all the volatility we keep talking about and the selling of the recovery, the s&p 500 inside of 3% of its record high. and for today, the s&p gaining .75%, the, i should say adding .9%, and small caps. haslinda: small caps -- caroline: small caps really outperforming today. s&p 500 about 9% lower. nasdaq basically where we are in general. joe: pretty much every s&p category up today consumer staples the only one in the red. carolina: a little political breaking news, nadler subpoenas the key former what has aidses, hicks and donaldson. more political analysis to come. nadler subpoenaing white house

aides, hicks and donaldson. abigail: thinking about volatility, not necessarily just the vix, which just closed at the lowest level in two weeks, the "fear index." this is a chart of the nasdaq 100, one-day moves. last september relatively small moves, to the downside, which proceeded huge volatility throughout the fourth quarter. volatility tends to breed volatility, both to the downside as investors become fearful and the but -- buy the dip exuberance. the s&p 500 taking the stairs up. more recently, lots of over 1% moves over the last seven days. seven greater than 1% moves, suggesting volatility might breed more volatility both up and down. so a good time to fasten the seatbelts. toah: as investors get ready

fasten seatbelts, we also see increased hedging, especially in the tech space. looking at put the call volume on the etf tracking the philadelphia semiconductor index, just yesterday we saw 24 bearish put trades for everything a bullish call. you can see the spike. so even though we saw a strong day for semiconductors today, it is clear investors are positioning to profit or hedge from any downside volatility, and not just in the tech space. broadening out, looking at the most popular s&p 500 etf's short interest has spiked near the highest levels of the year. romaine: let's look at footlocker. shares are up a second day here. a a lot of analyst chatter ahead of company earnings, which come on friday. keep in mind, they defied a lot of expectations. same-store sales had gone to a stretch of four quarters of

decline, but that really rebounded the last three quarters. we will get a better sense of what happened in the most recent quarter, expecting to see a boost on the relationship with nike and the jordan brand. should also point out that the company made a lot of improvements with regard to inventory, which has helped as well, and has also closed a lot of underperforming locations and renovated others. just last week, the stock was upgraded, the analysts pointing thathat based on footlocker is relying a lot less on promotional pricing. margaret: thank you so much for that -- scarlet: thank you so much for the context. as we wrap up another day of gains, we want to bring back our guest from northwestern mutual. fomc meetings come out tomorrow at 2:00 p.m.. you talked a little about how the white house is perhaps using the market performance as cushion to do more with talking

tough on trade. how much is the fed using market performance as a cushion to perhaps down the road tighten policy? brent: the federal reserve wants the market to go higher, because they don't want the cycle to end without accomplishing inflation, which would create all kinds of odd things moving forward. so i think the federal reserve wants markets to move higher, but in the near term from time to time, keep in mind the federal reserve picked up a third mandate after the great recession, financial stability. jerome powell likes to talk about it. in the short-term it the market -- if the market gets ahead of itself, gets to the end of the year and the market is doing well, i'm not sure the federal reserve wouldn't mind taking a rate hike to potentially back off any concerns they might have of a bubble. so federal reserve is intermediate and long-term friend, but in the short-term

could be a foe. joe: the conversation about the market has gotten so macro. almost all trade. maybe in terms of macro, a little bit about -- sectors, a little bit about chips. we got more retailer earnings today and this week. target still coming up. are there other interesting themes going on besides these two pillars of macro people are talking about? mike: my head is kind of wrapped up in the macro, too. one point that brent brought up, about the notion that the fed might tighten. i think people are also trying to wrap their heads around situationis tariff causes, finally causes some inflation. inflation finally picking up at least to the point where maybe the fed will not hike. rate cutteps for a will start looking a little off-base. ar december, still pricing at

