the barrier was slammed into outside parliament. decision not to elevate threat level after the emergency committee. one man has been arrested and police say there is no further threat and that the crash appears to be deliberate and they are treating it as an act of terrorism. closing arguments are scheduled to begin wednesday in the trial of paul manafort, his attorneys rested their case today without calling witnesses or presenting evidence. when asked by the judge if he whisked to testify in his own defense, manafort replied no. he is a use of defrauding banks to secure loans and hiding overseas income from federal tax authorities. and in the and him woman who lost nine family members, including husband and three children, in a missouri duck boat accident last month, is calling for a federal ban on the boats. she spoke during a news conference today from her

indianapolis home, saying the house no longer felt like a home without her family. 17 people died when the boat sank during a storm in branson, missouri. most of you somebody national park reopened today after being closed for three weeks because of a wildfire that earned 150 square miles and killed two firefighters. the park closure was devastating for hundreds of business owners during that peak tourist season. tens of thousands of visitors from across the world canceled trips to the region because of the shutdown. onbal news 24 hours per day air and on tictoc on twitter, powered by 2700 journalists and in 100 20 countries. i'm mark crumpton, this is bloomberg.

>> live from bloomberg us world headquarters in new york -- bloomberg's world headquarters minutesork, we are 30 from the close of trading. u.s. stocks higher today, halting the longest slide into march, the dollar at its highest june 17. joe: the question is "what'd you miss?" scarlet: president erdogan calls for a boycott of iphones. argentina on the other side of the coin, shoring up the battered payphone. plus the labor market prison penalty, a simple check docs on job applications could be contributing to great depression era unemployment among formerly incarcerated people. allies in name only, the standoff between the u.s. and turkey had been intensifying as u.s. officials insisted they would accept nothing less than the released of a detained american pastor.

in a staunch message to the turkish ambassador, john bolton made it clear that there was no room to negotiate. still, he countered with a message to the turkish people and president trump. >> a series of speeches defined turkey over the last few hours, starting with president erdogan making it clear that he felt the u.s. was responsible for a lot of the recent turmoil and that turkey has fallen under a coordinated attack and they would do everything in its power to defend itself and as a result of this, he added that they would be boycotting american products, shifting specifically away from iphones to other alternatives, and domestic options. we heard from the finance minister, which it in and call the u.s. dollar a tool of political punishment. showing you how the broader conversation perhaps escalated a notch. we will have to wait and see if

the united states responds again , either with sanctions or terrace. we saw a recovery in turkish assets, stocks, bonds, and lira posting a bit of a rebound, but liquidity is thin, not necessarily the best reflection of the realities of the market. the coming hours will be a real test for the country as it looks for sustainability and a lot of these trades with credibility among international investors. istanbul, bloomberg news. scarlet: more on the market acted in turkey -- action in turkey and contagion, we are joined by michael harris from london. great to have you join us again and thanks for staying up late in london. your message when it comes to turkey is that it represents perhaps the end of our tolerance for more risky investments. you could see the turkish financial crisis as perhaps a leading indicator. but a leading indicator for what? turkey has all his been

perceived as the canary in the coal mine for global risk. ,t grew up before the peso did before nasdaq. it's a risky market. the thing is, we cannot definitively say this. usually if it blows up -- by the way, there was a lot of pressure in 2006 that preceded the global crisis. it starts to tell you -- there is some jittery components associated with global risk appetites. one of the things that always supports turkey is global risk appetites so when it's not working, you know that there is some weakness there. that said, because they have done nothing to try to calm down the markets, it's too much to read into this that it is just a global risk off indicator, because turkey hasn't actually tried to win anything over. if they tried in the markets still said no thank you, that would probably mean that the markets are less tolerant for risk.

you have hammered into one of the key questions. they haven't tried any of the conventional measures that emerging markets are struggling to do, like raising race or other inks to assure capital that it is worth staying in the country. given what we have heard so far, everything from telling people that they shouldn't convert to dollars or to not purchase iphones, what is something that turkey might do that could be plausible under this administration? one thing that everyone wants, erdogan, citizens, lower inflation. he argues that high interest rates cause high inflation. forget about the reasons for it in the minds of people. the end result is that even he wants lower inflation. so if the central bank simply came out and said that we had an explicit target that they were going to achieve and didn't need to explain always they were going to do it, this central

bank has never given a target that is credible. it always gives estimates, but in south africa for its the market knows that if inflation is above 6%, the central bank of south africa is going to do something about it and there is an anchoring of expectations. in turkey no one has a clue what the number is. is extremelyation important and they haven't done that yet. lisa: michael, i want to go back to the idea of contagion. if you look at the ordination between lira and other emerging-market currencies, it has risen to a one-year high here. it sort of raises the question, could the turkish demise, from a currency perspective, really kind of be a harbinger to the shift of sentiment about emerging markets assets after so much money went into the asset class? it is a possibility.

