nomination fight. the democratic one including cooperated with prosecutors during the watergate investigation. on the public inside, theodore olson and paul clement testified in support of kavanaugh. citing national security concerns president trump said the justice department should investigate the identity of the anonymous new york times op-ed writer. the explosive piece published wednesday claimed there is a persistence and the trump thenistration to thwart most dangerous impulses of the president. during a rally the president said unelected deep state operatives are a threat to sadcracy itself added he is for the mainstream media. startttis made a surprise their stop in afghanistan. u.s. is trying to help them

reach a cease-fire with the taliban. the visit comes days after a new matter took over allied forces in america's longest war. italy is having a confidence crisis. the assessment comes from the prime minister of italy until june of this year. he told bloomberg the next european union elections in may of 2019 will be make or break for the eu. normally nobody participates. with national issues and not european issues. this time they -- next may we will have a european challenge, a real european challenge and we have to win it. >> he spoke with bloomberg on the sidelines of the four-minute elite. global news on-air and on tictoc

on twitter powered by 2700 journalists and analysts in 120 countries. this is bloomberg. julie: live from bloomberg world headquarters, i'm julie hyman. i'm lisa abramowicz. joe: i'm joe weisenthal. >> 30 miss from the close of trading, red across the major averages. s&p 500 falling to its lowest level in two weeks. >> the question is what you minutes -- would you miss? president trump ready to impose tariffs on an additional billion dollars worth of chinese goods. two senior executives announcing exits from the company after

elon musk smoked marijuana on a comedian podcast. a labor market surprise. wages climbed by the most since the end of the recession as hiring also jumped. president trump amped up his trade war rhetoric threatening tariffs on 267 billion dollars worth of chinese goods. he spoke with reporters earlier today. >> we have added another 200 million. $267d that is another billion ready to go on short notice if i want. the occasion. joining us from chicago the big question right now for a lot of people is have markets already priced in another $200 billion in tariffs, let alone

another 267 billion? >> they have not. first of all we have to think of how these work. usually you you have forewarning. companies stock up ahead of time. some of the strength in the economy, they are telling us they are seen people stock up ahead of tariffs to blunt the blow of tariffs they come in. that shows up as a building of inventories. when you have a rapid change you have the backlog of people looking for exclusions, waivers. we have gotten very few on the steel aluminum tariffs. there are also complaints there has been favoritism. happen.what starts to some companies who know the administration get a waiver and others don't. tariffscts of accumulate over time. so it is hard for financial

markets to price it in, the uncertainty. many going forward with plans for investments for 2018 don't know until what the landscape is going to look like or 2019 said but theirolding back investment plans are? >> we have seen some specific companies be affected. i wanted to mention a headline from apple which might end up being another example. the tariffs list covers a wide range of apple products. these headlines just coming out, saying the tariffs affect their and cables. pencil, the shares are taking a leg down on this. when does it go from being a specific company, specific product story to a broader economic story? >> it takes months.

if this were to happen, 200 billion alone would start showing up by christmas, basically. it will be a much more expensive holiday season. we just had a pick up in wages offset by an increase in prices and it would hit the u.s. consumer quickly. billionthe products, 50 in effect, the most recent ones in late august very recent. they are in the supply chain. you hope some of those are absorbed. they hit profit margins but many don't realize how many things are very specific only to china and how limited suppliers are in terms of getting those inputs. it takes a while. it creeps in and accumulates over time. by the end of the fourth order you will see some crying about margins and if these extra ones were to go in rapidly without time for people to adjust you would see it happen more

quickly. joe: i want ask about jobs. accelerating to 2.9%, is this it? is this what we have been waiting for? month,ill get one october was distorted by hurricanes last year. we will get a shoot up in october before they make the december decision. that is baked into the cake. the trend is we are getting more wage growth. we want that. trendis also an important in terms of benefits. the full-time jobs as opposed to temporary job hires, they are jobs with benefits. benefits picking up. compensation packages are getting better. and are not getting better faster than inflation. although this is great news and a trend we want to see get some

