more than 100 firefighters on the scene of a blaze that sent huge plumes of lack smoke over the area. no word on casualties and what caused the fire. it is not appear to be terror related. 10 people confirmed dead in the condo collapse outside miami. the city's mayor said more than 150 people are still missing as rescue crews search for the fifth day. they search to find the cause of the collapse. correspondence of the board and correspondence shall residents were concerned about the effects of nearby construction. ukraine and nato have an exercise set for two weeks following last week's incident with a british destroyer of crimea. one warship fire warships

and an airplane dropped bombs in the path. it was denied and said the ship wasn't fired upon and was failing. $4 billion in federal education pandemic funds to help boost the u.s. territory's fight against covid-19, the first time the island found the money. puerto rico schools closed in march. a month later the schools were reopened because of cases and some didn't open until may. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. >> good afternoon or good

morning pending on where you are. it is 1:00 p.m. in new york. it is 7:00 p.m. in germany. we have a lot to talk about today. first of all, germany and england playing in the europe cup. that is going to be a huge result. 50,000 people watching. you have the delta variant that is starting to really freak people out, even though they are allowing 50,000 people allowed to watch germany versus england. we have a great mohammed conversation coming up with el-erian and robert koenigsberger of gramercy funds management , more on liquidity risks and em. we are going to go through that. first let's look at what is going on in markets.

the s&p 500 rising to another record we continue to see gains into the close and that will be another record high, 4290 5, 4296 is the level. the u.s. 10 year yield at 14816. i have talked about all the reasons it should rise but it has not yet. today selling and only five 1000 of 1%. we have seen the gains in the dollar against the euro as well as the pound. crude it down but only two sets of barrel to 72.89. the global benchmark is still holding above $75 a barrel. i am wrong. i take that back, brent crude at

$74.73 come up a nickel. let's get to the conversation i had promised you. gramercy is finding some economies on the wrong side of the global rebound of covid. the asset manager seeing liquidity can't prop up all markets at all times moving forward and we have heard people talk about liquidity issues. here to discuss is bloomberg opinion columnists and gramercy funds management chair and the president of queens college at cambridge mohammed el-erian ,and we also have the cio of gramercy robert koenigsberger joining us as well as our own sonali basak. i have been looking forward to this all day. what are the concerns about liquidity? people have been talking about a drop over the last decade even

as rights -- rates lowered and trillions of dollars of cash but liquidity isn't always there when you need it. mohammed: thanks for having the peer we are in record levels of ease. a lot of cash has been put into the -- ask for having me. we are in record levels of ease. a lot of cash has been put in and it has to go somewhere. when you go to the emerging world, you have the contrast with on the one hand liquidity that has been wonderful thanks for so many asset, and fundamentals, where we have seen dispersion on the count of covid , and financial ability. the biggest thing an investor must face in the next six months is, can liquidity continue to be

the dominant factor. sonali: we all know liquidity is there until it's not. when you look at investing over the next six to 12 months, where are you most concerned about liquidity drying up. robert: good afternoon. that is the challenge. on the one hand, there is notions of daily returns but we have to put up preservation of capital and make sure the portfolios are secure. big risks that may lie where the people think about liquid securities. one does not get paid for the potential of the quiddity. liquid security -- of the liquidity. liquid security is camping that one the liquidity might not be there and do they need it back in three days and if not there are better places to go.

if so, be careful about what is good and what is not when you need it. matt: what is the turn going to look like, and how do you expect it to hit financial markets. robert, let me ask you, we have already seen a more hawkish tone from the fed, three fed members coming out saying they want to raise by 2022. we have not heard real talk or seen the plan. how is that going to affect liquidity and markets? robert: i think we need to look back and i would guess liquid markets will prove to be less liquid than they were back in 2013. the reason for that is how much larger it has gotten and the allocation towards liquidity, etf's, and what have you. so much larger, the number of

banks is smaller and the balance sheets are less. it is not if it is going to happen and the when is defined by outflows. matt: i also wonder about the financial system. mohammed, we didn't see this time around of prop the financial system as we slipped into a recession and held strong and a lot of people credit regulators for that. have a built up enough capital? are there balance sheets in good enough shape to balance anything at this point? mohammed: the good news is the banking system has built up a lot of resilience. it has done so in terms of capital and terms of risk they are taking. and they are being supervised and regulated very closely. the bad news -- and we saw it in