66% chance of a rate cut by the summer, as much as 80% last week. people will stay focused on the fed and how it intersects with the trade war. scarlet: just wanting to jump in with results from nordstrom. issac is tanking in after hours trade, coming out with same-store sales numbers that showed a big decline of 3.5%. i say that only because the consensus estimate was for a drop of 0.1% for the first quarter comparable sales. versus was $3.4 billion, estimated $3.48 billion. first quarter eps at 23 cents. the stock down 10%. carolina: like what happened to kohl's today. let's look at sectors to watch or any key trends. brent is with us in milwaukee. we are looking at certain sectors like retail in the line of fire when it comes to tariffs but also when it comes to lackluster numbers. are there sectors where you feel there is the opportunity to buy,

or that it is time to get out of? brent: given that our forecasts eventually resolve themselves in global growth continues, in the introduction you talked about sectors that did well today. if you look at those three today and what did well that would be an indication of where to have the portfolio lined up, so more towards cyclical stuff, and out of the defensive sectors. we do think there is time left in this cycle, and some of the cyclical sectors are undervalued compared to the safer sectors. scarlet: adding to nordstrom, looking through the numbers still. an outlook is well aware nordstrom sees 2019 net sales 2%,-- flat to down previously protecting increase of 1% to 2%. you wonder if that has anything to do with the trade environment or something broader. joe: quite a move. brent, on the fed, one thing, maybe a fly in the ointment of the idea that the fed is your friend. when we got the last powell press conference, we did push

back a little against the dovish view. he talked about their view that mediocre inflation was transitory. there's been a pretty consistent drumbeat out there that any market expectations of a cut could not happen. so could it be that people are sort of a little bit too comfortable about how much the fed has their back? brent: i think the fed wants you to feel that way in some way, because they want risk priced appropriately. but at the end of the day, the fed has had a dual mandate for years. but after the great recession of the 1980's the mandate was really inflation, which they were ready to keep in the box and never let out even if it sacrifices future potential economic growth. fast forward to today, and we are in the opposite, we had a recession about a lack of economic growth and the fed thinks they can get more employment growth, so they are willing to err on the side of letting the inflation run hot, and we are still pretty far below that.

they certainly want to do it without causing a market bubble that could cause the cycle to finish before it needs to. scarlet: mindful of the unofficial third mandate of financial stability. thank you so much, along with mike regan. to recap, nordstrom numbers, and a full year outlook for earnings-per-share that comes in later than expected, $3.25, whereas before nordstrom saw anywhere from $3.55 to $3.90. the company says they expect softer trends in the fourth quarter to continue into the first quarter, and a further deceleration. some executional misses as well. that does it for the closing bell and for me. romaine bostick is stepping in for what'd you miss, where we have more on retail's continuing challenges. this is bloomberg. ♪

♪ ♪ caroline: live from bloomberg world headquarters in new york, i am caroline hyde. romaine: i am romaine bostick. joe: i am joe weisenthal. caroline: a continued snapshot of the melt-up we see in u.s. stocks. joe: the question, "what'd you miss?" caroline: china pledges retaliation for huawei as the u.s. gives the tech sector time to adjust to last week's ban. the cloud of the trade war looms large over retail, nordstrom joining kohl's and jcpenney in declines. and a desperate gamble, theresa may making a final gambit to get her brexit plan through before leaving office, but the effort

looks doomed. a look at retailers. brutal quarter for nordstrom, cutting projected earnings per share forecast for the full year $3.25, before seeing anywhere up to $3.90, so clearly taking a hit.first quarter comparable sales falling 3.5% , much worse than the estimate of a very slight decline. so clearly misses for nordstrom. urban outfitters on the higher side, up almost 2%. not only a beat in first quarter comparative sales, flat compared to expected fall, they launched a new competitor, newly. rent.8 a month, you can joe: playing the waiting game. the trumpet ministration holding back on the huawei ban on concern it could sideline

ongoing negotiations, only taking actions after the latest round of talks stalled. i want to welcome our senior trade reporter. one of the key things the administration has done is really intertwining national security with trade, not keeping them separate. it looks like the treatment of huawei is a classic example of this? >> absolutely. hasnistration and public heard a lot about trying to keep the two things, the huawei case and broader trade negotiations, separate. but we have learned in the last few days that the decision to go ahead with actions against huawei last week was related very much to the breakdown in talks with china, and it is a real sign that those talks are not going to get back to life any soon, i think. you really have the administration doubling down on th china, andon wi

