has gathered as many as 190,000 personnel in and around ukraine come including troops, national guard units, and russian backed separatists. it is being called the most significant military mobilization since world war ii. defense secretary lloyd austin spoke earlier in warsaw. >> all indications are that he will maintain the capability to launch an attack at almost any time. john: russia told a u.s. it has no plans to attack ukraine and officials have dismissed u.s. warnings about a possible invasion as hysteria and propaganda. vice president kamala harris is calling the situation in ukraine a dynamic moment in time and is going to stay close with allies, checking in hourly if necessary. in her remarks, harris said the u.s.'s diplomacy with russia but also board there would be severe

consequences if russia invades ukraine. moscow denies it has any intention to attack its neighbor. the federal reserve has adopted top, sweeping restrictions on officials, aiming to avoid a scandal that engulfed the bank last year. they would restrict active trading, prohibit the purpose of individual securities, and booze disclosure requirements. the measure follows unusual trading activity by top officials in 2020. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am john hyland. this is bloomberg. ♪ jon: welcome to bloomberg markets. matt: here are the top stories

we are following for you from around the world. u.s. existing home sales rose to the highest in a year. buyers are rushing into lock in lower rates even as prices rise with limited inventory. ford is looking at ways to separate its ev operation from its legacy business in a bid to boost evaluations closer to those enjoyed by tesla and other pure play ev makers. and the biden administration cracking down on m&a in the drinks industry. we will speak to margie lehrman on what this means for producers. jon: as we wrap up this trading week, those jitters remain. we are seeing brad on the s&p 500, near the weakest levels of the day. technology still at the center of that selloff. we also want to look at the u.s. dollar trade.

we have more european central bank officials pointing to the reality of higher interest rates through the year. investors asking questions later and selling for now. as we think about that new interest-rate environment, that gets us to our for what it's worth segment. you mentioned the headlines we are watching, sales of previously owned homes increased to a one year high. buyers apparently rushing in ahead of a surge mortgage rates. contract closings increasing 6.5%. all four regions seeing gains. annualized 6.5 million gain. if you look at the supply story, which is behind the story here in canada as well, if you look at existing inventory, the market could eat it all up in two months time. it's been a very tight. matt: the inventory issue is really important. we had redfin earnings and they disappointed the street for a

loss. you would think that everyone is addicted to redfin, zillow, those kinds of websites, but i guess there is just not enough inventory out there. to talk more about this is michael simonsen of altos research, who has been analyzed markets in real time since 2006. michael, the number was a beat, so more people bought homes than expected, then have all year, but at the same time, almost no inventory out there. what does that mean? michael: one thing to keep in mind with this nar number is they are seasonally adjusted. the characteristic we have seen this winter season and last winter season is more buyers in december and january than in normal decembers and january's. that seasonal adjustment makes

it look extra strong right now. jon: if we go to that point that we were talking about, what happens as a rates start to rise? how much of a consideration do you think that has been for buyers? michael: as of this week, buyers have not slowed down at all. we know we can look at the last time rates rose significantly which was 2018, about 1% higher than when we started. that created a little bit more inventory to start 2019, like 10% more. not a big flood but more inventory. we can expect that again this year, to get off of the record type inventories, to maybe give more opportunity for first-time homebuyers. matt: if we see mortgage rates go up through 4, does that mean anything to you?

how much does it matter that rates are rising? we see words like surge and s oar, and people think 4% is a relatively decent rate,'michael: 4% is actually significant. it is the decades long average. when we are above 4% -- now about that -- that could be the threshold that consumer start to feel. in 2018, it went closer to 5, 4 .8%. you could feel the demand slightly weaken at that time. jon: at the end of the day, especially for first-time homebuyers, how should they approach a market like this? michael: when people asked me for advice on whether to buy, my advice is, if you can afford the house and you love the house, by the house.

if you cannot afford it or don't love it, don't buy it. if it is a longer-term commitment, in the u.s. right now, money is still ultralow in a 4% rate, 7% inflation environment, still a really good deal. if you cannot afford it, do not buy it. matt: one quick question. a lot of people were expecting some relief in terms of taxes. we didn't get that salt the adduction cap relief. do you think that affects markets like new york and new jersey who are looking at high taxes? michael: we cannot really see that specifically. we know that almost all of the legislation, structure in the u.s. is about supporting the homeowner. tax deductions, pandemic relief.

