mark: i am mark crumpton. questioning fbi agent -- quickly spiraled into chaos as republicans demanded he answer questions about the russia and his disparaging phone text about donald trump during the 2016 presidential campaign. >> you are overruled. >> point of order, let me continue, your testimony is it essential to the hearing. >> the point of order is not well taken. >> you don't know -- >> the witness will answer the question. >> attorney-client privilege. he has been advised not to answer -- suspend. >> are you going to just make up rules all along -- while you go along? >> he said let me be clear under oath, not once in my 26 years in my -- have my personal opinions action iany personal

took her paul ryan distancing himself from president trump's friend agenda. he says the president passes aggressive tariffs moves are a and will drivebs declines in american influence and also questioned the president's decision to withdraw the u.s. from the transpacific partnership, a multinational agreement to try -- cut trade barriers championed by former president obama. north korean leader kim jong-il and praised president trump in a letter written before secretary of state mike pompeo's visit to pyongyang last week. energetic and extraordinary u.s. officials presented the united nations with data that north korea has petroleumfluence over by bloomberg news. officials worry no show for a

meeting today with u.s. counterparts. they have scheduled tour discussions for u.s. soldiers who died in the war. spent a to be the first working level talks between the two sides since secretary of state pompeo's visit to be ended saturday with north korea a u.s.ing what he called gangster like demand for denuclearization. --global newsys 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪ julie: live, i am julie hyman.

we are 30 minutes from the u.s. and risk on his ax on p are the s&p 500 headed for its highest in february. the chief investment officer google -- guggenheim partners expands why he believes the rally in equities is the last to rot. -- last hoorah. kickoff and citigroup the bank earnings tomorrow. and, a grand vision. soft entrances live from idaho his role and reach into the u.s. the art of the trade deal. the u.s. and chinese officials are hinting that could get chance to -- for trade negotiations after president trump ratchets up pressure with tech -- with terrace and over

half of all goods they import to the u.s. the latest is to go into effect on august 30. are the markets pricing this risk in quickly -- adequately? our next guest says no. real -- it is really great to see you. why do you think the markets are crazy? some terrace actually going to affect but there is a little time to strike a deal. taleer is a time but that of risk is just getting fatter and fatter as he go along. so far, the chinese have shown no interest in backing down but neither has donald trump fair the likelihood we would strike a deal, let's say it is 50-50. .hose are high odds of risk the consequences of a trade war

u.s. be devastating for and the chinese economy. quasi-hear you on all of those friends but there is a view and it is bipartisan that the u.s. needs to stand up to china on trade. -- startinge going to as well. there is no other real -- never really an optimal time to take action. , somethingtrength jay powell alluded to in his comments earlier today, is the timing for this potential trade conference, however you want to characterize it, is it perhaps good? is there a better time to do it? blessed a sort of like launching a war. is there every good time? the language around this, you know, of a war, is an interesting one because wars cost money. no matter if it is good or a bad time, it comes with a cost. unlike to see other

means to apply pressure to china and to use a blunt force of tariffs. look at the consequences, i love to talk about washing machine tariffs. it is funny, such a -- and at secure area, but they were announced in january and they have gone into effect at 15%. much have washing machines gone up in price? the 17%. the reality is, the u.s. consumer will pay for the trade war. you talk about tariffs of 25% on automobiles, some of it is just content ribbon, so maybe it will not be a full 25%, but 15%. a 15% increaseet in auto prices in the united represents 6% of cpi, which means we would get a 1% surge in the price level. in the price level

will cause federal reserve to react. if they decide they have to start weaning into the price increases are picking up the pace, then it will devastate entire economy and the strength you are talking about today, we may with -- may very well and up undermining the process. >> talk to me about timelines. we have got potentially angry people out there who have to spend more on washing machines, >> or dirty clothes. >> yes. we're waiting for that purchase. go into other tariffs effect and prices start to rise, one would think there would then be a consumer led backlash and political pressure but how long does it take to get to the negotiating table and is the president susceptible to that kind of pressure? asking all there right question spirit i am not sure if we get to this point

especially if we view it as a tech -- an attack on the chinese, i think that will not go over well in china and they will say they have to stand up to the united states. this process could go on for .ears the political backlash i am not so sure about. who tell me wele are going to hurt them more than they are going to hurt us. i think that is sort of irrational inking. classic people are getting hurt, they are not caring of other people are being hurt. the individual u.s. consumer is paying more, do they really care if chinese consumers are also paying more? >> i think there is a hard-core element in the country that might look at this and say, you know what, so i am paying 15% more for my car to last another year or two, but we really have to give it to these chinese or these europeans, or these canadians or whatever you want to pick.