march of last year -- is the non-backing system, where there is a lot less resilience and when the paradigm suddenly changes, there isn't enough risk absorption capacity in the system. what do you get? malfunctioning markets. that is what we got last march, during the taper tantrum. it is malfunctioning markets because that causes investors to do things they don't want to do. when you can't sell what you want to sell, it typically ends up selling something else and you create this locked system. that is why the notion of structure of the system has become so important. sonali: i want to follow up on this point of the nonbanks. if you look at the leverage issue since late 2019, you had the basis trading blowout, rk goes, -- when you look at

these issues where we have seen major low ups that required -- blow ups that required intervention and you had the fed or other media area, -- other media raise, how -- medi aries, how worried are you? robert: you have to think about the leverage we can see in the leverage we cannot see. the challenge with leverage is because of the low yields, people are being pushed to places where they are less comfortable and i think the risky place is to take the credit risk with the leverage risk as opposed to taking illiquidity risk period and much more comfortable with illiquidity risk there that is just knowing when you are going to get capital. i am uncomfortable leverage. there is overnight leverage where it gets pulled away from

you exactly when you need it and there is term leverage. sonali: to the point you are making about a malfunctioning market, i am curious how much you think central bankers, regulators have a handle on the market that has moved so far from the banking system. do you think there is any degree to which they have lost control of it? mohammed: they themselves will admit the risk has migrated to paths that they understand less well and eight circular -- certainly -- and they certainly regulate less well. every one of those near accidents was a surprise and central banks -- surprise to the central banks. what stopped the near accidents from being a massive pileup on the liquidity highway is luck. luck stopped it from being a pileup. the system is signaling very

slowly and that signal isn't getting through that there is this risk out there of someone being caught off sides, that someone will be caught off sides and the worry is what happens when they get called off sides. that is why it is really important to think about differentiation, structuring, and financial resilience. matt: these near accident and the growth in leverage as well as massive accumulation of debt, both public and private, have been the result of the easy monetary policy. i wonder what you think about that debt, mohammed. earlier we heard about concerns in terms of the massive debt built up that we've seen for

society, and what are the consequences -- are the central banks, regulators going to be able to unwind that or bring it back somehow without causing blow offs? mohammed: it depends on where the debt is aired and my worried about u.s. government debt? no. am i worried about certain emerging markets, high-yield, triple cs, yes i am. a lot of it depends on where the debt is. this will not be central banks stepping away and selling their securities. it will take a very long time simply to stop buying, let alone selling. this will be the system deciding at some point that they are going to step back. you know how that works.

everybody is in the trade until somebody moves out of the trade, and then you worry because you don't want to be the last one in their. it is about when the tolerance of the system says enough. i can name lots of people, and we go back to the notion of people fully invested. they are bearish but still fully invested. if the paradigm changes, that is an enormous difference in terms of liquidity available. sonali: robert come everybody from citadel to goldman sachs has said central bank balance sheets being uploaded is what worries them the most at the end of the day. when you are looking at e.m.'s, are there places you will just avoid because of the risks you see out there? robert: that is a great question. a lot of successful investing in emerging markets using not what

you buy but what you don't buy and using differential was whether you were in lebanon, argentina and sri lanka when they dislocated and which ones to get back into. we are definitely concern about sovereign balance sheets. i think of differentiation and emerging markets is becoming a very challenging label because there are so many different types of credits. take oil, oil is a great asset for some emerging rk countries and more difficulty -- emerging countries and more difficult for others. you have to really differentiate . for all of these risks, i would rather go and not mention private credit. i think private credit in developed orchids is getting tired. -- in developed markets is

getting tired. when i look at emerging markets, you are able to get higher returns, good packages. that is the type of intelligent risk they can take if they can. matt: robert, it has been great having you robert koenigsberger , gramercy funds management ,. mohammed el-erian , always a pleasure. he is also a bloomberg opinion columnists when we are lucky and also with gramercy. sonali basak, always happy to have you bringing these star guests. thank you for bringing them. this is "bloomberg markets. i'm matt miller. ♪

matt: this is "bloomberg markets." i'm matt miller. six months until level debts. seismic change to the global financial system. the shift will force $300 trillion of securities to a new benchmark. how will markets fair in a post libor world? >> libor is part of the central plumbing of the financial system . it is not terribly sexy but it is terribly important. it has been called the world's most important, because it determines the interest rate of $300 trillion worth of securities, including organ just, loans and derivatives.

