pain trade might be developing. weather should -- could beat ruing. >> the short position has been built up for month and a half. why are we to 50, 260? it is because you have the central banks continuing to run down there balance sheet particularly the fed. rental amountchor of selling that is going on. you have a lack of flows coming in from overseas. the cross currency basis has shifted. if the short base were a big problem we would see rates a lot lower. we have to accept we have not seen rates lower. there is more selling to come. >> i agree but the ecb is doing

30 billion euro a month. you see that impact on the bond market, every time the bond market wants to react to the data all of a sudden the weight of 30 billion a month from the ecb comes and weighs on it. the italian election is a perfect example. bond deals should be wider on the results and they simply are not. the notion of price insensitive buyers impacting markets has not gone away. >> the magnitude has declined. january's was 160 billion a month of new money being printed coming into the government market. last year was less than 40 billion. there's a less -- there is less of a backstop. >> in october we will have to see what that means. >> if the bond market can support itself. >> is that anything to worry about? >> i do think it is. the fear is easy money is coming to an end.

scarlet: that was earlier. you can catch bloomberg real at 3:30 p.m. in london. julie: qualcomm rising on news of paul jacobs. seeking partners to buy the company. up but i am not sure how much real chance people are giving to this. but why wouldn't they be? -- the sheer size of it. if you remember the board was very dismissive of broadcom's original offer of $82 a share before they walked to that down after the acquisition. they said 82 was not in the ballpark. or 84n't come out with 83 and make this sound like this is

doable. you are talking about a $100 billion plus deal. virtually impossible. compare it.t who would he team up with? >> there are reports that he was -- and softbank is a japanese company. i do not know if you can have any sort of foreign financing in this deal. i do not see private equity forms getting involved because the big push back against broadcom was the private equity style business model. they do not like cost cuts, i do not know what private equity firm wants to take this over and see -- say you do it you want on r&d and we will not worry about profit. joe: what is the most likely path? just stay independent and do its

thing? >> i would not a surprise to see activist shareholders get involved. one we get this phot next week we will see a low percentage voting for that qualcomm board slate. if we do not see the management team take decisive steps to think about changing its business model, to give that licensing is this on a more profitable, sustainable path you will see an activist get involved. >> do you think jacobson fought going forward. >> there was a report that qualcomm might be thinking about living -- take aim off the board. could we see something further? that is possible. >> what about the bid to buy xp? that was part of its effort to stave off competition. parties thatll

need to approve this. >> the deal has been around for more than 16 months and we're waiting for it to close. there is some speculation could to retaliate? there is a lot of protectionist sentiment coming out of the u.s. and china may want to respond. itqualcomm cannot close than has problems. that was its big bet as far as how to rejuvenate the growth of the company. that is the strategy. it would have expanded to automotive and industrial chips. less competitive than smart phones. i do not know what it's go forward strategy is and i expect shareholders will be frustrated. are doing fantastic. it is amazing that anyone is not up in this chip market. .> except for qualcomm

>> that is investors' frustration. part of it goes down to qualcomm's business model. the chips weird mix of business. that runs into legal challenges antitrustom apple or regulators around the world. broadcom says you need to rethink the business model and a way that is adaptable to the times we live in. you cannot be in fights with the government. qualcomm has resisted that. they will have to think again. that is another big question. we do not have any question he would be involved in a buyout. theirolders have signaled displeasure and i do not know how much longer he will last. temper -- companies want more leadership in their ceo. i do not know that shareholders field that is the right personality for qualcomm. scarlet: it sounds like

shareholders are frustrated. thanks. -- coming up. trump ordered u.s. sanctions on russia. how do investors react? we will show you. this is bloomberg. ♪

>> u.s. stock funds have climbed bank oford according to america merrill lynch, they are using data from the efp are. if you take a look, this is the week ended march 14. you see into u.s. stocks, a record $34.6 billion even though right now if you look at the tally for the week through today, for the s&p 500 it shows a drop of 1% in price. it is interesting we are seeing these inflows.