that backs up the idea that the u.s. can win a trade war by other countries losing. it doesn't have to win it on its own to come out ahead. if other trading partners suffer , then relatively speaking, we come out ahead. your take is most analysis does not reflect the hard truth of these tariffs and taxes paid by the consumer. why'd you think that is? why are investors so reluctant to quantify it? >> one is it is not well understood. we have not dealt with the issue full-scale since the 1930's. a lot of people around back then who analyzed the situation came up with the idea that global tariffs are bad and not with us anymore. we kept a very simplistic view, which is we will only put tariffs on 20 billion or 200 trade andssets, let's that it's only 10% and that is only $20 billion hit to the

economy. the reality is it is a bigger hit because it spills over into u.s. prices and if it goes on long enough, you start to allocate capital and resources and efficiently. if it is easier and more productive to build automobiles in china and build aircraft in the united states, then there is an advantage, a come -- at -- a comparative advantage in trade. we want things that are more efficient and we want to let other people build the other stuff and the basis of trade is we can raise everybody's standard. there is another element, which is, the idea that we will declare were on the rest of the world and everyone will suffer. something people are not thinking about, and it is already happening, if the chinese reach out to mexico or we can findnada, that we are the odd man out,

that we are applying tariffs to everybody and everybody else is applying tariffs to us and they have free trade amongst them selves in that case, the u.s. will not be a game of them losing less than us, it will be the u.s. is winning it -- losing and everyone else is gaining. >> already when we had spoken to you over the past six months or so, a recession could happen as soon as the next few years. does this pull that forward, does it make it a recession -- -- therek the timing are things at the margin that .ould make it come faster it can obviously increase the risk the recession comes and if not, to a great extent. it will do is cause the federal reserve to continue to have to raise rates well past what we would think neutral is. monitor policy would be calm restrictive and because of that

restrictive policy, it could force us into a harder recession than we would have had if we had not had to lean against what would have come out of tariffs. back to the fed chair earlier this afternoon, the markets saying the economy is in a good place but not fully relieved -- not fully reached. he is saying the inflation goal is not fully reached. you are saying it will be pretty quickly depending on the tariffs. interesting.ly it is in the fourth quarter and would spill over into next year. it would be a lot more powerful. it is easy to see how automobiles at inflation. real serve into the inflation rates. what, we say you know could see the fed funds rate may

be at 3.5% somewhere in the middle of next year. past neutral. i was just with president williams at the fed today and when you look at his own work, neutral rate, it would suggest the neutral rate is somewhere around 2.5%. above thepoints or 1% neutral point would be very restrictive. think of it in percentage terms. we are talking about an overnight rate that may be neutral. is a fairly restrictive policy p request the fed will continue unwinding its balance sheet as well. >> that is right. coming at the same time and in the last piece is tax cuts. people forget that economic growth is the rate of change and not an absolute level. the surge in earnings and growth

becausetting is coming of tax cuts but when they do not happen again, the growth rate will flatten out or probably decline. at the same time that we are fighting the inflation battle, we may find that the economy is losing this. guggenheim's global chief investment officer is sticking with us and we will discuss these deals next. from new york, this is bloomberg. ♪

>> guggenheim striking a deal for restructuring and what --

liability taxes per financial terms were not disclosed. as cochairmanoin of guggenheim securities. for more, we're back with the chief investment officer. congratulations on the acquisition. talk us through how this fits in with your view that we should be preparing for a downturn in the economy and a refresh -- a recession could be forthcoming next year or 2020? helps to diversify businesses on the security side. we are currently representing boxey in the acquisition of . we have a lot of great m&a capability. what happens if i am right and we have a recession and m&a falls off? being able to do the stuff jim has made a name for, it is a great way for us to enhance our business. >> speaking of which, if indeed

we will see an economic downturn, how do you grow assets under management in that? is it just by being correct on that point? >> you're right that in the financial crisis, we have foreseen what was coming and we were one of the few asset managers that rue assets thosehout the crisis your times 10 to be very good for us. obviously, the problem that you have is you may be growing assets that the value of those isn't going down. challenge the real but if you can grow assets through the downturn, once it comes around, you will get a huge surge. hopefully, we get a replay of it again. is --genheim talk about who your ideal

strategic partner would be to recapitalize the firm and expand distribution overseas and in general? off, we do not need recapitalization. we're not really looking for money but have been approached by a number of people who see us as an interesting strategic fit. there are really no discussions going on now in terms of it to kill a partner. it would seem the type of partner is something that would complement us in other regions in the world like an distribution, perhaps to pick up asset management capability in categories like sovereign bonds. believe it or not, people still buy sovereign bonds in europe. we could further expand our business and so, when people approach us, that is the number one concern here at how we will fit in terms of future growth, not so much the fed -- we do not need the money.