it's not the idea that we are turning away from emerging markets. my guess is that we have a global risk off, u.s. markets will come under pressure and as long as those markets keep moving along be will be in a market where people believe in commodities over time, so you will go through these bouts and they will return to the healthy risk, the healthier emerging markets. deservedly i think we are at a state where people don't have tolerance for stories where for policies that are not conducive to positive market outlook, i would like to stress one of the things, there was nothing inevitable about these turkish problems. turkey, it doesn't have this wall of money that needs to rush into dollars as is go wrong. the problem has been the lack of communication since the election at the end of june. there has been way too long of a window of this new government only saying negative things to the market. that is something that is totally fixable. they could fix it tonight or

tomorrow if they wanted to and at the margin they keep doing small things. they have had a stealth rate hike by not offering money to the market at the policy rate. you have to pay 20% to get it today and friday, which has helped a bit, but it is just a tool, not a message. there is, i still think that turkey is going to recalibrate and send a clear enough message. it's just a question of whether they want to or not. joe: this is important. i think a lot of the perception is that there are these tools they could use out there, like rate hikes, that would theoretically make it more compelling for people to hold money in lira, but the turkey is loath to do them you are saying that they are doing them to some extent they are not as far away from the conventional measures as people tend to think or as much as we have described. just like he doesn't like getting bullied by trump,

he doesn't like getting bullied by the litany of analyst saying raise rates. it's a crude message because the bigger message is to communicate what are doing and slow the economy. the economy will slow already. raising rates is to allow to price things properly. if you regained confidence, the need for that premium diminishes . the government should focus on that effort and a piece of that is rate hikes, but they have already hike, including but you have to take out today, 700 basis points in the last few months. i think that they are basically saying -- i think it is happening like this. he is getting advice that they have to hike and it still doesn't work. he is not being surrounded by a lot of let's say market savvy advisors and i think there is a little bit of hesitancy in policymaking. you can see the move in the last couple of days at the margin moving in the right direction.

to help needs a way investors regain confidence. you point out that turkey has a strong balance sheet still. how does the government use of that and leverage it properly? usually an emerging market currency crisis is because the government has a debt problem. that's often the case. or when they had their scrambles in the past, it was just short-term positions that needed to close as soon as there was the central bank peg on the lira. this isn't necessarily like that. no company is suddenly scrambling to get it because they need to pay it back tomorrow. they're worried about an environment where the longer term liabilities are rising in the revenue outlook is deteriorating. companies, turkish can do something to help

improve, but it means cutting costs and firing people. turkey has the balance sheet capability, if they want to do it in a market friendly way. companies under pressure could get some government support. that would hopefully already help the sentiment regarding the bank. you could do that same thing in a market unfriendly way, something that turkey doesn't have the luxury of getting away with because they have a current account deficit where hungary didn't. it's a dangerous time. they will take some policy decisions and there is a map ,hat is possible for success but it is the flip of a coin if they are going to make the policy choices at this stage. michael harris, they give her joining us. household are owing is on the rise with a new record of $13.3 trillion in debt. that's next. from new york, this is bloomberg. ♪

lisa: "what'd you miss?" a $13.3 trillion record, household debt keeps ticking up to a new high. the bloomberg said reporter is here with the story and worse with plenty of charts. this was fascinating to me. the work seemed like a goldilocks read on the economy for people are paying down there ills more even as they incur more of the good kind of debt, quote unquote, mortgage debt. >> we are seeing that increase, that's what the latest data for the second order showed. it's not really rising that quickly, it is kind of a steady increase in at the same time you have an improvement in credit holiday. the chart shows the blue line with the u.s. unemployment rate.

then the percentage of household debt transitioning into new delinquencies. you can see it hit a record low in the second quarter of 2018. the data only goes back to 2003, but in general it's a good sign that we continue to see fewer and fewer people going into arrears on their debt and it helps to reinforce the strong labor market that we have been seeing. interestingly the delinquencies measure has flattened out over the last few years. might be sending slightly different signals, but both look pretty good. could this be a composition thing, debt extended to people of lower quality with higher delinquencies? >> absolutely. in the previous expansion we had lower reddit wally barr were staking out that so in this expansion it's interesting, mortgage debt tends to be the vote -- the vast majority of all household that.

we have really seen a shift towards higher credit score by hours in this expansion. chat -- chartve a of mortgage debt continuing to decline as a measure of gdp. to thempare that mortgage debt indicator that we got from the quarterly flow funds support that goes further back, but you can see they are both declining as a percentage of gdp into this expansion. it underscores the notion that mortgage debt is not growing anywhere as quickly as gdp and we are getting back down to those more normal levels that we saw for the housing boom of the 2000. it really took off in the housing bubble during that chart , so it kind of speaks to we are still continuing to borrow, but the economy as a whole, fewer imbalances, not as much to worry about there as there was 10 years ago. scarlet: i like the use of the

