>> i'm mark crumpton with first word news. north r and infant in carolina were killed today when a tree fell on their home. they are the first two of hurricane florence. police in wilmington say the father was taken to a hospital treatment. the hurricane came ashore early today pounding the state with and high winds. the national hurricane center of raine than 16 inches has fallen at locations in outheast north carolina, and another 20 to 25 inches are on the way. has slammed yphoon into the philippines on the northeastern coast. storm's fiercehe

winds and blinding rain ripped knocked oof sheets and out power. more than five million people are at risk from the storm which to pack winds of more than 170 miles per hour. former trump campaign chairman paul manaforte has led guilty to of aederal charges as part cooperation deal with prosecutors. the deal requires him to fully and truthfully with special counsel robert mueller's russia investigation. manaforte.for mr. he's accepted responsibility, nd he wanted to make sure his family was able to remain safe life.ve a good he's accepted responsibility, and this is for conduct that and back many years, everybody should remember that. >> the move allows manaforte to trial.a second criminal he was convicted last month of financial crimes in a

separate trial in gentleman gentleman. president trump wants tariffs on about $200 billion more chinese products. has learned that trump hase instructed his aides to proceed with the tear rivers attemptshe secretary's to restart talks with beijing to war.ve the trade retaliated with tariffs on an equal amount of exports. lobal news 24 hours a day on ir and at tictoc on twitter, powered by journalists and 120 sts in more than countries. this is bloomberg. >> bloomberg world headquarters in new york.

this is bloomberg markets, the close. >> caroline: we have 30 minutes until the end of the trading day. markets.ck in on the we're flat on the s&p 500. the headline, the bloomberg scoop that once again trump aiming ill be fiercely at $200 billion on chinese new pushing into a level playing field. on the upside is energy, downside, healthcare. bloomberg dollar marches higher, 1%.t 3/10 of it's forcing some currencies into the red but at the moment markets on a stock basis, we're just in the green -shares. the state emarks at department, he says he's resolved to defeat foreign election.dling in our this comes before the midterm elections. e also talks about personnel staffing at the state department saying having a full senior team at the state department is

critical. he adds that he needs confirmation of the undersecretary of management. of rtheless, the list vacancies on the state department team is long. we'll keep it posted on whether makes any comments on north korea and the prospect of iscussions between president trump and kim jung-un. in the meantime check out his comments on live go. to our top story. special counsel robert mueller's fromsecuring a guilty plea paul manaforte. manaforte also has agreed to ongoing with the russian election interference probe. more let's welcome a professor, jens david ohlin. it's been said that it was a everyone because it allowed the president to not have to deal with the trial in back yard, before midterm elections but now we've seen that manaforte has agreed to with the russian investigation. is this a clear victory for

robert mueller? it's definitely a victory for robert mueller. i mean, he gets a guilty plea from manaforte. the only thing that mueller is really giving up is the maximum manaforte, but a plea agreement, i think, contemplates that manaforte will substantial ive a prison sentence and he's also going to have to forfeit a lot assets, and so mueller isn't giving up a lot, a little, and i think that's why mueller deal.d the >> it begs the question, why on earth manaforte did plead guilty. is, it's an interesting question. surely looming over his decision tested out that he a defense strategy in his first trial and it failed and he was counts so he ight must have imagined and his lawyers must have imagined if he trial with e second the same strategy it was likely not to yield a good outcome for him. think that's really what he was trying to achieve, some certainty. sentencea lower prison and i also think the --

forfeitter is important. with ome to an agreement mueller's team about which assets have to be turned over to the government and which he retain. able to he has to give up most of them but keeping a few things might family.rtant for his >> going back to manaforte cooperating with federal prosecutors, question is what he it will implicate. how will we find out that information? when will that make itself apparent? i think it's going to be a while. he'll be cooperating with but i don't m, really think we're going to get any public information about, to muellerat he said and what kind of evidence he's turned over the one way we'll find out is if mueller builds a case against a new individual or files an a new ent against individual and it's clear that the evidence for that indictment flows from manaforte, but other that, the only way we're going to really know what provided n manaforte is when manaforte is eventually sentenced. at that point, mueller's team to the court and say, yes, manaforte's

cooperation was really helpful say actually, manaforte's cooperation turned out to be not very consequential helpful to us and that will factor into the sentencing decision. remember something another case.n when it came time for him to be entenced mueller's team came back and said he didn't provide much use at all. it plays into how president trump will deal with paul manaforte, too. key think that's the question i want to get to. how does this implicate jump, could we see the firestorm that would be unleashed if a manaforte's go way? >> both of those things could happen. it's a little bit unclear but realm rtainly within the of possibility that manaforte has information about the trump ampaign's connections with russia. you will recall that manaforte was very connected with not only russia russia so pro

