because there was no basis for withholding the material from congress. the former fbi director's memos could contain confidential presidential communications or information on an act of investigation. consequencesys the is a legal duty. the supreme court has thrown out a lot to deport foreigners convicted of serious crimes. bigime of violence was so as to be unconstitutional. it will convicted of violent crimes are subject to mandatory deportation, meaning the government doesn't have the discretion to let them stay. during a meeting in london, theresa may apologized to her caribbean counterparts for the treatment of long-term u.k. residence who had been asked to prove their right to stay in the country or face deportation.

comments came at a summit. i take these issues very seriously. the secretary apologize for her and i apologize to you today. shehe home secretary said was setting up a task force to sort out the group -- korean immigrants paperwork simply and for free. she promised that no one would be deported. a 15-year-old boy who was shot become the first victim to file a lawsuit. was -- anthony was shot trying to protect other students. global news, 24 hours a day, on air and at tick-tock on twitter,

powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton, this is bloomberg. >> live from bloomberg headquarters in new york. i am julia. >> i'm scarlet fu. >> i am joe weisenthal. >> stocks rallied for a second day, tech leads. >> the question is what did you mix -- miss? china goes from tit-for-tat two caret and stick. >> and a half in the assembly line at tesla. the automaker is temporarily suspending production of its models rate for the second time

in two months. seeing hissachs highest revenue in three years. the fixed income trading debt underwriting division helping to generate the gains. for more on today's earnings, i want to bring in chris. great study with us. let's start by talking. let's talk about goldman sachs. what did you make of it? chris: quarter to quarter, the changes are more exaggerated at goldman than elsewhere. if you compare them to study or jp morgan or bank of america, the universal banks are tilted more toward corporations. goldman sachs is tilted more toward investors. the investors come in and out of the markets. i don't want to say all is one or the other way.

goldman calls on plenty of corporate and citibank calls on 20 of hedge funds. if you just look at it, goldman's is skewed more toward hedge funds. what you see is exaggerated volatility. >> we also see the benefit of easy comparisons given that 2017 was not very good for goldman sachs. is this sustainable? last year there was a lot of head scratching and existential questions being asked. whether goldman needs to pivot to corporate clients and steer away from trading and what was investment banking, does that change anything? chris: there was the added problem that they had difficulty in commodities. last year mistake that was not repeated this year. that helps the comparisons as well. is its what i would say

is just different. it is not better or worse. it is just different. view thate a point of rates are likely to go up and that they will be more volatility in the markets and that we have exaggerated and low volatility than it is probably good to be positions the way goldman is. on the contrary, and you have a view that extended periods of low rates, nothing was ever be volatile again, then it is probably better to be facing off against the corporate. i can't say one is different than the other. i thinknal view is that the next few years will have more volatility than the last three years. goldman's i think exposure is probably a good thing even though it has been against them the best couple of years. >> we saw bank stocks selloff and it is a little weird because

we numbers seem good and generally have a nice rally on our hands in the market. what you make of that? the news?tter of i'm with you, i think the numbers were pretty unambiguously good. low, single-digit loan growth, they keep the expenses get 8-10% pretax and then a couple percent on buybacks and then you get the tax benefits on top of that. the credit quality is great. the numbers are really fine. the stocks are still too. we just ran this spreadsheet a couple of minutes ago and the stocks average at about 65% relative pe to the market.

that is well into the low end of the range. it is strange given that it is such generally good numbers. the only thing i can think is that maybe people needed to sell something in order to buy nor not -- by more netflix or something. to pauli go back samuels them is saying, that the markets have predicted five of the last nine possessions. the markets give us a lot of false positives. buying only would be this weakness for all it is worth. the sharelook at performance, they have gone nowhere fast. banks,ook at the bigger they trade at a pretty narrow range. at this metric, who is cheaper? would you be buying at this stage?

chris: if you look at the basic math, is coming -- these companies are earning 14 a 50% equity. even if they have some dividends, they can buy back at fairmount. . on average, i looked at it, the companies that reported have reduced the share cap by almost 5% in the past year. investors who miss out on this will find 5% fewer shares for them to buy next year. i think ultimately the banks will strike it down to the single shares, they have to. prettynue to be constructive on this. city is still cheap in absolute terms. -- bank of america's show you the best operating levels of the companies. goldman for the people who believe that we will have more volatility.

