allies. a fed cut priced in, the yield curve flattened spirit fundamental or technical? peter navarro urges people to keep the faith. u.k. prime minister theresa may loses control of brexit after three key votes, potentially raising the likelihood of a hard >> it. welcome to "bloomberg daybreak." david westin is in washington today. david: this is a national day of mourning for george h.w. bush. coming up on the capital where the former president license state in the capitol rotunda. at 10:00, the bush family will make their way to the capital, wait at the bottom of the steps, the honor guard will take the salute,ut, a 21-gun

load the casket in the hearse. they will start the service at 11:00 promptly. it will last about one hour and a half, then take the casket to joint base andrews and where it will proceed to houston. we will cover it all. we will bring you the entire state funeral. will be discussing his legacy and foreign policy in terms of china and domestic policy as well. markets are closed today. futures are open. a rebound after yesterday's brutal selloff. move in thely quarter, a big change. now futures of .5%. euro-dollar flat.

a mix to dollar, but mostly flatter. 10 year yields in the u.k., selling coming yields rising five basis points. bind uponit is a story. not with the u.k. as the brexit issue blew up yesterday in parliament. softer on oil ahead of the opec meeting. now for bloomberg first take, we are joined by michael mckee. our chief economist joins david westin in washington. happened? i heard eight reasons why we saw the selloff we did. >> there are probably eight reasons. is anyone surprised? the china news upset some people. ,he fact of the yield curve even a portion of it inverted --

people don't care about that portion, but the symbolism of it. we bridge the 200 day moving average. that led to some technical selling. there were a lot of factors in there. people have been looking for this. people have been looking for a capitulation trade, and maybe this is it. numbers better than expected. were looking for a good jobs report friday. john weems from the fed saying still have tailwinds going into 2019 and still need to -- williams from the fed saying we still have tailwinds going into 2019. maybe it is capitulation and it can start going up again. david: mr. williams might think there are tailwinds, but the markets are thinking the fed will back off any further rate hikes.

particularly 2020, even pricing in some cuts, which is far from what the fed said it wanted to do. this is a dramatic chart. >> it certainly is a dramatic chart. ellhave had the pow comments, talking about rates just below neutral. that greatly drove a repricing of estimates of fed moves into 2019. 2020, that is when you have fiscal tailwinds completely fading. 2019, you still have a little bit of the fiscal tailwinds. 2020, the fiscal tailwinds are gone. some political uncertainty. perhaps the trade war is looking more fraught. a periodmy will be

where we could be thinking about a recession and fed cuts. alix: the base case when it comes to brexit is brutal. yesterday was a disastrous day for theresa may. she had to go to parliament yet again for prime minister's questions. jeremy corbyn speaking. there were both yesterday in parliament. today, we get legal advice on the president deal that theresa may had to deliver to the market. what did we learn? >> that theresa may is in a weak position and the decision tree for brexit is difficult. it looks like she's going to lose by a large margin. they votedthe way yesterday, it weakens her position, although analysts are say it decreases the odds of a hard brexit because it gives parliament this opportunity to come back and come up with a

plan b. can they do that? can any legislative body do that? maybe not. ,here is an opportunity including the idea of just saying we will not do this. the european court of justice ruled yesterday they could automatically stop the article processor coal for a second referendum. odds are still below 50% for that, but growing because there does not seem to be a clear endgame. david: there is always risk associated with brexit, what did yesterday?o up no one seems to think theresa may has the votes next week to get her plan through. right.'s theresa may has been attempting to do the impossible, a deal that fulfill the mandate of the referendum, acceptable in brussels and in westminster. we are finding out she did the

brussels bit here the westminster bit will be -- brussels bit. the westminster bit will be harder to deliver. a softl risks, perhaps brexit going back to the people in a referendum, or the nightmare scenario of a no deal brexit. those tail risks are getting bigger now. david: that is what happened in buenos aires. we had peter navarro yesterday saying it is too early to lose faith in these negotiations. >> i think it is premature for people to lose faith in that process. the chinese, i know this for a fact, they have not even got back to china yet. they went to latin america, panama, and they won't be back until tomorrow, so let's give it some time. david: give it some time. there has been growing confusion

after the tweet from the president, which was encouraging, then his aides walked it back. >> we don't know what was decided. the chinese did not give us a has abut donald trump history of claiming massive victories that don't pan out. the chinese have a history of making promises they don't follow through on. you add in the fact they gave themselves 90 days to come up with framework for a trade deal that they have not been able to achieve in years, and it is no wonder people in the markets are skeptical what will come out of this. alix: having lived in china for a while as well, if we are looking at specific markers, what can china delivered to create neds in the market? ease inve -- create an the market? >> protection of ip, cyber warfare, problems that will not

go away. what we have to look to from china is for them to deliver some tangible wins for president trump. we have to look to them saying for joint ventures on automobiles, the licenses for u.s. financial firms on non-tariff barriers, this, this and this, giving the white house something tangible to brag about. that is the best case an area for an easing of trade tensions. david: we had a statement out of the minister of commerce in china that said they acknowledged there was a 90-day something they had to pay attention to and expressed confidence that would make progress. will that be encouraging to markets? >> it is hard to tell. theooks like that perhaps markets will want some proof here. there is a report on bloomberg today that the chinese have been various sectors of

the economy to prepare purchasing more items. if we get some contracts signed, some orders that amount to more than window dressing, that might start to encourage the markets. do they make enough progress in 90 days? tweeted yesterday that if they need to extend that 90-day period, they can extended. no one knows what will happen here. alix: thank you very much for joining us. you can find all the charts we used and more on gtv on your terminal. browse recent features and save our charts. just go to gtv . coming up, the details of yesterday's stock selloff and what it means for investor sentiment going into year and. our guests join us. this is bloomberg. ♪

>> this is your bloomberg business flash. the ceo of ford is downplaying the report the automaker may cut 25,000 jobs. morgan stanley analysts estimated the job cuts on monday. the company will have a meeting this week. the last bigof hurdles in the way of the $62 billion acquisition of shire. investors have approved the deal at a special shareholders meeting. shire's shareholders will vote today. as moonves could lose out on

$120 million severance package. lawyers hired by the network found les moonves destroyed evidence and misled investigators. hasaft report says cbs justification to deny les moonves his severance pay. david: thank you so much. u.s. equities declined yesterday , the average is falling more than 3% as raising interest rates and trade uncertainty w eigh on investor sentiment. , ubslcome now evan brown asset management head of macro asset allocation strategy, and the socgen chief global economist. why? we will put up a chart that shows the one-they price moves across all three indices.

it is dramatic. on the right, that is what happened. why? >> it is one of those days where it is hard to point to any particular catalyst. there is ongoing uncertainty with trade and conflicting reports coming not just the u.s.-china, but within the white house itself. ongoing concerns about slowing growth. we had hawkish comments from fed president williams. you combine that, along with the fact we have had two pieces of good news over the last two weeks. moreet powell sounding flexible and a tad dovish and you still can't break the highs. i think the markets were discouraged by that. ,lix: on a fundamental basis first drop in orders. gm cutting jobs. what part of this is a fundamental weaker u.s. story?