looking across, japanese stock funds saying and inflow. we have three emerging-market stocks on this graphic. high-yield bonds did see out for nine -- outflows straight weeks. the important thing is people were buying u.s. stocks in the week ending wednesday. scarlet: people were rushed -- selling russian stocks. and are ae biggest sex suffered is worst day of redemption since june. hat is -- the blue line

shows the way of measuring demand. morthe latest catalysts are signs that the rift between the kremlin and western governments is deepening. whether it is the u.k. accusing russia of poisoning. of that is playing into the geopolitical concerns. something we will discuss with pomerand.r and -- got earlier in the week we the empire manufacturing report. one of the questions they asked in the surveys is what is going on with prices. a p are, we have the white line, the prices paid index. this is what companies are paying for their raw materials, those prices are going up.

the prices paid index at its highest level in many years. rice is received. the goods they sell, are they able to pass along those higher prices? they are. this is also rising but not to the same it -- degree. we have the spread between the two and that is at the highest since early 2012. over six years. bottom line? prices going up, we are seeing more signs of inflation. it is not crazy runaway inflation. we are not saying that. also some margin pressure risk. prices companies are paying for their goods are rising faster than they can sell the goods for. that suggests they are getting the squeeze. scarlet: they are widening. if you look at how indexes are closing the dow is up by 117 points, the s&p gaining one third of 1% and the nasdaq back on its winning streak or up 10

points. the nasdaq at 7491. this is bloomberg. ♪

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scarlet: "what'd you miss?" stocks edging higher today after positive economic data. i'm julie hyman in for julia chatterley. joe: i'm joe weisenthal. if you are tuning in live on twitter, let's welcome you to our closing go coverage every weekday from 4:00 to 5 p.m. eastern. scarlet: let's begin with our market minutes. we have been up and down. as we close out the day and the week, keep in mind we had quadruple witching as well, so there may be last-minute gyrations. the nasdaq unchanged. the dow is up by 57 point. the s&p 500 gaining a 10th of 1%. the data was incredible. joe: yes, really solid. strong data, but it did not feel like the data was driving the show this week outside of the cpi report earlier. scarlet: this leads us to the fed meeting next week where jay

powell makes his debut before the world and explains what the fed does next. julie: in terms of quadruple witching, we saw a little lift in volume at days end, which is not unusual here. that is what we tend to see on the expiration of futures and options contracts. but volume overall for the s&p 500 only about 4% of the the 20 day average. definitely not a huge surge here. let's look at some of the individual movers in stocks. tiffany having its worst day since last may, falling 5%. that is after we saw same-store sales missing analyst estimates in most regions last quarter. tiffany has been trying to turn around what has been a lengthy sales slump. also looking at wells fargo. according to the wall street journal, the justice department and sec are probing wells fargo's wealth management business, which is basically an expansion of the existing probe into the company. those shares down 1.7%. ainally, alter beauty -- ult beauty and salon up 7.5%.

they got a guy that was good enough. better than sears according to rbc. the results were not barn burning. apparently, did not scare away investors. apparently, quite the opposite on the session. joe: let's take a look at government bonds. scarlet mentioned the strong data this morning, but in the end, a very quiet day in u.s. race. to year yield up to 2.9. 10 year yield up to 2.84. not much going on there. scarlet: let's look at currencies. the dollar reversed earlier declines today to build on yesterday's game. for the past two days, it is up 1.5%. for the week, it has gained for a fourth straight week. we mentioned the data. there was also university of michigan consumer confidence data. all of that beat estimates. a couple people cited there was no drama at the white house. no firings of any key staff members so maybe that played a role in this.

i don't know. it is a possibility. i wanted to check on the loonie, losing ground again. is the line goes up, that h the u.s. dollar gaining ground. for the week, depreciating the most in a year, the loonie. justin trudeau told michael mckee was to move quickly on it, but negotiations need to take place and 80 to figure out how to get it done. unfavorable yield spreads on the loonie. the spread now the widest since june. a quick mention of the turkish lira. in fact, at a fresh record low versus the euro as well. all of that reflect a concern that turkey's monetary policy is in the face of double-digit inflation. turkish bonds have been selling off. joe: finally on commodities, oil and gold. not much going on with gold. interesting weird day with oil. jumped 1.8%.

it is back over $62 a barrel. if we look at the intraday chart of oil, there was a spike in the middle of the afternoon that caused it to jump. no one really knows what it was. catalyst.o obvious there is no headline that seemed to to come out. nothing was going on. oil has been in the low 60's range for a wild but it jumped 1.7%. scarlet: when i talked earlier, our guest pointe out that something happened last friday around the same time. joe: mystery stuff. those are today's market minutes. scarlet: more on today's market action and the week that was, let's bring interest in our guest. u.s. stocks finished lower despite the mixed somewhat higher gains on today. what is your take on the u.s. economy right now? we have disappointed we tell sales and very good factory production numbers. how does it look as we head into the fomc meeting?

