tensions have been rising since the president's decision to pull out of the nuclear deal. >> anytime they want. anytime they want. for the country, good for them, good for us, and good for the world. >> some u.s. sanctions on iran are due for next month and more serious penalty is targeting countries in or around a iranian oil, taking place in november. senator rand paul says he will support president trump's's nominee for the supreme court. on twitter today, the senator wrote that he made up his mind after meeting with the judge in person saying each nominee must be judged on the totality of their views, characters, and opinions pay or he also cited what he called kavanaugh's

strong defenses of the first and second amendment and landmark cases as a reason for the approval. run for equity fund has a technology start a partially owned for president trump's's son-in-law and advisor jared kushner -- jared kushner. at as much asrm $2 billion, the company was appraised at $800 million at the end of last year. silla --harged of killing five people in the newsroom pleaded not guilty today in an annapolis maryland -- from us -- any identification of the trial will be tainted due to what they deem impermissible and suggestive identification used by police.

authorities identified himauthoh help of facial recognition technology. global news 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. ♪ >> live from bloomberg world headquarters in new york, i am julie. scarlet: i am scarlet fu. with agest tech shares tweet in stocks. may experience a correction bigger than what we saw on february. >> the question is, what did you miss? , the rush entering his third day today. currencyn, a virtual bank at the height of the crypto

craze. he tells her about her biggest regret. taking place across the u.s., japan, and india. how currency markets are initiating themselves. silicon valley favorites, facebook and netflix delivered results. joining us now to weigh in on their earnings season as a whole is remain. i want to start out side today. interesting case study of tariffs in the form of companies doing very differently. code -- one of them coping well and one of them not. they raised their guidance, remember all the kerfuffle it started a quarter ago when talked about the high water mark. in that quarter, they reported 282 per share in the quarter

that was supposed to be the high water mark. it reported 297 this year. apparently the high water mark has gotten higher p are that is not helping the share is much today. was positive for a good portion of the day and lifted a lot of .ther names in the sector they seem to be sliding a little bit as we head toward the close. betterally saw a much quarter than what we alluded to a year ago. >> this is a company that will be getting hit by the tariffs. >> basically, $200 million in extra costs because of retaliatory tariffs. futures, to not know if you have a chart for that are down 27% year to date. a lot of that is obviously tied to when this issue came up. they specific recited on the the implications going

forward. the stuff they sell is getting a lot more expensive. toy're trying to find a will do -- a way to do with it. >> you can see peeking around early february, it is cratering. >> this is what a lot of companies were afraid of one the trade issues started to come up. it wasn't so much with the u.s. was doing, but about the retaliation, from other countries. >> think you for the primer of what is going on outside of the tech world. what is focused on those tech names, scott galloway, also the best-selling author talking about these the tech giants. when you look at the selloff, now in the third day, is this a bump in the road or more substantial? >> i would describe this as the karma quarter.

billould literally look at will towards a lot of these names and accord mates. facebook beat on the bottom line. i look at amazon, same ring. beat on the bottom line and missed on the top. two entirely different reactions. tech sectors probably got a little far out, that i think it was a lot of pent-up energy or anger and the market was ready to unleash fury specifically on facebook. look at them as a group and i have a chart looking at the index which includes these guys but also tesla and alibaba was in here as well, but yes, you are looking at a correction, 10% pullback, they are still up 20 plus percent on the year. it is that much ill will if they are still doing this well. right here you pull

back and the day before the last earnings release for facebook was trading at 159. rocketed to 10, -- two right to- , and i would10 argue the ceo has an earned a lot of goodwill in terms of communication. joe: you are selling your tesla because of it? >> i am selling my model x. joe: because of his tweet? >> there are so many options be -- i do not think i need to own a car from a company headed by an individual who called someone risking his life -- pedophile. many options. as a consumer, i will vote with my wallet. i love my tesla and i think elon musk has changed the world. he is good for the planet but i think he needs to be held for 10 -- two task when he is on twitter. joe: we will talk more about tesla in a little but one