>> chris kotowski. thank you so much. up, the fed vice chairman makes the trip to capitol hill. how do lawmakers receive them? we will be hearing from jeff, next. this is bloomberg. ♪

♪ quarles face questions on capitol hill today. kevin stands with a key member of that committee. and ask about what the senate is done when i which is passing have no regarding the consumer agency that would overturn the

obama administration to read as dismayed that the house would follow suit. >> we are happy anytime the senate passes any bill, that is always news to us on the house. now that i have that out of my system. we are thrilled with this. the consumer financial protection bureau exercise a rule where we didn't have a lawful authority. it was clear that they cannot regulate auto dealers but they didn't anyway. so now the senate is active under the congressional review act to overturn that ruled area i have no doubt the house will do it, frankly 18 months ago we passed a freestanding bill with over 300 votes to do just this. number one, we will follow the law. it will be easier to get a car loan. the house is poised to act next week. one of the things that i

found interesting was that he said he would be open to reopening the comment. . >> we had been asking for and to show up, president obama never nominated one. there's been a lot of problem with the stress test. the rule of law works best when you know what that is. unfortunately there has been no comments, the public can't know what is in these tests, banks don't know what is in these tests. it is a zooming down the road and getting pulled over by a cop for speeding and you say what was the speed limit? but can't tell you that sir you are violating it. >> do you in that comment. ?

period? >> the comment period does need to be open. the stress tests in the secretive. the vice chairman said he was committed to greater transparency, part of the transparency is knowing what is in the stress test. the market needs to be able to react. the markets need to know that when banks are getting a passing or failing grade from the federal reserve, what is in the test? what the markets decide what ability of the tests are. they are also very cumbersome. by the way, the fed has access to all the stress test data anyway. thisare stress testing daily, weekly, monthly. wellat kind of fits regarding tailoring specific rules and regulations. what do you think is the next step as he begins to really settle into his post?

what time i did receive action? >> i was very impressed with him. i was very impressed by his testimony. i think what he wants to take this position. let's face it, is probably the single most important financial regulator in the nation, one might even argue the world. it is a very important position that he had. the regulatory framework used to be tailored to the size and complexity of the financial institutions. we know the regulatory love has fallen disproportionately on our smaller banks and our regional banks. none of them have anything to do with systemic risk. so much of this he can do on his own discretion, congress doesn't need to pass a new law. dodd-frank gave power to the fed. them use it to help us

achieve long-term 3% economic growth as opposed to the 1.6% average economic growth of the previous administration. >> there was some reporting by political pro that there has been instances of potentially ongoing conversations with banking committee chairman, mike. with advancingnd the bill? conversations continue between her committee and chairman prato. we have a 3% tax house in america. 90% of americans are seeing a tax cut. unfortunately, anything that has to do with capital formation, most of that takes a supermajority of 60 votes. witho have a conversation

moderate senate democrats. those conversations are taking place today, many democrats have said they want more jobs. they can't do that the way that the bill is today. it is a modest regulatory relief bill but it doesn't get us anywhere close to 3% capital formation. >> final question. i have to ask you about the speaker race. who would you like to see? you're probably jim jordan? what about mark meadows? who would you like to see in that spot? i think i will stay out of that one. i am retiring at the end of this congress. you mentioned to personal friends of mine, too great conservative leaders in the house. declinei will politely to answer that.

>> is in this part of the ongoing negotiations about dodd-frank? note, i don't think it is. i would like to get rid of that vestige of a swamp of crony capitalism. >> back to you in new york. >> thank you so much. that was kevin. next, not all economic data is created equal. of growth concerns remain and that might just mean a juicy opportunity for investors. more ahead from new york, this is bloomberg. ♪

♪ miss?: what did you the global economy remains growingut there remains anxiety. is this opportunity for investors?

joining us now is cramming christ -- cameron. globalhearing that surprise growth is coming. you think that is an opportunity? cameron: we started the year investors, analysts, economists, policymakers, everybody blowing their party wants and saying global synchronized boom for the first time in recent, post crisis memory, this is fantastic. obviously it has all caps on to pieces. if you look at the economic surprises. the united states but around the world, there has been a sharp deceleration. can we put it on the screen? for the whole world. you see there is a little pump up a few weeks ago. broadly speaking it has been a one-way train itself since the peak of optimism in january.

that natural event itself to if this is just a bump in the road at work this is something more serious. there was a prominent member of the u.k. press talking about recession in germany. i'm sure you can guess who it is. that idea got me thinking. when you hear things like that, your foot -- your spidey sense tingles. maybe we are now approaching the point where we are at the pessimism and you want to start thinking about taking to the other side. >> you have a really pretty chart here. looking at the one-year forward price change. >> it is morgan stanley forward leaning in foreign trade.