>> the economy continues to do well, but not super well as people were expecting. i think that is really the issue that the markets are dealing with. after the tax cut, the expectation was all of a sudden the economy will accelerate. it certainly has not happened. i think from a markets perspective, that is probably a good thing rather than a bad thing. julie: do you think we see the dot plot change next week? krishna: i think that is entirely possible. if that happens, especially what i am focused on is what happens in the backend. what are they communicating? that would be far more telling than what they do with 2018. whether it is three or four does not really matter. how aggressive they are going to be in 2019 i think has significant bearing on the direction of the market. joe: how far do you think the markets could be off in their expectations for 2019? what do you think the range of outcomes is? krishna: i think the markets to be very off. again --

scarlet: underestimating. krishna: underestimating the aggressiveness that the fed has. i am hoping that is not the case, but i think there is a possibility that that entirely comes to light. joe: why? you look at the data and obviously the u.s. is growing.it is fine . cpi report, wages, it did not jump out to me that this is an economy that is overheating and cannot handle it. why do you think there could be this step change up in the rate hikes? krishna: because of the deficit finance spending that will come to the end of the year. so far, we have had just tax cuts, but the spending related stuff actually comes later in the year. i think that is really the question that the markets have to deal with with respect to the economy. our expectation is the economic modest, and al lot of the deficit ends up making into overseas markets and

helps emerging markets and the u.s. trade deficit widens. whether that ends up being the case or not, we will find out in due time. that is the partner -- part that scares the fed more. scarlet: talk about a 10 year yield because they don't pointed out 3% as the turning point for u.s. stocks, but we are moving further away from it. we got to 2.95 on the brave first and having -- on february 1 and have been drifting lower. from coal percent to 3% is what i expect to be the case. jeffrey said that the present rate will be highly detrimental to the equity markets. that is an opinion i happen to disagree with. 3% we could get pretty quickly. if you have any bit of strength, we can get to 3%. but i don't think that takes down the market. or treasuries is

meaningfully high, talking north of 3.5%. scarlet: enough people think 3% can be a turning point. do we get there anytime soon? krishna: i don't think so. second half of the year rather than the first half. julie: if what you're talking about in terms of the trade deficit and the fed perhaps be more aggressive, how do you position around that? do you think we see a move next week in the markets in response to the fed? do you think it is something that is pushed further out? krishna: i think there is a risk that we see that the family adjusts the dot plot. i don't think it is likely but that is entirely possible. the real move in my opinion will probably come to the end of the year when the fed has had an opportunity to look at the full 2018 data and anticipate how things are going to happen in 2019. right now, there is no rush for them to do the markets one place because they do not want to walk the market back. there is plenty of time, so i think given the possibility and that timeline, what is the rush?

julie: how do you position yourself now? krishna: we are basically for a thetive modest uptrend in market. economy is good. rates are relatively low. inflation is under control. software data is really good. hard data is not that i start their really good.a good environment for the markets . joe: the one curveball here is trade and the possibility of some sort of tit-for-tat trade war. how do you see that going and evolving? what do you see the impact is on the market? krishna: a trade war has nothing to do with economics. it is really all about politics. from a political standpoint, ande positioning is good the trump administration and from followers gain a lot by positioning for tariffs, but doing it certainly things on tariffs can prove to be negative. and the trump-- extraordinary thinge terror front -- tariff front can

proved to be negative. some things that come in the market but don't change, the trade picture any meaningful way. on its right side, what we are watching -- trade side, what we are watching is not the terrorists themselves but the -- tariffs, but the impact on the dollar. savings will have to finance the deficit. that means wages will rise. inflation will edifice itself. all the things we talk about that being on gradual grows out. that is the risk for the market. scarlet: watch the dollar. thank you. appreciate it. krishna: thank you. scarlet: coming up, the biggest tent in the market is how some are characterizing this equity fund. more behind that reasoning, next.