>> you have a number of things happening. the underlying growth momentum, labor markets, things look good. we are getting into the later stages of the cycle. we're getting some of the slowing coming through on the corporate side, but one of the underlying concerns is the degree of leverage in terms of the global economy, the u.s. economy, and in particular the corporate sector. there hashis concern been a halloween out of the blue chips. that is one of the underlying concerns, especially in an environment where we see the fed tightening feedthrough. david: if you look back a week ago, they would save the concerns are the fed will keep hiking. then chairman powell said not so much. we are worried about trade talks in buenos aires. the news was positive.

if that will re-instill growth in the u.s. -- won't re-instill growth in the u.s. or globally, what will? >> we are getting into those late-cycle stages. the global economy as a whole of debt, andurden so it's hard to find that new relay in the global economy today. if you ask me what can drive has been one of the interesting debates on the u.s. fiscal policy side. by putting in place the fiscal theulus late in the cycle, hope was this would be through to corporate investment that we didn't boost productivity and give more life to the cycle, but we are seeing that there is some boost to the investment side, but were not seen enough of that corporate investment coming into the economy to really durably lift the productivity.

that is the missing piece in the puzzle today. fade iniscal tailwinds 2020, inevitably there is a slowdown in the making. alix: the result of that is a flatter yield curve, right? like 11 basisd points. what do you rerate in the market based on that spread? >> we saw some re-rating yesterday with financials. xlf down 4%. alix: regionals in particular. they have de-braided quite a bit relative to the yield curve. de-rated quite a bit relative to the yield curve. it is a signal we take into account and would be responsible to ignore, but it is not a timing mechanism. versions ofween and

the yield curve and an ultimate peak in the s&p 500 or recession, we are looking a year hard to be so it is bearish and self equities now based on an inverted yield curve. alix: in terms of the fed, we are pricing in a cut in 2020. if the curve flattens enough come up they will have to stop the short end from rising too much. is this a viable alternative for the fed? ,> overall conditions historically, you think about fed tightening. in 2015, the u.s. dollar appreciated significantly. indirectly delivering tighter monetary conditions. and 2017, and in 2017, the dollar went the other way, and the equity markets as well, so they offset the fed tightening. this year you are getting fed

tightening and stronger dollar working together. in terms of the international channels, the fed slowing down will be helpful for the dollar butnel and the short rate, we should not forget the balance sheet, which is another important fed tool. alix: whether it will be neutral , who knows? you will be sticking with us. coming up, theresa may's really bad 24 hours. she is now taking questions in parliament after losing three key votes after a power struggle. we will discuss what that means next. this is bloomberg. ♪ this is bloomberg. ♪

alix: prime minister theresa may hit with blow after blow yesterday, losing key three votes and gave the governing body the power to shape the final deal if she cannot get her

deal approved. saying today we have not concealed the facts of the brexit deal. our guests are still with us. what do you do? sell the guild, by sterling? >> we are keeping risks low. it is risk management. if you do look at what happened yesterday, despite the hard day for the prime minister, actually probably reduces the chances of a no-deal brexit hitting parliament involved, but there are so many different ways we could go. webe frank, we don't feel have a strong edge, so we are keeping risks low. alix: your base case? >> the uncertainty is high. the risk of a no-deal brexit is significant. brexit, get the no-deal the you cable go into recession next year at a particularly

challenging time for europe. we talk about china, the u.s., and everything else among but we should not forget the u.k. is mostf the euro area's important trading partners. gdp,e u.k. is losing 1% of 0.25%. probably lose it gives you an indication of how important this could be. if we get that co-deal brexit, i think the u.k. is heading for a recession. alix: you and mark carney. walk me through they europe read through. it's not like the pmi's are out of the park. they are weaker. is this a buying opportunity. will we be in a slower-growth world and have to rerate? >> we have to wait for confirmation of an improvement in growth. we have been waiting for growth to stabilize. we still don't see enough

evidence that will happen. our thesis is that over the year you get china's stimulus taking hold, helping trade-sensitive nations, the euro will stabilize, but we want to see that evidence before we by european stocks. some european improvement would help the dollar come off, which would help the global environment. alix: we see a later than expected ecb rate hike? >> not exactly. there are a couple of positives for europe. what we really need to see is some of that political uncertainty left. brexit is one dimension. evan mentioned italy. lift, theose underlying momentum is good coming into 2019, but i would want to see that brexit vote first. alix: do you want to be in u.s., european, or emerging markets?

>> emerging markets have de-rated so much, and now with this trade truce, i think the fact you will not have tariffs for three months go up, that buys time for china's stimulus to take hold in the domestic economy. throughout this correction and volatility, emerging markets have been outperforming. alix: thank you very much. honoring bush 41's policy and legacy. we will reflect on his policy achievements and relationship with china. ♪

♪ alix: this is bloomberg daybreak. u.s. markets closed today. futures are open until 9:30, and there is a little bit of calm after yesterday's selloff.

-- s&p had its fifth worst brutal led by homebuilders, construction, tech, and banks. in europe, a risk off feel. data, notome pmi great, but italy kissing a recession. you can see that not reflected in the currency market. the dollar pretty much flat on the day. ,able rates jumping 3/10 of 1% unclear as to where brexit is currently after yesterday, theresa may losing three key votes in parliament and today having to give an analysis of brexit. in the u k, it will be sell those bonds, it yields moving higher in dealt by about five basis points. crude down about 4/10 of 1%.

it is all about opec in the next 24 hours and iran and the saudi oil or our meeting but have lots of work to do. david: it is time to find out what is going outside of the business world. is warning the u.s. not to pull out of a three decade old trinity on nuclear weapons. the kremlin said president trump carried out his threat, russia will target countries where the missiles are deployed. the u.s. will pull out of the treaty within 60 days if violations do not stop. robert mueller is urging a judge to go easy on michael flynn, saying he has provided so much help that he should not get jail time. flynn has pleaded guilty to lying to federal agents. it is not clear what the leaders of the u.s. and china agreed to

in trade talks in argentina over the weekend, but china has swung into action. beijing will restart imports of soybeans and liquefied national gas -- liquefied natural gas. >> i think it is premature for people to lose faith in that process. the chinese -- i know this for a fact -- this was december 1, saturday, they got back to china. untilill not be back tomorrow, so let's give this some time. emma: global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. the nation today remembers the legacy of president george herbert walker bush and perhaps the most important part of that legacy lies in his foreign policy achievements. >> the day of the date hader is over.