we know that they are big exporters and quite sensitive to global growth. you're probably seeing very attentive to global growth. withis great correlation global trade. i thought it would be interesting to projects that , basically you're on your change with the broad stocks index. it doesn't do us any good to say the trade integrated, we want to see what is going forward. we can't trade with 2020 hindsight. there is a sharp negative correlation here. , things indicator says look kind of grim, the return on goes youhe saying

should be by one there crying and selling when they're yelling. >> women have gone from one extreme to the other, from too much optimism to a literacy much pessimism as well. couple that with what we have heard when it comes to all of the trade rhetoric. is what we are setting up a situation for the could be a shock in a positive way. >> i think that is a possibility. the elephant in the room is of course trade rhetoric. at the zoo survey which cannot today, it was awful. of days ago,couple you had the empire manufacturing survey in the united states. you can see light one of those far side lemon cartoons when the lemmings are just falling object left. i think those both speak to the sentiment impact that the trade

rhetoric is having. it is natural. if you aren't sure if you have a tariff slept on you, i going to buy that piece of machinery? well you hire that additional person? i think that is a legitimate possibility. if we something like nafta where the rhetoric was very inflammatory, before he took office and soon after he took office, rhetoric is soon given way to a negotiated table. aings tend to tone down little bit, yes, the u.s. is still playing hardball and he is still fighting for his base but the u.s. is conceding a few andgs on those of arjun canada and mexico are considering a few things. i think the consensus will meet in the middle and i would be surprised if he saw the same thing emerge with china, present she and his people. can deliver with a already promised they will do and maybe

put a cherry on top. present from tenants i look what i hammered out of them. we are singing to buy our round the campfire. >> is, what new englanders said. trade talk is what north korea was in 2017. >> i take issue with that. let's call a spade a state. -- a spade. cameron you so much for crise for being here. we are looking at another day of gains on a hand here. , theow adding 228 points s&p 500 up by benzema percent. look at the -- the nasdaq out by netflix after yesterday's peak.

from new york, this is bloomberg. ♪

♪ >> what did you miss?

landed for a second straight day. they were led by netflix. >> i am scarlet fu. joe: i am joe weisenthal. scarlett: info you to our market minutes, president trump and shinzo abe are holding a bilateral meeting at mar-a-lago. this is the third summit so far. you can hear president trump this into an interpretation of a question from a reporter from the headlines that have crossed bloomberg including present from saying he and shinzo abe are talking about north korea, trade, military. he says a lot of progress has been made in this shinzo abe summit discussion. the trump administration is set to unveil a weapons export policy that will be coming on thursday. we will continue to keep you posted, we know that larry

kudlow has said they do want to put together a free-trade agreement with japan. that would be a priority. if you want to continue following the news conference, you can follow it on live go. we are also covering in on to talk -- tick tock. netflix reported -- they blew the cover up the bulk -- ball. joe: that stock is up over 70%. scarlet: the s&p 500 has pushed through its 50 day moving average to a level it hasn't reached in a month. technically speaking, we are getting to a level where investors are looking at the market during new set of eyes. we mentioned netflix is a big mover here in trading but i want to highlight some other companies that reported results.

notably, goldman sachs. the debt underwriting division generating the highest revenue in three years. bounce, a really strong back from a pretty dismal 20 17th. nevertheless, you see goldman shares down almost 2% in trading today. , as we mentioned, a blockbuster quarter report. on some a followthrough solid numbers from the fourth quarter. that was up by 10% on the session. twitter, getting more than 11%. stanley's by novak says he has upgraded twitter to an equal rate. united health up by 3.5%. in reported earnings that beat the highest analyst estimates. joe: let's look at the bond markets. look at that, it is more flapping again.

we see two-year yields inching higher. that long and refusing to move higher. there is a risk on rally that we yield downa 10 year to 2.8%. there's a low changed but we see investors taking notice. and -- for the first time in what feels like a long time, was the lowest level since 2012, obviously, the epicenter of any traits consents going forward. sterling holding a seven-day rally, you can see 3/10 of 1%. this is the highest level since the day of the u.k. brexit result. we are beginning a lot of lost ground. this is the fastest pace of rising almost three years.