huawei as we saw with the chinese reaction, is kind of crossing a red line for beijing. romaine: talking about how maybe the action with huawei had to do with a breakdown in chinese trade talks, there also seemed to be the implication here that the u.s. would go forward with some kind of action against huawei, but maybe it was putting it off until later. is there a sense here that this was always in play? shawn: i think we need to be absolutely clear, the u.s. government for several administrations now has had huawei in their targets. the obama administration was looking at huawei. national security types here in washington have had concerns about huawei, and what they say are its links to the people's liberation army, that have been going on for years. it's been a conversation on capitol hill for a long time now. there was always going to be some kind of action against huawei, over what the department of justice says was its

violation of the u.s. sanctions against iran. but really how that played with and into played with the trade really the at sensitivity of china, and how conscious and really focused on getting a deal the trump administration was just a few weeks ago versus what we have seen in the last few days. caroline: meanwhile we have heard from the chinese ambassador to the european union, saying china will not sit idly by and there will be a necessary response. the white has bracing for any response from china? huawei i think everyone in washington is bracing for a response. what you hear a lot from the administration, they feel they have the upper hand when it comes to china, and what they often talk about is the direct retaliation china can do in terms of hitting u.s. exports to china.

the u.s. obviously exports a lot less to china than china does to the united states, so there's a lot less trade you can hit directly with tariffs. but china, and we have seen this from its battles with japan, with south korea, its other trade battles, has all sorts of other measures it can use, including in the past things like consumer boycotts, regulatory harassment of foreign firms that are operating in china. so there's a lot of people in the business community here in the united states who are savvy and who realize that this isn't just the trade war that will be fought with tariffs. caroline: great perspective, shawn donovan. thank you for the latest on trade. sticking with one area really hit by trade, retail today. look at the after hours moves in nordstrom, after it downgraded its full-year outlook. currently off 9%. ohl's fellhat k about this amount today. we're starting to see the

consumer, not as strong as we hoped. romaine: i was going through some of the conference call transcript, and they didn't talk too much about china trade at all in these things. it seemed to some of the weakness we are seeing is more domestic, and in future issues they didn't seem to address it. joe: almost like the physical retail angst is still not going away. caroline: exactly. home depot also a concern, not addressing the elephant in the room of trade. let's bring in our opinion columnist from washington. first, the recent breaking news, urban outfitters looking better, but notably we are seeing a really dire quarter for nordstrom. sarah: yes, and the particular callout there is the department stores really whiffed, 5.1% decrease in net sales. they said in the press release it was execution issues, and my years of retail reporting have

taught me that's a euphemism for "we had the wrong clothes," they simply didn't have a good merchandise selection. this continues problems in the fourth quarter, when they said women's issues were ok but every other women's category suffered from weak traffic. two consecutive quarters of this, and you have to ask yourself about the health of nordstrom going forward. joe: there was one retailer that actually was up quite a bit aday, tiny chain stein mart, market cap of about $50 million, surging because they will add those amazon lockers. kohl's itself which plunged 12% today, part of what they thought they would turn around was because of partnerships with amazon and a place to do returns. that doesn't seem to necessarily be an automatic ticket to success, does it? sarah: it is not an automatic ticket to success, but it is one that is critical important for them to make work. as we saw today, comparable sales down 3.4%, with particular

softness in their home goods business. so what kohl's needs more than anything else is bodies in stores. that is what the amazon partnership promises to deliver. is stein mart development interesting. for the partnership with amazon to bear fruit for kohl's, it has to be exclusive, and they need to make sure amazon isn't setting up similar deals with competitors. the stein mart, even though it is a very little fish in the retail pond, it makes you wonder if amazon will pursue arrangements with other retailers, diluting the value of kohl's partnership with them. a retailer that did fairly well was tjx. last time i was in a t.j. maxx, there were piles of clothing everywhere and it was a mess, but also packed with people. i don't quite get it. maybe you can explain. a long time has

been winning with shoppers who love this treasure hunt mentality, who love the feeling of going into a store and it feeling like a sport, if you will, to find that last skirt in your size, so they have been one of the most consistent success stories in retail the last several years. they do hardly any e-commerce business, and they are killing it. the marshals, t.j. maxx division, comps up 6% that division this quarter, and the home goods chain also saw positive comps. as much as e-commerce is disrupting the retail industry overall, you can see places where the brick and mortar model is still working quite effectively. joe: i need to check out a t.j. maxx. haven't been to one in a long time. czak, hall's arc -- hol always appreciate your perspective. coming up, presidential democratic candidates might be shunning corporate cash, but -- more on that story next.