-- dictator is over. >> astonishing news, where the east german authorities have said the berlin wall does not mean anything anymore. god, americace of won the cold war. >> his presidency from a foreign policy standpoint, with such a consequential president. he knew foreign policy, he understood it. he had control. >> it was his foreign policy dream team that helped him do that. >> it gave us tremendous privilege to be in a joint team. it was a great team with the , nationalin chief security advisor, secretary of state, and myself. we would all work together. the stage for set many of the issues that still plague the world today -- the

origins of nafta, conflict in the middle east, and a rapidly changing china. ,> after tiananmen square instead of screaming at china he toetly sent bren school call repair the damage and it made a difference. you think about kuwait, when saddam hussein invaded kuwait, he stopped that. he was effective. >> if he were involved now, i think he would be supportive of an aggressive trade policy with is very strategic and would be looking forward to the kind of relationship we want to have with china in trade and how we look at resolving major common interests like north korea. david: george herbert walker bush will be remembered first and foremost for his remark or -- remarkable foreign policy achievements. >> he demonstrated in war and peace, he was the most qualified person in foreign policy ever to

serve as president of the united states of america. layer.we welcome deborah deborah served under the bush 43 administration. welcome back. that, aay, watching number of major foreign-policy events that he presided over in four short years is quite remarkable. >> it is amazing. .avid: let's talk about china you heard reference of tiananmen square. give us a sense of how george herbert walker bush set the course for relations with china. >> president bush had a long experience with china, having envoy,here as special and had quite a tough perspective on china, but probably one is -- probably one of the most knowledgeable people. hims fortunate to work with as we were rebuilding our relationship, and he could be

very tough with them, but he understood how to get things done and where the balance was. david: how did he set up the world so we can have better relations? what is left of that legacy? to what extent are rebuilding on a foundation he helped construct? he did a tremendous amount of things and a lot of it was not recognized. segment,ard in the talking about rebuilding the relationship after tiananmen, and after bill clinton was on aed and came in platform of criticizing the butchers of beijing, president bush started to put in place building blocks of the relationship so when president clinton came in he would not have to deal with difficult decisions like establishing cabinet to cabinet. president bush dispatched barbara franklin d lead a delegation to take care of that. he balanced that with some

measures with taiwan. wente same time carla hill , the first cabinet level visit to taiwan. david: every single day we cover china, including today as we are trying to parse through the statement of the ministry of commerce about whether we are on a path toward agreement on trade or not. presidenttent would george herbert walker bush approved of what is being done? he was tough on china. bush launchede the first major trade negotiation with china and it was one of the largest bilateral agreements the united states has done. it was very aggressive and covered all of our tea sectors. the chinese welcome that as one of the first ways of really opening up their economy. the buildinglace

blocks for some of the things the trump administration is doing today. david: what do you make of where we are today? what should we realistically expect out of the chinese and what should they expect out of us? deborah: the key is to make sure the trend is moving in the right direction. president has rightly pointed out that china has not opened up to the degree we expected, for u.s. companies. the fact that we are taking action aggressively is important and the united states is always a leader. it is better to build a coalition of the willing and like-minded. we hope they support us in opening up these markets, but the u.s. is the big player. i think we could see some significant market opening but hopefully for the structural issues, addressing issues around 2025, some of the state owned enterprises, those will be longer-term to play out, especially conflicts in technology. david: can i play out over a

longer term? is this a zero-sum game? can we succeed without china pulling back? can they succeed without curtailing u.s. interests? deborah: hank paulson in a recent speech warned about the creation of an economic iron curtain were countries have to pick on their technology. i think if we are going to avoid that kind of scenario, we have to find a way to work together. david: is robert lighthizer the right person to get it done? he is received as a china hawk. deborah: that may play to his benefit and they are the lead for trade negotiations. it should be the right thing to do. david: if it is going to be progress we will see over the next 90 days, where will we see it? deborah: the first thing is purchases of u.s. products, and

there are reports they are starting on the politically sensitive issue of soybeans. major announcements on market access is important beyond financial services, and the chinese have started to indicate they have flexibility on state owned enterprises. looking for what that means in real terms is important. stepping up on intellectual property rights, cracking down on the companies who have forced technology to transfer. david: appreciate you being here with us. alix: one of the possible excuses for the selloff yesterday had to do with china. in a bloomberg opinion article, john authors writing -- do not discount china's role. the world market is deeply worried about what happens to a very sickly panda. the question is is it as sick as it appears?

the other thesis is that china is actually slowing irrespective of anything else. do you agree? michala: we have seen slowdown on the domestic side of the chinese economy, and it is important to see that china is trying to achieve a number of policy goals for its domestic economy, and sometimes they can be conflicting. there is really an effort and a will to deliver the economy. we have talked about china's high debt burden. if you are deleveraging, you may be slowing down your economy. we have seen that balancing act happening in the chinese economy. alix: it feels like they can pump more money in when they need to. michala: in theory they could, but you are building more troubles for the future. they are trying to make sure you do not create those issues for the ensure -- issues for the future. it is a delicate -- delicate

balancing act and the future trend is slowing down. alix: a sick panda, we might not know how sick. michala: "sick" is probably a big word. i do not know how fast the panda runs but a running less fast panda would be my analogy. alix: thank you. david: it may have cost him reelection, but many attribute the prosperity of the 1990's to president bush's economic policies. this is bloomberg. ♪