this is not about the consumer growth that we saw but the older growth providers here weighing on the australian dollar. i want to show you a chart looking at euro swiss. the formeraching caps on look, the 120 level. this is the highest level that ofhave seen since 2015 january. kerry is -- on the commodities front, let's look at oil and gold to start up a pretty quiet day here. it was quite in down a little andis weak, still below $66 $.50. the real action is actually in

aluminum and that continues to have one of the most extraordinary few weeks in a long time. the entire industry is really being scrambled by these sanctions. it has all sorts of interesting effects. you can see they are continuing to surge of about 17% in one month. those are today's market minutes. tom.et: let's bring in stocks are at the highest level since march of 21st -- march what depressed. 21st. what is interesting here is the backdrop to all of that is that people were exactly feeling very good heading into this earnings season. week,wrote about it last collapsed.rnings had

investors had taken the positions. now we have good earnings. now the buckets are rallying. i think it is a starkly a contrarian call when investors are bearish. this is the weakest reading in two years. going into the red over there. in 2014 other collapse took about three months. joe: one of the weird things people have been talking about is the dispersion in process of volatility. all the volatility has been in equities. when you look elsewhere, they all sort of move together. the currency of fixed income, we are not just seeing it. everyone is trying to wrap their heads around the significance. is an important chart

you pulled up. it shows us that the equity market delivered wealth was to standard deviations above normal. bond markets and ethics markets didn't care. do things were not cause in the bond market or fx market to be perturbed. the blue line there, that is the bond index. you notice that bond falls below average. the stock market has gone up though. joe: do you have a theory for why there hasn't been a transmission? why the trade better it seems to only be impacting the equity? >> i think it is a liquidity function. we know hedge funds and macro funds have been reducing their data. we have money on the sidelines. an incremental selling pressure is going to cause stocks to overreact. of course, if people are trying

to do risk, we sell bonds and stocks. scarlet: i have lost the count of the number of analysts that say they don'td know what it will be. is that what will hit the bond market? >> i think it is a fair point. equity markets don't like uncertainty. i think they are very good at pricing. i think the message from the bond market was that these trade and other actions were not going to hurt the economy. i think historically it is always good to say if the bond markets calm, the stock market are overreacting. scarlet: we were having a conversation with kevin crise. aching that part

where they may have gone too far. there could be opportunity. i at that point? >> yes, it has been difficult. we have had corrections. now that people are bearish and conservatively positioned, we are in a position for a sustained rally. i think that technically the pictures are improving. maybe that was it for the year. >> when you say a sustained rally, how sustained? >> we will close about three dozen for the end of the year. >> assad about this earnings season and one of the things people are saying is that expectations are so skyhigh that there is very little opportunity. also that even if they come in stellar, we had this huge rally last year. what have you done for me lately. we have this chart showing the

huge jump up in eps estimates and the decline of p/e ratios. can this earnings season deliver the juice that we have gotten impasse. ? periods?t >> we are hoping so. demanding, you can adjust that for cash and the markets are even cheaper. marketlook at an equity with two and change in the bond market, i was still rather on stocks. >> you are staying with us, don't make a move. first-quarter operating analysts. dollarsooking for two and $.42. this is also higher than what analysts were looking for. in terms of the global business plans and whether it is cognitive solutions, the business services or the texans

is which includes the cloud platform as well, all getting anywhere from four or 6%. its full you'll view. you're looking at a drop of in after-hours trade. this is when japanese prime minister abe and president trump. he made a, suggesting that the united states is talking to north korea directly at high levels. clearly one of the discussion points between japanese prime minister and president trump. the japanese are getting a little less debt. the south koreans and the president have been making overtures toward kim jong-un. we are seeing for the developments, high-level talks and north korea. from newre to come york, this is bloomberg. ♪

♪ >> i am mark crumpton with first word news. the national transportation safety board says one passenger aboard the southwest plane that made an emergency landing in philadelphia today has died. the desk is the first fatality on a u.s. airline in nine years. the federal aviation administration says that flight from new york to dallas made an emergency landing after the crew reported damage to one of the engines and to the fuselage and at least one window. haleykudlow says nikki got ahead of the curve when she publicly discussed further sanctions on russia. the trump administration is considering additional sanctions but no decision has been made yet. on sunday, ambassador haley says

cbs has face the nation. steven mnuchin would announce more sanctions on monday. haley's comments may have been what he called momentary confusion. they met today for talks what on trade, growth, global security and climate. the zenit innovation partnership with $6 million. this will be beneficial for both our countries, job creation and as well as the climate. >> the prime minister also met with the five nordic prime ministers for the first indian nordic summit. least 30 people were arrested as demonstrators fought with police, opposition groups were protesting a vote in the parliament. they give the former president the post of primal history.