the system has broken and needs complete overhaul. beyond these disclosures that the libor system is structurally flawed. an explosive growth of derivatives in the 1990's and 2000 meant increasingly banks office were determined whether libor went up or down. so you had banks lying about borrowing costs. >> during the 2008 financial crisis, people started looking at banks libor and how they engage their credit and what they found was banks were lowballing so that they were more in line. >> in 2008, you see questioning the veracity of libor. then you get regulatory investigations. in 2012, see large ranch

institutions -- large branch institutions with scandals. >> you have to operate that libor is going to go away and it should go away because it is not supported by a robust regime. >> they forced banks to change how they did business and also started the process of transitioning. >> here we are in 2021 and that process is still ongoing. matt: that was the co-authors of a book about the libor scandal called "the fix." it is a lot more interesting than just the libor numbers than the london overnight number. let's get to something that caught my eye, legendary nfl quarterback tom brady and his supermodel wife gisele bundchen making their newest move into

the world of digital assets. they have taken and equity state -- stake in one of the largest crypto exchanges ftx. this news comes on the news of ftx's deal with major league baseball and the agreement to rename the miami heat's nba stadium to ftx. that is a huge jump. the ceo and founder of ftx, sam bateman friede, a very young genius billionaire, will be named the bloomberg new economy catalyst list -- named to the bloomberg new economy catalyst list. it celebrates the brightest anchors and innovators who are accelerating innovations during recovery from the pandemic. joining me is andy brown,

editorial director. i don't want to editorialize, can it be considered a fact westmark the kid is incredibly intelligent. andy: we can agree he has a billionaire making money. from other perspectives we consider him to be a real catalyst. he is one of 31 people that we have selected who have created a new economy. he is challenging the status quo. he's got new ideas and most importantly he is leveraging technology. if you talk to him, as we do, he will say there is a lot of problems with crypto and he candidly acknowledges the problem around pollution and bitcoin. in his view, bitcoin may never make it.

his main point is, if you think the global financial system is working for everybody on this planning -- planet, you must be kidding. what happens if you are in a latin american country and you want to do a cross-border remittance? another one of our catalysts is working on that problem, using crypto trying to do remittances from venezuela. the cofounder of eubank added 40 million customers during the pandemic because resilience realized the traditional banking system isn't working for them. that is what catalyst is all about. we are choosing extraordinary individuals working on resolving the world's biggest problem, not just in the finance all kinds of areas. matt: it seems to be catalyst about people who are going to

change the world, as the name implies. these are the sources of change or at least the instrument of change. what about the investment side of it? is it possible to go to this conference and take away ideas about putting your money, if you are somebody who isn't going to change the world but has a lot of financial power? andy: we have assembled people at the leading edge of technology. if that helps you contextualize the problems facing the planet and the solutions then yeah, maybe you will get some ideas pierce some of the best ideas have come out of the covid pandemic and the elated crisis of climate, which is not just a threat, but an enormous opportunity. trillions and trillions of dollars will be employed for energy systems, transport systems. we gathered together a group of

people who are at the forefront of that. the chairman of moderna is one of our catalysts. we talked to him and this was a technology that had been decades in the making lying around and then covid-19 it finds it right through application in weeks. you have a vaccine which can and pandemic. matt: it looks like there are possibilities that mrna can do so many more things. andy browne, bloomberg new economy editorial director has all of that. don't miss bloomberg economy catalysts tomorrow. this is bloomberg. ♪

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matt: -- mark: i'm mark crumpton . president and misses nine will travel to surfside florida,

according to a white house state -- president biden and misses biden will travel to surfside, florida, according to a white house spokesperson. they are going to the site of the condo collapse. ace -- a justice inquiry into foreign lobbying for turkish interest aired it is separate from a probe for activities in ukraine. giuliani pushed the trump administration to -- to support a cleric which turkish president claimed was behind a failed coup attempt. new york city is getting one step closer to figuring out who the next mayor will be. the elections board will announce a ramped tap -- a ranked tally of ballots. voters ranked the top five preferences.

the elections board eliminates the last-place candidate and transfers of votes to the two candidates who remain. the pacific northwest is starting to cool off after record-breaking whether. it was 115 degrees in portland, oregon on yesterday and what 06 -- and 106 in seattle. it is a region known for rain. it is on a dome of atmospheric high-pressure in the upper northwest and canada. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. amber: welcome to bloomberg

markets. matt: we welcome our audiences each day. here are the top stories. china's communist party marking its 100th anniversary this week we discussed the state of u.s.-china relates with anna ashton of the business council. home prices jumping the most since the 1980's. i was 14 the last time prices rose this fast. and the world financial centers struggle back to the office. a new study shows remote workmate shift as many as 835,000 jobs out of london alone . we will discuss how the pandemic has transformed the way we work. amber: let's take a look at some of the market action right now.