traction we are still a shadow of our former self. lisa: to your two-year treasury yields in the post crisis, people pricing in more rate hikes on the heels of this labor report. what is your expectation and how high will that though? >> i do think we are going to see two more rate hikes, in september and december. next year it could be two or three depending on how much tariffs get in. tariffs are tricky because they are both stagflationary. they slow the economy. that is going to be tricky to negotiate that kind of environment and the latter part of next year because that is when the biggest effects of tariffs, at the magnitude we are talking a going to kick in. do a lot ofthem to distortions we don't want in the economy. julie: buying the worst-case scenario what is the biggest

risk? >> the biggest risk is -- don't. of oldies age. they die of imbalances. the m&a activity we see is surging. the pricing in the m&a market. we are seeing a lot of loans for nonfinancial operations, not being done outside of the banking system. those are the things i watch. i always ask when the economy is doing well, i have written high before and know how hard it can fall. it is the time when you want to hedge. the fed overshooting on rates is another. remember my they are reacting to data and it is always back word looking. it is not forward-looking. they are reactive. they could be reacting to an economy that is petering out but not showing it yet. julie: so we will be looking at data very carefully

to see if any evidence of that is materializing. thank you diane, joining us from chicago. the apple headlines, saying the tariffs cover a wide range of apple products. pointedur producers out, the apple pencil is their stylus product. the watch, the air pad, some cables. we saw apple coming down. it had been higher but now it is lower on the session after these headlines came out. we will update you on them. we will have another area of trouble for the market potentially, a stabbing in brazil shifting the presidential race. we are looking at emerging markets more broadly as well, next.

joan: after a hammering last week latin american currencies are making gains. argentina looks more likely to get credit from the imf and the central bank governors are predicting calm. an assassination attempt is perceived to be boosting his chances to win and investors are liking that. let's bring in charlie robinson, at renaissance capital and he follows markets and countries around the world. thank you for joining us. interesting times in the em space. latin americanh what we see in argentina and brazil. investors being compensated for the risk they are getting?

we reckon the argentine peso finally got cheap on the 22nd of august. it was only at that point it went through fair value. it has been too strong all year. that is why the current account .as been getting worse it is why the government has had to keep coming back getting bigger and bigger promises of fiscal cats because demand was still strong. now with interest rates here , we the currency this cheap are going to see a turnaround in the next months. possibly as quickly as august data. do you would hear to the narrative that was driving the emerging market weakness from the federal reserve, that they are raising interest rates and they are going to do so faster on the heels of this jobs are or more this is an idiosyncratic issue stemming from specific

problems like the one you mentioned. >> i have been to dovish on this. i was assuming an april, may it would be staying at a turkey argentina issue. the stronger dollar, the threat of fed hikes and the trade were with china, which i am hoping and assuming trump will declare victory on before the midterms. i think those three things have been putting emerging markets under pressure. the more sensitive they are too bad news. that story has been going on for months. suddenly it blew up. combined with the week growth as well. em is sensitive. the whole asset classes under pressure now. you're not only person

who is said maybe sit tight when it comes to emerging markets. wrote this columnist is the reason people get into emerging markets. not because they are stable. it is because you see take upside and downside and if investors would be patient another upside cycle will be coming again. is it just a matter of buckling up for these painful times? things. if you have gone back to any point and looked at asset classes. equities, em fx has been one of the few neutral at fair value, at the long-term average rate asset classes out there. expensive have been based on their long-term history. what you are getting is spectacular value. it could be a value trap. i accept that. turkey since 1971, we have never

seen the currency cheaper than in january 1994. this is extraordinary. this is the worst time in their economic history. i don't and that quite make sense. 100ed to cover turkey with cent inflation. -- 100% inflation. there is something happening here which is throwing out good value for investors now. joe: when you say it is the cheapest you have seen it, what is your preferred approach to currency? when you say argentina hit fair value on its currency, what is your framework? >> we use the real effective framework model. 1995 becauseck to it takes into account the full

commodity cycle. it is no good looking just at the last 10 years. currencies are quite strong for the last 10 years because commodities were strong. we go back the full twenty-year cycle where you get the downs and ups. we then take the exchange rate rate todayhe spot and give ourselves an average rate over the last 25 years. 1971.key's case, what that is showing is it really is throwing up a dollar value. there are still overvalued in asia but latin america, turkey, south africa are looking decent. joe: the way to play this is to go at the heart of the pain. south africa, turkey, argentina or some of the article -- ugliest in the world. rather than diversified or go for stronger ones, go with the