several thousand people bus traffic camping out on the streets to find a change of government they see as an attempt by the ex-president to stay in power. local news, 24 hours a day, on air and on tick-tock on twitter. powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton, this is bloomberg. scarlet: we have breaking news. .t is tax day today the tax deadline today extended because of a website outage. people are having difficulty filing the taxes online. there is a possibility according to the new york times that the irs will extend the deadline and nobody will be punished for filing a little bit late. >> you may have been like enough .o be one of those this is the head of research. you have some pretty punchy calls on where they pointed end.

but 25,000 by year end? talk about the tax implications as suppressinge the price in the short-term and wife in power ahead. >> with anti-selling related to capital gains played a role in bitcoins weakness. we estimate that last year, capital gains for all crypto was around 500 billion. of which u.s. households had one third exposure to that. this starkly, half of that is realized. about $25.l is that is a huge number for the irs. wasreceipt of capital gains 144 billion. this is a windfall for the irs. , thehe crypto market historical ratio is 25-1.

joe: is there an equivalent? do you see a more traditional asset class? first the problem is crypto went from 17 billion to 600 billion. >> let's find something similar. >> there with enthusiasm buying and taking a back up to 25,000 by year end. one word, regulation. two words, fear of regulation. >> regulation is coming. compared to the start of the year, it seems a lot more negative.

the sec casablanca statement saying all tokens are securities. that way they are subject to securities regulation. you really want relations she's in place of institutions feel comfortable actually feeling there is price discovery. i think regulations plus group custody are roadmaps for this. >> do you presume bitcoin will be the leading edge of cryptocurrency? couldn't you can take the place? take thean ether place? >> bitcoin has the most on wraps. -- on wraps. ramps. it'll be regulated as a commodity. joe: going back to my legacy markets amid this volatility, where are the biggest opportunities? or is the biggest -- where is the biggest price indication?

>> i think the opportunity, you see it in earnings season is in the material sector and energy. energy earnings are up 60%. have not kept up with the recovery in oil. energy has been a dead sector for decades. scarlet: it is a bitcoin one is i long bitcoin. i think that point and cryptocurrencies will be this nasa class. scarlet: that you so much. we have more earnings on bloomberg, we are keeping track of united continental.

they missed the analyst estimates. this is the lowest analyst estimate here. $.12. i'm looking for $.47. anywhere from 44 to 52. -- operating revenue is the stock is higher by 2.5%. from new york, this is bloomberg. ♪

♪ as we reported earlier, president told reporters the united states is talking to north korea directly at high levels. these comments came as the present bilateral talks with japanese prime minister shinzo abe. this is the latest from

washington. give us some context in terms of two powers here. japan is taking a very hawkish stance on north korea, even up to now. twice a lot of the developments between u.s., south korea, north korea took place has a bit of surprise in japan. of course, president trump seemed to quickly accept the invitation to meet with kim jong-un. i think that is one of the issues high on prime minister witho abe's meeting president trump in florida. what the president said today is that there are high-level discussions going on. it is hard to know whether he means something more than the cia director who we believe has been working with his counterpart in north korea or if

there are other officials at the highest level of the administration also talking with their counterparts in north korea at this point. unusual would that be? >> you would expect some kind of a channel to exist. just to intelligence agencies of countries that are chatted with still at war. to have the directive for people in the director's office speaking, that is very unusual. it is unprecedented. we have long had a channel between the u.s. and north korea through the united nations. on jim withcused detainees and austria. not setting up summits and talks or anything like that. >> japan and ourselves are very

unified on the subject of north korea. involved in any discussion with north korea, so too is china. where does china stand in all of this? i think you have president trump saying to give a lot of credit to present xi jinping. i'd is hard to imagine a lot of this happen without the help of china. china agree to a lot of the tough sanctions that many analysts believed helped bring north korea around to considering talks. and theugh north korea north korea u.s. summit won't necessarily include chinese participants, we do remember that bloomberg news broke the news that kim jong-un traveled to china to meet with xi jinping just several weeks ago. that really continue to lay the

groundwork for what we expect to come later this month. i think there is a meeting planned between the south korean president and north korea leader , kim jong-un. that will be the preview of what may come with the trump-kim jong-un summit in may or june if it happened. >> a while, it could happen before the midterms? it could be early to mid june or perhaps earlier. up next, the ceo of goldman creek will go full tilt on blockchain technology. that is coming up. from new york, this is bloomberg. ♪

♪ reporter: i am mark crumpton with first word news. a southwest airlines jet apparently blew an engine at about 30,000 feet and got hit shrapnel that smashed a window and damaged a fusillade, killing a passenger and injuring another. a flight from new york to dallas made an emergency landing in philadelphia. >> at this point, the ntsb is classifying this as an engine failure. we might sayhere, this is an uncontained engine feelers -- failure. the parts may not have been in that section of the engine associated with the protection the engine.