world,other parts of the what would a trade war or whatever you want to characterize as going on, how would that affect us? >> a good question. there is a lot of uncertainty in the world especially looking at ways to china where the logical next step if we get into the trade war is to start capital restrictions. how do you get in a strategic joint venture with someone in china, it is a difficult thing is that is what is happening. hopefully we would not get to that point in europe. i think at this stage in a game, if the right person came along, we would entertain a discussion regardless of where they are in the world. >> getting back to the idea of competition, your main fund has performed quite well in the past .ear over the five years as you look ahead and you look

at the recession potential scenario, it seems as though there are an increasing number of strategist coming around. morgan stanley coming out and saying the curves can invert next year and that usually receives a recession. risk?id that become a that everyone is as pessimistic as you are? >> give them about 40 more years in basis curve. it is interesting. i am one of the most boring people in the investment world. if you talked to me in 2013, i would have told you we are doing virtually the same thing today as we were doing. we only difference was upgraded the credit quality of the portfolio but in 2013 given the shape of the yield curve after the taper tantrum, the direction was that it would be flat from there. the curve was 300 basis points.

today, it is a lot lower. not want tople do jump on the bandwagon and caption the basis points. ok. welcome to the party. so, for me, i am often called a contrary in which i do not like. the label implies that i'm trying to have an opinion different to other people in the reality is that is not me. i just like to look at the data and look at the world and see what logical conclusions i can draw. it is uncomfortable in terms of the pack because i am often outside the pack as i do not really listen to them much here >> it helps being outside of new york. >> california is a pretty big thing. thing i will say is i have written about this before. the path tos is mediocre returns.

happy to see that people are coming around to our way of the world and hopefully they will join us soon. >> i love that you describe your site is or him and everything you said after was not boring. thank you for visiting us. this is bloomberg. ♪

>> shares a broadcom lower today and expressing doubt for the $.9 billion acquisition of technologies for more, let's bring in nikko from san francisco. walk us through doubts. what are they specifically bearish on? >> the ceo has a lot of explaining to do. basically broadcom has surged in terms of share price and has laid out a clear strategy of how

he will acquire this for the industry and he will be able to execute. spinning off were shutting down the rest of it, he has now told shareholders that he will buy and enterprise technology company that makes software. the no overlap with broadcom aich has so far just then horizontal play. the vertical play has investors wondering whether he has lost the plot after missing out on qualcomm >> what is their defense and rationale? it will addk recurring revenue that will be very valuable to the is this. think it will be valuable as soon as the fourth quarter. >> that makes perfect sense. , joining us much from san francisco.

the market close is next. way updaq is leading the by one and one third percent. from new york, this is bloomberg. ♪ ♪

julie: "what'd you miss?" technology comes roaring back sending the nasdaq to a new record. i'm julie hyman. scarlet: i'm scarlet fu. joe weisenthal is off today. julie: if you're a live on twitter, welcome to the closing bell coverage. minutes andh market technology is dow performer on perhaps investors are less worried on trade tensions. maybe there were decent talks on trade and we just talked to scott hyman from guggenheim who is not optimistic to think the least. amazon also hit a record on the session. the s&p 500 and dow gained by nearly 1% on the day. we were just talking about this agreement by broadcom to buy ca.

in terms of the share price reaction, a good news bit from ca. they were up 19%. investors and analysts are doubtful that this is a good idea strategically for broadcom. a software firm, not the traditional semiconductor maker. speaking of pessimism on and listens, -- pessimism on hadysts, victoria secret comparable sales. officials say it is game over for victoria's secret and pink. they have seen massive traffic decline and market share losses are mounting. he says investors are ignoring the facts and they continue to believe that it is a great brand. it is great commentary there.

synchrony financial is one of the worst performers in the s&p 500 according to bloomberg. walmart considers moving his brand and credit card business to capital one. this is according to people familiar with the matter and being reported by bloomberg. walmart is considering moving its brand and critical business to capital one from synchrony. . that sends synchrony shares down 1%. taking a look at the bond market, not much moving. even on the days where you see a lot of buying or selling in the stock, there is relatively little movement in the treasury markets. this is especially notable for a couple of reasons. you had a 30 year auction today. powell, and jay auction. treasuries is not doing much of anything. we've not yet met the fled -- fed inflation target.