company i do not perceive there to be a lot of ill will towards that got covered his netflix. i'm curious how you think about them. this company, a massive leader in screen -- in screening, and everyone is trying to replicate. does tesla have -- sorry, does offlix have enough to hold all of these companies that will try and do the same thing? >> just bring the camera back, in january of 2017, $97 per share. got hammered to the drop of 350. since they only grew by the population of southern california, not the population of california, they get hammered. does netflix have a mode? at the end of the day, to be a $1 trillion firm or have the opportunity to, you effectively become an operating system for lives. facebook is for relationships, amazon is for retail, and what

netflix has done is become the operating system for the second-most important screening in our lives, the television. basically your netflix home scream is a look at who you really are as a person, to see who you are watching. i think the netflix mode is high. player is social media. spotify oblique has unbelievable potential. these asof folks saw from the china problems and trade war fierce. largely china, they operate or rely on the market to that extent. is that true or a fallacy. >> the existential threat from china is an out of a tariff war.

the one that is most phone is apple. down and iof slowed would argue the relationship apple and tim cook have with china will be the last thing they go after. everyone wants to protect that relationship. they have some incredible players. if you look at the product road map, we are narcissistic in the u.s. and like to think all innovation is in a stone throw of the international airport. ityou look at the roadmap, is actually more robust in terms of future rollout than some of the players we have learned to be the indicators it silicon valley. >> we will dig into that later as well. insighth us for more here professor of marketing and author -- scott galloway. this is bloomberg. ♪

>> facebook falling and dragging other tech stocks down with it. off by 24%. sheryl sandberg has been strangely quiet. you are in the middle of this? >> i think this is an extraordinary failure of leadership. in general, december is an inspirational character but i think she has literally retreated when the company demands leadership. the company didn't say anything after they came out for a full week, it is a lesson in how not to handle a crisis. they continue to step in it. , it zuckerberg's comments

was difficult for him to impugn what i'll customers wanted to do. that was a blunder. several executives that work at facebook could not protect him because he said those things. i believe mark and cheryl have an extra ordinary lack of leadership. it makes no sense for mark zuckerberg or elon musk have chairman watch the next annual meeting for resolutions to separate those two, watch and go nowhere. a board of directors of directors, i just met the former american express ceo. on, will not do a thing. in of the day come own you have two classes of shares, all you can do and it -- do is advise. most media companies are like mind, markep in zuckerberg proposed last year a third class of thought -- of

stocks so he could leave the company and still control 2.5 billion people. if you think you should control 2.2 billion -- 2.2 billion people and what they see without any interest, have a effectively set i am jesus christ? >> and yet. users missed but not by that much. all of this that you are talking about, we care about it and talk about it all the time. do most people who use facebook really care that this is going on? is it really going to have an actual effect on the company over the long term? >> people in me barking at the moon, the media angry, where do we go to express outrage, facebook and instagram. absolutely no bump up in the crisis.

the biggest advertisers in the worldthe biggest advertisers ine world all say the same thing. flat in media except for one thing. what is one thing every advertiser in the world is increasing, not just social but specifically which platforms? instagram. matter,le that advertisers and users, do not care. >> one thing you hear from know, we that you don't want facebook to be an arbiter of free speech and what views are correct. is there any way for the problem to be reconciled? in the other hand, he built a platform. will this ever be resolved or will this inevitably become a matter of public policy? >> we have been co-opted into believing by big tech and media

that this is the world we live in. the network computing, they are platforms, it is what it is. no it is not, the world is what we make of it. he does not want to be the arbiter of truth. you can, when you see some of this content, you can take it down. when an advertiser advertisers controversial content, and they pan rubles, that is literally and figuratively a red flag. the realm ofbout the possible but the profitable. facebook refuses anything that dents their earnings. we need to take them to task. quite that was a business decision, not something they just feel like, it is a slippery slope and they get into an untenable position. >> listen to these returns. . morning, mark zuckerberg

is waking up in every decision he is focused on the one thing. this will hurt shareholder value. out ofle are pulled out cars. on bikes for india, because of rumors spreading on what's at, you do not run newspaper ads. you shut the platform down until it stops. it is time for you and me to elect people that will hold these firms accountable. >> what you are suggesting is no one in the u.s. is doing that. >> it is not happening in the u.s., and it is purely an -- economic. even with all the negative things happening, they are our

heroes. they are our tom brady's and everything we look up to. we shouldn'tan hold them accountable. in europe, they get all of the platforms. they get the anticompetitive behavior. there are very few hospital the only individual. they are being ignored by a da that sees a blue to the district attorney's -- to run a populist campaign against big tech. it breaks out in continental

europe. >> i think we need to re-work the analogy. her sherd directly from likes that. >> i will come up with something else. school of business profession or -- professor of marketing, and we are reaching out for comment. this is bloomberg. ♪