reporter: seven other people were treated for minor injuries. the new york times reports the irs will "likely extend the deadline for filing 2017 tax returns," because of a website outage. makes itays the glitch impossible to accept information from service providers and taxpayers will not be penalized. it also says all indications point to a hardware issue, not factors. every year, the irs processes more than 120 million tax returns and gives out about $300 billion in refunds. the kremlin says russian president vladimir putin has told german chancellor angela merkel that the united states, u.k., and france violated international law by launching airstrikes at targets in damascus, syria. the russian government also said today the prospect for peace talks for syria was damaged by the strikes. mexican drug lord

el chapo says his client's mental health is deteriorating. guzman repeatedly has complained about being held in solitary confinement the -- since he was extradited to the u.s. in 2017. he faces trial later this year on charges that his drug cartel --ndered billions and laundered billions and oversaw a campaign of murders and kidnappings. global news 24 hours a day and on air, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪ scarlet: let's get a recap of action.market a second day of gains for u.s. stocks. the s and p at the highest in four weeks, moving through the 50 day and 100 day average as well. netflix was the star performer. speaking of results, we also have ibm reporting. first quarter margin coming in

shy of analyst estimates, stock down 5.5%. company,railroad higher than anticipated. united continental up by 2.5%. the adjusted analyst estimate is $.50. a look at intuitive surgical, adjusted eps for last quarter will be the highest analyst estimate at $2.44. analysts were looking for $2.07. joe: "what'd you miss?" morgan capital making a big hedge fund blockchain. they are buying the crypto focused fund. terms of the deal were not disclosed. here to talk more about the opportunities in blockchain technology is mark yusko, the ceo for morgan creek. let's talk about the deal. talk about the opportunities. y fulltilt, why now? >> the easiest reason is they

were local. this is a group that started off during early-stage investing across technology broadly, became more focused on crypto and blockchain technology as they were getting ready to -- further fund. we have been investing in blockchain technology for five years, but more of the shovels, not so much in crypto. now we have seen an evolution from crypto to utility tokens, to the big opportunity, security tokens. we had to find a team. joe: let's talk about the distinction between blockchain and crypto, cryptocurrencies. are people actually -- here's the thing. every time i read about some company implementing blockchain, i never get what they are actually doing or solving, or how blockchain technology is better than a traditional database. where is that blockchain technology is actually working

and that you see the opportunity? >> if you think about any technological innovation, it takes a long time to implement. think about the early days of the internet when nobody thought it would be interesting. what do we need an encyclopedia at our fingertips for? now all the information in the world is at our fingertips instantaneously. commerce, who could possibly order a book or a magazine over the internet, when much of our shopping is over that? blockchain technology takes value and brings it over the internet. we are going from the analog stage, which is paper certificates, to the electronic age, which is securities trueing on a screen, to digital ownership. the internet of value, which is what blockchain technology is going to be, is what i think will be the biggest disruptive evolution of technology in our khmers -- careers. scarlet: how many customers have been asking for this?

you invest in high net individuals. how many want to get in on this? >> that's how this evolved. five years ago, we were leading andcharge into the picks shovels things. i want to lead in coinbase. four years ago, it did not enlist -- exist. last year it did $1 billion in revenue. i want to own a piece of the company that will facilitate across order transactions so we can easily the fact that two banks get paid because 400 years ago, somebody signed a treaty. that doesn't make sense. why do we have settlement, t plus three insecurities? why isn't it zero? we started with hicks and shovels. two years ago, some of our clients that, these crypto -- said, these crypto things. that started to take off. along, not told them

kicking and screaming, but making a little money in crypto. now this security token thing, if you think about utility tokens like airline miles or tokens points, security is all things of value. building, a business, can all be secured and made digital ownership. it is always that is going to go on for decades. julia: i have two questions. intimatedou -- you that it began as crypto and evolved into blockchain. what is the portion of money invested into crypto versus blockchain? question.portant crypto market cap is around $330 billion-ish, changes day-to-day. the big moneybout

raised for infrastructure, we are talking about $3 million to $400 million. pantera is coming out to raise about $175 million. we think it will end up being billions and ultimately trillions of dollars of transactions over security tokens. -- questions. to have you seen interest fall off this year versus the end of last year, and also, for people who want direct exposure to bitcoin, what is the safest way for them to have exposure? >> two important points. one, to own crypto, you should own crypto. whichare direct methods, trades at a premium. that is hard for some people to understand why they would pay a premium, but it has been a consistent premium. they have been able to capture a lot of the gains of bitcoin overtime. i think they are coming up with one for ethereum soon.