this is bloomberg. ♪

joe: wall street has long been the deep well of finances for presidential candidates, with hundreds of millions of dollars for advertising and staff. as the presidential race gears up, almost the entire democratic field is hitting industry donors. so it is trendy to say we won't take corporate cash, we don't want to get wall street's money. we saw the trouble hillary clinton got in. but in reality, they are going back to wall street, right? >> well, they are still trying to say we are all raising clean money. everybody wants to be like bernie in 2016, and you might recall he raised 230 $7 million from what are called low-dollar donors, almost all of it from

individuals giving under $200. pop.ly $10 to $15 per almost all of that came online, and very little came from corporate pac's or any kind of pac. some came from labor-related people. but anyway, it was considered clean money, and blew everyone away. the trend this year is to be like bernie, but not everybody, there are 24, 25 democrats, i have lost count, they can't all raise all that much money from small-dollar donors. so yes, they have gone to wall street. and even though they say we are disavowing corporate pac's, disavowing money from lobbyistss, we are not accepting support from super pac's and not holding these big, fancy big-ticket fundraisers, they are, almost all of them except for bernie sanders and it was with warren, going to wall street and saying help me raise money. romaine: is it just there aren't

enough small donors, or it is too hard to court them? obama seemed to have good success with small dollar donors. trump, 25% of his fundraising came from small dollar donors, so they are out there, right? paula: a lot of the small dollar donors for obama were the same who gave to bernie, so they didn't run against each other. we don't know how many there are. you can have several hundred 10 dollarsand raise or $15 a pop like bernie sanders and still not get to the amount you need to get from now all the way to june 2020, to the end of the primaries. it will take a couple hundred million dollars. when you hit california, you will need big money, because that is a very expensive state. caroline: paula, how much does the voter care? it would seem trump's still getting money. we broke the news last week he's managing to get certain bigwigs of wall street to help him raise cash, and does the voter base

really want them? paula: maybe not the republican voter base. but in the democratic party, a lot of the energy is on the far left, and those are people who for decades have been agitating for a cleaner system of politics, getting the big money out of politics, getting the special interests out a politics. they blame those special interests for not having allowed them to accomplish the things they want, such as medicare for college, allree the various things bernie sanders is campaigning on. they say the reason we haven't been able to get those things is special interests prevented it, and if you get your money from them, you have to kowtow to them. caroline: elizabeth sanders and andi -- elizabeth warren bernie sanders don't have to, but everybody also little indebted to wall street. thank you, pollard wire. romaine: coming up -- paula dwyer. romaine: coming up, theresa may

serves up another brexit deal. we will take a look. this is bloomberg. ♪

mark: i am mark crumpton with bloomberg first word news. special counsel robert mueller is resisting the idea of testifying publicly before congress on his pressure report. bloomberg learned -- his russia report. bloomberg learned mueller is pushing for a closed-door meeting, reportedly telling the has judiciary he doesn't want to be dragged into a political fight. sources tell bloomberg mueller is suggesting he make a public statement and then be questioned by the committee in private. on orders from the white house, former counsel don mcgann -- mc gahn defied his subpoena to appear before the has judiciary

committee. chairman jerrold nadler said they would vote to hold him in contempt and take the issue to court, adding "the panel will hear from mcgahn one way or another. >> there are forces exerting other kinds of pressure on mr. mcgahn. in short, the president took it upon himself to intimidate a witness who has a legal obligation to be here today. this conduct is not remotely acceptable. mark: congressman doug collins, the ranking republican on judiciary, called today's session a circus and said chairman nadler preferred a public fight over fact-finding. this afternoon the committee subpoenaed former white house comedic asians director hope hicks, and annie donaldson, a former aide to don mcgahn. blockrnia will seek to the cancellation of one billion dollars of federal money for

the high-speed rail project. kevin newsom says it is political payback -- governor gavin newsom says it is clinical payback. they plan to file a restraining order blocking the administration from awarding the money to another project. in a major concession, prime minister theresa may allowed u.k. lawmakers to vote on whether a new referendum should be held. may says she plans to ask the house of commons to vote in early june on what she calls a last chance to see lay -- seal a brexit deal. >> right now it is slipping away from us. we risk losing a great opportunity. this deal is not the final word on our future relationship with the eu, but a stepping stone to reach that future, a future where the people of the u.k. determined the road ahead for