>> amid all of the text declines and earnings, apple in the days to come. back with us with more. author, scott galloway. >> he is fired up today. >> let's go back to tesla. we were talking earlier about how we were selling the car because of elon musk. when i think about tesla, i think about the stock and company, all being part of the same.

it is all a package dear. -- package deal. do you see the tweet? do you feel like there is a stench wofford -- wafting over? >> i would argue it is mild and will blow away. question is, is this the thomas edison of our generation, will the company change the automobile industry forever or is the stock overvalued in a think the answer is yes. i think you will see the auto industry remake itself largely because of tesla and elon musk. the company traded i think seven times revenues and auto between .25 and one. this company, if the stock got cut in half, by traditional people -- iftrics,

i ever say anything negative, apple,g negative about and tesla has such a rabid following that my twitter feed will light up about what an it at -- what an idiot i am because i questioned the genius of elon musk. >> two to cook -- there was no other action taken at the board meetings. meeting ofnual shareholders will postpone. no other action taken. they are the process to conduct the independent investigation. -- this brings up an interesting point you are selling tesla and you do not like some comments that elon musk has made. how do we in the current hold ceo's tomorrow

account? if you think about the image of corporate america in this day and age, you assume they are doing things they do not approve of, whether it is the ceo or corporate practice. increased been visibility because of social media. how far does that go especially when it comes to spending missions? apple is another example. >> i think jeffrey is the right guy to head this. we are in an era where people are held to a greater account. i would argue it began about supply chains and they want that for -- i believe it has a place here. thinkect them to long-term. standards iety

believe the market and the government needs to step in and break the companies up. i think they have become too powerful. in tech is power corrupts and they have way too much power. joe: our companies compared to navigate? about papa john's now. the ceo said one thing about football players and next thing -- managersople are and boards, are they prepared to think about these topics? boardshould be holding to account. they are generally trying to do the right thing. i do not have a good answer. it is a longer conversation. >> all right. scott galloway, thank you. the headlines from cvs, did not take any other action today aside from outside counsel and they are postponing their annual meeting of sought --

stockholders, the 2018 shareholder meeting. the market close is next to take a look at major indexes. the mastec leading the way down in the dow losing 156. this is bloomberg. ♪ two, down and back up.

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"what'd you miss." a selloff in stocks, especially in technology stumbling for a third straight day. . joel joel if you are tuning in live we welcome you to our closing bell coverage every day. julia: i'm looking at the latest carnage in technology, the selloff 3.8%. that's the most since march. this is relatively unusual where we see this selling especially within the technology complex as we were discussing with scott. he sees it a reckoning. karma in his words indeed. especially for the likes of facebook and some of the other social companies. the worst performer in the s&p 500, twitter. twitter continuing to decline in

the wake of its earnings report, down another 8% in today's session. remarkable decline we have seen in the past two sessions in response to its earnings' report. now down by 27% in the past two days. we gave you the breaking news on cbs, which we will update you on further. but the company's board meeting o discuss the fate of moonves' allegations and his performance on women. and you can see the shares are down 5%. the board says it's not going to take any kind of action. it is talking about finding independent outside counsel. cbs shares were lower on the day. they took a brief hit. and went right back down to where they were. and even though the company came

out with earnings that beat estimates and raised its forecast, very sharp difference of what we saw last quarter when it caused consternation with comments indicating they were past the peak. this quarter they did better than last quarter. not being hurt by tariffs as hey were able to raise prices. tyson getting hit by pork tariffs from mexico and china. that led it cut its forecast. interesting stories revolving around the tariffs as well as what is going on in technology. joe: the government bond market, interesting stuff happening here, which is despite the selling and the risk, we did not see any sort of flight into bonds. that is characteristic of what we saw earlier this year. if you have a portfolio, you don't like to see that.