from new york, this is bloomberg. ♪

mark: on mark crumpton with first word news. president trump's chief of staff has reassured presidential aides that no staff shakeup is imminent. that is according to white house press secretary sarah huckabee sanders, who told reporters today that john kelly informed aides there are no immediate personnel changes at this time. sanders said the message was relayed to other administration staffers who were not present for the meeting. florida authorities say today that cables suspending the beingrian bridge were

tightened for a stress test when the concrete at florida international university collapsed on traffic. at least six people were killed. the bridge collapse came days after the installation was celebrated as a technological innovation. >> the bridge was about collaboration, about neighborliness, about doing the right thing. today, we are sad. all the can do is promise a very thorough investigation getting to the bottom of this and more urn those we have lost. -- mourn those who we have lost. mark: the mission has shifted from rescues to the recovery phase. one person says he is more hopeful going forward that about trade relations between the u.s. and ireland.

he spoke exclusively today to bloomberg television. >> i am a little bit more optimistic than i was when i arrived. i think the president means what he says in terms of imposing tariffs on steel and aluminum. -- did detect really engaging the european union around the possibility of the free trade agreement. bute not as it was planned a unilateral agreement between the european union and america on trade. mark: british police have launched a murder investigation into the death of nikolay drew scott -- bushkov. he died from compression to the neck. meanwhile, another probe has been launched into his death, which is being investigated as murder. as strongoligarch

kremlin critic who died under disputed circumstances in 2013. 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: "what'd you miss?" risk parity funds. the palace strategy that attempts to spread volatility equally across different asset classes for smoother returns is being called out as the weakest hand in the market. the strategy was battered during the recent volatility shocked financials. when we say it tries to spread volatility, how exactly does that work? who are the players who are employing this strategy right now? >> something names that people know in the risk bearing world. bridgewater, the advent, they .the all weather fund some different flavors. the strategies are all different

in their specifics, but generally, if you look at the historical volatility, it makes sense how much a given asset class will swing. you'll know inflation protected securities is a lot smaller swings. treasuries, maybe a little bit bigger. equities, they will be volatile. the portfolio says, ok, we'll have a heck of a lot of inflation. nominal treasuries. smaller equity component. because we still want to have a decent return, we are going to let her it all up. -- to lever it all up. scarlet: talk about how big risk parity is in the markets. luke: that is something will get you in trouble. the biggest disparity, players would say that we are not as big as you think we are. however, when i talked to paul britton, he said if you tally up a lot of the risk parity and its cousins that are acting like

risk parity, it is around the one trillion mark. joe: do people think the strategy is not going to be good moving forward? luke: i think if you are a volatility fund manager, i think part of this is an environment in which risk parity is doing poorly is a great environment and stocksre bonds are selling off in tandem. what more can you ask for? i think that is probably part of the story, but another part of it is looking at central banks and at the race complex -- rates complex, would you can argue this february was about, the correlation is not positive but working in both of their favorite. joe: so they just is that to some extent, risk parity is a different flavor of shorting volatility in that if central banks unleash more volatility through the rates channel, this is going to be a less effective strategy. that is the theory. luke: exactly. in an environment where both asset classes on coming under a

cute pressure, that one would be underperforming relative to just straight stocks. scarlet: it is one thing to underperform. it is another thing to create a ripple effect just like we saw with the etf blowup. is there risk of that happening? if it is mostly these specialized hedge funds were doing this, that implies maybe the risk would be contained. luke: that does imply that. i did a big issue or concern or worry is counterpart to the u.s. that they are so big and that in some markets, we do not know how in ahe positioning is given asset class or a given part of the market. joe: speaking on xiv, there is a loss of from people who are upset because they lost money. in a given asset class or athey havee technical, but what is the deal with that? luke: first of all, but is not about. the has been a lot of talk about how the vix thought vix

manipulated potentially the as spoofing. this is not about that. this is about an investor who saying they had had their position -- hedged their position in a blowup in the futures that we saw in by the end of day trading activity, they were the ones who blew it over the edge. in the process, they actually made probably a killing. that is essentially the allegation and another aspect to it is that the indicative intraday value of this, it's not updating for a certain point of the day so some people may have been buying it with the impression that it was worth one thing and actually was not worth that at the time. scarlet: good stuff. thank you for joining us today. coming up, elon musk reigns supreme when it comes to dreaming up big ideas. when it comes to retaining

talents, however, a bit of a different story. more on the company's revolving door. this is bloomberg. ♪

scarlet: "what'd you miss?" tesla facing a crucible. in the electric carmaker saw a string of executives head for the exit. all of this competition already challenging test for elon musk proving he can operate his companies as well as he brings them up. joining us now is eric newcomer. when we talk about a senior executives who are leaving the company, is there a common thread here? where are they going to? what preceded their departures? eric: they are going to a lot of different places.