phrase more normal. we haven't gotten the more normal wage growth with the economic recovery and the third chart that you pull together is a custom chart, wage growth minus shelter in nation. the fact that it's below zero is not a good sign? >> exactly. this chart shows that shelter inflation has been outpacing wage growth. more meeting its way expensive to live or you want to live, in your home, then what you are making. christ correct. that has been a big characteristic of this expansion and really, going back to the 70's, since the 70's, throughout the 80's and the 90's it outpaced wage growth, one of the reasons perhaps why we are not seeing as asked of an increase in mortgage debt because in addition to tighter lending and it's an higher scores, we have really high house prices. you need a bigger down payment to take out a mortgage now and people are not seeing the same

wage growth. that kind of makes you wonder how much we can really expect to see a faster increase in mortgage debt at this point and it alters for a continued slow but steady economic expansion, that's what we are getting from these numbers. every chart, every story, goes back to the stronger economy except for the pickup and wage growth, the kind you would expect at this link. all right, matt roser, thank you very much. time for our stock of the hour. we're looking at shares of switch tumbling, down more than 20% on the day, off by 23%. that i the way is the worst day on the record after they cut sawyer guidance. what does switch do? >> it's a data center and if you remember, the company went public last year and it was kind of a big deal. the third a guest tech ipo last year, the idea was that it would ride this wave of these companies that needed to store

all of this data and information and they would be there to provide a service. investors jumped on board. the stock rose on its first day, but it has really lagged since. last night it came out earnings and revenue cut guidance going forward for revenue. shortly after that the analysts came out with a downgrade, shares down 28% today. joe: is this a situation unique to switch? or could we read into it further about the exuberance of analyst growth? >> some of it is too much exuberance. another issue with switches that it has moved away from its original business model as initially telegraphed. now moving to this hybrid cloud model and some analysts raised concerns that that model has longer lead times and would create longer revenue recognition times and put a cap on short-term wrote. thank you so much. coming up next, home depot hit

the nail on the head with strong second-quarter results but some investors need more convincing. we will have analysis and we will take a look at what's ahead for macy's and walmart as they get set to work or dissolve. this is bloomberg. ♪

"isa: -- "what'd you miss?" works onpens its thursday. will a strong consumer narrative drive the rest of the earnings season? sarah joins us now from washington. sarah, home depot coming out with decent numbers, raising for your guidance based on the strong showing in the second quarter. how much can be extrapolate from those numbers to the rest of retail? >> i think that what we saw with them today was a case of strong execution collided with some egg macro factors.

8% comparable sales growth is strong, broad-based across the geographic markets with both the diy mom and pop consumer and the row consumer, the more general contractor type. they were feeling these rushers from things like increased freight costs, related to a trucking shortage. i am sure that we will he or other retailers talking about that in earnings season. they are also sort of thing a lot of questions about terrorists and inflation. lumber prices were up in the order. i am sure that we will hear especially from walmart more discussions and russians around that. >> what can we infer from what home depot said about whether they have the ability to pass along those price increases that they are seeing for things like lumber, labor, etc.? >> i do think it is a bit apples and oranges here in pro customers a big part of their

45% ofs, making up about sales and you could see how they might be willing to shoulder increased lumber cost more than a mom shopping at walmart for divers. there's a difference there. that said, one encouraging thing from their results is that we see the strong consumer sentiment shining through. 10.6% increase in big-ticket sales, sales over $1000. i don't think customers would be shelling out for purchases that big as they were not feeling good about the economy and we can see some of those threads coming through in macy's and lamar -- walmart later this week. people know about these big consumer packaged goods companies that have been trying to raise rices. what are you going to be most interested in looking at when those companies were or? >> it's going to be really important to look at the walmart operating margin. it was two years ago that they

posted their lowest ever since numbered began tracking the data. clearly they are shelling out a lot for the minimum wage hike they implemented and i think those are all pills they have to swallow to shore up the business . certainly these price increases and the likes of procter gamble and kimberly-clark are going to be difficult for them to manage. on the macy's front should look for -- we know the headline number is not going to be great. they have already telegraphed that comparable sales will be down because of this major friends and family sale that last year was in the second order and this year it slipped into the first quarter. so we know we will see a decrease, so we will be looking for whether they did a good job managing inventory and how did they fare on gross margin. were they able to sell things at all price rather than forcing discounts and promotions down people's throats to get them to spend? scarlet: macy's will be recording results tomorrow. sarah, think so much.

the market closes next. you can see we have green across the board here. the s&p is breaking its five-day losing streak. four day losing streak. this is bloomberg. ♪

[applause]

>> "what'd you miss?" stocks closing of the green. largest500 holding its march in the dollar raising to a fourth month high. i'm lisa. scarlet: i'm scarlet fu. joe: and i'm joe weisenthal. if you're tuning in live from twitter, welcome to the closing bell coverage everyday from 4 p.m. to 5 p.m. eastern. scarlet: we begin with martin minutes. the s&p 500 ended the losing streak finishing up by two thirds of 1% beginning -- 1% gaining. earning season began for retail companies and financials also gaining and materials -- in materials -- and materials as well. joe: lots of green on the board today. scarlet: let's get to some individual movers here.