10-year yield up 2.98. and want to point out long-term rates in the u.k., 30-year yield rate 1.79% and bank of england report tomorrow. expect some action there. scarlet: the dollar is weak over the g-10. we have the fed on wednesday. the bang of england on thursday. . brought in there euro stock after swedish g.d.p. rose compared with half of one%. the latest data show that the weakness of the start of 2018 and was risky. keep in mind the u.n. weakening story. now for a third straight day and the yen falls. that rise there overall showing

he dollar strengthening. and it is now near its weakest level. joe: let's look at those commodities. oil bouncing back nicely. amid of the selling. oil up to $70 a barrel. and gold, i put it in here because of what it's not doing, continuing to not help at all. there is a one-year chart of gold futures and it's in the basement. and those are today's news. "what'd you miss." let's look at how markets are positioning themselves before these policy meetings this week. we will hear from the d.o.j. tomorrow and on wednesday, the federal reserve and thursday, bank of england. we are joined by jason vaillancourt from putnam investments and oversees 15

billion investments. there isn't a stampede into bonds the way you might expect given the selloff in equities. is there any kind of rotation or is it limited to selling some of your best performer? jason: the big story as you pointed out has been the longer term stock-bond correlation is negative. but in the short-term, the price cow relation between the two can be positive. the big news last week and going into the d.o.j. meeting with the idea that they might be backing off their program, might be backing off their targeting zero interest rates and that is across global bond markets. that is from the follow-through. i think the reality is likely to be much less interesting than that and what they are trying to do is impose volatility around

that zero target. but even the rumors they have started to have those debates is enough to introduce volatility in that bear steepening trade. joe: i have been impressed for the most part, most of the weaknesses we have seen hasn't bled too much into the broader market but i was struck by the failure of these stocks to bounce these stocks and outside of tech, looking at catter pillar earnings and the fact that couldn't hold the gains even though the news looked pretty good, what does that tell vading, not er dramatically. jason: it's a reflection of some risks appearing in some of these. and it's indicative of the last few earning seasons we have had

if you don't beat on revenue and earnings, you get punished and we are starting to see that from a lot of these speculative growth stocks and to get paid on that. a lot of market comment tateors have been talking about valuations and getting stretched and how narrow leadership was this year. as recently at the end of the second quarter and took the stocks, they were pretty close to flat. a lot of this is reflecting the fundamentals. and as you said, it's been pretty restricted to the stories themselves as opposed to turning into a broader narrative about a growth slowdown. julia: i know you are broadly neutral across asset classes. commodities are the exception. you are overweight there. you don't see it is catch a falling knight situation.

jason: obviously, they struggled after the big rallies in risk assets at the end of last year into january. they struggled a little bit. our commodities has been relatively recent. commodities are driven by a couple of things that tend to be important. the first is momentum so you have a strong momentum and the second would be the shape of the futures curves. the rolled yield built into commodities is starting to improve quite a bit into the second quarter. we don't think about the world in terms of mapping our portfolio to a cyclical playbook, but you would say commodities have been a late cycle play. when you think what's going on in the world and the slowdown in momentum in global growth even the u.s. has been strong, what we saw, if you look to developed markets and the null of developed markets that had

p.m.i.'s above 50, that was 100% and that has rolled over substantially the number of emerging market economies that have their p.m.i.'s above 50. and so as that grollingt kind of starts to peter out in other parts of the world, even though it is staying at high levels of global growth, but commodities do very well. and supply growth has been constrained. scarlet: what the treasury said it will be increasing its outlook at $769 billion, total net borrowing. $1.33 trillion for the whole year. how treasury will push in the different options, but what does it do for you? does it change how you invest? jason: what's different recently

is that because of the cross currency base differentials, it has been extensive for what had been a traditional pocket of demand of japanese investors and hedging back to yen. the cost of that hedge has gotten more expensive as we move through the course of the year so the demand from those big poggets of investment has receded. one of the things that is odd, you usually don't get big doses of fiscal stimulus when the federal is tightening. this is one of the things that is changing and causing debate about the inflation outlook and the cyclical playbook. we don't think everything will be different over the next six months to 12 months as far as what the traditional playbook looks like. but jay powell talked about debt