the country. mark: jeremy corbyn, leader of the opposition labour party, says the party will not support the prime minister's brexit plan , calling it a rehash of talks that fail to reach a compromise last week. moment.brexit in just a global news 24 hours a day and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. romaine: some breaking news. toll brothers, one of the larger homebuilders focusing on the luxury end of the market, beating on putting much all estimates. revenue and net income and earnings per share all up in the most recent quarter. also, the one negative, the backlog both in terms of value and number of units fell in the quarter. caroline: great perspective. thank you. we were just talking about

brexit, and we are trying again. u.k. prime minister theresa may made another did -- attempt to put her deal across the finish line, a fourth attempt. she promised to give members of parliament the chance to vote on a second referendum. is.hey back her plan, that the embattled prime minister lamented the challenges of finding an exit deal earlier today. >> the challenges of taking brexit from the simplicity of choice on the ballot paper to the complexity of resetting the country's relationship with 27 of its nearest neighbors was always going to be huge. while it has proved even harder than i anticipated, i continue to believe the best way to make successive brexit is -- success of brexit is to negotiate a good exit deal with the e.u. as the basis of a new special partnership for the future. caroline: for more, let's welcome dartmouth professor of economics danny blanchflower,

former boe policymaker. you have talked at length about this, and we all have since 2016. is there any way this agreement gets through, do you think? danny: none. no chance whatsoever. i was teaching class this morning, and we decided we would listen to the talk, and we got about eight minutes in and one of my students said to me, there is nothing new here, is there? i said no, there's nothing. that is where we are. fourth time is not the charm. 20 of the tory mp's who voted for it last time said they would not vote for it this time. she lost by 58 last time. labour will not vote for it, dup will not vote for it and large chunks of her own party will not vote for it, so this is as dead as the proverbial dodo. i don't know why she keeps repeating the same thing. i sat trying to listen to what is new, and the answer is basically nothing.

so here we are at this impasse, like waiting for godot, waiting for halloween, the date set now, not march 29, but halloween, when britain is supposed to leave. the big deal now, there will be european elections in two year'' time for britain's continued participation in europe, so here goes the merry-go-round back to where you started from, i think. no progress has been made. if anything, this pathetic government and the pathetic process by which they have tried to sort out brexit has taken three steps back, and it is a very long way from getting anywhere near a brexit plan. joe: so, hard brexit? is that where this is inevitably headed, just a crash-out? danny: well, i don't know that is true. i have been thinking about the possibility if you just crash out, although of course that's not the end of it. if you do crash out, that is likely to be a disaster, and nobody really wants that, but

nobody really knows where we are. probably what we will see, the bookmakers are putting their strongest odds on pushing back the exit date further again and again. but you are right, at the moment there is nothing a on the table. and even if there was a second referendum, it is unclear what you would put in it. theresa may, it's not clear where the votes would go. it's pretty hard to call this, but it is not a surprise. might be a surprise for theresa may not being able to sort this out, but not a big surprise to economists and others, and those on the program who have been watching it. it never looked feasible, it is clearly not, what they are trying to do. romaine: can you talk to me a little about the economic impact and ramifications? some data seems to suggest a softness in the economy there, and anecdotal evidence about consumer spending. danny: absolutely.

obviously we have seen the pound fall since the day of the vote, and weakness in it recently. today is interesting. on manufacturing from the confederation of british industries which was really pretty bad, suggesting weakness coming. one of the things we have seen perhaps, today things are not quite as bad as they are going to be, but there is evidence firms are planning for brexit and stockpiling, which might mean the softness you see will be even softer, because you pull things back and spend money on stock. three things occurred today as well. british steel now looks like it may well crumble, go bankrupt. they run one of the two steel, integrated steel plants in scunthorpe. restaurantr's