they are all about making sure that people stay in their homes, have affordable home payments. slight adjustments like that do not seem to really deter the demand. jon: some helpful context. we appreciate your help, michael simonsen of altos research joining us on the housing market. let's turn to the capital of canada. ottawa police arresting and charging two of the most prominent organizers of the trucker protest. joining us from ottawa is brian platt, who has covered the story. very busy day in the capital. police have been very strategic with all of these checkpoints, keeping only essential people in the downtown core. >> what we are seeing right now is the beginning of the end. i think it will take a long time. probably throughout the weekend if not longer.

police have set up 100 checkpoints around the city to control access in and out of the downtown core. at the moment they are moving slowly through one of the major intersections, about a block and a half away from me right now. about a dozen semis and pickup trucks, and police are moving through to clear them out. matt: will they be able to clear out ottawa by monday? >> monday is a holiday, so tuesday is probably the target. i think what they are hoping is they clear out this one area and all the other protesters realize that the police are serious about moving in. so far, i have seen the protesters in other parts of downtown sticking around. a few are leaving but now that people see police coming in, more may start to leave. matt: thanks for joining us. we hope you have a great long

holiday weekend. coming up, we will talk about ford and its electric focus. the company concentrating on ev's, looking at ways to separate the ev unit from its 100 --year-old internal combustion engine business. that is our stock of the hour. this is bloomberg. ♪

matt: welcome back to bloomberg markets.

i'm matt miller. with jon erlichman. i recently moved from germany to the u.s., took me a lot of bit longer to assimilate back into u.s. culture. i often don't know what day it is. fortunately, we have astute viewers who say, it is not mlk day on monday, it is president's day. a lot bit of a correction, i apologize. in canada, you have a holiday as well. what do you have coming up on monday? jon: family day. investors on both sides of the border are selling into the weekend and asking questions later. matt also has to get used to the american automakers versus the german ones, and that gets us to our stock of the hour. it is not a split yet, but for ceo jim farley is thinking more about separating ev from the rest of ford. ed ludlow broke the story in san

francisco. you have been busy on this file recently. this is a massive transformation we are seeing. what can you tell us about the details on the ford plant? ed: they are still up 3% on a day that the markets have turned a corner, gm under pressure. sources say options are being considered. the ultimate goal is to separate the electric business from the legacy business. one option would be to spin off the ev business, the combustion business, or as we have reported , a restructuring, where they stand alone as two separate businesses. sources tell us, no matter how you do it, ford needs to raise capital. they looked to a specific private fund raise for ev's last year, but an ipo for the ev

business could give it a higher multiple, something in the tesla territory, help them raise funds with a lower cost of capital. matt: it makes sense if they spit it off, if they sell a piece of it, because they have to get a valuation. if they just make them two separate units in the company, they would not do that. why would they choose any other option? i am sure they are already focused on their mission. ed: analysts have reacted and see some complications with the roadmap. ford did issue a statement saying they have no plan to spin off either unit at this time. the think about ford credit, lending and financing arm, it operates under its own legal structure. each year, it pays a cash dividend to the parent company, that is how that structure works. the f-150 is the center of

profits for ford in the legacy gas business. how do you protect that while transitioning to ev's? that's the big question. sources say that this is front and center on farley's mind. there are some barriers, like the role of the ford family, but he has to do something if the future is electric. jon: when you think about the innovation from henry ford himself, just that aspect of where the family ultimately falls in this big transition, because you are reporting on that extensively, as well. ed: the ford family has three board seats, they are a big factor. they say that probably has to submit a plan that has to ultimately get passed then. most of their income comes from dividend payments, so they want the status quo to remain, or have a structure where that would continue. this is all about raising

capital to run the business. henry ford, 60 facilities need to be converted to ev's. how do you raise those dollars most efficiently? jon: great reporting as always. we are going to take a quick break. a new treasury report suggests m&a activity in the beer, wine, and spirits industry should face more if you trust scrutiny. we will talk to margie lehrman and get her thoughts on the study. this is bloomberg. ♪