sustainable issues coming boo the sustaining markets and all of those mean leveraged balance sheets are going to be hard to sustain long-term. julia: jason vaillancourt, thank you. coming up the rise and fall of a private equities tightening. an unusual business model. ♪

italy has pushed for the european union to accept tens of thousands of migrants. the state department today announced 113 million investment initiatives in asia focusing on digital economy and infrastructure. t a u.s. chamber of commerce foundation, secretary of state said the united states will continue to create the conditions for mutual prosperity in a free and open indo-pacific. >> it is in our interest to be engaged. one-third of the global

population is there. four of the world's six largest economy. china, japan, india and the united states. >> secretary of pompeo sought to allay concerns because of president trump's decision to bolster from the transatlantic partnership. he says the u.s. is working with better and higher standards bilateral trade agreements. in northern california, those deadly wildfires are taking aim at the state's power grid. knocked outd it has high voltage lines. the electric company told operators to restrict work in anticipation of high demand and continued fire threats. greece's prime minister visited the site of the country's deadliest wildfire in decades after it went through a seaside

resort north of athens killing dozens. and spoke to local citizens as well as firefighters, soldiers and volunteers. last week, the greek defense minister visited and was heck willed. 24 hours news a day followed by more than 2,700 journalists and analysts in over 120 countries. this is bloomberg. what'd you miss" >> things were spiraling out of control. spectacular did he mies to dubai's reputation. julia: here is tracy on the demise of his firm. i'm fascinated in these situations how these kem can

convince others to trust them when it's all just a front. what was his special? >> the jury is still out what went wrong but we are getting hints from the joint liquidateors who are nominated o wind down the company. joe: what have we learned about the unusual nature? >> it's useful to get a bit of background. biggest equity firm in the middle east. wasn't just important in the middle east. it was also a big dealing for

emerging markets globely. this was a blue chip emerging market play. say you wanted emerging market expose sure, you went to them because of due diligence and corporate governance. it turns out that the company itself was not a shining beacon of corporate governance. >> this is not how it should be done. >> highly unusual for a private equity firm. maybe they will have some degree of leverage but the idea they were borrowing money to fund day-to-day operational costs is extremely concerning and speaks to that to cultivate home grown success stories. this was supposed to be the big one. people talked about it as the

goldman sachs of the middle east and imagine this happening to goldman sachs. >> how much of a plow does it strike to that reputation and investing more broadly? >> that's the question, dubai and united arab emirates are building up financial centers to declining oil revenue. this would strike a big blow in terms of confidence. if you speak publicly to other p.e. people in the region, they will say it has not had an effect on their deal making but if you speak to them privately, most of them the deal making has slowed to a trickle. we haven't seen a lot of response from the local regulator and if you are a dubai financial regulator, you should be all over of this. >> thank you so much. ♪

>> challengeses of listing shares in his crypto market bank in canada. >> if i knew what i knew now, the crypto markets were going to have as much, i would maybe stayed private for another year or so and then gone public. i don't think it's a mistake. there is an advantage now that we're public even though the capital markets are weak now. two months from now, that could have turned. part of this was a lot of companies that shouldn't have gone public went public up here.

garbage companies or companies overvalued. some of them were ok and others weren't. >> like what? >> i don't want to pick on these guys, but the mining companies -- crypto mining companies and that had a negative impact on overall sentiment. you get bit coin to move back 10,000. and the rest of the enthusiasm shows up back here. you will see the capital markets. >> bitcoin is in the 8,000 neighborhood. do you think that is a step on the way to 10,000 or 12,000? >> there are two things. this rally is being generated by a few things. all that enthusiasm i talk about is working its way back into the market. i said it in korea a week ago

and i say it now. part of this is in anticipation of an e.t.f. will get approved. if it gets approved in the next few weeks, we will go to 10,000. there is a big ceiling. a lot of retail investors got caught buying at bad prices last november, december, and i don't think we'll go through 10,000 until we get custody solutions announced and implemented by names. >> what do you expect will happen to galaxy stock? >> i have been telling investors. you want my advice, the stock goes down, buy more. i honestly think two things. one year, two years, three years, completely decentralized crypto system is going to be far, far more significant than it is today and we will build a

world-class company. i feel far more comfortable where our stock price will be in 12, 24, 36 months than in the next two weeks. >> how is anyone supposed to value this thing? >> it's hard to value. we went public with a book that you'll get delayed response on will think in 2019, you see how these businesses will generate receive few and will continue to build and talk about book. our stock -- we are the only real public company where you can get exposure to the entire crypto ecosystem. >> you raised money but i wonder if you think it's not possible that these businesses will have firings. and that was with many fewer people. that number is only going up.