we are keeping our eye on those retail names. certainly as they get into seemsg seasons, tapestry to be getting shoppers back on board with its recovering catesby brand. sales are beating analyst estimates and shares rose as much as 12% here closing your size of the session. match group is falling about 3%, founders, early employees of tender, which is owned by mat ch. some of the people suing them include the cofounder and former machinecofounder just a -- justin machin. shares of, quite a bit in early trading. the company is the world's

biggest chipmaker revealing a number security fall that could allow a list of access to data. it said it has made this withvery and has come out software to repair it as well and protect the vulnerabilities. switch was something we just talked about. a decline of 22%. it is the unexpected transition to a hybrid cloud strategy causing endless stew lower their once targets and downgrade this data center. joe: let's take a look at the government bond markets. rates are higher in the u.s. across the board, although not much. 2.63%.ls are up to -- 2.89%.ld is to 29% today was a day of columnist in calmness in turkey.

no one has gotten confidence that waiting will stop and turkey. yearsfive year years -- -- yields are still at 5%. paringlittle bit of a back of losses in the turkish lira versus the dollar. the dollar also lost against the peso in argentina. same thing for russia versus the dollar. againstd, the dollar the majors, they are still doing well and at its highest in more than a year. you can see that from the euro. the ex-wife is the bloomberg u.s. dollar and you can see it rising and reaching a new high since june the last year -- of last year. joe: on commodities, green arrows for everything, oil is up, gold is up bouncing again. lumber is up. the one red arrow is copper futures. we have weak data out of china.

5%estment is down at year-over-year growth, the worst level in years. it did not affect markets overall. also a mine in chilly, the coppermine, where people are worried about a strike. scarlet: ah, supply issues. joe: and those are today's market minutes. scarlet: we will be talking about china later with tom orlik. for more on today's market bounce our next guest joins us from minneapolis. doug, your overall view on the market is to look for a move south eventually to blow the early february lows. in the meantime, we bounce around the ground for direction -- looking around for direction. is the reason you are bears driven by trade concerns, emerging market issues like

turkey, or something more familiar in monetary policy? the: i'm not so sure emerging market stocks are exogenous. i would look good back over the market tightening. the fed's balance sheet is a down -- is down 5%. that is said to accelerate in the second half. you also have the ecb which i believe is buying about $30 billion in bonds per month through the end of the third quarter which will go to 15 billion in the fourth quarter. what has happened in turkey, there are certainly issues in regard to turkey, but is this liquidity squeeze, this monetary squeeze that is the root cause. mexico.k to 1994, 98 was rougher with markets. lisa: emerging markets were doing well earlier in the year. they have had inflows.

i'm wondering why you are attributing it to the tightening now when you see some very specific political risks in turkey managing not to his will over and cause massive contagion in the emerging markets complex? doug: the tightening takes a while to work through the system. the first rate hike was back in december of 15, in the middle of an emergency markets maelstrom. in addition to the tightening backed up to the second cap of last year, the hike in the dollar from year and was maybe the catalyst. ultimately, we traced back to the monetary tightness. joe: doug, do you expect this to spillover into what would be characterized as risky assets in i do.kets gekko doug:

-- markets? doug: i do. i would not argue the stock market is narrow, but there certainly have been disjointed moves when you have the nasdaq up 12 or 13% on the year, the nyse composite flat. technology up00 50% or 60% on the year. the rest of the s&p is up only 3%. a lot of these oddities tell us this managing liquidity is taking hold, but whether we see a narrowing of the market, fewer stocks participating in the new highs and small caps to underperform, maybe that's phase lays ahead of us. that troubles me sitting in a relatively defensive position. lisa: have you recently changed your allocations at all, doug? doug: just within our equities.

we have been sitting with 43, 40 -- 44% net equity. our normal ranges ready percent to 70%. we are on the low side, let's not as defensive as we could get. part of that is strength in the market itself preventing us from going all the way down to a 30% of maximum defensive exposure. own, we of equities we see some of the defensive groups rise up in our quantitative rankings. our number one sector is health care which is defensive. we own the health care service stocks, own the hospital stocks, so that is our number one sector for many months. it had been tech and consumer discretionary. within those two sectors, we own none of the faangs. i don't know if we see value, but we see appeal in the

semiconductor equipment stocks and the data processors and outsourced services. then, we own some of the retailers that were beaten down when they were so-called amazon-ed. sort of a barbell portfolio in equities right now. do you do with the non-equity portfolio aspect of your portfolio? one of the striking things this year, during some of the. of strongest volatility -- the periods of strongest volatility, we saw a selloff in stocks. could we see something similar with strong volatility? doug: and equity hedge was implemented. we run a strategy -- and equity hedge wasn equity

implemented. -- strategy with vulnerable stocks. that is how we have accomplished that equity reduction for the most part. we also have a small piece of our tactical funds in fixed income. is about aswhich low as we would have it go. we don't see a lot of appeal in the fixed income market. if yields work their way higher, that may change and we may elect at some point to reduce that equity hedge and say yields are high enough that we move assets into fixed income. , thank youug ramsey for joining us. , one firmeaking news exited the data analytics firm during the quarter. this is according to the 13 filings. in berkshire is making takings