beaten-down bloody ones. >> go with them when you have catalysts to change. i could have said this about south africa or turkey two months ago. it was cheap. theneed to see in turkey is rate hike next week. you want to see the pastor released just in time for trumps midterms. those factors plus the big catalyst, victory in china, over china, that could turn sentiment. that is what we are looking for. lisa: great to get some time with you. charlie robertson. shares of mattel rising as the toymaker makes its biggest push ever to turn more of its brand into hollywood home. discussing, my

little pony. >> here is the thing. you think about these great friends. you wonder why you have not seen them on the big spring -- backscreen. hasbro went down this road. bay making ofel the explosions. they have this huge resurgence. let go has had success. but really never went down the road. i did try a couple of times that the projects never materialized. now they have brought in robbie brenner. she is a veteran of hollywood. she is going to bring in the film division and try to get those brands out there, starting with barbie and masters of the

universe. joe: we were talking about this yesterday. the producer of dallas buyers club making a barbie movie. >> she is bringing management. will talk about the failed efforts of the past but this is a new industry. it is not easy to just walk in and be good. >> when you look at what hasbro has done, i have a chart on my screen. you can look at the divergence between these companies. it is largely because of what hasbro has done. these are to our advertisements that are going to sway your kids to buy them whatever is on the screen. the fact they have not been able to leverage that, a lot of their brains are kind of stodgy. it can can revise that have a big effect on revenue. up next, tesla ceo elon

musk. he lights up and the stock burns down. more on the latest executive drama. this is bloomberg.

>> turmoil at tesla as executives leave the car company just hours after the chief executive was smoking marijuana and drinking whiskey during taping for the joe rogan podcast. gordon, we talked earlier today. we have an $88 price target for these shares. one thing i am looking at is the debt. we're watching yields climb. chance.hink there is a >> we think that is one of the biggest things.

their payables have increased significantly over the past couple of quarters. money they own. they are up as well. if you look at the cash generation, we think they are not. we think that is a real risk. debt investors saying there is more risk. we don't think equity investors are as invested on the sheet. about himere talking smoking pot but that is not really the point. the point is he decided to do it in the first place. i don't know where his calms person is. his communications person, it's his last day today. how big of an issue is that for tesla? >> it brings about the book bad blood about elizabeth holmes.

therd that doesn't know health care, it tesla automotive's, you have the ceo who is basically unfettered , there is the company parallel between these two companies. executives leaving is not a good thing after less than a month. the chief accounting officer leading $10 million of equity grants on the table. joe: -- tesla has a real product that works. that is one difference. >> that is a good point. have you driven a model three? no. the issue is they have a card that works. if you can't make that car profitably you don't really have a business that works. that is where people get confused.

the market closes next. here are the major averages in the red. four minutes until the close. this is bloomberg. ♪

>> "what'd you miss?"

apple wing on the dow. the e-cig to you 500 in the red -- the s&p 500 in the red. i'm joe weisenthal. if you are tuning in on twitter, we want to welcome you to our coverage every weekday from 4:00 to 5:00 p.m. eastern. down on the week for the major averages, for the s&p 500 in particular. we saw some of the headlines weighing on stocks here with trump talking about a tariff on amount of chinese goods. declines not that sharp. it is not clear whether the terms will go into effect. apple said some of its products would be affected and its stock took a leg lower. tbd on some of these tariffs.

we were just talking about tesla being down after a couple of executive departures and elon musk's appearance with joe rogan. shares their lowest since april. a couple of other declines worth mentioning. t. rowe price lower, deutsche bank lowering it to hold saying trends are were sitting. they favor even wrote her's and kers ands -- e-bro exchanges. the stock getting it's only sell on the street initiated with a $55 price target. analysts predict a protracted decline because of its portfolio . broadcom providing a little bit of hope in the semi conductor industry after they had numbers that beat estimates.