network has gone into bankruptcy. and thomas cook, the british travel agency, in trouble with brexit because people have stopped booking holidays to go to europe. so that softness in consumer spending, in retail, does suggest this is a big uncertainty. the other thing we should of course mention, productivity has gone negative the last three quarters, and investment continues to decline. so you are right. there is a softness, but it might be this is as good as it gets, because once stockpiling stops, with more uncertainty, we will see greater weakness. forecast growth in 2019, 2020 of about 1.3%, very poor growth, assuming a reasonable brexit takes place. so hard to see much good news. caroline: if some clarity arrives, whether it is a hard brexit or a soft brexit or none at all, could we start to see businesses investing? there was a fascinating chart on the bloomberg today that shows the irony. many who voted for the exit from

the e.u., to stop migrant workers taking their jobs, actually a lot of investment has been done in labor rather than robots, and there are fewer robots invested in in the u.k., about 85 per 10,000 workers, much less than the more than 300 per 10,000 workers germany has. could we see productivity growth if we see the right type of investment from the u.k., danny? danny: well, we might. i always take the view that certainty is helpful. at lease knowing where you are ians firms can plan, and think that's completely possible. but you have to think even if what is a brexit moment, does the future after that look like? you haven't negotiated deals. the u.k. negotiated with the iceland,ands and small islands in the caribbean and a couple latin american

countries. that's not great. we don't know where that goes. we don't know what the future european relationship will be. a little certainty is fine, but it will take a long time to sort out the law, what the trade deals will be like, and of course what to do about ireland. we have no greater clarity. with a border appear there? folks who show up in dublin, can they get on the bus and go to belfast and then move deliverable? i don't -- move to liverpool? i don't see this being resolved in five years. pure politicshe aside for a moment. the criticism of the government is pretty clear, but also a lot of chrism of how the opposition labour party handled things, some of viewing a missed opportunity to define more of the anti-brexit. will this be a defining event in u.k. politics in terms of the demise of the two main parties? we see in polling now weather

for the european parliament elections or a theoretical new election for the u.k. parliament, other parties, whether it be the brexit party or whoever else, are doing well right now. danny: certainly what we see in the polling, the european elections coming up in two days, the brexit party led by farage appears to be ahead. the two parties, the tories and the labour party, really their remain parties, are down in the polls. people are thinking if i am a remainder in -- remainer in the labour party, i don't trust jimmy corbin, and we are seeing moves to other parties. there is proportional wreps and tatian. so movements to scottish nationalists in scotland, welsh nationalists in wales, the new change u.k. party, the lib dems and the greens. the brexit has been driven by both parties -- debacle has been

driven by both parties, unable to get a deal. we will see how things go, but it looks in these things that the two major parties are basically irrelevant, so we have a brexit party and a bunch of remain parties. it might be the split of left and right moves away, as the split between brexit and remain takes over. you are right. that's the kind of move we are seeing. whether it transforms itself into a general election that presumably is coming after a new tory party leader, we will see, but doesn't look good for the big two parties. romaine: that is professor danny blanchflower of dartmouth college. coming up, a real estate shift. foreign cash entering the new york real estate market is drying up. we talk about what is happening with overseas demand, coming up. this is bloomberg. ♪

joe: fueled by foreign demand, capital from overseas once caused new york city real estate prices to skyrocket, but the market has been in a correction for the last couple of years. let's take a look at why the market is particularly sensitive to economies beyond u.s. borders. joining us now, a specialist in real estate and business law in new york city, managing partner. pierre, thank you for joining us. i was driving into the city this weekend and saw a bunch of those really tall, skinny buildings that went up over the last few years, sort of counting how many there are. i think a lot of the appetite for that kind of real estate was foreign money, all over the world. are people still banking on that? is this a temporary lull?

what has it slowed down and what our prospects? for it returning? having meank you for today. excellent question. look at the construction boom before and after the recession. before the recession is when foreign capital really started driving the market, 2040 2008, and with the crisis it dried up to 2011. now in the present day, every new development in the city is one of these glass towers that keep getting taller and taller than the next one, right? central park tower just released for sale, now 432 park is the tallest residential building. compare that to the prior cycle. the prior cycle if you look at what was developed, it was product for foreign nationals, high-end market, and also domestic people. i like to joke, call them semi-normal people able to afford $1 million to $3 million homes. and today the only inventory coming in is in the