ukrainians because of his political consulting, in the ukraine, and so he had a lot of contacts with russian so it's very possible if there were so it's very possible if there were connections between the trump campaign and russia, at least some of those would have flowed through manaforte or manaforte might have known about them. so oligarchs, it's possible tha rovide that information to mueller. if he does, i think it's a total game changer for the that igation, and at point, it's also possible that trump might feel that he wants o pardon manaforte, but if trump is going to pardon him, it's better for him to pardon manaforte before he talks rather than after. >> so many things to calculate here, professor, rudy giuliani, is representing the president, his attorney, has said that he's been in contact manaforte's legal team. does that continue now that paul anaforte has agreed to cooperate with the government? >> it shouldn't, and if it's that uing, then i think would be deeply problematic. i don't think giuliani has said nything today about the nature of the cooperation agreement but the way those cooperation

they ents work, is that are only ethical and appropriate of the variouses clients all line up together. so when trump and manaforte were on the same side of the investigation, it was appropriate for there to be a ommon defense agreement or an arrangement between their attorneys. but now that manaforte has cooperate with mueller and, in theory could, be providing information about manaforte puts really in an adverse position to trump, and their lawyers should communicating anymore. > thanks to cornell law school professor jens david ohlin joining us from ithaca. breaking news. there are four deaths related to hurricane florence according to "the new york times," so the to h toll has been upgraded four. we'll continue to keep you posted as the storm delivers pelting rain and flooding to north carolina. from new york, this is bloomberg. ew york, this is bloomberg.

>> with less than 20 minutes to go to the close it's time for "top calls." a look at some of the big movers on analyst recommendations. reinstated to be over its flip ed cart investment. the downgrade citing the store's performance asking the question is this as good as it gets? finally, needham boosting price target to a street high citing increased confidence. chipmaker will take more share of the interference market with one of its newest florms are some of your "top calls." meanwhile, cooler retail sales americans took a break from spending after very strong numbers in july. sales at retail stores and rising only slightly. welcome semien siegel. bearish on the

outlook for retail. what do you make of these looking pretty good even though retail dropped more than expected? >> i'm officially out there the retail bear. everything is back. i think what's interesting, this take any news headlines across this space. retail is never as dead and it's alive right now and today the two crack know data points are interesting because you have consumer sentiment that's beating and the actual sales hat are not so where is the disconnect? what's happening people are willing to spend and there has concentrated effort by brands to sell fewer goods, with sweaters on the shelf you can margin more per sweater. i doesn't mean people are buying more sweaters, though. you are saying this is an inventory game in which retailers have perfected their inventory management? . >> i think they have spent, if you go back to 2009, we have a for 10 years, let's look at the retail -- >> way too much in stores. was r five years the game you promote 10%, i'll go 20.

you do 30, i'll go 60. no one wins. so collectively the retailers get together, not actually but e can imagine this happening and they say we need to make fewer things. otherwise we're going out of business and that's what when you see in 2016 is there is just a much healthier picture of inventory the channel. i think that changed last holiday. i think it went unnoticed and changed is you see companies like tjmaxx and heavier n with much inventory levels. that's the offprice segment as segment is clean so if i can hide my product in offprice and it doesn't show up sentiment will be strong. we'll still think we can get cheaper sweaters. the happens when they hit floor? >> we saw today's data running up to the close, let's do movers. a company that you cover, go barish, one of the best up 5.6%, yes, it's selling off assets. do you think this is a good move generally worried about this company?

>> the best part of retail is 5% day.ust another [laughter] >> we have to look in context to see where it's coming from. a iously the stock is down lot. they have done better than many others. their business like portfolio managers approach their portfolios and historically throughout their past they have looked at that needed to be shed or should have been shed and they have been really good at allocating with their dollars businesses that were working. right now, if you think about drag versus f that having two main brands, the move makes sense, and from that perspective there is a little relief. at the end of the day, someone because l brands not they are saving -- they will buy it because they believe in it. bestry quickly your single buy? tjmaxx.e best, >> owner of tjmaxx and marshal's. tjmaxx. be keeping a close eye >> owner of tjmaxx and marshal's. >> we'll be keeping a close eye on that one. always great to get your opinion.

analyst semian siegel with us. >> close just 10 minutes away. we're keeping an eye on stocks. on the ck with more tension in trades with china. the green back is higher. the green back is higher.

>> this is counterdown to the close. is a gecht h us the effect of the traded lines. >> effect is the operative word. this again? i feel like the market reaction,

s i was kind of confirmed by that, because 200, 267. oh, whatever. scarlet: i'm glad you bring that up because if i look at loomberg and the charts of the s&p 500, down on nasdaq, here the effect but since then we've back to the y unchanged line, and the major index is really not ending the with any kind of direction. you have financials, industry, leading gains, financials up of 1% and sol of those bond proxies, utilities, for estate investment trusts, lower. real estate investment companies off by a percent. by half of 1%. >> the hurricane knocking some out.ties explosions in boston. >> let's dive deeper into the action. may be barely moving

on the day. it's quite a week. up 1.2%, on pace for its best weekly performance in two months. by the fact that the 10-year yield up six basis bonds are s us haven pulling back. the yen also declining against dollar. the fear index lower. overall we're looking at a risk picture. he bulls are out but when you're looking at the markets you also want to make sure everyone confirms. something that stands out could attention to the nasdaq. the nasdaq is on pace for its best week since the end of last week it had its worst week since march. this is a monthly chart of the nasdaq. of these bands represents a one-month performance. in white it's an up month. yellow, a down month. we see over the last five years not a lot of down months but in 2014, 2015, and 2016 when there weakness, we had a lot of up and down. earlier this year, two down in february and march.