it has been a down week. it's 8% gain a ray of sunshine for some of the bulls. joe: let's talk about the government bond market. look at those higher rates coming in the back of that jobs report we got at 8:30 a.m. wages, the fastest pace of acceleration since the crisis. rates up across the board. 2.94. year yield up to short-term, it is shooting up. 30 and then the high of the day. >> we have not seen moves like this since may 30. in the fx corollary market is the stronger dollar. let's take a look at the currency world, the euro weakening against the dollar.

not ahe chinese currency, yuan,move with the still below the dollar. dollarn you saw the strengthened against the japanese yen. the real story for me was the russian ruble. absolutely plunging versus the dollar. the highest levels since 2016. more sanctions loom over the russian market. joe: on commodities, let's take a look at oil. not doing much. gold not doing much. the loser on the day, lumber. keep an eye on that. that has been swinging back and forth. the limit is set by a dollar amount. keep an eye on that one. those are today's market minutes. >> for more, let's bring in ameriprise's strategist anthony

cameron, whod joins us in new york. anthony, as we mentioned, we saw this decline based on the tariff headlines. not a huge decline. we've been trying to pull us apart all day, why there is not more concern the markets about the tariffs. the firstu look at $50 billion with chinese tariffs, there has not been a lot of economic reaction. most of the tariffs have been intermediary goods. it has not had an effect on consumer goods. the next round of 200 billion is going to hit consumer products. the markets are waiting to see if we actually see the tariffs in place. puts tariffs that on every export coming into the

u.s. that will be an issue. joe: cameron, you found 267 billion dollars hits every import. it feels as if they create an immediate response. over long-term, you could not see them. they are hard to see on a chart. there is a threat they are and every important. it is not like we had a big selloff. >> i was surprised by that. the confluence of the 267 out of the blue and wage number and the higher yield, i would have thought after the weak week we had, that could have sent us spiraling lower. i am not sure what is going on. [laughter] i had an argument with one guy who said the comment trump made that the 200 is ready and it

could happen soon, you could twist and say that is not baked in the cake. earlier in the week, we were thinking the comment period ended yesterday and we could have had the announcement starting today. some people were thinking that is up in the air. >> anthony, what clients are asking? what do you tell them to do? reduce risk? go along? tariffs arehe something you have to pay attention to. when you look at the fundamentals of the u.s., labor conditions are strong, profits are up, confidence is high. this is a good time to be in the market. there is uncertainty, but conditions are strong. i would say talking with clients, in 2009, you had cheap

today, low valuation, and you have stock prices at all-time highs, confidence, and valuations are stretched. thisting large gains at point is not what you should be banking on right now. i think this bull market has some legs. next 12t 5%-7% over the months, those are solid gains with where we are right now. joe: cameron, going back to the wage number, the february wage number kicked off some intensive volatility. it is hard to connect the story with the market reaction. it seemed to be a factor. time, you think this 2.9%, did not seem to do much on the equity side? is, looking at

the immediate rate of change, in january the s&p went up 6.5%. i was on here in january talking about the hang seng going up every day for 18 straight days. the backdrop is different. it took two months to go up 6.5% in july and august. also the fixed income move preceding this has been a lot less violent because investors are short, or underweight. today's move was a big one. again, treasury yields moved up in january. there was upward momentum in yields that was writing pressure for stocks whereas recently treasury yields have not gone anywhere. >> not even 3%. recommend people be

invested in stocks, cyclical, betting on the strength of the economy. not getting defensive. what would change your mind? what arenot tariffs, going to be the risks signs going forward? >> yeah, tariffs are something you have to watch. you have to watch in the context of confidence in corporate profits. not been a lot of economic impact or impact on profits through the $50 billion so far. as we put more terrorists, they act as a tax. companies have choices, particularly american companies, do you pass on that cost or pass it on? for earnings are very high. 25% earnings growth in the second quarter. 10%, 2020, to 2019,

another 10%. expectations are companies will continue to earn. we have to see that. if tariffs dampen growth, investors have to rethink the equity mix they have. right now we believe the fundamental conditions in the u.s. support being positive on equities. >> thank you so much, anthony saglimbene, ameriprise strategist, and cameron. coming up, trump going all in on china from north dakota. sitting.hreats are we will head to washington. from new york, this is bloomberg. ♪