john mcneil probably the most high-profile exit. he was the president at tesla and left to become the chief operating officer at lyft. that is a big opportunity, but that muchthink not bigger of a title necessarily than the role he was playing at tesla. i think it is hard to paint a common thread besides a lot of them were on tesla's financial team. they lost the cfo sometime last year. they have lost a chief accountant, controller, a number of people in the finance organization. i don't think we have a lot of visibility into what is going on, but this year number of executives leaving is worrying. joe: the brain drain at tesla has a part of the short thesis of jim chanos and others. they say if this were really the rocket ship to the future of automobiles, people would not be jumping off. but it is also a weird company. maybe it is weird working with

elon musk or something like that. could there be a benign explanation other than the possibility that maybe they know things that the rest of us don't? eric: certainly. musk,ad the book on elon and there is no question he is a hard guy to work for. hard-driving, pushes people, expect the best out of them. so it could just be a mix of that with the fact that, you know, if your boss leaves, maybe there is some shuffle in the ranks below. that is very possible. yeah. i think it is hard to know, but given exactly what you mentioned, 23% of the flow is short, it is hard not to look at these departures and think that is a common argument of shorts when you are purchasing is something is amiss in the company. posts are that these empty, do we have a sense how quickly tesla will try to fill them?

in the interim, does it set tesla back to not have these key posts? scarlet: good question. eric: elon musk's response tends to be, i will take that responsibility, i will take that on. we saw the compensation package, eraseis set up to sort of fears that elon musk may step aside or leave at any moment. it is designed to keep them there. this company is built around one man. when someone leaves, we will make it clear that elon musk is still here and taking care of it. julie: but he is not a finance guy. the people who have left are on the financial side. what one things up as an accountant. eric: right. there is only so much you can do. i know everybody thinks he is superduper, but you know, there is a limit to his talent. eric: right. yeah. i think that is right. we will have to see how quickly they can bring people in. thin the case of the chief

financial officer, it is particularly strange. last was replaced and then came back and took the same job so there is a level of seemingly needing to bring in loyalists and longtime employees. scarlet: very quickly, when you talk to investors, do they care? does this worry them? eric: the stock price has been holding. just bouncing back and forth. is now, i think the price not moved by these concerns. scarlet: thanks. we will keep watching. "bloomberg technology" the porter eric newcomer, thank you for joining us. next, the outcome may be certain, but there are other things to watch for in russia's presidential election. we will discuss. from new york, this is bloomberg. ♪

i'm mark crumpton with first word news. vladimir putin has barely campaigned in the run up to sunday's election. a victory in his quest for a fourth term is all but assured. still, the election could hurt vladimir putin. one person was russia's richest man until he was stripped from his oil company. he spoke from berlin. >> a significant part of russian society and people abroad, you follow russian politics and will not elec except these elections. the legitimacy will be weakened. mark: chancellor angela merkel

is playing on the possibility that germany could boycott the world cup in russia to show solidarity with britain as tensions escalate over the death of a russian spy. the eu's response to the attack will likely be discussed in next week's meeting of the leaders in brussels. angela merkel says the priority now is making sure there is a full investigation and not about boycotting the world cup. lithuania's foreign minister says the nerve agent attack on a spy is a challenge to the eu. he tells the associated press recent appropriations need a tough response including actions against oligarchs who use london as a safe haven. he noted moscow is becoming emboldened. new york congressman louise

slaughter, the top democrat in the house rules committee, died today following an injury she suffered at her washington home last week. she was the first woman to chair the rules panel and is widely known as one of congress's most influential champions of women's rights. she was first elected to the house in 1986. new york democratic congresswoman louise slaughter was 88 years old. 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: let's get a recap of today's market action. your stocks finishing higher. unchanged, but up by a quarter of one point. actually, this is the first time all week that u.s. stocks finished in the green. it comes on the heels of decent data, factory production data. joe: decent data, but shopping this is the defining aspect of