it is pretty unusual for the fed chair to give at all. not much reaction here in the treasury market. scarlet: it is summertime in the bond market. let's take a look at currencies. you mentioned the cpi report. it was a team report for the month of june. it did not give investors much reason to bid the dollar higher. the dollar was inching lower by 1/10 of 1%. some of the safe haven currency declined as a result. the dollar-yen is higher with the dollar gaining versus the yen. lost ground versus the dollar as well. if you look at commodity currencies, they have recovered after yesterday's selloff as oil and other commodities a stabilize. we saw that big selloff, a brutal selloff in oil prices. other variousthe

currencies gaining against the dollar. let's look at commodities. the supply demand picture here looks a little better after the iea issued a fresh warning on fresh cushion. even after oil fields had been opened. this is likely machine driven and presented a buying opportunity that fundamentals were seen as hype for the summer. they have wti inching lower here off of the lows of the ascension -- the lows of the session. those of today's market minutes. let's get to insight on the markets. jim polson, chief investment strategist here. the matter if the market stocks recover or fall based on the latest trade headlines, you are looking at recession indicators.

in terms of recession indicators, forget the flattening yield curve, you're looking at the investment-grade credit spread. why is that a better indicator to you? >> i don't know if it is better or not. the thing that bothers me about this recovery is, it has been an odd, unconventional recovery on many fronts. a subpar grower throughout. we have used on traditional munsell policies -- untraditional monetary policies on these. i wouldn't be shocked if we had a recession for unconventional reasons. while everyone is watching the conventional indicators, even though they don't turn red. of recession a lot indicators flashing caution. the yield curve is positively slow. the leading in the comic -- leading economic rates are up. there's not a lot of obvious excesses of behavior throughout the economy.

i'm looking at nontraditional things that might suggest caution. one of them is the yield spread on investment-grade credit. since 1970, over the last 50 years, it has done a pretty good back upng from below 2% to 2% either during or not that far before a recession has occurred. they had one false signal in the middle 80's or grew back about 2% in 85. there was a big slowdown but to no recession. the next time it came back below 2% again, it did not rise until 1990 above that level area it is pretty much tracing out the recession that we have -- level. it has pretty much traced out the recession level that we had. the investment-grade aa spread hit 2% again after being below 2% from the first time in its recovery.

i'm wondering if that is a signal that's not too many people are watching and could signal caution ahead. julie: if you take a look at my bloomberg, we have the chart you were talking about here. we saw those spreads go below 2%. then, they popped right back up again recently here. you say in your note you're not are why the spread has been predictor of recession, but if you are going to predict a recession right now, why would it be? that youamental reason are seeing potentially in the economy right now that could lead to a recession scenario? jim: one thing i would say about recessions is generally, almost always, no one knows we are in one until it is already hitting us and passed us. indicator,ike any even when the yield curve inverts, it does not feel like a recession at all. everyone feels good about things. recessions occur in an environment where we are at from

the standpoint. they typically come when you are starting to get overheating pressures. they typically come when the fed is forced to tighten rates which is what they have done for the last 18 months. they typically come when long-term yields rise. when you are late on the calendar, when there is strong confidence evident throughout the economy among company, consumers, investors. hits.s when a recession carries evident today. it does not mean we have to have a recession but i think it is time to be looking for the possibility, because this is the type of environment it happens in. scarlet: if that is the case, what are you doing in terms of allocating money? had you prepare for that eventuality without knowing we are in it or we might enter it in the next six months or year? jim: it is a really good

question. if i saw more evidence i would get more defensive. right now, i would not leave stocks because i'm not convinced we are going to have an imminent recession yet. is diversifiedne much more broadly. for example, i would leave the to extenttes consistent with my parameters. i put most of my investments overseas. beat up more are than the united states, much ch morepular, mu support a policy issues here. i put most of my equity bet overseas. secondly, i raise a little cash. if we hit an air pocket and there is panic, you can have fresh powder to buy other people's panic sells. intold also diversify commodity etf. not a huge amount, but a little bit in that commodities do well

while equities struggle. i would look at hedge fund exposure a little bit right in here. we would not have as much downside risk, but still participate in markets. i might add a little gold to the portfolio as well. then, i would bar metal my sector exposures, have to inflationary type of beneficiaries like materials, energy, industrial sectors, and half toward consumer staples. the market goes up you will participate. if it falls apart, you hold up a lot better in here overall. i think it is not so much to wholesale leave the stock market , but it is to change how you are investing from here on in. julie: thanks jim paulsen at the leuthold group. the numbers for cpi and why they hit for -- and for relief from renters. from new york, this is bloomberg. ♪

mark: i'm mark crumpton with first word news. an fbi agent who is anti-trump's text message fueled partisan bias and said today his work has never been painted by politics. he rejected public and allegations that he set out to stop donald trump from becoming president. he testified publicly for the first time since being removed from robert mueller steam -- robert mueller's team.