-- and berkshire is making tweakings. in the meantime, it boosted its holdings in apple, u.s. bank or, pharmaceuticals, and delta airlines. this is all taking place in the second quarter. -- there.eir joe: they have killed it on that apple holding. they entered when a lot of hedge funders were dumping it and said it was boring. they've also been accumulating during the incredible run. lisa: i will say there was a big which i find interesting. it you continue beaten up pharmaceutical company thereinafter hours trading. i find it interesting because this could be a vote of buffettce by warren saying therefore this generic

drug maker. i believe that is the biggest in the world. scarlet: i went through some of the other ones, for apple it's barely budged. lisa: exactly. -- for apple, it's barely budged. lisa: exactly. coming up, more details on argentina's fight to stabilize the peso. this is bloomberg. ♪

mark: i am mark crumpton with first word news. british police returned a bicycle to an unidentified cyclist outside parliament today after a car rammed into pedestrians and other cyclist during the morning rush hour.

three people were hurt yards away -- three people were hurt. driverway, we say the was arrested on suspicion of preparing a terror attack. today's decision by paul manafort's legal team do not recall witnesses clears the way for juries to hear closing arguments tomorrow in the first trial to merge -- emerge from roger marlowe's investigation -- robert mueller's investigation. manafort referenced his case and he did so because he and his legal team believes the government has not met its burden of proof. mark: a federal judge rejected the defense motion that the case should be dismissed on those grounds as outlined by the defense. jim mathis made a pitch today to

brazil for building a closer defense partnership with the united states. the secretary addressed students at the war college in rio de janeiro. states expects long-term in latin america and recognizes the success of future generations depending on how well we build trust at every level with our western hemisphere allies and partners today. we look to the future to build on trust today. mark: the secretary emphasized american interest in partnering with brazil in space research, an area in which china has shown growing influence in south america. the chinese operated space center is in argentina. toarius will be allowed enter porch with 41 migrants as part of the deal with the union.

those rescued at the borders will be distributed among other eu nations. doctors without borders had appealed to both italy and another country for safe harbor, but italy refused. 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. more details from berkshire hathaway's filings. breaking news after the market closes. we have more details on how big their stake in apple is. the firm increased its stake by 5% and owns 231 million shares. that makes them the third biggest shareholder in apple. in the meantime, they are the second-biggest shareholder in southwest airlines because berkshire hathaway also increased their stake by 90% there 256 and a half million shares -- to 56 and a half million shares.

and now owns 56 and a half million shares of southwest -- it now owns 56.59 shares of southwest. because it's -- it cut its stake in american air. it also cut its stake in united continental, and increasing its stake in delta. lisa: it's interesting there is not more from move in the airline stocks given how they have been recently. we should move over to turkey contagion. "what'd you miss?" argentina is taking emergency measures to stabilize the peso raising interest rates five percentage points and announcing an fx auction. this is an unorthodox move from argentina coming in response of the lira's downward spiral ripping through emerging markets. joining us for more is

bloomberg's felipe a hernandez. thank you for being with us -- for leap a hernandez -- felipe a hernandez.- felipe steps, have to take start taking steps to rebuild confidence in economic policy. that is one of the reasons why otherina with some of the economies in the emerging markets have been hit hardest by all of the noise coming out of turkey. joe: when people look at turkey, they say the problem is they're not doing any of the things that investors want to see, they're not raising rates, they're not being friendly to capital. it seems like argentina is falling -- following a more traditional market friendly capital friendly playbook. felipe: usually.

what you have seen in latin america recently is when you get these negative external shocks, most countries would allow the currency to devalue eight and absorb most of the shock. now, you have places in argentina where the currency has depreciated by almost 40% since they hiked interest rates from 23% to 40% back in may. since may, the currency has appreciated another 40%. clearly, that was not enough. their ability to allow the currency to continue to depreciate to allow to absorb the negative shock is limited because inflation is already rising anti-levels. they have to think about alternative measures. in line with that, we seen

measures being announced in the last two days. scarlet: so unconventional less traditional measures, which of those would be more effective? felipe: i think the more beective once -- ones will toward building economic policy. high interest rates are good. we don't think higher interest rates will make investing in argentina more attractive, but it is showing strong commitment and the central bank to keep anchored, and tried to build the confidence and policy. -- in policy. looking at tariffs and experts on soybean products, they consolidate the fiscal outlook and those measures will build up confidence in the outlook of

economic policy. those will be more important. joe: if 45% short-term rates are stemming inflation, what does that say in terms of what we think of the connection between race and inflation or the ability to do anything about central inflation from the central banks? felipe: you have to think about why inflation is so high in argentina. it is tied through the exchange rate of inflation, and also due to a lot of the government reducing subsidies on the services and the local foods that used to be regulated or highly subsidized by the government. subsidies on those goods and services imply higher prices, but these should be a one-time shop only. you need to have inflation expectations well anchored, and that is where high interest rates are supposed to be do the work. , felipe thank you

fernandez. diamondback energy will buy energy and -- energen. this is an all stock transaction valued at $9.2 billion. this is a transaction that was already approved by both boards of the company. diamondback is an emp company based in midland texas. it is a market cap of $13 billion here. for aboutng energen $9.2 billion. that makes the shares of worth about 84.95 based on the most recent close. --a: without over to china let's head over to china. the pressures of trade war show no signs of dissipating. for more is washington's chief economist.