march, of course, and then acebook debacle, right now, nasdaq is on pace for its worst monthly performance since march. it will be interesting to see, the month is only halfway through, whether that happens but if it does it could e some sort of warning signal worth paying attention to in this risk context. costco.ooking at the shares taking a little bit of it g down today and a has to do with this note that came out this morning. -- primary idea behind it they bottomed out in may and since then they have gone on a record run. s&p 500 consumer staples 11%.x up the concern is this may be as good as it gets. it may not get much better all that was built into the stock over the past few months, that's about it. company that's also lower for a different reason is wal-mart. it's also part of the same but we staples sector

had a different analysis no doubt from goldman. reinstated his coverage on this company with a neutral rating. he has suspended coverage back to that, he had a buy rating so a lot of folks were looking at this as a downgrade, effective downgrade and the shares moved lower there. it's down for a fourth straight it closes at f this level, it will be a second for ght weekly loss wal-mart. julie? to l i'm going back brands which you were just siegel.ing with semian 24 of them after 123 years in bought the brands chain in 1985, although it only had stores in new york city 2008. l brands share are higher, but terribly alysts are optimistic. randall saying this is a smart brands butmove for l he calls victoria secret broken and overstored. breaking,he issue and

bath and body works peaking. if you look at l brands versus peers it's already done pretty poorly, so what we're seeing today represents a pop. take a look at bloomberg 'm looking at index of other apparel and shoe retailers. i went back five years because it was tracking pretty closely we saw. until really 2008 where we've seen a lot of these other and l brands ver has just kept on going down. caroline? wrap-up, julie, and the markets team. let's go to what's been driving some of the movements. president trump is said to have nstructed the aides to move forward with $200 billion more tariffs.e despite talks to quell the war.ing trade for more let's welcome sean. it feels like we keep getting headline.

when will we see the announcement of tariffs? >> we're definitely in a cycle, we?'t we've seen it this week, the ycle of we're going to talk, put tariffs on, talk, put tear rivers on and that will be repeating through the fall. we're hearing on the tariffs side is that the $200 billion that they have been may ng at, and that number change slightly, come out, but of doinge final stages that they are working through products. there is some debate on whether to pull some products out. to absorb a lot of the public comments from these es that came on things. we're expecting something in the coming days. some been saying that for time, but the important thing that we heard today out of the white house, and this is based a meeting yesterday, esterday afternoon, at the white house, in which the u.s. trade representative and senior officials were meeting with the about all of alk this, the president gave clear instructions. let's go ahead with this. for a second,g up

to understand, because as i was saying earlier i have trouble placeg track of what's in and what's not. what is currently in place? > what's currently in place is $50 billion in imports from china. we've had two that were put in over the summer. $34 billion and then $16 billion effect last o month. we've now been talking about since july.llion it's been out there as a threat, and if you remember, there is he threat from the president just a week ago of another $267 billion. that there ist is a movement in the white house to keep increasing the pressure, up the pressure on beijing. there are some in the white house who thinks that will bring youchinese to the table and get a better deal. and there are some in the white house who just think, well, the lly tariffs, these are way long term to rebalance the trade to get at that trade deficit that president trump has to bring down. >> so this is a process and it's proving to be a long process. we've been d,

talking about this since july. you mentioned as well that companies have been commenting comment e public period. do those have any impact? does the administration change its approach because of what hearing from companies? >> that's what we're going to see. july, we've got a list of ,000 products that was put out for comment. how much that list changes is oing to give us an answer to that question. companies came here to washington over six days and these mmering that tariffs were going to hit them in a number of places. the president is kind of impatient, is one of the things we hear. he wants to move quickly on this but at the same time, there are in the administration who also worry about the possibility of lawsuits by companies. we've already seen some of that to of legal action related the steel tarries earlier this year. you know, there is a process

that the white house needs to go through here. scarlet: thank you so much, shawn dunnan. for >> i think a fair amount of the corporate impact is in the. we analyzed the 600 earning calls for the second quarter and 70% said they would pass on impact from trade. sector wegly, the think is most exposed, tack, they talked least about trade. companies seem relaxed at this point. joe: the lack of concern in the markets portrayed echoes a broader lack of concern in the market from anything we see. anything politics, midterms, none of it seems to matter. is there a link or is it paranoia? >> if you think about how the market has priced trade, it has