♪ emma: this is "bloomberg daybreak." coming up in the next hour,

republican senator rob portman of ohio. this is bloomberg. ♪ president george h.w. bush came to office with a wealth of foreign affairs experience, but some of his tough challenges came on the domestic front pay mounting domestic ajit and a pledge he had given never to raise taxes. >> i will keep america moving forward, always forward, for a better america, for an endless and enduring dream and 1000 points of light, this is my mission and i will complete it. david: president george herbert walker bush, that meant passing the americans with disabilities act and the clean air act. it also meant tackling the budget deficit. >> i am submitting a budget that holds the growth in spending to

less than the rate of inflation. wasd: the budget deficit $2.8 trillion when bush took office, gripping his ability to achieve the one big thing he promised. >> read my lips -- no new taxes. david: president bush was forced to abandon his promise. his economic team pat -- try to ,alance with spending cuts which led to months of negotiation with the democratic congress. the final program was a cut to government spending and an increase in tax on the highest earners. >> there were some tax increases and spending cuts, but it laid the foundation followed three years later by president clinton's pledges which produced balanced budgets in the country. ,avid: then the recession hit confidence fell, unemployment rose, and oil prices spiked. >> and yes, the largest

peacetime economic expansion in history has been temporarily interrupted, but our economy is still over twice as large as our closest competitor. we will get this recession behind us and return to growth soon. david: not soon enough. reelection to a campaign that overlooked his foreign-policy and highlighted a president out of touch from the everyday american. this was on display in the 1992 presidential debate with ross perot and bill clinton. >> how has it affected you personally? >> i am sure it has. i love my grandchildren. >> how? >> i would like to think they will be able to afford an education. that is an important part of being a parent. are you suggesting that if somebody has means, the national debt does not affect them? help me with the question and i will try to answer it. david: the debate and budget

deal cost him the white house. george h.w. bush was remembered more for not knowing the price of milk than the prosperity of the 1990's. >> to his great credit, whatever the political implications, past and enabled us eventually to have a balanced budget in a very successful economy and our country for a period of over a decade. david: i must say it almost feels quaint to think about the situation he faced. talking about $2.8 trillion in debt. we have over $15 trillion today. bring us forward. at what point do we have to reckon with that deficit and debt the way he had to in the late 1980's? michala: icy two issues in the twoent context -- i see issues in the current context.

the really big question is what type of policy ammunition do we have available to deal with that? we talked about the fiscal side being overstretched, but if we look at the monetary policy side, the fed has been tightening, does have some ammunition left, but we are not heading into the next downturn with a lot of policy ammunition. this is true at the global level. one of the concerns amongst economists is that the next step would be monetary financing of fiscal expansion. that is the first issue and if that were to happen, you would see potentially a violent reaction on bond yields. the second issue which relates more to the dynamics of the debt -- and this is where the u.s. is very different from say italy, where we see already today concerns of a fiscal expansion that will not lift the trend of potential growth in the country. the u.s., because of the reserve currency status, the u.s. gets

marva benefit coming from the system. i think it is really when we get the next slowdown that you can see some concerns coming through. you will get conflicting forces on the bond yield. what you could see is a repricing of term premia. i will move back to my first point in the question of what the fed would do in that situation. probably they would be back in qe mode. david: simply put, at what point do the bond vigilantes show up and say you are buying too much? michala: when the economy starts to slow very substantially. david: thank you so much. a reminder, bloomberg television and radio will be bringing you special coverage of all of the state funeral events as land fold. i will be -- as they unfold. i will be hosting our live coverage at 10:00 this morning new york time. alix: oil prices lying in wait

for opec's meeting with the technical committee meeting starting today and a ministerial meeting on thursday. they say it is premature to commit to a cut. joining me is gary hammond are. good to catch up with you. what is your expectation for opec plus? gary: it will be an interesting and critical meeting. we believe there'll probably be some sort of a cut, probably in the million barrel -- 2 million barrel range. whether that happens immediately or it might even take up to the next meeting, but we believe there will be a cut. alix: many say if there is wishy-washy language you can see prices dip into the 40's and could see an extreme reaction on the market. gary: the crude market has been very volatile this week as we

all know. the fact that it has rebounded the last couple of days, producers are very concerned with this price, oil and natural gas producers. so far we are not seeing much of a change. there has been a little bit of a pullback, but i think they are anxious on what comes out of this meeting. as we see in the u.s. and globally, when you look at the five-year average of crude inventories, that inventory position and come back into a norm over the five-year average early in the year, and has crept up since. i would expect to see some sort of a pullback by opec. alix: which really delves into your business. inventories have been following -- falling because the heavy market has been light. what is the disconnect that you see remaining from the oversupply in the u.s. and what

we actually need out in the rest of the world? , let's lookide domestically first. we are importing a substantial amount of crude we need here in the u.s. if you look at around 17 million barrels or so in demand to run the u.s. refining session -- system. and natural gas. you look at how much is coming in from canada, and we are exporting about 3 million barrels per day. we probably are still importing -- alix: i am glad you brought up canada, because they had that unprecedented cut. how long does that last? gary: our information indicates the producers had already started cutting. over the last month or so, we

recognized about a 300,000 barrel per day cut by the producers on their own. if you look at the information that has come out and the context from the producers in canada, they are in favorite of let the free market work. they were already in the mode of cutting that production. the canadian market was very volatile. it seemed to correct monday afternoon and yesterday, the spreads widened a little bit. it looks like temporary news. we will see what happens long-term. it is not a production issue but pipeline takeaway. alix: are you noticing any lack of supply from canada? gary: the pipelines are still completely full coming out of canada. that is the answer. i recall in 2007, i was giving a speech in calgary about this is an issue of tweaking the world on the edges.

this is having more pipeline takeaway capacity to get the crude to a market. alix: do the weaker prices in west canadian select and the discount that wti was trading at, is that changing the pipeline build out? have you heard people wanting to hold out. what are you hearing? gary: if you look at the permian , there are a number of pipelines. the possibility that we might combine one of our pipelines, we have announced a permian to gulf coast pipeline. we are in discussions with exxon mobil on combining our pipeline with one they have discussed as well, and announced we will go from the permian to east texas and maybe down to the galveston bay refinery. we will see how that progresses. there are a number of pipelines to take further capacity into the gulf and further for export,

or from the canadian side, there will not be new pipelines built. alix: rail gets dicey too. how high on your priority list is the pipeline build out with exxon? gary: it is very high. there needs to be an industry solution. is it more efficient? certainly it is more capital efficient to have one bigger pipeline been several smaller ones built from the same source to the same export center. it is high on our priority list. we are also looking at a natural gas pipeline out of the permian to take it to the gulf as well. that is important but we are just in initial stages of discussion. alix: specifically to your business, part of what has contributed to the volatility is the desolate demand. you get gasoline as a byproduct

and not a lot of people want it and it is an oversupply. what do you see going forward? gary: we are in the shoulder quarter of the season. many people forget this happens every year. we are still -- if you look at gasoline inventories, they are still online and midpoint of the five-year average. just a little inventories are much lower than the five-year average -- distillate inventories are much lower than the five-year average. we expected to continue to grow with the regulations in 2020. we expect this to start mid-2019, people will start inventorying for the ultra low sulfur diesel that will be required. if you look at the global gasoline demand, we are exporting about 500,000 barrels alone,ut of our company there is still a tremendous amount of demand, mexico, latin