wonderful to have you. let's look at the signs that the chinese economy is flowing. how concerned should we be? >> i think the question is what is driving the slowdown. that will tell us about how concerned we should be. is it the trade war and all of the policies coming out of the u.s.? or, it is something closer to home? it -- is that it is the leveraging agenda which is the slowdown in china. that is undering policymakers control in the short-term. some of thesee controls and allow a little more dreaded to come through which will ring back some of those concerns about financial stability risks in the long-term. short-term, they should put a floor in the falling growth.

joe: is this the type of thing they will continue to do more of as long as this trade spat continues? wanther words, they do not to delivered their economy and fight to trade war at the same time. tom: i think that is exactly right. if we go back to that existential movement for the global economy and the chinese economy at the end of 2008 when the great financial crisis hit, the problem for china was partly exports coming out and they had engineered a big slowdown in the domestic real estate sector in and a testament -- in an attempt to control bubbling prices. it was the demand that hammer their economy. memories of that are still very present fort chinese policymakers. the more donald trump -- four chinese policymakers -- for chinese policymakers.

scarlet: when it comes down to is we are in a highly politicized environment and everyone wants to interpret every piece of data as backing up their point. the white house will likely want to interpret the data as evidence the trade war and tariffs are hurting china's economy. would they be right in that interpretation? tom: i would not make that interpretation, scarlet. what i would say, from the perspective of if it is the intention of the white house to inflict maximum pain on china, then, now, at a moment where china face is financial risks, imposing tariffs could be particularly effective. as china attempts to escape from its debt trap and finds new sources of growth which do not come from ramping up bank lending, the obvious thing to do

is export more. if the u.s. now moves aggressively ahead with the protectionist agenda and goes beyond the $50 billion and tariffs that have already imposed, the export your will not be entirely closed to china but more closed than it was making deleveraging more difficult. joe: what is the next key data point to watch out a china to see how this evolves? tom: i think we need to look at the forward-looking numbers in particular -- numbers. in particular, credit. the government said they want to encourage more lending. we need to see what that means in the credit data in august and september. much tomnk you so orlik. out of prison but still out of work, how a common question on job applications could be to blame for big talent facing problems.

this is bloomberg. ♪

mark: i am mark crumpton first word news. theresa may is calling on the u.k. to come together and carry on as normal even a she urged the public to remain vigilant after a car crashed into parliament injuring three people. authorities are investigating the incident as terrorism, but they have not determined the driver's motive. the driver was arrested. >> it is appalling and shocking. those a big thank you to in emergency response that got there so quickly to assist able. investigation will take place and arrest have been made. we will have to see from their.

mark: britain's government has kept the threat level for terrorism at severe following the incident. pennsylvania officials released a grand jury report that identifies more than 300 predator priests who must the children in six dioceses and also accuses church leaders of taking steps to cover up the abuse. from one ofmerged the nation's most exhaustive investigations of clergy sexual abuse. chilean authorities raided the headquarters of the catholic church is a physical bowl -- a apiscaplenference -- conference. they're looking at abuse schools. at former chilean prosecutors summoned the archbishop of santiago to appear in court and testify about the

alleged cover-up of years of abuse. in may, 31 bishops offered their resignation to pope francis. so far, they have accepted resignations of five. venezuelans top prosecutors say the investigation into assassination attempts on the president using drones has widened to include the rest of two high-ranking military officers. the list of suspects, including an exiled lawmaker has now moved to 34. officials are seeking arrests in colombia, peru, and the united states. 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. headlinese have more and breaking news on a fund firm run by nelson peltz.

iny're boosting their stake general election and others in the second quarter. wendy'sits stakes in and others. there are the biggest shareholder and institutional shareholder in wendy's. not much of a reaction in after-hours trading. the new position for them is in the t electric -- nzt electric. i had not heard of it before looking at this filing. they provide electrical contracting services. it is a small company of $4.8 billion in market capital based out of the u.k.. these are the latest filings indicating their tweaks to its portfolio. joe: "what'd you miss?" the labor market has its own punishment to impose on those with a criminal record. according to a study by the prison policy initiative, the unemployment rate for formally incarcerated people was at 27% in 2008. it is 2% higher from the peak of