the week. julie: "what'd you miss?" vladimir putin is affected to victory in russia's presidential election this sunday. this comes as western governments take a harder line on russia. therantz is the director of institute and joins us now. thank you for joining us, will. first of all, obviously, we have our coverage in the west of what is going on in russia, especially the poisoning in the u.k. what is the perception and the coverage looking like inside of russia of the recent events? will: russia has issued various denials about the events in london, and those are what have been reported inside the russian federation. obviously, people are more distracted you they are leading to the election coming this sunday. the russian foreign ministry, the russian government's of all issued denials. .ery sharp denials and have basically said russia

was not involved in the incident in great britain. putin obviously not affected to have any real challenge in the election. what will be at the agenda in the new term? william: we just do not know what vladimir putin is going to do when he is elected. a lot will be seen by his appointment of a prime minister. does he stick with has long time prime minister? which would suggest more of the status quo. or will he appoint someone like alexi, who previously served as finance minister but has been very outspoken in terms of demanding government reform going after corruption,, and trying to make significant changes in vladimir putin's system? we do not know where vladimir putin is going. it is rare for politicians after serving in office for 18 years to radically change their programs so i don't expect a radical change, but a lot will be known once he decides on his appointment for prime minister.

scarlet: those of us outside of russia will be looking at that appointment to get a reading of the tea leaves where he is going next. does it matter to people in russia who he appoints as prime minister? william: i think it does. if he sticks with the current one, it means nothing will change. a system that has grown increasingly corrupt will remain so. if he brings in someone else, that is at least someone new, someone outside the most recent political structures who has promised reform. he himself is not a symbol of radical reform. he served vladimir putin's government for the better part of 10 years as finance minister. if he is appointed, there will be at least a hint that the fourth term of vladimir putin represents some element of change. he can do something radical. he can start spending money, but that does not appear to be in the cards. julie: vladimir putin has been in power for 18 years.

that means the first iteration of russians reaching adulthood who know nothing but a russia under him. what do we know about their opinion of him having been raised under his reign? are they fully supportive of him? what do we know about any opposition on the part of young people in russia? mixedm: well, it is a picture. there is a strong statement of the young population that supports letter putin. they have only seen russia's thatcher globally grow under putin. he is the only leader they know. he is a leader of stability and unpredictability. for both their generation and their parents's generation, that is seen as a very positive sign. there is still a very negative impression of what occurred in the 1990's when the russian federation finally emerged from the soviet union and all the economic chaos that occurred during that period. for a large segment, there is support of putin as a

predictable and stable leader. that being said, there is a new generation of russian liberals and idealist who would like to see change. voice is unlikely to be heard in this election, but it is a significant part of the russian electorate going forward. julie: since there is no -- joe: since there is no ambiguity about will win, what will be worth watching? william: two things will be worth watching. what percentage of people participate in the election. clinton has basically told his underlings that 7% of the population has to show up to reinforce a positive impression of the election. the second thing that putin expects to have is 70% of the vote. if he does not obtain either of those, it will at least look on the outside as not quite as convincing a victory as he wanted. that being the case, he will be elected and will have six more

years in office. it is a technical matter, but those are the things i will be watching for. julie: the recent sanctions imposed by the u.s. and the expulsion of diplomats from the u.k. are not viewed as really having an effect necessarily on russia's behavior when it comes to its cyber activity, for example. in your view, is there anything that would be strong enough to change russia's behavior on that front? william: honestly, there are more steps that the west can take. there is talk, for example, in britain about going after the income of oligarchs and former government officials in london underthe notions that british law they can go after sources of wealth that are unexplained. there is a chance they will go after oligarchs's money. there is a chance of increased sanctions. that is the possibility of boycotting the role cap, as the story mentioned -- world cup, as the story mentioned.

i have to say it is not the best environment right now in order to pursue those policies. -- itample, if the u.k. will have to convince its european allies going along with increased sanctions, a difficult task doing brexit. at the same time, president trump would have to convince european allies to take a stronger stance against russia at the time that the european allies are visiting trying to evaluate a response to the u.s. tariffs. so the environment in terms of the unity of the eu and united states is really being tested right now. i think that is something that putin understands and is exploiting. scarlet: taking full advantage of it. thank you s very much. william: my pleasure. scarlet: coming up, it has been a decade since j.p. morgan in a fire sale became a key part of the american lexicon. come?r have we