been a rational environment. early in the spring, we were pricing for all of the rhetoric to become policy. as we move through the summer, the rhetoric shifted. we have come to some near-term arrangement or close to with europe. canada seems to be on deck. the only bilateral trade relationship seeming to be questionable is that with china which is the reason these stocks in particular have been under pressure in the s&p 500. frankly, we have been pricing this for all summer. the president is tweeting $200 billion again and that is nothing new. we talked about it weeks ago. the market already absorbed that. and with the stoxx, we closed completely flat -- stocks, we closed completely flat. scarlet: for the week, all three

major indexes closed higher. for the s&p, it was a nice weekly gain in the past 11. the dollar was firmer as well and 10 year yield moved up reflecting selling and treasuries. tack, as a group of little bit weaker here. amd is the best performer of the day. you have this divergence. in terms of what else is moving the market, gina, you were looking at the couple of different things including the midterm elections and how sectors have been shifting. isn't it early for that? happened thing that was a breakout in health care stocks. they did really poorly for years. suddenly, they have broken out over the summer months and part of the reason is much better than expected earning trends in the second quarter. they generally beat expectations for earnings growth.

i also think you have to give may be some oft these stocks are pricing in an environment where there is no legislative risk coming out of washington. this is the group that suffered ast once we start to price in republican administration and following the 2016 election, this is the sector that saw the great's valuation compression following that election year. and i doe these signs not think it is coincidental. anytime you improve the predictability of the earnings stream you improve the st ocks. ben: were not worried too much. some sectors are going to benefit. the moreand cons are

administrative measures could generate more equity volatility which is low now. we do worry about about that. flipside, one of the few things democrats and republicans agree on is infrastructure spending. scarlet: we've heard that one before. ben: but that might be the one thing that gets through a gridlock and there were sectors -- there are sectors that would benefit. caroline: i want to go back how we shrug off these risks and you said volatility is something to worry about. would we go much higher inequities? had 25% earnings growth and 4% gdp growth in the u.s. the question is, how quickly do we decelerate on their. i would argue -- there. i would argue that it is above average and they don't look like as good as we had in the third quarter but markets should move moderately higher. scarlet: you said markets are

becoming shockproof. what shock has not been priced in and could deliver a crushing blow to u.s. stocks? ben: volatility is the one thing that worries us. i think valuations have compressed lower and we have good visibility on the fed. we had a positive surprise there. equity volatility looks low. there are some risks out there and we have talked about it. if valuations come down, you have a pretty big buffer with earnings outgrowth but it will only take us so far. joe: the chart we have on there now catches my eyes. the two-year and 10 year yield are both climbing full -- high eveneaningfully as we have the benign inflation writing. how you think the macro outlook affects the market? it is that relentless march higher in the expectations for the fed could push prices higher in the two-year yield.

is that the threat or is it happening for good reason? gina: in a lot of ways it happens for good reason. it has not been a threat until the two-year yield suppresses that. this ongoing steepening environment is not meaningful. it is notable over the last few weeks you have seen a modest steepening in the curve as opposed to a flattening environment which is a little different and stimulated rotation to value as opposed to growth. that has been the only story in the market for two years running. where get an environment you see a little bit of steepening going into 2019 the feds back off a little bit, that could change the outcome. for now, the flattening is the flattening. it has been this way for a long so it's not particularly consequential. joe: let's talk the global picture. it starts to feel the gap between u.s. performance and the

rest of the world is driving people crazy. so it's not particularly everyone is trying to figure out when it will converge. when is going to -- when is it going to converge? ben: not yet. we talk about trade risk and it is logical that the u.s. outperforms here. that is absolutely not the case for japan or for europe and asia. they are very exposed and have pretty weak growth to begin with. they are in a much more difficult cyclical position. joe: i'm guessing the white line is the u.s.? caroline: yeah. let's look at e.m. here. we see a slight pickup in emerging markets. ben, will discontinue? ben: as long as the dollar is on the front foot, and we think it will stay there, yen will be under pressure. --e.m. will be under pressure. u.s.,t: outside of the

gina, are there crowded trades people have piled too far into? say the crowded trades are going out of all of the non-u.s. stocks as opposed to into anything else. i think ben is spot on, you have to see a trigger tutor -- trigger to reduce the trade. i think the trigger is the dollar. the midterms could be a trigger for the dollar as well or if the feds backpedal. over the last month or so, we hear the fed talking about potential he come 2019 and the market is not pricing that. any backpedaling by the fed into 2019 or europe producing that are growth, you would release concerns with brexit over the next few months. scarlet: what about comments on

president trump over the dollar as well? could that be a catalyst for the dollar and the rest of the world? ben: probably no more than short-term. is that the rest of the world is doing nothing and continues to backpedal. dollar as they do, the will remain where it is. china is one of the very few e.m.'s that has policy flexibility. they have been a bit reactive and i would like to see them proactive, but they run balanced fiscal policy. infrastructure spending has come down to zero. they could increase that. monetary policy is tight and they have just begun to loosen it. it is one of the few markets that it can control its own destiny. bit in the market for foreigners and we will have to wait to see as it changes. caroline: many people think