this was in the run-up to the presidential election. and stating to you, it is not my understanding that he kicked me off because of any bias. it was done based on the appearance. if you want to represent what we set accurately, i'm happy to answer that question. >> i don't appreciate having an buys working on two major investigations in 2016. mark: struck said the focus on him is misguided and it is part of "our enemies campaign to tear the country apart." china's vice commerce minister called on the u.s. to resolve a conflict through new round of talks. they are inarned favor of negotiating.

russian president vladimir putin stepped up efforts to broker a deal on the pullback of pro iran militias. the move comes as he prepares for the next week's summit with president trump. russia has agreed in principle that iranian backed forces the borderay from israel's and replaced with troops that are loyal to the government's in damascus. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. julie: "what'd you miss?" u.s. consumer prices have climbed and you may see relief

when rent is due. here are three charts you cannot miss. matt boesler coming to us with good charts here. let's start with the rent question. overall, you're starting to see a little bit of heating up in inflation and it looks like rent is not where it is happening. is interesting because when the fed talks about inflation, it is about low unemployment putting upward pressure on prices and that is why they had to keep an eye on it. when you dig into the data, you look at the price index, the only place you see that response to a tighter labor market manifesting in higher numbers is rental markets. the blue line shows service inflation in the service center of the economy without the rental portion. you can see over the past several cycles, that has not responded to tightening labor markets. it is going sideways at lower levels. the blue line shows rental

inflation components, and you can see that has been decelerated. last month a decelerated to the lowest level in about three years since july 2015. that is a story we are seeing a lot of sort of overbuilding and multi family houses. a lot of that supply is coming online so landlords have a little less pricing power these days than they had over the last few years. that is showing up in a bit of a deceleration. >scarlet: real estate is hyper local though. if you break it down, and look at rents in the northeast versus the west, there is a totally different story -- does it tell a different story? matt: it does. if you look at a geographic breakdown, all of the major regions of the country are seeing deceleration or a stalling out to begin with. you can see the blue line is the western region. this is cities like san

francisco, seattle, los angeles. you can see that is where the rental inflation has gone the highest read it is showing the sharpest deceleration because that oversupply is showing its most out there. the white line is the northeast, another major coastal center including new york city notably. new york city rental inflation was the lowest since june 2010. that is an interesting tidbit. it speaks to the west -- it speaks to the nature of this. the takeaway for the fed is it will see downward pressure across the country, and if it does, we might be talking about more inflation being too low later this year as opposed to being a little too high as the narrative has been headed in that direction. scarlet: at least on the red side. -- rent side. julie: not only on the rent side but also the food side.

the fed does not look at food. what is interesting is, if you look at this picture with rent and add to the staples, this appears to be good news for u.s. consumers, particularly lower income consumers who tend to be renters. matt: that is right. this chart shows the average price of milk, aches, and bread. you can see that has come down a lot. at last month was the lowest since january 2007. $5.78 for a basket of three of those items. this has led to a lot of angst in the crisis. -- crisis period. bill dudley's comment in 2011 he said inflation has been low and you look at things like ipads that come down in price, and someone said i cannot eat and ipad. there was a lot of discontent. that is not a reason for so much discontent anymore, now that

those food prices are coming down. scarlet: let's pull the chart up again, what happened to the big drop-off at the end of 2015 through half of 2016 there? chart,f you look at this you can throw it up against the chart of the u.s. dollar exchange rate upside down, it tracks it. we might see some of the effects of dollar strength and going back to the 2000s, that was up. of dollar weakness. that is also an interesting sort of factor because it speaks to importance of exchange rate management. that is something we don't talk about as often when we talk about the fed. scarlet: especially with all the trade war talk swirling around. that could be a factor looking at these prices. matt boesler, thank you so much. up, whistleblowing on one of the world's biggest banks brings a big reward. that is next. this is bloomberg. ♪

scarlet: "what'd you miss?" crime doesn't pay but reporting on it does. the cftc has awarded money to a whistleblower that's a jpmorgan was steering clients to conflicts of interests without telling them. matt, give us context year. what led this to be the biggest award yet? >> this is back in december of 2015 so it takes time or the word to come out. arewhistleblowers awards tied to the size of the penalty. 10 or 30%. this time it was a hundred million dollar policy -- penalty. it is the size of the penalty given to the whistleblower.