i am mark crumpton with first word news. the new york times has responded call for jeff sessions to investigate the anonymous author of the op-ed. we are confident department of justice understands the first amendment protects all american citizens and it would not participate in such a blatant abuse of government power." it says president trump's threats underscore wireless safeguard the writer's identity. presidents held a summit on syria as the offensive looms. with vladimiriran putin and the turkish president

may determine whether to engage or halt military action targeting the northwestern syrian province. yuan envoy for syria says any proposal to avoid what he calls the biggest to military and tragedy at the end of a horrible recent conflict must begin a chance. he is also calling for protective evacuation routes for civilians if they want to leave. people,reponderance of 98.5%, are civilians. said the assad has feeding terrorists remains the priority of the government. say this is the next gold.

mark: the signals of that meeting are that they intend to continue talking to avoid a potential catastrophe. millions of people covered under the affordable care law will see modest premium hikes next year. some of your price cuts, according to the associated press, which found obamacare marketplaces seem to be stabilizing. global news 24 hours a day on air and that tictoc on twitter, powered by 2700 journalists and 100 20s in over countries. i am mark crumpton. this is bloomberg. president trump issuing a terrorist threat from air force one -- another.e added behind that, there is another go billion dollars ready to

on short notice, if i want. infor more, let's bring shaun donovan from washington. thank you for being with us. what is president trump's ability to impose additional tariffs on china? >> he has the authority he needs to do this. he is acting and has been acting against china on the back of , section 301 which has not been used very much since the creation of the wto. he has this authority. there is not much congress or anyone else can do to stop him. talking about changing

the equation, which it does. this is going all in on a trade war with china. joe: all in. earlier, weon tv are still talking, we have communications with xi. what is the status in terms of your reporting? >> what we have been hearing for a long time is it is low level stuff. we saw this when it was mid level officials, about possible talks at a higher level. there has not been a high level negotiating going on between the chinese and trump administration. the answer is, there is a simple reason for that, neither feels like bending right now. certainly the trump administration does not. the chinese value and capitulate . this is going to drag on for a while. these 200 billion in

chinese imports being hit, that is going to have an impact. if you go with the 267 president trump was talking about, that takes you to all imports from china in the u.s., something like $505 billion last year. >> should be interesting. no deal with china. no deal with canada or mexico. we saw a headline, no nafta deal will be reached today. that is not a surprise. it did not seem like that was going to happen. what happens next? and theyack next week drag on. for some time. the next deadline is the end of the month when the administration used to present a deal to congress. it could be some wiggle room

using trade negotiators all the time available. it is hard to see this getting wrapped up soon. we should expect a long september. it was steamy in washington today. it feels like the heat is coming out of the usdr building. >> no sign of cooling down. thank you very much, shawn, joining us from steamy washington. we've been talking about what the trade and tariff fight means for the public markets. let's talk about the private markets. joining us now with more is brian gildea, hamilton lane head of investment. we've been talking about the muted effect on equities today. implication for the private market. as we see this volatility, what does that mean for private equity? private markets love volatility. it creates an opportunity. they have long-term capital and

the ability to do diligence, they created a buying opportunity for managers. what about in terms of sectors or international versus domestic? what are the implement -- implications? >> for private markets, there will be a less impact because the companies tend to be smaller, which tend to be domestic-oriented. obviously to the extent it expands, people think about other factors as they are making new investments. >> i wonder whether this time is different in terms of volatility and value because there has been so much money that's gone into these markets and they've been trying to seek opportunities. are there fire sales going on you notow, or can deploy the capital? >> when people talk about the

asset classney, the has grown. it is spread out. the numbers are looking at a bigger set of assets than the past. in terms of deployment, it looks good. managers are able to match up the capital that is available with the opportunity. it is a good balance today. joe: how much of the appeal is not diminished volatility, but the daily volatility? fundamental values are going to swing around. we don't have to look at them every day on a market to market basis getting hit every time trump tweets. >> that is important. team that asset compares to the public market. if you look at rick adjusted volatility, it is still lower. >> when you see jitters, where are the opportunities? >> it is early to point out