>> i look at musk as a hero -- we're not that bad. east coast guys, we try to make enough money to fund our business. and i think we will. each of my business heads absolutely are focused on getting themselves profitable by first quarter. this year, we knew we were going to spend money. we know it would take a while. you don't set it up overnight. there are regulatory hurd lings, licensing and hiring and we knew we would burn money the first six months. that was part of the plan. asset management is paying for itself. >> means what? >> we have enough fees to cover the broad cost of management. so by the end of the year, i'm hoping all three of the businesses are break even and we go from there. we plan -- i fundamentally

believe that this is a big, big opportunity and we are taking a long look at it. >> that was galaxy digital founder. the parent company owns and owns the glal actiony crystal partnership. up next, how currenty -- currency markets are positioning themselves and perhaps more importantly, japan. there has been focus on that central bank with that perhaps being the wild card among the three major central banks. little bit of uncertainty. jay powell is expected to hold rates steady. no press conference following this week's fed meeting. ♪ this isn't just any moving day.

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>> a federal judge in san diego, california ordered the trum administration to submit plans for reuniting parents for those who are already deported and whereabouts are unknown. they said they reunited 2,500 children who were taken from their parents during the trump administration's zero tolerance crackdown and left other children still in custody without a parent or guardian to claim them. during a press conference today,

president trump said he would be willing to meet with the iranian president. tensions between washington and tehran have been widening since the president's decision to pull the u.s. out of the landmark 2015 iranian nuclear deal. >> any time they want. any time they want. it's good for the country, good for them, good for us and good for the world. no pre-conditions. if they want to meet, i'll meet. >> some u.s. sanctions on iran are due to kick in next month while other sanctions with companies importing iranian oil take effect in november. paul man for the earned $60 million as a political consult apartment in ukraine. first report of his income to be made public as prosecutors said he failed to report much of it.

man for the's trial begins tomorrow in virginia. a lawsuit is demanding $100 million from the owners and operators of a duck boat that sank in missouri killing 17 people. it claims they put profit over people's safety when the boat sailed on a lake despite weather warning. the suit was filed on behalf of wo families. followed by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. >> today's market action, a lot of selling in the big tech names. the nasdaq off by 1.4%. throw out a name out there, facebook shares losing 23% or as much of their market value over the past three days. in the end, they paired some of that decline and off 21%.

just to give you a sense. "what'd you miss," a busy week for monetary move. bank of japan is set to announce tomorrow and the fed on wednesday. central banks in israel and ndia hold policy meetings. marc bring in the head of chandler. japan is probably going to be the one where there is most suspense because we are not entirely sure what they are going to do. marc: and i think if it stays away from the market, but if there is a change, there will be a price to paid for and make

them further to intervene. joe: what is the problem with the current monetary stance that s causing a rethink? marc: the federal reserve meaning it slowed down its buying to get to the end. but what the bank of japan is doing. the economy contracted in the first quarter and bounced back in the second quarter. net-net the first half, the economy is stagnant. if you ex clued fresh food, and rather than tweaking programs, they have to tweak their programs to extend it. scarlet: they have a 2% inflation target. any chance it could change that? it's been discussed. marc: the mets got the least amount of home runs in the major league so it could have bought

more or better players or closed a blind eye to cheating. it brought in the fences to make it easier to hit home runs. bring in the target and make it easier to achieve. they lose faith and credibility. they have made a lot of sacrifices to get to 2%. it has become a federalish. every major central bank has a 2% inflation target. they just measure it differently. there is political clout and face here that is reluctant to take back. julia: if they brought it to 1%, 0.2% is a far way to get there. what do you think the bank of japan is going to do and what do you think should be doing? marc: i don't have a clue. so many moving parts. the change of how they buy the