america, for refined products and distillate. alix: 500,000 barrels a day, what does that grow to? what is your expectation? gary: i think this can grow into the 600,000 to 700,000 barrel a day range, and that is not all gasoline. it is probably 50/50 gasoline and diesel. many latin american refineries continue to struggle and have not done the turnarounds and preventive maintenance to keep the plants running. we expect -- and if you look across the industry, the industry is exporting 2 million to 3 million barrels per day along with 3 million barrels of crude. america alone has tremendous balance in what we are exporting into foreign countries. alix: such a pleasure to catch up with you. marathon petroleum chairman and

ceo. ♪ the day after, the u.s. equity route. a fed cut gets priced into the market. the yield curve flattens. is it fundamental or technical? china confirms a 90 day deadline for trade talks. peter navarro urges people to keep the faith. may's worst nightmare as she loses control of her brexit, handing more controls to the house of commons and raising the likelihood of a hard brexit. i am alix steel in new york and david westin is in washington today. david: i am in washington for special coverage on bloomberg television and radio. the state funeral will begin at 10:00 and we will be covering it

on television and radio. atfor what we can expect, 10:00 the bush family will go to the capital. the honor guard will take the casket out of the rotunda and bring it down the steps. by about 10:40 or so, it is expected to reach the national cathedral where president trump and the remaining living presidents will wait. there will be a service from with eulogies from john meacham, the biographer of president bush, as well as prime minister brian mulroney of canada, senator alan simpson, and the 43rd president of the united states. day will then go to joint base andrews and the part to houston -- depart to houston.

be discussing has foreign policy and legacy throughout the next hour. markets are closed for the day in commemoration of the funeral for george h.w. bush, however futures are open until about 9:30. a brutal selloff yesterday, but futures are stabilizing, up 5/10 of 1%. homebuilders, construction, and regional banks also got hit yesterday. euro-dollar flat european pmi falling. there is a nice bid for btp's. the u.k. 10 year yield up by five basis points. selling the back end, the theme of the day all about opec, still hedging on what kind of cuts we will see from opec. aining us now on the phone is

wells fargo securities equity derivatives strategist. yesterday, was that capitulation? >> i do not know if i would call it capitulation. has beenhe yield curve kind of slowly flattening for a while, and i think the kind of rapid flattening you have had in the past couple of days is pretty interesting. bigger picket in the equity market, we have come a long way fast. if you look at where we are in the s&p, we are back to where we were before powell started speaking last wednesday. we have the best week for the s&p since 2011 and a quick give back. alix: if you take a look at the bloomberg terminal -- and you are looking at some pretty weak breaths -- it is still well below normal at this point. is this a re-rating of a flat yield curve and spreading to

other parts of the market and assets? pravit: i think in markets, what happens a lot of times is the perception of price action influences the narrative. yield curves are flattening. i have not heard a good explanation. one explanation i have heard as people had been positioned to make money with the yield curve on the steep end. now at the same time, you have that forced liquidation yield curve and people look at that and say parts of the yield for -- yield curve converting, what does that say about global growth? ism, ther picture, last manufacturing panel was strong for the u.s. some are pointing to underperformance in the u.s. as indicative of a potential slowing in the u.s. economy but we are not seeing that born out of the data.

housing looks at maybe top last year. the auto sales data has been kind of week but still chugging along. that, bank of america said they are looking at a baby bear market in 2019 and they are reducing their stock holdings and want to put more money into cash. what is the trade holding over the next eight weeks? pravit: i think you can expect higher volatility. if you look at what the credit market is doing, ig spreads have been widening consistently over the past few weeks. februaryifferent from which was pretty much an equity dislocation. if you look at what is going on in equity volatility, fx, commodity volatility, credit spreads, they have risen off the lows. what is happening is higher risk premium, higher volatility.

i think you can expect more of that going forward. alix: good to get your perspective. thank you very much. -- you us on scene talked about the flatter yield curve and that is having some reverberation effect. why? >> a good question, why exactly now? fore's insatiable demand u.s. treasuries and that is a piece of why the yield curve has been flat. three inverts this weekend? i do not think it is a macro story. i do not think inflation expectations have changed drastically in the last week so it could be a re-pricing of the term premium. part of the moves yesterday could have been that the wall fell from the size -- the wall fell from people's eyes but the trade deal did not have much

substance. part of it may have been technical. david: a couple of weeks ago we were waiting for the fed to give pause, andtion of a i think we certainly got that from chairman powell and others that the fed is open to slowing down. why isn't that being more reflected? megan: that has already been reflected. if you look at the five-year, investors are expecting fewer rate hikes last -- next year than previously. i agree with you. i think the markets overreacted to powell's comments saying we are a long way from neutral. it was ambiguous. we do not know, but the market priced in a more hawkish fed. and has prepared comments a few days ago, he was walking that back. what he said was factually true.

we are close to the range of estimates for the neutral rate. i think he was trying to send a signal that the fed will have to back off. that has been my call all along so i think consensus has caught up. two factors worth looking at, one is the housing market. it has softened significantly partly because of rising rates, partly because of supply and changes in the tax codes, and that will not change anytime soon. at is a huge weight in the cpi basket. weight costs are a huge in the inflation basket so if the fed will be data driven, we should expect them to back off has inflation should not be accelerating as much as we have seen over the past six months. david: to what extent do we think the markets may be reflecting that monetary policy has done what it will do?

it is not that it is all going away tomorrow, but it cannot take us much further. if you do not have monetary policy, what is the alternative? megan: a bigger pieces fiscal policy. fiscal policy stepped in to take the baton from the central bank as the central bank started normalizing. is duer fiscal stimulus to peter out next year, so the question of what happens in 2020, which is an election year, when the fiscal stimulus of the tax and spending bill starts hitting the economy. maybe we will get something in infrastructure. we might get another spending bill, but we face a fiscal cliff at a time when we were very late in the business cycle. i would highlight that went --nomists find 6 -- alix: that raises the question

of the markets, they are repricing for a non-hawkish fed but still pricing what a non-hawkish fed will do. in 2019,euro-dollar 2020. that is looking at a cut in 2020. are we repricing too much? megan: i think we are. there is an argument that the fed wants to get rates up so they can cut them in the next recession, it is a real argument at the fed that i hate because it becomes a self-fulfilling prophecy. if they can get two rate hikes next year, i think they will and the data should support that. at is more dovish than the fed itself thinks. have a median of three rate hikes next year, so i think they will have to back off. i think investors have overdone it. alix: megan greene sticking with us.

the euro area showing no signs of a rebound and emily peters on a recession. this is bloomberg. ♪

♪ i was in the white house visiting george bush. ofis one of the fathers communication and we will never forget that. alix: that was angela merkel remembering former president george h.w. bush, who helped bring europe together after challenging times during the fall of communism. the mentum at the weakest level in two years for the economy in europe.