specific opportunities. there are a couple of things to keep in mind. one is currency. for managers across geography, currents he could have a big impact. the other place is the venture capital space, given how important china has become as a source of venture capital. >> that could be one of the things that are negative for the see thisarkets, if we play out, a crimping of some of the investment in venture capital? >> that is one scenario. historically the u.s. was the largest source. that has changed in recent years. china has become a big source. money,at about u.s. which is interested in china, chinese internet growth, technology? does the threat of a trade were change that or is that something that can continue to some extent since it is not about shipping

goods? >> those are second and third order consequences. trump has not threatened bad. those are things to keep in mind. >> do you think returns are going to be lower going forward? >> we have not seen that. the data does not really show that. >> what kind of returns are you seeing? toit is hard to point specific time -- >> an annualized return of 8%, an average portfolio the past six years. >> most of our investors compared to a public market equivalent and look for a spread in excess of the public market. they are searching for 300-500 basis points above the public market. >> and you think that is possible. thank you so much, brian gildea.

we've got more ahead. from new york, this is bloomberg. ♪

>> it is time for the bloomberg business flash. media andf verizon's advertising business is in talks to leave. he has been unsuccessful in trying to build his unit into a digital content giant. he came to verizon in 2015. launch a fight to replace the entire board at campbell soup. he is unconvinced by the plan to sell two units. afellow investors pushing for

sale of the company. for the third year in a row, television ratings fell for the nfl season. philadelphia versus atlanta us saw an 8% drop in viewers. some have changed viewing habits, others may have to doubt because of player protests during the national anthem. i do not believe there were any last night. the papa john's founder is accusing the ceo of plotting to oust him. falsely accused him of racism to save his own job. he step down as chairman after admitting he used a racial slur. papa john's the says the allegations are without merit. that is your business update. comes to the crisis facing emerging markets, the doomsayers are out. there could be a silver lining. we will explore. this is bloomberg. ♪

in mark crumpton with first word news. john dean is taking a swipe at the vetting of supreme court nominee brett kavanaugh. says he is surprised that brett kavanaugh is not demanding every document be reviewed by this committee "unless, of course, there is something to hide." members of the american bar association have given the judge their highest rating of .ell-qualified former president barack obama charged back into electoral with a detailed sake of

president trump's style of government. mr. obama warned of dire consequences if american voters stand on the sidelines in november's election. he told a mostly student ofience at the university iowa that it would allow the politics of fear and resentment to keep their status. president obama: you have come during one of those moments. it did not start with donald trump. cause. symptom, not the mr. obama --

progress.e is preparing for his third summit with north korean leader g-un.ong-il and -- kim jon the 15-month embargo of qatar may have helped its economy according to the foreign economy minister who spoke to bloomberg in berlin. from an economic point of view, that is behind us. we are doing excellent. in point, from an economic point of view, it is a blessing. ni says that exports are up 15% since the blockade began. qatarition claimed that supported separatist movements.

bloomberg news point for hours a day on air and on tictoc on twitter. i am mark crumpton. this is bloomberg. ofie: let's get a recap market action. we saw a selloff in stocks, but not a huge one. we saw a bit of a slip with the dow underperforming the nasdaq. that was due in large part to comments on trade from the president, who says he is considering tariffs on another jointer and $67 billion worth of chinese goods. however it was the interest rate sensitive groups who did the worst. real estate and utilities were the two worst performers and equities. "what'd you miss?" some have drawn comparisons to the asia and financial markets

crisis of the 1990's. here to share insights on where look for risk or maybe green shoots in the dismal landscape our guest. what is the biggest difference between now and the beginning of the crisis? capital, and if you look at the lows relative to short-term debt, they were off the charts several times. it may mean the countries were in trouble. effect. the currency that is not the case right now. that arehe places gotuate, especially -- shellacked. this is short-term debt.