e.t.f.'s. the bank of japan buys stock every month, every quarter every year. so they can tweak this program and make it less impact by the nick eye and change the inflation target. target the five-year. julia: it is moving it around versus any radical changes. marc: i think what we need -- we need a new regime. they have to give up 2% inflation target and need new peron ell and abe is going to face competition. julia: change is afoot there at the bank of japan. let's talk about the bank of england. the question is what happens next. how does it telegraph what its intentions are following that? marc: the federal reserve is going to be a hawkish hold, they

won't dissuade people like me. i think the bank of england is going to hike rates and talk about how there is further expansion in the future and no one will believe it until the u.k. leaves the e.u. joe: with the bank of japan you have a stable country and central bank. the bank of england seems to be kind of normal. we have a country of them talking about hoarding blood, insulin and food in case of a hard brexit. it seems like a side show. the government policy, in case of a hard brexit because the imports would be delayed. how do you wrap around having to think about building up supplies of food and blood in the next

six months. marc: you get to the heart of the matter. the big picture is more important. and i think how can they raise interest rates in this kind of back drop, this is still a risk. t not the odds-on most unlikely scenario. the bank of and relatively higher ranges. you look at the phillips' curve, t is alive and well in london. scarlet: what about the fed and not acknowledge president trump's comments about higher nterest rates. marc: going to be a short statement. and one i would be watching for the federal to make is the housing market. higher interest rates and higher lumber prices or whatever it is, we have a housing market weakness, new home sales and

will have to identify the houseing market. the other thing is we should be preparing ourselves that second quarter g.d.p., leaving treasury secretary, most of us in the private sector don't believe the economy will sustain this growth. .5%.g from 4.1% or 2 we will have above-trend growth. julia: bring us back to currencies for us. it doesn't sound like the path forward for currencies is terribly clear. marc: give you an example. the euro is in 116, 117. as long as we stay in the range. it prevents them from making money on the breakout.

you get to the top of the range. and the longer we stay in these ranges. the more the markets are going to be caught off guard. julia: do you see any breakouts? marc: not this week. next week, we don't have a lot of economic data. this is the last big week of the summer before people can take vacation and get trump's tweets. and things will be stable. no central bank breakouts. thank you for joining us. oming up as they shape their muscle. ♪ ♪

beijing is losing the threat of economic hardship to bend the will of companies. our recent guest talked about china's policy. ely ratner is here and joins us now from washington. what is economic coercion? >> beijing is using its economic clout which is something it has done for decades and using not just carrots but sticks and using punishment and the threat of punishment. companies and firms including american companies, but foreign

policy and domestic political reasons for beijing separate from the pure economic consideration. joe: there has been some speculation that because china can't respond to tariff threats because it doesn't import as much as the u.s. imports from china that we will see this go up against companies operating in china. are we seeing any of this now already? >> we are starting to. what i'm talking about is much broader trade dispute. what we are talking about here is over the last decade, beijing has been using tourism boy cots, import restrictions and other measures to punish countries for things related to chinese human rights. so this is much broader and i think the concern is china's interests around the world are expanding and more offensive measures are becoming a prominent tools.

this is much broader than the bilateral feud about the united states and they are starting to bear down on u.s. interests including with our allies and partners relating to our security alliances and much broader. joe: what is the specific example which in your view is impinging on u.s. security? > one prominent example in 2016-2017 period are a series of economic sticks that they have applied on south korea and tourism restrictions, sanctions against one of their major shopping markets that was operating within china as agreeing to host a missile defense system that was designed to intercept north korea missiles but had a potential effect on their security interests. here's an example where they are trying to coerce the government

of south korea for the united states taking measures with its allies to protect american troops and the south korean people. joe: you testified in front of the senate recently about this. from a policy response point of view, how should governments go about addressing economic coercion issues? >> there are a wide variety of measures that they can reduce their vulnerability and to strike back if necessary against beijing. the first recommendation i had for the senate was that the united states needs to get back to the transpacific partnership trade deal. this is an area where u.s. withdrawal and the trump administration to withdraw has hurt commitment to the region when countries foresee a region led by china, they will be much less willing to stick their next out. that is one thing that the united states could do. another is the trump