action might be a generous term. hanging around all-time highs for the s&p and nasdaq. another day of tech resurgent -- resurgence, quite a rally for tech stocks in. financials are mixed. morgan stanley trading up after doubling dividends. citi a bit of a drag on disappointed investors not moving on the dividend. others within financials, jeffries came off a record quarter in its result. everything seemed to go well for the midmarket banker investment. that's look at the stock of the hour. what is driving the results at jefferies? david: it is a growth of investment inking business. we -- investment banking

business. they are reporting early. in terms of the second quarter, you had a 70% increase in revenue, yes 7-0. a beat the average estimate by 17% -- they beat the average estimate by 17%. a similar story with earnings, came out of the average of 46%, this most in six quarters. you can see this company is unable role. the shares, they are at their highest price since 2008, and back then it was a conglomerate called the acadia national. they focused on investment banking and changed their name in 2018. in terms of revenue, we are

talking advisory fees on mergers, underwriting fees for selling stocks and bonds. that is really the bulk of their business at this point. they had declines in commissions and principal transactions during the quarter. those segments of the business took a backseat to what was going on in investment banking. that is how things lined up and that is why the shares of jeffries have taken off. matt: sometimes jeffries is seen as a harbinger for what other rich firms -- for what other brokerage firms will do, can get , what they require from their workers what are we seeing their? david -- seeing there? david: you had positive shares in other companies that focus in investment banking. smaller terms, evercore, lazar,

all of those shares higher in today's trading. let's not forget, they are competing against the likes of goldman sachs and morgan stanley. they increased payouts after passing the federal reserve stress test those shares are higher but they are not keeping up with jeffries in response to today's trading or the dividends went up by 25%, the second increase this year. it goes to show you how well a company is doing. matt: thanks very much. dave wilson, bloomberg's stock editor talking to us about jeffries. for what it is worth, by the way, jp morgan is making a lot of headlines today when it comes to pay, as well as offices. it was first reported bank -- the bank has increased pay for juniors, $100 per year before

bonuses as they compete to retain staff. then we heard that the main trading center in the eu. previously, jp morgan had voiced concerns about taxes and the way -- as well as regulations change so frequently in france, but now they have 250 people working full-time in paris and they plan to boost that by 800 i the end of 2022. -- by the end of 2022, and maybe it is going to help by paying more people. amber: paris, france continues to grow. waste marked -- we marked the five-year anniversary since the vote on brexit. all of these bankers leaving,

unlikely to change anybody's mind on whether brexit was a good or a bad idea. if you're outside, you say you didn't care about them in the first place. matt: that is true. if you look at any of the populace issues we have had, the actual evidence doesn't change people's minds. very good observation there. coming up, the communist party -- xi jinping said the communist party must stay true. we will discuss with anna ashton with the u.s.-china business council. this is bloomberg. ♪

matt: this is "bloomberg markets." the president of china says the communist party needs new heroes to carry it into the second century. calling for officials to call on the problems of the people. the leader urged the chinese people to live proper lives. >> all party members must be aware of, observe and practice the ethics, aim to be clean people and do clean deeds. matt: now for a discussion on the -- first of all, what is going on in china right now and then the xi and widen

relationship we bring in and ashton of the u.s.-china business council. it seems like a great time to take stock as we reach 100 years of the communist party in china. it clearly changed so much over the last decade and reduced some heroes, i would have thought of its own, jack ma, but in the last few years they have been clamping down on innovative leaders. what happened to china that seemed to maybe be leaning towards more capitalism but leaning back. anna: there has been thought on this recently. there was an article in foreign affairs by jan rosen that talks about the two steps forward, two steps back under xi jinping to

economic reform and liberalization. that is a piece of this. they are at the point in their development where they have to escape the middle income trap and hitting the right sweet spot between state intervention and market liberalization that will let them do that without there being major disruption to their society in many ways is part of the challenge that xi jinping and the chinese leadership are facing and that could be part of the reason why they are seemingly getting a little tougher on paragons of capitalism. i also think this is the 100th anniversary of the chinese communist party and they are trying to reflect on heroes of the party, more so than heroes of the country. it is a little bit the same yet front. amber: it is interesting heard

this is where the china and the u.s. have in common, where they are trying to both figure out how to rein in tech, albeit with different approaches. the relations between china and the u.s. under joe biden, i am curious about the consistencies you expect when some of the things that donald trump advocated. you think joe biden will overtly continue? anna: i think there are some similarities between the trump administration approach and the biden administration approach. there have been policies they have not gotten rid of or up did to keep in place -- are opted to keep in place there is bipartisan consensus in washington that china poses a challenge to the u.s. in a way that it didn't when it entered the wto in 2001 and that we need to shift our policies to respond