china is the big concern and a hefty weight when it comes to the emerging markets. do you will abide by the fact that china could be the good state and, therefore, does that help everything else? gina: it's being down 20% has already helped its case and they are easing monetary policy. if there is any risk in e.m. is that everyone is piled into india trying to avoid the risks everywhere else. they have gone to india inserts of shelter. there are opportunities emerging in the rest of these markets that have experienced extraordinarily did -- extraordinary declines. i would add brazil to the list like china that are down a lot seeing improvements for prospects going over the next 10 or 24 months. scarlet: what will you be watching for in the next week? gina: just a week? [laughter] gina: what is interesting today is this rotation we see into

value cyclicals which has a modest rotation over the last few weeks. i would like to see follow through on that. for the first time in a long time, the top factors in our library art value performing performingour value factors. ben, final thoughts? it's a risk case and potentially a big price shock out there with venezuela or iran. if that happens, there is a lot of inflation or. scarlet: so watch for oil and watch for election. -- and gina,ina, thank you so much. that does it for the closing bell and for me, romaine bostick is stepping in and we will have the latest on hurricane florence's deadly wrath.

we're live from north carolina. ♪

caroline: live from the world headquarters in new york, i'm caroline hyde. scarlet: i am romaine -- >> i'm romaine bostick. caroline: the stock managed to pick up their lows after try to trade tensions -- after china trade tensions. joe: "what'd you miss?" caroline: florence claimed its first victims. they are reports of four deaths and numerous homes without power. argentina will have to wait for the $300 billion it requested from the imf until renewed talks

conclude. onegal tussle is weighing stocks. why a u.s. law could pose headaches for cannabis companies and investors. our top story this hour, hurricane florence. it is bringing driving wind, torrential flooding to north carolina. the new york times reports four deaths related to the storm so far and hundreds of thousands of people have been evacuated. 1500 fights have been canceled. about 2000 north carolina residents have taken cover in shelter. david joins us from fayetteville, north carolina. what is it like, david? now, i'm seeing a flickering of power. maybe we are some of the walk you -- the lucky ones that have not lost their power. people are still feeling the

worst is not over. farmers and they are waiting for the rivers to rise more. hours are8 to 72 intense. joe: is that because of the persistence of the rain expected? downd as the water rolls hill and stream, eventually, can relating and picking up. it takes a while for the water to build up in the rivers. it will not be instantaneous. romaine: have there been any barriers or temporary levees set up to prevent flooding? david: yes. there was a report of some of that happening in one of the lower counties in the southwestern corner of north carolina. we were watching troops build up sandbags across they rail line

to prevent what they thought would be future slumping over there. thank you for your on the ground feedback, david. stay safe. manufacturing could take a big hit from florence. boeing and others are in the path of hurricane florence. even if they dodge a direct hit, they could face big storm related damages. us on theuest joins phone. what are companies having to tackle right now? what are the key concerns? keyor carolina, the concerns are the closures and safety of employees. the thingentioned, i'm thinking about and i am sure many people are thinking about looking down the road, is critical infrastructure. .ou mentioned the rail line

in that area of the storm, we charlestonrtes like charleston because --modern supply chains moderate supply chains, there is a lot of auto-parts trades going through. if there is damage to the , then you have massive disruption of the supply chain. today, we have all the complexity. the rains and flooding are potentially a big problem. romaine: we have a lot of complexity but this region is no stranger to storms. how fast or what sort of preparedness to these companies have to be able to get things back up and running once the storm passes? the companies are going

to be well prepared. boeing moved a lot of their 787's out of their plant. bmw expedited shipment of their cars. the biggest risk downstream maybe supply of parts. how an autoat factory works these days, there are a lot of parts coming in time from lots of places. if you are supplying parts to an auto factory and you shut down your line and truck them parts, they often talk about that costing them $10,000 a minute or numbers like that. it reflects how a lot of parts imports and exports out of , one of the major imports into charleston, so disruptions will happen. if you have that

just-in-time manufacturing, all it takes is one part to be missing which is a big problem. you expect to see localized price spikes trickling into broader inflation data? so because not think most of the parts are on longer-term contracts especially if you talk about auto-parts. those are purchased by model. in will see spikes transportation costs as people try to expedite or gets around any temporary stoppages. that is why protection to the infant structure -- infrastructure is important. south carolina has done a good job on integrating container shipments with what they call inland portes. they supply an area much wider than south carolina. it is the southeastern u.s..