will explore. julie hyman at eyewear right here on bloomberg television 10 years ago covering all of this. julie: yes, we have been going down the relay and trying to find some of the old coverage around that time. there i was at that time doing an interview. i believe that was from march 17, 2008. scarlet: you can tell by the $240 billion price tag. julie: which didn't end up going up in the days following. matt miller and erik schatzker television as well talking to our guest there about what will happen next. unfortunately predicting lehman brothers would be ok in september of that year. it was decidedly wrong. joe: we get some wrong. julie: yes. this is bloomberg. ♪

scarlet: "what'd you miss?" 10 years ago today, bear stearns agreed to a fire sale sold to j.p. morgan chase for two dollars a share because of the toxic mortgages. the bank was the first number of the fall in the financial crisis, the worst panic to grip wall street since 1929. we all know what happened afterwards. here now to talk about how far we have come in the mortgage lending market is our guest. we were talking during the break at 10 years ago today, you are at citibank covering mortgages. >> i was. i was looking at citi mortgage. scarlet: talk to us about the current environment and whether we are on a trajectory upwards and how long that can last. >> we are on a trajectory upwards. there is no question. in the last six years or so, there has been a lot of cleaning up.

i was part of the cleaning up. there has been a lot of regulation. there has been some really good origination. the quality of new loans has been very good in the last four or five years. as far as the trajectory is concerned, this is where you gets interesting because rates are going up. housing affordability is a challenge. there are few mortgages likely to happen in the foreseeable future before it gets better. so the quality of lending is really important at this point in the cycle. some: what is the role of of the larger banks and their originations versus independent firms like yourself? how has that landscape changed over the past decade? sanjiv: as you know, clearly, a lot of the large banks have pulled back. little banks have stepped in. i will say that the quality of the nonbanks postcrisis is substantially different.

the quality of mortgage lending in banks was very different compared to where it was precrisis. nonbanks have become particularly the stronger ones, that really well-capitalized and professional management teams, good leadership, and we care a lot about the quality of risk and the quality of lending because we have seen it all. we know how it can all go wrong quickly. joe: from a regulatory standpoint, how well calibrate right now are the requirements for mortgages? do you think there is some need for loosening in terms of the ease with which you can originate mortgages? sanjiv: yes, i do. athink that there has been very intense form of regulation in the last several years. and i think to some extent, it because of how bad things have gone with respect to lending, but i feel like there is a balance that is now coming

back in terms of really understanding the quality of ,isk as opposed to just risk very single-minded view of regulating. i think that pendulum is gradually beginning to come back. scarlet: there is more nuance now than the years after the crisis. you mentioned regulations does not have to be a bad thing. it can be valuable for the industry and the consumer. give us some examples of regulation that is into an with the housing market right now and works in both parties's favor. sanjiv: i think about consumer protection. it has been much talk about the last 10 years. i am a big advocate of consumer protection. i believe some of the things that the regulators and consumer protection agency put in place around making sure certain types of products were not in the safe harbor in my opinion was the right thing to do, the right set of rules to play by. the whole idea of making sure lenders ensure that

consumers have the ability to repay is completely -- how basic is that? they lenders of a who has the ability to repay almost feel embarrassed that had to be regulated upon us, but it has been and has been a good thing for us. julie: is the financial crisis -- since the financial crisis, how do you think the idea of the american right to ownership has changed? has that been a positive thing to the industry? sanjiv: i will say something that is marginally controversial. julie: please. sanjiv: i always believe that , but theship is great real objective should be shelter as opposed to homeownership. there are those who a 30 year mortgage is probably not the right thing. but everybody is entitled to shelter. the moment we start pushing the boundaries of homeownership beyond 64%, 65%, start taking it you deal with's,

the fringe in terms of the credit margins. that is when it becomes tricky. joe: after the financial crisis, there were a lot of pundits and people who said on this point that homeownership, the american dream, that was old. it never made any sense. the next generation is not going to be into homeownership. was that an overreaction to a was ultimately a deep cyclical thing, which is that a lot of people got burned? or do you see a secular shift in ,ow people think about housing such that the great financial crisis does represent the trend break about how people think about it? sanjiv: actually, i think the answer is in two parts. in the short-term, yes, this new generation thinks about what happened after the great depression. the generation immediately after the great depression was so stymied by what happened in the great depression that they were scared of homeownership. going to a little bit of that right now.