it's not at all similar to that situation. it may not be a meltdown akin to the one we saw. it can still be painful and go on for a lot longer given to the withwe have some hot money etf's funneling cash into these markets. >> absolutely right. absolutely right. is because the fundamental economic performance has a challenge, which i talked about earlier, too. it is relative to an external situation. you can come out of it and it can be very painful. but you come out of it with a manyped recovery that economies are looking for. typical e.m.s the recovery saw your economy

contracts, so you are starting to see some of that in turkey, for example. but some of your export start rebounding, right? era of those were in the growing shares and those markets . europe left or europe right. they were growing their exports. so, in that environment, eventually capital will come back and it will be all fine. so what is the growth story? what happens this time? >> if you go back, it will be growthestic demand story. if you are growing much faster, your imports will grow faster, right? not print their

own currency. take india for example. they are the fastest-growing economy among the growing economies because their exports are not growing fast enough and imports are growing and that is in solvable. lisa: i like the term they are getting shellacked. joe: the shellacked level. it sounds like they need a different growth model, the growth model that worked during the age of increased globalization is just not going to work. there is no external demand that will accelerate that fast. maybe china, but it's not clear. are there any other countries in your view doing anything different that could be looked at as a playbook? >> ultimately they have to get where they -- you do not have a balance between your

imports and exports. that is the issue. course, there is singapore, but they are not young anymore. joe: what about korea? >> korea is probably there, yes. so, here is what i'm struggling with. it all makes sense from an economic and fundamental perspective, but the money that has come into the emerging markets is not gone and because of the development story. it has gone and because of all of the stimulus from central banks. that's reversing now. even if they do everything right, isn't there a huge risk for another type of crisis, perhaps not remiss in of the want -- reminiscent of the war in the past, but another one? >> a slow-moving crisis, yes. people are getting nervous because the economy is

fundamentally in a position where inflation shock could and interest rates and there for the dollar. you're absolutely right. what i want to say is this is a different dynamic. it is very slow-moving. it could suddenly accelerate, but looking at the parameters -- yes, it does not inflate them. lisa: i do want to ask about trade also. when you look at the case of china, does that exacerbate some of the other factors? that china, you could argue was in a different spot then turkey or argentina, etc.? tightening trade tensions are not helpful for the emerging markets. they need to be in a situation where exports are not only not growing, they need to be multiplying. julie: does that to bit further into a potential crisis?

yes, if china were in trouble, yes, it would. a lot of them have linkages to china. so, the u.s. has a surplus. a lot of the e.m. has an account deficit, so it's actually a net demand. have talked about fundamentals and growth and growth models, people who want to make money, they look at currencies and the question is, has the line stopped going down or are we at a point where the downside risk is better than the downside risk. in your view, you hinted that some of these countries are seeing the payments come due and from a trade perspective -- and by trade, i mean global trade -- are there opportunities given the degree of shellacking we have seen? this leads to the improvement of the currency and leads it by a long time.

you can keep going down. current economy had started to improve and it kept going down. so, you are seeing improvement. where -- ire places would look for places where the current account is improving and start to make some allowance and try to get in. he is going to get the word shellacking in every episode from now on. joe: i want to sound sophisticated. srinivas thiruvadanthai, thank you. >> thank you. julie: trillion dollar company is getting hurt, axel one of them. and this was the discussion ahead of a product long -- product launch next week. this is bloomberg. ♪

lisa: let's talk terrorists -- tariffs. china could be impacted by an if the trade war, even economy is not directly impacted. how much does a trade war hurt the chinese economy and what are use ands china can sustaining encountering the trade war? is monetary policy possible? i'll think so. allow me to say this. , aneed to have a calculation mathematical model to calculate war onact of the trade the chinese economy. they are analyzing this.

it is so large and as important 500 billion u.s. dollars. impact.s a small with the cool dutch would be trolls, the confidence is a sign. -- with each would rules, the confidence is a sign. people may become nervous. with the trade war, they may change their minds in terms of stock market investment. it is more reason for the portfolio.