iting up with a secure while isthe safest way -- wallet the safest way. think about your bank, and the pin number. you don't want anyone to know that. there are direct ways do it. in terms of interest, interest in terms of any investment, current price is driven by human beings. human beings go through fits of butoria and depression, there's a network value to cryptocurrency based on the number of participants and the amount of money that goes in. when that got to about 10,000, it was about fairly value. when he got to $20,000, i tweeted, there is going to be a correction, be ready. who chased hot performance will get shaken out and at the end of the first quarter, that will be the chance to reenter. we think it is a good time to reenter. the thing about cryptocurrencies, because they are driven by human emotion,

they will move in parabolic ups and crashes. but when we look back over 30 million -- 30 years from now, we will look at fiat currency going like this, and cryptocurrency going like this. in the digital age, cryptocurrency will eventually be global. scarlet: how much of the time to you spent talking about crypto versus traditional? [laughter] >> five years ago, 1% of my time talking about crypto and blockchain, today is around 45%. it's a huge change. i get up every day so excited about what's going on. we made this acquisition, brought in a team, we will raise the money. julia: i want to talk about facebook in light of the data scandal and blockchain. there's a lot to discuss. no time. scarlet: mark yusko, of morgan

creek capital. thank you. coming up, after steady economic growth in the first quarter, china may face hurdles. we take a look at the risk of china's economic growth. joe: you can get involved in the conversation here at "what'd you miss?" send me a tweet. i check it constantly, even during the show. hear a question about this, let me know, and maybe we will get it on air. this is bloomberg. ♪

scarlet: "what'd you miss?" a tug-of-war between old china and new china. first quarter gdp shows steady expansion, but highlights the to the new economy sectors. the company is now extending an

olive branch to automakers, allowing fullerene -- foreign companies to take full advantage. great to see you here in the u.s.. why don't we go through the numbers first? china first quarter gdp, 6.8% matching estimates here. ,onsumption was a big driver making up 78% of first-quarter growth, increased slightly from last year, but people see things tapering off. >> pretty good quarter, all told. bonnet, look under the the consumption side of things have done nicely. noting, the education spending in the first quarter. in the first quarter in china, every year, consumption is usually pretty strong.

that will taper off a little bit. at the same time, the government wants to get a grip on the debt, so there might brought -- might not be as much fiscal support for the rest of the economy. we are not talking about a hard theer, but moderation of activity. scarlet: define moderate. >> no less than 6.5%. scarlet: put that into context with what the pboc did with cutting the ratio requirement. is that monetary support for the economy? >> you look at the tweaking of the liquidity for the economy, it is not an outright easing, but they are making sure there will be enough liquidity for a dose sections of the economy that do need it. what they are doing is quite targeted. they are taking risks in the specific sectors of the economy. julia: it's about maintaining stability of liquidity in monetary supply, basically.

>> that's right. joe: let's talk about the news about that by 2022, there can automakers will no longer have to have a joint venture with a domestic company to have access to the market. how much of this is news, and how much of this is just putting details on the road that -- and roadmap? i think xi jinping talked about this. we are constantly hear promises to open of the sector, and then the execution doesn't follow through. nonetheless, on the auto sector, it still seems like people are optimistic now that it will be a step forward and they will allow foreign carmakers to move freely. nothing will happen until 2022 and china already has a strong domestic auto sector. julia: -- trumpt seems like the administration would like this, but they just announced more

tariffs. what china said recently was that they will fight until the end. to make someing concessions, but at the same time they will retaliate against what they perceive as rising u.s. practices. that the firm signal from beijing. wasa: even if beijing caught with their hand in the cookie jar and it has been asymmetric in terms of trade, and trump will try and rebalance that, how much growth in the short term do you think they are willing to give up he's done what you just said, the fact level? maintained a 6.5% how much growth are they willing to give up in the short-term to appease president trump and rebalance the asymmetry? reporter: they probably don't want to shift too much.

whatever concessions they want to make will be in their own longer-term strategic interests and that's why they are willing win.ave a perceived julia: how does the united states and china when lane in n-win in thiswi case? reporter: trump can say, i have won, but it will be on china's terms. joe: quickly on the jv question, thee are the mechanisms via technology transfer that people are anxious about happened. it's not just that the companies get a slice of the business, but without the requirements, that takes care the idea that the companies have to give away their secret sauce to the locals. reporter: just to be fair and now instead about it, in china's defense, they say no western company is forced to go into china. there's no investment agreement. there is no rule being broken.