if anyt have surprises infrastructure is hit which could cause problems for a larger region. joe: willy, thank you for joining us. later this hour, why fema officials keep a close eye on the waffle house during hurricanes. from new york, this is bloomberg. ♪

romaine: canada is set to legalize cannabis on october 17, but the u.s. is not which is posing difficulties for investors. any participation in the cannabis sector could result in a permanent ban on traveling to america. let's bring in a reporter who

reports on the stock for us. gottenone thing that has lost in these stocks is that it is not legal at the federal level in the united states. these are canadian companies but primarily u.s. investors. craig: a big part of the trade up is the money pouring into canada. it will be legal it in a few weeks -- legal in a few weeks. a lot of these valuations have to deal with the u.s. loosening regulations. that is what the prizes. the da considers this the worst of the worst. romaine: how many states and we have this that allow it on a recreational level? craig: a few dozen. you can't cross state borders. it is a very restrictive market. joe: ultimately there will not be bans on people entering in the u.s. that work for these companies, that given the run ups in the stock, the could

take the slightest news. craig: that's right. the border patrol considers marijuana illegal and people in the industry to be drug traffickers and they could ban them for life. people at the industry have gotten questions at the border. some of them have to lie to border agents. this is an investor in pot companies. it could become a problem. think about the ceo of canopy growth. he has partners in rochester so is he going to be banned from seeing them? it was a reminder to investors that this remains illegal in the u.s.. caroline: i'm looking at tilray which has 10 billion valuation. these are not widely held stocks which is why they are so volatile. craig: it all changed when constellation announced they were making that investment in

canopy. that was the tipping point. tilray is up 500% since july when it started trading. used tore still getting this. romaine: when they play this as forstors, do they play this the potential in the u.s. market or outside? canadian market could not justify these valuations. just selling marijuana medically and recreationally within canada, it is predicated on the idea that other markets will open. joe: and because the stocks have gone nuts, we have seen short-sellers piling in a big way. we have a chart showing the big ultimately,rt, but if you're shorting these stocks you are taking a big risk. craig: absolutely. there's a clear market, it is just a question of the regulation catching up.

people like marijuana and that is a known fact. a lot of people tend to like it. if the regulations catch up in the u.s., it will be a gigantic market. caroline: thank you, fantastic. a quick check of the latest business flash headlines. wells fargo has room to grow despite a limit on assets. it is not happening yet. expectssays wells fargo loans to decline in one of their quarters. the cfo blames competition across consumer and commercial categories. one china group is backing away from its bet on movie investments. the richest person in the world

says it is dangerous to vilify the news media. the washington post owner criticized president trump in a chat with david rubenstein in washington. >> i will say this, it is a mistake for any elected official , in my opinion, to attack media and journalists. [applause] >> i believe it is an essential component of our democracy. caroline: you can watch that interview with jeff bezos next week on the david rubenstein show. any of you see that story of carney adopting amazonian techniques? romaine: this has been the rumor about the way he has been running the bank for a while. if it works for him, it works for him. joe: i missed it.

i will look at it in the break. caroline: "what'd you miss?" you missed that. this is bloomberg. ♪

mark: i am mark crumpton with your first word news. the new york times reports for people have been killed by hurricane florence. two deaths happened in north carolina where a mother and infant died when a tree fell on their home. the national hurricane center says more than 16 inches of rain has fallen at locations in northeast and southeast carolina and another 25 inches on the way. the white house says trump will visit the hurricane impacted areas sometime next week. paul manafort agreed to cooperate with the special counsel's russia investigation as he pleaded guilty to federal charges.

ais allows metaphor to avoid second trial that could have exposed him to greater punishment. his attorney told reporters manafort "wanted to make sure his family was able to remain safe and have a good life. he has accepted responsibility." the deal gave robert mueller a who led the trump reelection effort for a crucial stretch during the 2016 campaign of the white house said the outcome had nothing to do with that. says histary of state obama era predecessor john kerry has been actively undermining u.s. policy on iran. the comment to reporters today came after president trump what theim of holding president described as illegal medians -- meetings. >> what secretary kerry done is unseemly an unprecedented.

this is a former secretary of state engaged to the world largest state sponsor of terror. him, these are his answers, he was talking to them and telling them to wait out this administration. mark: secretary kerry was an architect of the iran nuclear deal. kerry has met several times with iran's foreign minister since leaving office. the bank of england governor said the central bank is compared for all brexit scenarios. he said although brexit presents a challenge "the bank of england is well prepared for whatever path the economy takes." yesterday carney gave government administrators a stark warning of the dangers of the no deal brexit. 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 am mark crumpton. this is bloomberg.

caroline: we just got breaking on the pay of goldman sachs bankers. ass is set to be number two the coo will receive an annual back salary of $1.2 million. if you have six kids, 1.8 million definitely helps. "what'd you miss?" let's take a look at u.s. productivity. recent figures said the highest quarterly labor productivity in the business sector hit the highest level since 2015. you can see the quarterly changes now. that's raises the question of or the that was a blip start of something more meaningful. to continue this conversation,

we have the professor of economics at the city of institute.new york what causes productivity growth? >> a lot of things. it is something we care about a lot and would like to understand better. we can see productivity growth if we see people working harder, working with better techniques, with more capital and making better resources -- use of the resources we have. as economists we have thought this happens on its own and it does not have to do much with the year-to-year fluctuations in the economy for with unemployment or aggregate demand. one of the lessons of the past 10 years, and the lesson of the longer historical frame, is that productivity growth depends on the state of the economy. joe: we tend to think of productivity of someone out making a great breakthrough in technology and we become more productive.