ultra high-end, and there is such a saturation of that that it is causing a softening in pricing and demand. romaine: on the demand side, what is happening with these buyers? we know some of the nationalities. a a lot of chinese buyers, eastern european buyers. china, i can understand why maybe they aren't buying to the same extent, but what is going on on the demand side? pierre: demand for high-end residential properties is driven by exchange rate plays, driven by the desire to exchange in a stable market, getting the money out of your country, like greece for instance, which has been on the brink of collapse for how many years. china, which has had its own economic concerns, in hopes of putting it in a more stable environment. the exchange rate, the hope of making a return on your investment, and like we discussed, the stability component. for instance, china, why such a huge drop-off in demand from china? number one, it has been able run -- a bull run for a number of

years, and number two there is a capital restriction of how much money you can take out of the country year. in china, you can only take out $50,000 a year from the country. this rule, for reasons unbeknownst to me, was completely ignored until 2017. the government started enforcing this, and that had a tremendous impact on the market, probably the biggest factor in terms of the slowdown of money coming from overseas. caroline: kind of a perfect storm. the demand has fallen domestically because of tax changes, particularly in the very high-end markets. what is the answer? are people seeing prices come down, or more like the london luxury market where nothing is selling because people won't actually lock in that loss? pierre: we are in a different boat. i'd say that our market is more negotiable than i have seen in close to 10 years. talking about the regular market, there's a very positive

outlook, the people actually buying homes to live in, non-billionaire clients. the reason i say that, if you take factors like the interest rate on home mortgages, they are right now at a 15 month to 60 month low, so some be buying a home to live in will factor in the exchange rate -- interest rate increases as of today. unemployment today is at a 50-year low and the stock market has performed well, all great signs for the real estate market. kind of carving that out of the market in general. that's the majority of the market. the high-end luxury market, to be honest, i don't see an end in sight, because that demographic isn't concerned about the factors i mentioned. somebody buying a $30 million apartment doesn't care what 30 year interest rates are. caroline: putting it very well. pierre debbas, thank you very much, sadly -- thank you very much. sadly, last orders for british

celebrity chef jamie oliver, whose restaurant chain is collapsing, risking 1000 jobs. they could not overcome intense company should and rising costs. i am saddened by this. not only is it italian, which is always a pretty solid choice if you are in a shopping mall, but 15 london was a really charitable organization he started up, helping train the homeless, the unemployed, the youth, who could not get normal jobs. romaine: a lot of people in the u.s. know this because he tried to make an effort to improve nutrition standards in the public school system. joe: is this a micro story, or about how hard it is to run restaurants? caroline: it is brutal in london right now. there is too much out there. you go to any high street, there is too much. a lot of them going into administration. romaine: coming up, we talk samsung's succession and how it might raise uncomfortable

questions, including the payment of a $7 billion estate tax bill. that story is next. this is bloomberg. ♪

♪ onaine: we are focusing succession at samsung. the 77-year-old chairman of the tech giant and south korea's wealthiest person has been incapacitated since a 2014 heart attack. his expected passing may incur a estate tax that may throw into question control of the conglomerate. let's bring in shery ahn. the estatending is tax will be about 60% of what they would inherit, and to do that they would have to sell off some stock and punch eventually sell stock?ly shery: the chairman, who has been away from public view, is

worth $14 billion. he controls around 62 companies, valued at over $300 billion. south korea's estate tax, as you said, 50%, putting it at around $7 billion. the second-highest in the oecd, is 40%o fyi, the u.s. but it only kicks in after $20 million. for korea, $2.2 million. way korean conglomerates operate is not through a corporate entity that oversees all these companies, but through a very complicated web of cross-shareholdings. as you said, the shares could be diluted, stakes could be diluted. and the soft power, his decades of experience at the helm of the conglomerate. joe: so it is not that they are

one company that would then have to be split up, because it is so complicated, all different kinds of shares would have to be sold. what is public opinion right now towards these conglomerates? shery: not great. the chaebols were part of the economic miracle in korea, but this administration got elected pushing to end these conglomerates. you can see how big samsung is for the korean economy, around 14%, the data from 2017, their revenue is 14% of korean gdp. romaine: wow. caroline: very important, but not quite in vogue with the public. great analysis, thank you. don't miss shery on daybreak australia and daybreak asia starting 6:00 p.m. eastern. that is all for "what'd you miss?" romaine: bloomberg technology is next in the u.s. joe: have a great evening. this is bloomberg.

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