so it is not investor funds that are harmed. julie: this is an incentive for people to, even though there might be reputational costs, costs for their job, that they are still compensated and, in this case, handsomely so. how often do we get these kinds of cases? >> it is starting to get more traction when you have a big number like this. and, people are risking careers to blow the whistle. government folks have talked about the quality of the tips improving because now, there is substantial money. long time it takes a for these to come out because you have the award, and after the enforcement action comes out, you have to go back to the agency and show this is how i helped bring this case. scarlet: i wonder to what extent

we have been in this economic environment and there is a market contributing to increase likelihood of something happening as well. what do regulators look for when a whistleblower call something in? matt: a lot of times to get -- they get thousands of tips. toally it will be something be like here is the violation. here is the law, here is what is going on. with a good whistleblower attorney, someone who is at the agency, they understand what cases work and what violations work and go from there. julie: matt, thank you so much. it is time for the bloomberg business flash. a look at some of the business -- biggest stories in the news now. consideringmart is moving its critical business. bloomberg has learned the world's biggest retailer has

narrowed its competition for credit card partnership from the two lenders. the retailer is looking to find a partner that can support the long-term plant from walmart pay. a st. louis study is warning president trump's tariffs against china could backfire causing plant shutdowns. they affect mostly intermediate goods in china used to make final products. that cuts companies cost leading to higher prices and increasing their competitiveness in the global market. for victoria's secret and pink. and analyst says the retailer is struggling with a massive traffic drop and mounting losses to its market share. the analysts expect other shares to underperform. netflix, home of the crown secured eight 112 ricky -- record emmy nominations for the first time. netflix began as a dvd by mail operation.

meanwhile, hbo's game of thrones is still the most recognized show. apple was nominated for the first time for its collaboration on carpool karaoke. the emmys will be held on november 13. julie: where breaking news bringing it here. the justice department is going to be appealing a judges decision that allowed at&t takeover of time warner. they were not certain they were going to be appealing this decision, but again, the judges decision that allowed the takeover is now going to be appealed by the u.s. justice department. this renews the government's antitrust against the merger creating the media giant. there were a lot of questions about if the merger was approved. there was a lot of suspense. it was approved another government will appeal. scarlet: the zika is not over.

-- the site is not over. julie: this is bloomberg. ♪ 2, down. back up.

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matt: i'm mark crumpton with first word news. the trumps were welcomed to the palace today bride the british prime minister and her husband. as mr. trump's first visit since he took office. the black-tie dinner is expected to focus on trade. they say the ancestral home of winston churchill is scheduled 14. hundreds of protesters gathered in multiple locations across england following the president's arrival. processors -- protesters held posters across the street.

president ise staying, demonstrators are also out in force. prime minister may has published her biggest blueprint today on future relationships with of the european union. the so-called white paper proposes a new free trade area for goods, but not services. this may cause principal and practical. she is urging brussels to consider the proposal with a spirit of respect. london called the plan a real blow. fundnternational monetary is standing by its proposal for fuel price hikes that lead to four days of violent protests. a spokesman says fuel subsidies were agreed to be eliminated at the broader agreement. 6, the haitian

government announced that price increases of up to 50% would take effect next day. looting and several deaths followed the announcement. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. julie: breaking news, the justice department is appealing the time warner major -- time warner merger. joining us from sun valley idaho is ed. was this expected? it seemed this was done. it is absolutely unexpected and a huge surprise. the justice department, were not only blocked in their pursuit of trying to stop at&t during a deal, but they are really smacked down by the judge who said they should never have thought them in the first place and said they would be -- you

would be opposed to them doing a deal. i was trying to see if it was a may -- if there was a way the market could respond to this. there's going to be, if this happens and they are successful in the appeal, you would see this huge deal be unwound, which would be almost without precedent. scarlet: what level of uncertainty does this add to other deals in the media space? does it make people rethink comcast, fox's assets. as you mentioned, this deal closed and we wouldn't even begin to figure out how to unwind it if they won the government favor and he goes through. ed: the complexities are unwinding. when you think about all the shareholders involved and entities impacted by this, it is mind-boggling. it does impact other deals and certainly impact the mood around the deals.

but you had think, disney has been approved in its pursuit of then,x news assets read give other situations like t-mobile, then they have to reassess their deal and see of the terms will be changed? the point with the time warner decision was that everyone was watching it. it was seen as a litmus test for what was going to happen in regards to big ticket m&a. the president was that there was nothing to block year. if they managed to overturn the decision, we are better off. we are in an all-new environment. julie: at this point, it looks like a notice of appeal. ed, any hints or clues as to what the grounds could be when you say the judge in the case so thoroughly rejected the government's argument before? ed: it is unclear. the information has come out

from the doj and is extremely limited in scope. normally, in a merger, or any leave, you would be given to appeal if you found material new evidence, if there was something you found was pertinent to the case that you were not able to present at trial. does not the case. there is nothing that the doj found after the trial or during the trial that they were not able to present. this is a deal to years in the making by the time it was approved. i don't know what justices have that they feel will get them back on the table year. it may be as simple as the decision may be in just, they think that the judge was too harsh in the way he sided with the companies. it is unclear. they're not given any information as to what they will do. i'm sure they will have to in the coming days. this is not something going unnoticed in the market. scarlet: and bankers are working on different deals. let's bring in david maclachlan