but i think homeownership is a very fundamental and deeply ingrained part of our psyche. by the way, it is a good thing. i think that in the medium-term, that desire for homeownership will come back. but i think it informs all of us in the ecosystem to make sure that we do not push this directive of homeownership beyond a percentage like 70% to 75%, pushes people to lend to the fringes of society, which in my opinion causes everyone to go high wire -- haywire. julie: thank you for coming in. appreciate it. next, the prime minister ireland discusses the importance of trade and his meeting with president trump. this is bloomberg. ♪

julie: "what'd you miss?" ireland is one of the central players in brexit negotiations as the government in dublin has said it will not tolerate a hard wate -- a hard border. jason kelly talked about the importance of trade relations. >> everyone knows that a lot of american firms invest in ireland. what a lot of people do not know are 500 irish firms that have invested in the u.s. and employ 100,000 people across 15 states. trades crossing across the atlantic every week in both directions. the u.s. has a trade surplus when it comes to services. it be much balances out. more jobs, trade, investment between our two countries. >> more trade. trade has been a huge topic in this country. because of that, globally owing to the tariffs that the

president has spoken about, were you less optimistic or more optimistic about global trade coming off of these discussions? leo: i am a little bit more optimistic going home than i was when i arrived. i think the president means what he says in terms of imposing tariffs on steel and aluminum. t a real openness from the administration and also on the hill to re-engaging with the european union around the possibility of a free trade agreement. may be not as it was planned, but a new bilateral agreement between the european union and america on trade. i certainly would prefer a trade agreement logic there -- rather than a trade war. jason: what would a trade war look like from an irish perspective? how does that play out in your estimation? leo: from our point of view, it would eventually be tit-for-tat. we don't produce steel. we do produce aluminum. very little of that gets exported to the u.s. if that goes ahead, there is a

risk obviously of retaliation from the european union. the european union is a big market, bigger market than united states. you could see, for example, the suggestions that there could be tariffs put on harley davidson and bourbon and denim jeans. no doubt the u.s. would have to respond by putting tariffs on other european products. it gets to a point where everyone is exchanging sanctions on each other and you end up with less trade and thus jobs and less investment. that is definitely not good for ireland. i don't think it would be good for america either. julie: that was the irish prime minister earlier today on bloomberg. scarlet: for investors interested in ireland, one of the best ways to gain exposure to a market that would otherwise be lost in a sea of developed markets, so this st. patrick's day, we take you inside an etf tracking i was company -- irish company. ♪

the island etf offers. exposure to irish stocks and trades under eirl. it is one of the most top-heavy etf's accounting for three quarters over overall waiting. because of its top holdings crh. food, based on helped, and entertainment represented by the group, the bank of ireland, icon, and paddy power. eirl has returned more than 150% since its conception in 2010. this year, it has taken a bit of a dip. it costs 48 basis points. while it gets a green light, it is best to buy and sell during the u.s. morning hours when holdings are treated across the pond. scarlet: you can watch etf iq

stay at 11:30 a.m. to 10 because of daylight savings time and 3:30 p.m. in london. joe: coming up, what you need to know for the week ahead.this is bloomberg. ♪

scarlet: "what'd you miss?"

u.s. stocks rising for the first time this week in the s&p 500. coming up on sunday, russia holds its presidential election. we know who will be reelected. joe: not much suspense. the fed decision on wednesday but it is jerome powell's first meeting succeeding janet yellen. julie: don't miss this. you might have on friday a potential government shutdown as the house and senate struggled to negotiate a spending bill. scarlet: how many times have we been here before, right? too many to count. that does it for "what'd you miss?" julie: "bloomberg technology" his next -- is next. joe: have a great evening. this is

mark: i'm mark upton. you are watching "bloomberg technology." here is a check of first word news. president trump's chief of staff

has reassured presidential aides that no staff shakeup is imminent. that is according to sarah huckabee sanders. she told reporters that john kelly informed aide there are no immediate personnel changess at this time. federal regulators say a russian government hacking operation aimed at power grids in the u.s. did not compromise operations at any of the nation' nuclear power plantss. corporate networks at some of the plants licensed by the nuclear regulatory commission were affected by the hack, but no safety security, or emergency functions were impacted. florida authorities said today that the cable suspending a pedestrian bridge were being tightened after a stress test concrete spanon collapsed over traffic thursday, killing at least six people. afteridge collapse came it was celebrated a a technological innovation. nancy pelosi took to twitter