jon: this is bloomberg markets. i'm jon erlichman. with matt miller. we want to turn to a u.s. treasury department study which recommends greater scrutiny for any deals, mergers and acquisitions in the beer, wine, spirits industry. they say the department of

justice should reassess the way it looks at these combinations and regulators should take a closer look at distribution practices that may seek to exclude smaller firms. matt: this is interesting, caught our eye, so to speak. in order to dig a little bit deeper, we want to bring in margie lehrman, ceo of the american craft spirits association. we should start by saying, i just found out it is national drink wine day. i believe there are some whiskeys and bourbons that are finished and wine caskets, so maybe you can get around that with a loophole. what does the concentration look like -- no pun intended -- in the spirits industry. that is what regulators are worried about mostly in the beer industry. margie: right now, the american craft spirits industry has about

5% of sales on the spirits side, 7% of volume. while we have grown tremendously since this craft spirits renaissance, it really began in 2010, when there were fewer than 100 operating craft spirit producers. we are now well over 2000, around 2300 operating craft distilleries across the united states. despite that growth, we have still not penetrated the market as we know we are capable of doing. jon: how would clarity on the competitive realities potentially open the door for more growth for the craft industry? would it open the door for more investment? margie:

we know, in 2019, our last economic briefing on that, total investment was $759 million. it represented an increase but we know that was also including federal excise tax reductions which greatly help to the industry. we are so thankful for this report because it shed light on competitive practices that continue to put constraints on our small businesses in order to move forward. i have to say, with craft spirit producers now operating in every state, we know that they are a vibrant part of the community. most of these businesses have fewer than 10 employees working, which means they are being asked to do at every level the same thing that the big producers are doing, who have voluminous staff, department devoted to just that. matt: the concern is, when it comes to breweries, we although the craft beers have taken off, so many different brands. it turns out they are mostly

owned by just a few big brewers. do you have that same problem in spirits? i like makers mark or knob hill, they are owned by suntory. on the other hand, i like pappy van winkle, too, and they are still independently owned. margie: in the past weeks, heaven hill picked up a part of our craft spirits portfolio brand. i spoke to those distilleries, they are super excited to have this new opportunity because what it does is give them liquid assets to continue to invest in their business, do things that they could not do before. i think we are impacted less in that particular acquisition, but with the mergers and acquisitions of the distributors, because as that industry itself consolidates,

there are fewer distributors to pick up craft brands. but i believe this executive order gives us ample opportunity and actually sets the stage for further discussions in how the modernization of the industry should occur at this point in time, knowing that those consolidations and murders are taking place. -- murders are taking place. a good example of that is direct to consumer shipping. at this point there are fewer than a dozen states that allow for direct to consumer shipping. jon: only about 20 seconds, but i want to talk about the supply chain. the bigger players had an easier time navigating when your customer wants something and the supply chain disrupted by that. what would you say about the spirits plays that you represent? margie: 100% true. with the distributors consolidating, asking our brand

owners to do on the groundwork in order to get the distribution, it's becoming more difficult with you in the marketplace. matt: great to have you on, margie lehrman, american craft spirits association ceo. tune in on tuesday for our supply chain pain special from the micron headquarters, the chipmaker. it is at 2:00 eastern time. we will see how these industries are handling bottlenecks with a special focus on the chipmaker's who have provided a real problem and help to boost inflation. for jon erlichman, i'm matt miller. this is bloomberg. ♪ . ♪

romaine: keeping you up-to-date with news from around the world. john: i am john hyland.

the latest developments with russia and ukraine. the white house is biden will speak about the buildup of military troops near ukraine. tensions run high as they ramp up threats of sanctions against russia. we will review comments live at 4:00 on bloomberg television. in ottawa, police have started to arrest truckers involved in protest that gridlock their capital, following last nights arrests of two protest leaders, and much of the downtown area has been sealed off. police have begun an extensive operation to lockdown the city center to clear the streets of demonstrators and semitrailers. you may see more avocados on grocery store shelves soon. the u.s. department of agriculture said today the avocado inspection program in mexico restarted and avocado exports to the u.s. have resumed. officials have halted avocado imports aftern