in washington. as ed mentioned, this was a complete surprise that the justice department is now appealing this decision, when it is a done deal and time warner shares don't even trade anymore. to undo something like this would be complex. do we have any sense of what the doj is protesting specifically? said, the only thing in the files so far is a notice of appeal. we may not see reasoning behind the appeal for quite a while. we will have to wait for that. i think there was some indication of reversing this decision and it being very complicated. there were in decisions -- there were indications that they would make this move. when at&t and time warner closed, they agreed to keep the to give dojparate , and ifce to appeal

they win, that would be easier to unscramble the deal. julie: can you recall another instance, david, when we saw this kind of situation with the justice appealing a decision in a case where the deal was already closed? no, the last number of appeals challenged by the ftc, and the justice appeal, the government has one. when that happens, the deals fall apart and they go their separate ways. we saw one appeal last year by two insurance companies, and some and a cigna, they lost in the trial court as well. this is extremely rare. scarlet: i want to bring you back in here, ed, is the issue that the doj had against at&t, time warner merger, is there a discomfort with a vertical merger which would be a little unprecedented. or, was it with the players involved with at&t and more

specifically, time warner? ed: the speculation was always that time warner was something that trump really did not like any did not want to see the merge go through. he said on the campaign trail, if he was elected, the deal would be blocked. it was always the speculation in the background, but this was the they thought that it presented an unfair competitive challenge and the environment. why are they going after it now? it is unclear. they lost the case and something impossible to lose. there were none of the things they asked for, that they got. the judge said this was a case that should not be brought and nothing in it at all. scarlet: we will see how it all plays out. julie: ed, after you have a chance to talk to people there, what their reactions are, because this news is just out, i would be

interested to hear what people say. thanks to ed hammond and david maclachlan. from new york, this is bloomberg. ♪

julie: we have breaking news a few moments ago that the justice department now plans to appeal a judge's's decision -- a judge's decision. the government is renewing the antitrust fight against the merger. at&t shares traded lower at about one and a half percent in after-hours trading. are gathered who in sun valley, idaho. so's ed hammond and he is now on the ground back with us and with a special guest. ed? ed: that is right. 11'sere with the ceo joe

-- joey levens. we saw this newsbreak as we were heading to set of having the merger decision opposed again from the doj. this is so much of the conversation at the moment. play out herethat with of the disney, comcast saga as well. to focus ontry content and not enough on distribution at the moment? >> you can't have one without the other. both of those things are important. at&t and time warner is the combination of content and distribution. -- whether that deal is a good one or one that is working out, i don't know. i think bringing in competition to the big internet players and the extent that allows them to

play with the big internet players is a good thing for everybody. >> that is the threat to the media industry now? >> absolutely. netflix changed everything. facebook and google, those are massive threats to those businesses. ed: we can look at the scaling and you can see it as a defense measure, a prophylactic against amazon or google. is it scale alone going to be enough to protect them from that? know. it is a combination. i think scale helps, but it has to be product. one of the things that could come out of this, or will come out of this comcast, disney, fox thing is one controlling shareholder of who's who. content you could put out could be interesting if

they put all content onto lulu and mount that asset as a real offense against those things. that could be interesting. there are all kind of ways this could get interesting. ed: you have been very successful at identifying and growing businesses that have done well at warding off the big tech, facebook, amazon, google, etc.. the secret to that? had to you build businesses and not allow those huge companies to steal the march? joey: i think you have to focus on product and brand. if you have a big roddick and you build a brand trustworthy -- brand that is trustworthy, you will compete because your customers fight for you. once to herlatforms your business, your customers will fight for you. we've seen facebook move , the online dating

space, you are the owners attend her and match. how do something -- had you deal with something like that? they have so many people and so many markets. they have such a huge customer base. are you able to withstand that, look for partnerships, what is the solution? joey: we are absolutely able to withstand that. we don't know what the product looks, or when and if the product is coming out. now we areright helping customers build relationships. all over the world. we have customers in every country across many brands using our products to find successful relationships. we have to continue to do that. people will not do that because another product comes into the market. deliver on to that. if we fail to deliver, facebook and anything else will lose. i think we have been executing in this category for a long time. this is something that we are

very passionate about. thatnk this is something is best in class and most experience in the category. i like our chances. ed: does the world had to get more amorous for facebook to concede? it sounds like there is a defined market in the dating space. do they have to take market share from you? joey: i think there are 600 million singles worldwide and there is still penetration of being veryproducts small relative to the size of the market. i think it is possible that they expand the market, the facebook users -- i think a lot of the ,acebook users, anecdotally some of the older demographic is still engaged. i think bringing those people on to dating products could be good for the category. ed: another area you are focused on is retail.