verge.s on the what is the scenario for 2019? megan: a lot of people have been surprised. i do not know why they are surprised. growth isotential gdp somewhere around 1.5%. we should have expected europe to slow down, and that is what is happening. some of the wobbles in italy are a huge red flag for the european project, but we should have expected europe to slow down. alix: what is going to be the catalyst for any kind of strength? megan: strength could come out of germany. they just hosted a really weak quarter and that is largely down to the car industry, regulatory issues. the german economy could rebound without behind them.

the car industry is really important. trump is now talking about auto tariffs so that remains a huge risk for european growth. alix: tie it into what is happening with brexit in the u.k. mark carney warned of dire consequences if we crashed out. what is your read? megan: anything can happen with rex it. -- brexit. whatever they decide before march 29 could be reversed if they have a new government coming in. we all think we will be done with rex it at the end -- brexit at the end of march. i do not think we will be. in a way, if brexit is a complete and utter disaster, it could strengthen the european project because the antiestablishment parties that are doing quite well could

think, it does not turn out that well if you decide not to be part of this. alix: if the global world's lower bond yields, when you factor in what is happening with europe and the u.k., what is the right narrative for the global bond yield world? megan: the story is lower yields. inhink we have lower yields the u.s. because of the ecb and bank of japan. i think the lower for longer story will persist. bank of japan does not show any signs of hacking out of its path. the ecb will try to hike rates after the summer of next year, but they will have trouble with that. inflation has never really looked like it was approaching the ecb target, so they will end target long-term refinancing, which will target

banks and particularly italian banks, which could be a huge catalyst. if that is the case, rates will be low globally. alix: megan greene, thank you so much. david: turning back to north america, the north american free-trade agreement was signed under the president's -- presidency of george h w bush. the value could not have been more different. >> the north american free trade agreement is an agreement of three strong and proud nation's -- the united states, mexico, and canada has seen the powerful and beneficial impact of freer trade and more open markets. with nafta, as open markets stimulate growth, create new products force consumers, we will create new jobs in all new countries. >> we are taking nafta, one of

the worst deals ever made in the history of trade, and redoing it. it will be a fair trade for the americans. we lost millions of jobs because of nafta. david: joining us from capitol hill is republican senator rob portman. he went on to serve as the united states trade representative under george w. bush. thank you for joining us. you were a trade representative yourself. you were in 41's white house. did the times change or are there just two fundamentally different views of trade? sen. portman: 1, 24 years is a long time, and it was time to revamp nafta. the labor environmental standards were what dutch were

not nearly what we have in modern trade agreements. the is a difference of opinion between the two of the impact of trade on our country and what to do with regard to tariffs. david: what is the overall effect of globalization or trade? since world war ii we have been working on reducing trade tariff barriers. has it been good for the american economy and worker? sen. portman: it is hard to argue it hasn't been. you see the economic growth we have had. having said that, we need to have balanced trade. when he to make sure our exports have a fighting chance leveling the playing field, reciprocity. we need to make sure there is -- thatt if the trade the trade is one that benefits both sides. also, that imports are fairly traded in our country and are not dumped or subsidized. , but is really important

we have to be sure that all countries are playing by the same rules. david: to bring it to the specifics, your meeting today with the head of general motors who announced they will be laying off a lot of people and shutting down plants. is there a direct line between trade, whether it is nafta or that or europe, between and the decisions gm and mary barra are making? sen. portman: she is making decisions to deal with her lower capacity. they are about 25% over capacity in their system. the have a car that is not selling. what i have said to her over the last several months is that we want a new product in ohio, and general motors will make five new electric car models in the next five years. we want it done in lordstown. competitive, one

where the uaw has made workers willso stand by gm and it is time for gm to stand by them. we also have to talk about the tax issues. the tax reform effort that was just completed makes it more competitive to stay in the united states. people are talking about the difference between mexico and the united states. mexico's corporate rate is 30%. hours went to 21%. investment in the lordstown plant can be written off immediately. is the tax policy in addition to the trade and regulatory policies, make it advantageous for gm to make a further commitment to ohio and our country. david: you not only served as trade representative but also the office of management and budget. as we think about george herbert walker bush, he had to make some tough decisions and that 1990

budget deal have cost him the presidency. we talked with the majority leader at the time. >> that resulted in a budget package that had pain for everyone. there was some tax increases, some spending cuts, but it laid the foundation followed three years later by president clinton's budget which produced balanced budgets in this country , something that has not occurred often in the past half-century. david: president bush pledged he would not raise taxes and then change that view. we have a chart it shows as a result of that, revenues went up, debt went down, and it might have situated the united states for growth and a balanced budget. do we need to be making those kinds of decisions today? sen. portman: when george bush make that decision, it did show his courage, political courage. he wanted to do what was right for the country.

the agreement was three dollars in cuts for everyone dollar in tax increases. those three dollars in cuts to spending did not occur in a timely way. was an agreement that he agreed to with certain conditions and congress is not good at following through on the cuts in spending. that is an example. i think you are right, that set up the possibility for the economic growth we saw in the late 1990's. the primary reason we got to a expectedbudget, no one the economy to grow as fast as it did. we cut capital gains taxes and $100 billion showed up that helped us get to a unified, balanced budget. today, the problem is different in terms of the scope. president bush was worried about a $250 billion deficit. we would be happy to be in that situation today. this is not something new, but

it has been coming over the past decade. we have even bigger challenges today, and we need to put together a package to ensure we can get this fiscal situation under control so it does not have a detrimental impact on the economy, which is possible. over that time, what is in the discretionary spending with congress versus mandatory spending, interest on the debt, social security, important safety net programs, those mandatory spending programs have grown tremendously so that is a bigger part of the budget and the fastest-growing part. david: which makes it a more difficult problem to tackle then when it is all discretionary. you were a very senior staff person back then and now you are a lawmaker. do you see a path forward to accomplish those things or are we just being nostalgic? sen. portman: i do. i think the tax reform is

responsible in part for this incredible economic growth over the past several months. you were having discussions .arlier about europe if things like it is ok for europe. that was the new normal here. now we are looking at over 3% growth this year and we are seeing more revenues coming into the federal coffers this year from our income taxes than last year. not a lot, but there is more taxes coming in, more revenue coming in because of the economic growth. that is part of the solution you saw in the late 1990's. had you get this economy to be the 3% or 4% for a short time, but for a sustained time? with the spending which is unsustainable and its current form? that is something that congress and the administration should be dealing with. david: senator, thank you so

much for your time today on this very important day of national mourning. that is republican senator rob portman of ohio coming to us from the capital. sen. portman: thank you. alix: bloomberg bureau chief jason kelly interview one of the biggest names on wall street, cc capital founder chin choo. do not miss that conversation. this is bloomberg. ♪