ist you and others argue that, as the economy gets hotter and pressure builds, companies are forced to invest, spend more money on training their existing employees or would be employees, so productivity becomes a function of the business. j.w. mason: that is right. there are a lot of great inventions and do not get adapted like that. when you have a tight labor market and it is hard to hire workers, that is when an innovation letting you produce more with fewer people becomes attractive. romaine: his productivity accurately being measured? i feel like the traditional way it has measured is working for more for a manufacturing economy but we move more toward ideas and brainpower with services. how do the metrics we use coincide with that? j.w. mason: i think there are deep problems that we should be worried about. do not think they are important

for this conversation because these issues are long-term. they will not very much from year to year. mix of intellectual property, traditional manufacturing is in the economy, is the same as last year. if we ask why productivity is higher this year, it reflects something happening in the world. caroline: we were hearing mark was said mark harmony to talk about the disruption of automation. when do we see the disruption in big numbers? j.w. mason: there is something very funny about this conversation. we hear on the one hand that productivity growth is low and there is no more new technology, but a lot of people think it is out of our hands. but then, out of our other ear, we hear automation is coming and we are all going to have huge problems with surplus labor. both of those things cannot be true. joe: what does it mean for the

federal reserve? the fed does not want to see inflation and one thing killing inflation in its tracks would be increase in productivity. does that argue for the fed to say let's just hold off and let the economy run hot and maybe productivity will take care of our problems? j.w. mason: i think that is right. we all learned lessons of the 1970's and it would be helpful if people learned lessons of the 1990's. reason for the great success of the central banker is because of that choice. joe: every historical figure, their legacy goes up and down. crisis,he financial maybe you go through a trough. if people look at the 90's and say the right move was to have confidence that economic growth would help productivity could it be that we look back and say we kind of got it right? j.w. mason: in that job he had

one big decision to make and he got it right which was when the hawks were saying this is the fastest growth we can get in the lowest unemployment. he saw the potential for a much stronger boom which is what we got. caroline: we seem to be hearing that being echoed today. we will see who wins. thank you for being with us. coming up, workers from venezuela can enjoy a 3000% wage hike. the problem is they may see not even half of the jobs. we see that's next. this is bloomberg. ♪ -- that next. this is bloomberg. ♪

caroline: it has been 10 years

since lehman brothers fell and since then, the banking space has changed. our next guest spoke exclusively to bloomberg. >> from 2006 onward, the drumbeat have begun. quarterings of a fourth 2006, the fact that credit markets were in trouble in 2007, one of the funds collapsed 2007 so the concern around credit mortgage markets had existed for a year and a half. we were risking more from july 2007 onwards. >> is that's when you realized -- that when he realized the stress would not be contained and the financial systems at work was if not imminently headed over a cliff, was headed in that direction? >> no.

each person's recollection would be different. we have gone through the asian debt crisis and through russia. i would say all the way since summer of 2008, it felt like a bad market crisis. the first quarter 2007 through , it was clear the system was under stress and fixed income markets in general were in trouble. it still felt like a market crisis. until the beta weekend. >> there was to liquidity -- that fatal weekend. >> there was still liquidity. >> not just liquidity. equity markets made all-time local highs for the four-year period. in november 2007. . you are hedging,

your hedges are getting squeezed. >> do you recall the moment when you felt real fear? >> there has been fear all along. when you run markets that is your constant companion. perhaps panic might be a better word. me, it is --.or i will tell you why. i have gone through a far smaller islands sheet and less systematic system and the regulators pulled us into a room and we walked out of that. no one was happy or petrified. we all felt we had a solution.

the monday after did not feel nearly as same -- the same. the fact that struck me was not the fact that lehman was going into solvency, but there was no statement or agreement. when it came to prime brokerage, there was a whole series of complex questions that monday morning which no one had the answer to. caroline: that was the cantor fitzgerald president speaking with eric. a quick check of the headlines. rose tosumer sentiment a six-month high. according to a survey, americans have grown more optimistic about the economy. as one giant leaps toward commercialization, elon musk's company has signed up its first passengers for a flight around the moon. it will reveal the identity of the people on monday.

musk did post an emoji of a japanese flag. that is your business flash. from one billionaire to another, we sat down with the amazon founder. david rubenstein asked him about his new philanthropic plan and how his showdown with president trump is going. >> i will say this, it is a mistake for any elected official , in my opinion, and i do not think this is an out there opinion, to attack media and journalists. [applause] i believe it is an essential component of our democracy. -- i thinkever been there has been no public figure that has ever liked their headlines. it is ok and that is part of the process. if you are the president of the united states or governor of a state, or whatever, you don't

take that shot thinking you will not get scrutinized to read you will. it is healthy. -- scrutinized. you will. it is healthy. what the president should say is that this is right, good, i'm glad i am being scrutinized. that would be so secure and confident but it is dangerous to demonize the media and dangerous to call the media lowlifes. it is dangerous to say they are the enemies of people. we live in a society where it is not just the laws of the land that protect us. we have a freedom of press in the constitution, but it is also the social norms that protect us. because we believe the words on the piece of paper. every time you attack that, you erode the edges. i do not want to be dramatic, we are so wrote burst -- robust in this country.