i think actually this is much impact.hen the another is in the distance of the trade war, when we see the u.s. function against the economy especially in emerging it makes people nervous. , the sentiment will stabilize. lisa: that was the former governor of china's central bank speaking earlier on bloomberg. julie: of next, for marijuana becomes legal in massachusetts, -- before marijuana becomes legal in massachusetts, it has to be tested. any volunteers? stay with us. this is bloomberg. ♪

julie: apple is caught in the crosshairs. they just announced that trump's would affectffs nearly all of it products. losing us, mark gurman from angeles. i'm a little computer spirit if the government is imposing these why does apple need to tell the government how it's being affected by them? how is this filtering down, i guess? >> that's a good question. under last earnings call, apple ceo, tim cook, said there is one

set of goods that could potentially affect apple products. apple took the next month to investigate which of its products fell into those categories. u.s. government has been soliciting comments from companies that could be potentially affected so they could get their opinion before the going to place. this is the response, in the hopes that their response, in addition to others, will deter the u.s. government from implementing these taxes on the consumer. julie: mark, that is what i wanted to go with. how do we determine whether this is -- i don't want to say propaganda by the companies, basically a pitch saying how horrible is this. how real is this? apple's positioning is what i meant by taxes on the consumer. that is what tim cook essay on

the earnings call. always leave the u.s. government, the trump administration has a different opinion and that is why they are proposing these, but the letter does indeed they that the affect key apple products, mostly in the accessories category. the apple watch. they give examples of how it has saved people's lives. applere saying the pencil, which is a stylus for the ipad -- there's also tariffs afecting the mac mini, computer that apple has sold for many years, but has not updated for four or five years. real quickly, what are you most looking for juicing next week when apple unveils its new product? mark: definitely the big new version of the iphone 10 will be

the big hot item. lisa: thank you very much. "what'd you miss?" a boosta stocks getting from easing regulations. pot sales are legal in massachusetts, but the product needs to be tested at a lab first. emily chang looks at the process behind it. ♪ the next state in the u.s. to sell recreational marijuana is gearing up slowly. in sales are legal massachusetts as abdul i first, but by law, it cannot be sold of july 1,d -- as but by law, it cannot be sold until tested in a lab. >> the biggest heart is the life -- is the license to test it. before him be sold, it has to be tested. emily: now it can.

the labn straus runs that has been testing marijuana since 2015. >> we have 13 or 14 clients in the medical marijuana space. flower,lients send concentrates, and edibles from their grow house for testing before selling to medical consumers that their dispensaries. we are probably testing six seed samples a day. we expect that to go crazy once recreational comes on board. i imagine we will triple or quadruple our samples, probably in the next year. science officer breanna cassidy oversees testing in the lab. testing takes between 48 and 72 hours. test marijuana

is key to the business plan. one uses a petri dish to show harmful microorganisms. >> we get a snapshot of the dna, at whatmicroorganisms ratio are present on the cannabis on the shelf. emily: which technique works debate.s up for >> certainly september, the end of october, i think, the does and series that are up and running now will be able to sell. emily: labs still need to be expected and the state needs to roll out software to monitor's sales at all stages. is market in massachusetts expected to hit $325 million this year and reach a billion dollars by 2020. not profitable's because it's all money going out

to get the infrastructure up and running, but i'm hope and by the hoping byter -- i'm the first quarter of 2019 we will be showing a pretty significant profit. emily: massachusetts is the seventh state to legalize sales of recreational marijuana, and the first on the east coast, where it could want nate -- maine, newhbors -- jersey -- to go likewise. >> this is just in its infancy. emily: emily chang, bloomberg. so, we have executive announcements for tesla. it looks like jerome gilman will be the new president of automotive at the company. he is currently the vice president of worldwide services and deliveries, and it looks -- i'm terms of others -- the v.a. ofe

people -- the vp of people and places. kassevert. it looks like this places the hr he would said permanently stay on leave. it is unclear who the automotive resident replaces -- president replaces in this particular case. a couple executive announcements following departures. joe: coming up, what you need to know for the week ahead. ♪

♪ on wednesday, apple will hold its product launch event, we talked a little bit about that. >> and the u.s. cpi out thursday morning. >> more economic data on tap, u.s. retail sales on friday. we will see if that can turn around stocks. "bloomberg technology" is next. >> have a great weekend. this is bloomberg. ♪

♪ >> i am emily chang in boston, this is "bloomberg technology." tesla is feeling the burn, to senior executives resign and musk smokes pot in an interview with joe rogan. massachusetts is the seven state to legalize marijuana. we will look at the drug being regulated. plus, jack ma is considering life after heading alibaba.