♪ alix: this is bloomberg daybreak. i am alix steel on this national day of mourning, as the nation remembers george h.w. bush as we wait for his funeral service in a few hours.

markets are closed but futures markets are open for the next hour. it seems the equity market is having a sigh of relief after yesterday's selloff that spared pretty much no one. goldman sachs on a erasing its entire trump bump gain since 2016. home builders in particular. in europe, equity softness. european pmi coming in soft. the dax on tender hooks with the auto companies awaiting their fate and what it means for taxes from d.c., down 7/10 of 1%. euro-dollar not much affected but the sterling cable story quite interesting, up 5/10 of 1%. a lot of headlines over the last few hours, philip hammond saying he did not expect the backstop to injure or forever. forever.

parliament ruled it was in contempt and it got released today. anyway you slice it, it seems to be by cable, sell gilts. crude waiting for the opec meeting to start. trade still front and center. a trump tweet -- walking back the trade man rhetoric from yesterday. david: if the president says there are strong signals, i believe him. let's get a look at what is happening outside of the business world. the u.s.sia is warning not to pull out of the three decade-old treaty on nuclear weapons. the kremlin says if president trump carries out his threat to withdraw on the agreement, russia will target countries where u.s. missiles are deployed. the u.s. will pull out of the treaty in 60 days if russia does not stop alleged violations.

-- entirelyearly clear what the u.s. and china agreed to over the weekend, that beijing will be starting to buy american soybeans and liquefied natural gas, and they will push forward on trade negotiations within 90 days. robert mueller is urging a judge to go easy on michael flynn. mueller says flynn has provided so much help to prosecutors investing -- investigating campaign meddling that he should not get jail time. flynn pleaded guilty to lying to federal agents. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. alix: we all want to turn to made anlly who exclusive interview with chinh chu. jason: thank you so much.

chu, one ofth chinh the most respected investors and the private equity world. we will talk about private capital. you also spent about 25 years at blackstone. are you seeing the rise of that firm and the whole venue of private capital? steve schwarzman, your old boss, described the markets -- and i think this is a technical term .- a barf berger what do you make of this volatility over the last several months and the last couple of days? chinh: thank you for having me on the show. i think when he talks about a barf berger, it is a technical term. be that the economy and jobs and earnings were the key things that drove the stock market. itay, given the volatility, is really politics and other things like trade driving the

market. it is the unpredictability of all of these factors that causes volatility. jason: could there be a decoupling of some of these things? chinh: i think it is all related , but volatility is resulting from disability and other factors, not extraneous, but related factors, but not the key ones of jobs and earnings power. jason: as someone who has watched the markets and valuations, does that surprise you that the economy is maybe down the ladder? chinh: it does. i am not sure if it is a short-term trend. through the next few years, we will have that phenomenon that the economy is very important, what drives the short-term volatility market may not be the jobs. jason: you spoke to a lot of investors. how does the economy feel to you now, even if it is less important to the broader market? chinh: the economy feels ok to

strong. there is not a lot of signs it is weakening. if you look at corporate earnings, consumer confidence, it feels pretty strong. jason: volatility traditionally, i think you would agree, has been pretty good for private capital and private equity specifically. agree, disagree? is this a moment where private fore? comes more to the chinh: a lower volatility may cause a freezing in the market because corporate boards and sellers may look at the last 52 weeks of valuation instead of the current valuation. believe is what they the valuation needs to settle down. extreme volatility can cause a slowdown in deals but overall,

volatility creates opportunity. the stock market is lowered for private equity. jason: two, two and a half years ago you leave blackstone after a couple of decades helping lead blackstone into being the biggest name in private equity. what was the thought when you set out to create something different? you are not just hanging out a shingle as a "traditional" live at equity firm. chinh: blackstone wasn't terrific experience. -- was a terrific experience. i was mentored by steve and helped build the firm. i hoped to build a different firm to focus on long-term capital or permanent capital. some of private equity will move toward that trend, and investors and lps are looking for capital that is longer duration.

we look for companies that can compound over a long time, high-quality companies that do not have to five years. that is the main difference between cc capital and other private equity firms. jason: how do you structure it? it is a blend of private equity elements and public market elements, right? chinh: it is a hybrid. we do traditional private equity deals. the dun & bradstreet is $700 billion going private. we think this is a company that exemplifies what i'm talking about. high quality fundamentals, strong modes, and a company that has significant upside in the revenue and cost side. in addition to that, we raise special acquisition vehicles. we have done a couple of these that are public vehicles

designed to buy companies to very differentc, from a traditional private equity. jason: what is the attractiveness for an investor? the fact that it is been around for a long time, and they are a market,ig part of the market probably underestimated how big they are, what is the attractiveness? chinh: recently, there has been a new generation. starting from 2010, the market was revived. spac's were about 3% to 5% of the ipo market. in the last three years, the spac value is over 20% of the market. there is a lot more interesting issuers. private equity firms have started to sell tospac's and sponsor them.

people like myself and my s thatr have done spac' have elevated the market ultimately. jason: who are the investors, the traditional private equity investors, or other types? chinh: the traditional spac investors are mostly hedge funds , but today you have private investors, including some lp private equity firms, and more importantly in mutual funds. , we have had a lot of traditional mutual funds. the largest investor in colliers was t. rowe price. it is a very change in the market where you have high quality institutions investing in spac/. jason: the big name private equity guys talk about getting to that market, a water market

for private equity. .hat is the holy grail have you found the holy grail for retail investors to find their way into private equity? >> spac's do not compete with private equity. these are companies that want to go public and ultimately do not want the higher leverage in the nature of private equity. if you buy a company and put it you usually have two to three times leverage and compete more against the ipo .hen equity you can provide more liquidity for the seller then an ipo, .sually two to three times you can negotiate a deal for a youd-price whereas an ipo are subject to the valuation of the market and whether it is open or closed. you can do detailed due diligence on a company and have actual projections. in seller, either keep

majority or minority so it is a very flexible capital structure. jason: is this a scalable business? how much do you effect that expect your firm to grow to accommodate this? chinh: it is a scalable market and the spac is an asset class that will continue to grow. it is changing rapidly. over 20% of the ipos were done 's.spac over 10 million dollars were issued. still very much a fraction of the private equity market. over $650 billion, but i think that market will grow. financial equity groups including ppg and carlisle are well.g spac's as

fortune five companies are selling into spac's. 's will continue to do spac and traditional private equity deals. jason: i have to ask you about your personal story. you came to this country as a child from vietnam. .ou have been very successful you have given a lot of thought to your philanthropy. it is your time -- that time of year. what is your philosophy? .hinh: i feel very fortunate i came to the u.s. as a refugee, and very fortunate to be an american. it is very important to give back. we support a lot of charities around new york city. we also build schools in asia and africa, and do a lot of health care missions. it is important to give back and a privilege, not an obligation. jason: do you feel like that

spirit is in wall street right now? it is a volatile time. chinh: i think it is. if you look at what steve has done giving to the public libraries and what my colleagues have done, it is a wonderful thing to give back. it is alive and well. jason: chinh chu with cc capital, what a treat. thank you for sharing your insight. alix: thank you so much. conversation at 8:30 in the morning. coming up, more on the life and legacy of president george herbert walker bush in his own words. >> you must feel responsibility to others. you must believe in serving others. that is a fundamental tenet of my life. ♪