administration needs to differentiate between its friends and rivals when it comes to economic policy. the united states should be working with allies and partners coordinating to responding to china's unfair trade policy instead of levying tariffs against our partners and allies. some of which congress is working on and the administration is working on related to domestic investment restrictions as well as export controls and rethinking how critical supply chains are or not routing through china and what the u.s. government can motivate companies to make sure they are insulated from chinese threats. joe: what kind of controls do you have in mind? >> critical technologies going to china now that president xi is talking about a military fusion and the types of any

technology that the united states is transferring to china is going to the people's liberation army and we have to ask ourselves, is that in the interest of the united states. narrow national security interests as well as broader economic competitiveness issues associated with china's industrial policies and otherwise. joe: on the issue of the transpacific partnership, how much has the trump administration whether with withdrawing from that and and creating tensions with our allies. how much has it set back the agenda for the china side of the trump agenda? >> the tag line i would like to use is it is confrontational without being competitive. trump wants to take on the chinese and put out a national security strategy and his pentagon put out a national defense policy describing china

as a rival and not taking the actions one would take. the problem is not only china's strength but the perceptions of american withdrawal, questions about american commitment and if countries don't see an alternative in the united states or the west, they will concede to chinese coercion whether they ike it or not. thank you very much. scarlet: we have breaking news. the "new york times" reporting that the trump administration is considering a tax cut for the wealthy and bypass congress to grant a tax cut mainly to the wealthy and this would be how and why it would define capital gains tax liability this is based by a steve mnuchin comment. he said his department was saying it could use its regulatory powers to account for

inflation in determining capital gains tax liabilities. the white house considering a unilateral tax cut for the wealthy when it comes to capital gains taxes. ♪

"what'd you miss" julia: there is a contract extension with hundreds of millions of dollars. let's bring in bloomberg. the cbs board met today and decided at this point it's not going to make a decision and exploring hiring counsel to head up an independent investigation. for himmon tearl, what could he

stand to lose? >> there is a lot on the line les amongves, he signed a new employment agreement. and over that time he stands to gain several hundred million dollars. if he steps down tomorrow or the board decides to fire him for cause if they find these could ons are true, he lose out on $300 million. joe: could he be fired for cause and come to some agreement and gets part of this money? >> there can be special agreements and it will be difficult to speculate because we'll have to see what the investigation shows. but safe to say, there are several hundred million on the line. > you explore whether if

moonves does leave, he would forego his company. he would stay on at cbs to become a producer or senior adviser which brings in some money. >> he has quite an interesting deal. his contract runs through 2021, june 30. after that, he has a deal to stay on for five years as senior adviser which will pay him $5 million. $40 million. joe: media executives are the best paid. >> they are up there. joe: why do they have the huge cash salaries? >> we thought about that in the past. perhaps when you hang superstars and people who are very well paid, it comes back to being around lots of money. julia: you can't be the boss of people and getting paid tens of

millions. when the board is making its decision, how does it factor in this huge salary that moonves is expected to get. >> it might be more of how it looks public relations-wise rather than expense. cbs is a huge firm and couple hundred million dollars might not move the needle for the company but it could have an impact. and and certainly something that the board if they decide to stay pay out a lot of money, they would have to explain to investors. >> thanks. joe: coming up. things to know for tomorrow's trading day. ♪

>> the climb in u.s. stokes with tech selloffs. and falling 23% over the past three days. biggest three-day loss. coming up much more tech earnings. apple. we will be breaking it down. joe: i will be watching economic

data. and with the briefing from the governor. >> the fed as well, joining the party, first beginning their two-day tomorrow. the decision. joe: huge week, personal income and spending. and culminates on the jobs report on friday. >> this is the most consequential week for the rest of week. that does it for "what'd you miss." joe: have a great evening. this is bloomberg. ♪

♪ >> i'm emily chang in san francisco and this is bloomberg technology. coming up in the next hour, the bull's love affair with tech has been put to the test. has the industry officially overheated? and the rush to get out of u.s. stocks after facebook results almost $3 billion getting wiped from market caps since. but investor is buying. he tells why he's still a big believer in