unemployment during the great depression for the general population. comer practices like asking applicants to check up a box disclosing try conditions could be one factor to blame. joins us with more on the study. peter, thank you for joining us read people convicted of a crime are published once, and then punished again when they limited employment -- when they have limited implement options getting out. how big of a deal is this? how much does a person's odds of being unemployed surge after having served the time? peter: it is about five times higher. if you of a criminal record, the rate is five times higher than people that do not have a record. that is a pretty massive difference. lisa: what would you say to people who say perhaps it is because these people don't want to work when they get out of prison or are criminally inclined and end up going back to jail and that is the reason

why they're not getting employed? peter: if they go back to jail, they are not unemployed. what is important about the report is not only did they calculate unemployment rates affordably incarcerated people, we are able to talk precisely about the fact that people with criminal records want to work. people that have a criminal record are more likely to be looking for work then people that do not have a job. scarlet: when you look at which industries people who can -- were formally incarcerated can get into, other industries more welcoming and least welcoming -- less welcoming i should say? where can you look for best actresses? -- best practices? peter: the best practices are hard to come by. jobs of formally incarcerated people are often the low-wage, temporary, insecure jobs. people need a record need a job

just for the same record you and i do, supporting their families. there is no good reason for to be making it harder for people that are formally incarcerated to find a job. joe: what about the employers? peter: employers think they should not hire that have criminal records. they think they will not become good employees. they don't give them a chance. one of the things we talk about in the report is the research that shows when employers give people with a criminal record a chance, they are more likely to become good employees and more likely to stay a long time. they are also more likely to work hard. these are things employers want, but routinely, there is blanket discrimination and refused to review an application where someone says they have a criminal record. fascinating a bullet point in your study and

cited another research paper. it said there is lower turnover among the previously incarcerated than for employers who are worried about job markets in a tight labor market and these employees stay longer and are less inclined to quit. is there a theory to explain why they would be less inclined to quit a job? peter: my theory is that it is loyalty. when employers are willing to take a chance and do what others are not, that employee returns that favor with loyalty. lisa: as joe was alluding to, we are in a tight labor market. are you seeing employers taking more risks and hire people who do have criminal records when they might not have in the past because they do need workers? that ine've not seen our data because our data is not as new as that. it looks like and sounds like employers are willing to give people that have a criminal record a chance when the economy is tight.

we have to remember, when the economy is good, the first people -- the last people hired on the first people you will fire when the economy changes. if we make a structural change to allow them to succeed, we need to do that regardless of the economy. scarlet: it seems there is an opportunity for the public sector to lead the way. our executive director pointed out that prisons are used to fight the wildfires. it is a regular screening process and only take people who are capable of doing the hard work of holding the heavy equipment. the irony is that, as many of the incarcerated people are helping fight fires in california, they cannot work as firefighters and not -- cannot be hired once they get out of prison. could the public sector do more? a lot we need to change

of these rules around which is called professional licensure. train tens of thousands of people in prison to put out fires, but they are never hired to do those jobs. it makes no sense. joe: some places i believe have instituted rules where they can't ask employers to check the box that they are in prison. what results have we seen their? peter: when employers ban the box, they give a fair take -- fair shake the people. one of the reports we talk about in the study is another study that shows employers that take a chance on people get employees that were carter, do not leave, and are more loyal. if you ban the box, you can give people the fair opportunity to compete for a job.

scarlet: peter, thank you so much. we have more details from another filing. capital isuare taking 7.7 2 million shares addition to its holding. it is adding shares of loads. this is a company the ceo has been vocal on seeing significant upside for another home side -- home retail side. they are adding to the lows holding and making other changes as well. let's bring those to you. hold on, let me get it back up your. it reduces its stake in edp and boosting its stock in united technologies and others. it adds to its holdings in automatic data processing and in terms of qs are, the restaurant

brand is adding to its stake there -- excuse me, reducing its stake and boosting its stake in united technologies. coming up, crypto crunch and bloomberg spoke to a theory um'ss co-founder -- atheri co-founder. this is bloomberg. ♪

joe: "what'd you miss?" the crypto crunch over the last 24 hours in overall cryptocurrency markets have lost 10% of its value and the number two digital token is down over 11% after falling 17%. eric sactown -- set down with

the co-founder to get his take. >> this is something we have seen so many times in the block chain ecosystems since essentially 2009 when bitcoin was invented. we've seen rises and falls and saw what many call bubbles. i would agree. >> what happened last your was a bubble? we have seen six big bubbles and each more epic and the last one. each of the bubbles is astonishing when they are happening. when you look at, they seem like little pimples on a chart because the growth has been exponential. each of the bubbles has the advantage of bringing attention into our ecosystem. it brings entrepreneurs, it brings, money, and

the prospect of building fundamental infrastructure and creating more value. what we have noticed is, with each of the bubbles, we have a tremendous surge of activity. that is what we see right now. we had a big bubble and we're now back to november or december prices. we thought those were incredibly high. since then, we have probably seen two orders of magnitude increase in developer activity, increase in scalability technology, so it is going well. >> that is were you -- does it for you that the developers, entrepreneurs, talents, and money that enters the ecosystem on the way up exits on the way down? >> we are not seeing that. types feel like their fortunes are rising and falling with the price of bitcoin and ethereum. all of these coins are

correlated. it is the trader types moving them around. >> don't you feel it as well? surely. -- ether, you are much wealthier man then today. >> sure. and we are still on track today. this is not unexpected. we do feel it. we feel the exponential increase in activity in our ecosystem. it is overwhelming what is going on in terms of our different product projects and scalability , new team projects, developers entering our ecosystem, and companies that have gotten comfortable with the ecosystem. >> is this going to turn into another bubble? if we have seen six already -- >> absolutely.