to that. i also think there is a feeling from those members on the hill come of congress, and the administration -- on the hill, of congress, and the administrations that it is one of the only devices that can be used to pull together bipartisan's of court for various -- bipartisan support. matt: that is fascinating. i always wonder when i read about u.s. versus china, it is more serious than england versus germany, which by the way, england is up 2-0 and there is only five minutes left. are they really our adversary? are they really the bad guy here or just the opponent the u.s. needs to focus here? is this just more helpful as a

way to think about the global paradigm as these two superpowers? anna: i certainly think it is not black and white and any simplistic characterization of china as simply the bad guy is a gross simple vacation of the realities -- gross simplification of the realities. the thought that china is what we need to be more competitive and ensure our technological edge, that is not a bad role for china to play as long as we can keep that competition relatively friendly. amber: there is also morality. that is where the u.s. would like to stand out, particularly when it comes to the uighur muslims and the sanctions they have placed on companies.

do you expect to see more of that? anna: i do expect we will see more of that. i think there is strong, strong sentiment along policymakers in washington, and not just washington, that whatever is happening in the information coming out does not look good and needs to be addressed and china needs to change its policies. i think that is how a lot of government officials here and elsewhere feel. i think we will see more actions on that front good i just would caution that there is a different between measures -- front. i just think i would caution that there is different measures and putting policies in place that aid uighur laborers, i don't think the policies we have seen proposed or implemented to

date do anything to directly help uighurs. i think they protect u.s. consumers. amber: thank you so much, anna ashton, with your thoughts on the u.s.-china business council. when we come back, u.s. housing red hot, home prices increasing the fastest in more than 30 years. is this sustainable? more on that when we return. ♪

amber: this is "bloomberg markets." the u.s. housing market, home prices rising the fastest paste

in more than 30 years -- fastest pace in more than 30 years. a full confluence of factors driving this, but i am sure this is bringing up people who want to reference the days of your when prices were much lower than today. matt: this price chart hit me in the heart. i bought my house in brownsville about 10 years ago and sold it in the middle of these two dips. i wish i had waited a little longer or maybe i had never sold it. always regrettable when you sell a house or a good bar, something you never forgive yourself for, but i needed money. this has been amazing watching these gains, especially compared to 1988, because you had double-digit inflation, at least

in the beginning of the 1980's. they were not unheard of, whereas nowadays, anything over 4% would give you a shock in terms of either inflation or a mortgage, but certainly we are seeing that in terms of house price increases. amber: you have a whole generation of homeowners who don't have any idea what that is like. let's bring in a u.s. real estate reporter. it is difficult to pinpoint this or hang this on any one particular driver, right? it is a bunch of things coming together. karen: -- craig: it is supply and demand. you have a generation of 11 ales, a massive -- of millennials, a massive amount.

mortgage rates have been near historic lows, down below 3% for a big chunk of the year. money is cheap and there is demand for housing we are seeing prices going up and up and up. matt: it seems like this is a phenomenon we are seeing across the western world. in the u.k., house races -- prices climbed the most and that is en fuego as well. also in the toronto area is unaffordable for people who work there. what is going on. craig: i think new zealand is the only one hotter.

it is a global phenomenon. the pandemic sat off -- set off a lot of this. a lot of people were sitting in their homes saying, i need a room for a school, office. new york city apartments were not designed as a school or an office. in the new york city area, there was demand for the suburbs and five years pulled forward. you are seeing that all over the country, people in the house stuck at home who started to hate their house and wanted a bigger front yard. a massive generation of millennials that delayed home purchasing because of student loans that suddenly are in the markets. the issue is there is nothing to buy. matt: it is a dreadful prospect if you are thinking of moving

back to the tri-state area and looking for a house to buy in westchester. crab -- craig giamonna talking to us about the housing market. amber: we are moving because i am about to have my third kid and we ran out of house. i didn't time market very well when it came to that. matt: sometimes life comes along. thank you for joining us. this is bloomberg. ♪

mark: president biden is in rural wisconsin promote his

infrastructure plan. it is a region where support for donald trump runs deep. biden is pushing a bipartisan deal that has benefits for agriculture. he toured the la crosse municipal transit which handles public transit in the area. xi jinping says the communist party needs new heroes to carry it into its second century. xi called her officials to focus on the problems of the people and urged the chinese people to live proper lives. >> all party members must be aware of, observe, and practice the ethics. we must aim to be clean people and do clean deeds. mark: chinese communists are celebrating the 100th anniversary of the party's founding. south african officials put tighter restrictions in