if you want a slice of the market, you come in, give us the technology, and it can be developed. whether the westerners think that is a level playing field. julia: thank you to enda curran. went elon musk said tesla has entered production thinkn july 2017, did he the company would still be there in april of 2018? this is bloomberg. ♪

scarlet: breaking news. good news for procrastinators who have not filed taxes. tax filers will get an extension

because the irs website is down. last year in 2017, the irs received about 5 million returns on the final day. i'm sure there are plenty of people who consider this good news. julia: don't leave it until the last minute. scarlet: but they always do. julia: i know. another production possible for tesla. they are halting production of the model three sedan for a few days, the second halt in about two months. robert shot is an analyst over the phone. with us.have you first at tesla we knew there would be a number of days when to tweak with -- production. how concerned are you about these ongoing tweaks, and what we heard from elon musk about his overemphasis on automation? i'm not concerned about it. i think these tweaks we have reard about our noise -- a

noise. if you look at the data, it shows they are making quite a bit of progress on model three production. said totalt they production increased and model production increased by a factor of four to almost 10,000 vehicles. suppliers lot of the out of asia that sell into tesla and specifically into the model three. what they are indicating over the last several weeks is that to hits in fact on track their production target of 5000 cars produced per week. when i look at all the data, it seems like they are making quite a bit of progress, and we are encouraged by that. scarlet: i guess it depends on whether you believe elon musk will deliver or not. elon musk says tesla will be positive in the third or fourth quarter and does not need another capital raise. what does the company need to

do?what needs to happen so elon musk can deliver on the promise? >> they have to get to 5000 cars produced per week. if they can get their based on our analysis, they will be free cash flow positive in the third quarter, and they can hold off on doing a capital raise until maybe later in the future. julia: is that what you expect? >> yes, that is our expectation, that they set this important milestone this summer. that within three to six months, we will not be talking about production. we will not talk about balance sheet or cash flow. we will talk about the tremendous market opportunity companyket has with -- has with the model three and the cars that have been coming to market. scarlet: the haters will always be talking about that. we: other big news today, were just talking about it, the news that china is going to open

up its market to foreign automakers without the need for a jv. elon musk may have tweeted at president trump, if my memory serves me. theow this is kind of down road, but what does this signify to you as an opportunity for tesla? >> china is arguably the companies against opportunity. if you look at the luxury car market, it's around 2 million units, on its way to around 3 million. the company has had tremendous momentum this far in china. cars insold about 2500 2015, 10000 and 2016. based on our math, close to 20,000 in 2017. we have seen tremendous growth, and yet with a car market the size of 2 million to three 3 million units, it is just scratching the surface. despite strong growth, they have done all of this with 25% import tax to the consumer, and that

seems like it could be going the way, so i think they have done tremendously well. --is arguably there biggest their biggest opportunity and we see future growth on the horizon. julia: and elon musk has tweeted as much to open up china. thank you so much. joe: coming up, what you need to know for tomorrow's trading day.this is bloomberg. ♪

"what'd you miss?" u.s. stocks rallying for a second day. the s&p 500 index above the 100 day moving average and at a four-week high. speaking of earnings, don't miss it. -- reportsley reit first quarter before the bell tomorrow. joe: i will look at the fed's latest read on economic conditions out at 2:00 p.m. new york time tomorrow. julia: welcome to the xfinity store. i can tell you about... streaming the most free tv shows and movies on the go. yeah, and... xfinity internet. it's so fast! and you can save by... by getting up to 5 mobile lines included. whoa, you're good. i'm just getting started. ♪ simple. easy. awesome. come see how you could save $400 or more a year

with xfinity mobile. plus ask how to keep your current phone. visit your local xfinity store today. reporter: i am mark crumpton in new york and you are watching "bloomberg technology." here's a check of first word news. the u.s. trump says and north korea are speaking directly in what he calls extremely high levels ahead of a potential meeting with kim jong-un.

the president spoke during a japanese prime minister shinzo abe at the president's private club in florida. killed ander was seven others injured when a southwest airlines jet apparently blew an engine at 30,000 feet. faa officials say the plane was hit by shrapnel that smashed a window and damaged the fuselage. the flight was from new york to dallas with 149 people aboard. it made an emergency landing in philadelphia around noon. treasury secretary steven mnuchin says the irs will extend the deadline for filing 2017 tax returns because of a website outage. glitch makes it impossible to accept information from service providers, and taxpayers will not be penalized. starbucks says it will shut down more than 8000 stores across the u.s. on the afternoon of may 29. the coffee chain plans to conduct racial bias education classes geared