>> so if the price it reaches, is it that much higher than the last? >> the thing about the internet, the dot-com bubble is that things were so slow back then --t there was one rise >> in one collapse? >> one collapse -- and one collapse? >> one collapse and a steady rise. building on these technologies, we can see a quick rise and because there are people rushing and because of the promise of the technology. then, we build more infrastructure, see a correction, and the potential gets even more impressive. there is a correlation tween the rise in price and growth of fundamental infrastructure in the ecosystem. we are probably two orders of

developer as a community then we were eight or 10 months ago. that will be astonishing. >> and you will feel the price again? -- many we see many to layer two technologies built on layer one trust layer. these technologies will enable exchanges in games to have hundreds of thousands of transactions per second. a bunch of those will be released this year. >> this is precisely what i wanted to talk about now. you talk about layer two, if i understand correctly, you are talking about the challenge that crypto has faced until now which is scalability. do you believe the scalability problem will be solved this year? >> the scalability problem is never solved. for decades, developers have been bumping up against these problems -- >> hardware developers too. >> yeah.

on the internet, the web, we have achieved tremendous scalability in terms of transactions per second, but we are thrown at the way because of the blockchain approach to owning a decentralized world wide web. we're down to 20 transactions per second throwing that the way, but that is in a trust infrastructure. that is a much better foundation on which to build the next surge in scalability. joe: that was ethereum lubin.der joe scarlet: we wanted to update you on diamondback energy. shares have now resumed trading. this is after it agreed to buy corp. which would double size -- the size of the company. we should mention as well that 30% shares almost

outstanding are owned by hedge funds. with 7.7udes one million shares, elliott management has a 3.9 million stake. a lot of familiar names. energen is taken out by and shares energy are down about 7.5% -- .25% -- 7.25%. this is bloomberg. ♪

lisa: "what'd you miss?" decade, a pilot posted sexually explicit photos of his girlfriend who is also a flight attendant at the airline. she complained to authorities and the company is facing a federal lawsuit to allow this behavior. united said it "does not tolerate sexual harassment in the workplace." more on this -- for more on this, rebecca greenfield has more details. >> as you mentioned, there is a pilot who is engaged in a relationship with a flight attendant for four years. while they were dating, he took pictures of her content tool -- consensually and non-consensually. after they broke up, he posted them online, called revenge porn.

for 10 years, he has been posting this online after they broke up. ant and happens because ex-lover once to get back at , sor x so they post -- ex they post something online. joe: what is it about this case that highlights or challenges the corporation apart from the difficulty they already face facing sexual harassment in the ranks? rebecca: with revenge porn there are criminal cool -- criminal actions in the book. under title vii, people are saying united failed to protect their employee. lisa: this is a private relationship happening outside of the workplace. where is united's responsibility here? rebecca: i think they are

positioning it as he was a superior, piloting capping, and she was appointed attendant. they talk about how he may have been posting it while on layovers. there are cases of sexual harassment where things can happen outside of work. joe: is this a growing phenomenon in corporate america? a challenge were corporations have to possibly intervene in what seems like criminal matters. we've seen this in the nfl where people are under a lot of pressure to suspend people and they had be private adjudicators of the issues. rebecca: i don't think they want to do that, but in this case, it seems the eeoc is saying that the woman came to united and they did not do anything. the employees try to do something and the eeoc said you failed. scarlet: rebecca greenfield, thank you so much for that

story. one of the most well read -- one of the most well done stories and most read stories on the bloomberg. where another filing to tell you about. icon enterprise is boosting its stake in itself. presumably that means buying back its own shares. in the second quarter, it reduced its stake in herbalife and an energy company and added, or build a new steak in -- stake in energen. there are others as well including amtrust financial services. what you need to know to gear up for tomorrow's trading is coming up. this is bloomberg. ♪ this is bloomberg. ♪

scarlet: "what'd you miss?" your stocks and in the green. that does it for "what'd you miss?" . lisa: "bloomberg technology" is up next. joe: have a great evening. this is bloomberg. ♪

emily: i'm emily chang in san francisco. this is "bloomberg technology." in the next hour, turkey's president called a boycott of american-made electronics in response to sanctions. what crisis in the country could mean for the iphone and more. u.n. musk in the tesla board go over private plans and musk is being advised by goldman sachs as critics continue to doubt his transparency.