♪ emma: this is bloomberg daybreak. i am emma chandra. coming up, alan lichtman, american university professor joins our special coverage of president wishes state funeral. -- president bush's state funeral. ♪ today, the nation mourns the passing of one of its leaders, a man whose life reflected in shaped the second half of the 20th century. >> i, george herbert walker bush, do solemnly swear that i will faithfully execute the office of president of the united states. david: with that, george herbert walker bush became the nation's

41st president on friday, january 20, 1989. he was born in new england in 1924 and his father was a banker and politician. they lived in greenwich, connecticut. bush was excepted to yale but did not go right away, instead enlisting in the u.s. navy on his 18th earth day. he flew 58 combat missions in the south pacific, including when his aircraft was hit and with his plane on fire they dropped the bombs and floated to see before being plucked to safety. bush married herbert pierce and they started a family. in yale, he was captain of his fraternity and the baseball team. toer graduation, they moved west texas where bush started an oil company and begin a career in politics. by the mid-1960's, he was serving as a u.s. congressman.

president's in what him u.s. ambassador to the united nations. then he served as the chief envoy to china and eventually as president. some like his friend james baker called him the most successful one term president in history. >> if you look at what happened in the world and the way he managedthat, the way he to handle the cold war so that it ended with a whimper and not with a bang, was really incredible. look at the other things along the way. peace as a member of nato. the coalition he put together to reverse iraq's aggression in kuwait. ending the wars in central america. david: although he excelled at foreign relations, the national

economy served as his achilles heel. he reached across the aisle to reduce the deficit through accommodative spending cuts and increased revenue. down, heeconomy turned lost the presidency to baby boomer governor bill clinton in a three-way race with ross perot. >> it was not easy. you are trying your hardest. i had a great feeling of letting down a lot of people, a lot of people that worked for me and our administration. i have this ghastly feeling that i let them down, and then you go over it. david: moving on, including more time devoted to his family and the service of others. in 2005, he and president bill clinton partnered to raise funds for victims of the indian tsunami and in haiti. >> we have been given a lot of material things. we are blessed when you look around, to how lucky we have been.

you must feel responsibility to others. you must believe in serving others. that is a fundamental tenet of my white -- life. --id: his wife of 70 years died earlier this year. he largely kept out of the public eye, spending time with his family. in 2012 how he viewed his life and what was to come, he simply said he was not afraid. >> not a fear something. -- fearsome thing. not a worrying sense of being cheated out of something. i do not know where i would have been in life if i had not been blessed with kids, grandkids, and family. david: joining me now in washington is al hunt. somebody who knew bush 41 quite well. as you look at that, a remarkable life, what is the

legacy of george h.w. bush in terms of the presidency and washington? al: he governed with great civility and decency, and at the same time was able to accomplish things. he was a nice guy and he did not finish last. i think jim baker is probably right, he may have been the most successful one term president. it might have been a contest with james polk. all great presidents are two term presidents. during that one term, there are some great deficiencies. he did achieve a lot, the end of the cold war and the americans for disabilities act and the buzz it resolution -- budget resolution. david: is there anything left when we look at things like the 1990's budget deal? could we have that moment in washington again today? al: not today.

hopefully tomorrow or five years from now. the partisanship has become so intense, the 24/7 campaign is there. the wings dominate the republican party and to some extent the democratic party. it would be hard for george bush to get elected today. david: he knew all these world leaders. he was his own desk officer for most of the public policy proceeding. how much was his personal charisma and bonding with individuals? al: that is important in politics, dealing with world congress, orers of the unruly people called the press. the night before he came -- became president, we had a dinner party. we had a hack political writers group and we invited bush. he came and stayed for about an hour and a half, charmed

everybody, all of these reporters. said, you better give me something to sign for them, don't you think? he had marvelous charm. david: we have a brand-new freshman group of congress people, a lot of women and veterans. what would you instruct them to study injured herbert walker bush that they might learn from -- in george herbert walker bush that they might learn from? al: personal relationships matter, and you can engage in a civil manner and still get things done. i think a lot of them want to do that. when you talk to abigail spam better -- in many ways they reflect a democratic version of george bush. through the years, you have seen so many major events in washington. we saw one not long ago with john mccain and the funeral. do they just come up and pass away, or will they have some

lasting effect? boy,ll come away saying, why can't we get back to those spirits? al: the memory of george bush will endure. he was a great man and a good president and deserves the accolades. at funerals, we tend to aggrandize and eulogize. go, what are they going to say it mine? it will be better than i am. i hope the memory of his service as opposed to what happens at the cathedral today, their memory of the way he served as president and what he did and the way he reached across the aisle and had people like danny rostenkowski, people who were good friends with george bush. the one person he called, when dan rostenkowski went to prison, he called him.

al: the last call geraldine ferrara had was with george bush and they said i love you. david: a reminder, bloomberg television and radio will bring you special coverage of all of the state funeral events as they hand full today. i will be hosting our special coverage starting at 10:00 a.m. new york time, 3:00 in the afternoon in london. alix: it is such a stark difference where we are then and now. david: he was an extraordinary man. he was a lovely man, no doubt about it. alix: a special edition of "bloomberg markets" up next. ♪

>> it's not :00 a.m. in new york. >> welcome to a special edition of "bloomberg markets."

♪ vonnie: global equities firmly in the red following the biggest selloff on wall street since october. china confirms the 90 day deadline for trade talks, boosting u.s. futures. recovery on growing optimism the u.k. is unlikely to exit the european without a deal. all of that in the next 60 minutes. we will be keeping an eye on proceedings and washington, d.c. let's check those future is now. here's abigail doolittle. abigail: u.s. markets are closed today to