does that future play out? we hear so much about amazon and used as theays proxy for all online retail. how do you continue to build the brands or do they exist at the level they are now? joey: we will definitely continue to build the brands. i think of home services in the u.s. alone, the $400 billion category. that is less than 10% online right now. is so much more we could be doing in terms of product. i know we have the best product in a category, but there is so much we could be doing before we start to worry about what amazon is doing. amazon is absolutely crushing retail and has a phenomenal product. we are a very happy amazon customer. my family is a happy amazon customer, but home services is a very different category for consumers.

it is a different portion of your mind. ofs a very different portion your day. when you're looking to get a job done, you're coming to one of our properties. when you look to shop, you're going to amazon. i think there is overlap there. there is overlap like television mounting. getting a job done, i think that will be done on our property so we have a lot of runway. ed: to end on another company you are involved in is groupon's and there's been speculation on them. will that ended the sale? joey: i think groupon has a bright future no matter what happens. , think they have capable teams a good product, and a real sustainable business with a good loyal customer base. i think whatever happens, it will. ed: joey, thank you so much for joining us. scarlett, back to you in new york. scarlet: thank you ed hammond. our bloomberg deals reporter

joining us from sun valley. up next, we stay in idaho, but had to the rocky mountain summit. from new york, this is bloomberg. ♪ . .

scarlet: the rocky mountains mountain economic summit is in full swing in victor, idaho. michael mckee is there with a key voice and finance. mike? >> they you very much, scarlet. you notice how bloomberg is present in idaho these days. i'm here with palm a collie, the --mer -- paul kelly

it's nice of you to join us here. you work retired from actively managing money, but you keep an eye on everything going on. jay powell the u.s. economy is in a "really good place." do you agree or disagree? >> it is hard to argue with the truth. if you look at gdp growth, inflation closer to target, unemployment incredibly low, the economy is in a good place from a cyclical perspective. where i might push back on that, and this is my hobby is that i is a bigome inequality black mark on our economy. that is a more structural phenomenon as opposed to a cyclical phenomenon. >> you made the point that that partly comes out of monetary policy and they are the only policy coming out of town out of recovery.

where's the fed now and where should they be following? paul: the fed should pat itself on the back and say that they did with the textbooks could not do -- said they could not do. getting out of the liquidity trap without any meaningful help from fiscal policy. the fed should take a huge fornt of justified credit the fact that we are in an m economic-- an expansion. that is a positive from the other side of the coin -- that is a positive. from the other side of the coin, they should appreciate the environment they are working in. the income inequality is a byproduct and it really matters politically. i think they need to be very sensitive to that. aboutn, less religious

the inflation target. i think they are doing that. i love the fact that they are consistently pounding the table. that our inflation target is not a ceiling we are moving around that target. i have nothing to complain about with the fed. i don't like the fact that they were the only game in town 10 years ago coming out of a crisis, but they are becoming less the only game in town. i think that is a good thing. mike: they're not feeling game in town because we have a lot of fiscal policy, a lot of fiscal stimulus. it is that a good thing when the time is growing at a strong pace? about theecstatic return of physical policy as .ctive to macro management the timing was miserable. policyld have had fiscal robustly expansionary early in

the recovery. it was strictly a political decision on the part of the trump administration. don't think it makes sense to do it that way. a grandit is giving us experiment in running a hot economy. janet yellen talked about the benefits of running a hot economy. we are running it on the back of fiscal policy, but i'm not against it. the big thing for me is that fiscal policy be ready politically, as well as economically be used in the next economic downturn. as i look out longer-term, the biggest risk i see to the fabric of our democracy is if we have to fight the next recession with monetary policy alone. those of the consequences of having done it last-minute, and they are not good. mike: we have about 30 seconds

left read you heard both sides on trade and tariffs. the worry about where we are? [sigh] i don't think it is a productive game for the united states to be engaged in. i wish mr. trump was not doing this, that at the same time, i do not think the consequences are going to be a disaster. , thinkaul mcculley you so much for joining us. back to you in new york. thank you to mike and paul mcculley. this is bloomberg. ♪

scarlet: "what'd you miss?" rallying u.s. stocks led by tech names. jpmorgan and citigroup kickoff earnings. julie: we will see if they can help with the financial recovery. trump continues his visit with theresa may tomorrow. scarlet: that does it for "what'd you miss?" julie: bloomberg technology is next. have a great evening. scarlet: this is bloomberg. ♪

emily: broadcom is betting big on corporate software paying nearly $19 billion for ca technology, but the deal has some investors concerned that they are going too far from their focus. 's intentpidly growing market, then mo is hitching a ride with uber -- then mo is hitching