the media will be fined and we will push through this. baron said the administration may be at war with us. we are not at war with the administration. just do the work. just do the work. [applause] i didn't mention the president but you did, so since you did, have you met the president? [laughter] >> he was a lawyer wasn't a? >> so you have -- wasn't he? >> so you have met the president, has he called you in for lunch or anything like that? >> i will keep my conversations with the president to myself but i have had frank conversations with him. >> this does not make you think you want the job yourself, right? >> are you asking me if i would

run for president? i will be your vp. [laughter] you run. caroline: that was the amazon founder, jeff bezos. a quick reminder, you can watch the full interview here on bloomberg wednesday at 9 p.m. starting this week, 7 million employees are guaranteed 1800 -- president maduro things the movable give him a good spot but it is having the opposite effect. the caracas bureau chief is in new york. tricia, what is the concern for the workers there? >> they have made a series of big economic announcements to see the failing state of the economy. they cut off five years from the currency and are loosening strict foreign currency controls and they announced a 6000%

increase on minimum wage. this was supposed to be a political boost but it is having the opposite effect because employees are getting to their workplaces and being told not to come back. this is not new. he has increased the minimum wage 24 times since he took office in 2013 because wages cannot keep up with inflation. they are at 100,000% annually. of: since the introduction the new currency, we have already seen 100% inflation. >> they are printing more and more money to make up for the new wages and it is having the opposite effect. it keeps increasing inflation. on top of that, you have this use inflation, failing public services, constant power outages, running water becoming a luxury -- joe: this is the cafe calais j situation. -- cafe calaisus

leche situation. explain it for us. initially, it stayed flat for a long time and you can see so clearly how it is tracked the crazy hyperinflation. romaine: so on the right it is basically $5 million equivalent? patricia: exactly. caroline: the reason you have to track it is because you cannot get formal data. patricia: you can get private estimates from economists but no public data. is running the economy down there in terms of economic policy? when i look at a chart like that and you talk about printing money, it seems to defy all metrics. patricia: we are truly not sure. the president has a closed circle of people he trusts but we saw last week there was chinese officials that came to venezuela to advise him. we do know he has people by his

side. ministers have told bloomberg exclusively that china is giving venezuela $5 billion loans. one of the last few governments willing to give finance into venezuela. caroline: thank you for your reporting and it is great to have you in town. speaking of emerging markets, according to sources, argentina will have to wait for the $3 billion it requested until the new talks conclude. the payment was initially expected to be paid on monday but now we look at two weeks. joe: why fema officials give a close eye on the waffle house during hurricanes, coming up. this is bloomberg. ♪

joe: when it comes to tracking hurricane damage, fema turns to

an unlikely barometer. the waffle house. , andould a good waffles hashbrowns, but that is good to --and that is good too, pat, thank you much. let's talk about the origin of this. it is fascinating. what is the perspective you have at waffle house about the type of damage a storm is doing in real time to a region's infrastructure? pat: in 2004, the former fema administrator was the emergency management director in florida and he came up with this index as a way to tell how the community is coming back after a storm. when he became the fema administrator and it came up in his confirmation hearing that he uses it as a way to illustrate if the waffle houses up and

running, the community is coming back to quickly after a storm. i try to have -- that is how the waffle house index took off. what we do, we report up to fema and the state agencies our status reports. it gives them a clear picture of how the community is coming back. if we and other businesses are open, they can put their pods with resources elsewhere because people are being served by us. that is the way we kind of serve is sharetorm like this information with them so they can make better decisions going forward. after theseing and storms, what is the one logistical issue to keep these stores up and? pat: by far the people. we want everyone safe and out of harms way. as we get the restaurants back our next concern is the people running the restaurants.

in what we call jump teams from around the nation of other wall for solace -- waffle house restaurants help the current employees get back on their feet. we have about 120 people in the markets in north and south carolina from across the nation helping local folks out right now. pat warner, i hope everyone at your company stays a safe -- stays safe. moon jae-in visited the north korean capital for a summit with kim jong-un. joe: and, next week i watch the bank of japan. romaine: and the numbers for existing home sales on august -- four august come out on thursday. that is all for "what'd you miss?" caroline: "bloomberg technology"

is next. joe: have a great weekend. this is bloomberg. ♪

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emily: -- >> i'm selena chang -- selina wang. jeff bezos stands up for press freedom>> and the washington pot owner said leaders should welcome robust criticism. push brown continues his back on the trump administration's rollback plan for the environment. we hear from him from the global climate summit.