caroline: another fantastic interview by bloombergs erik schatzker. get a quick check on asset class. i'm talking technical indicators. the relative strength indicator -- you will see that the euro is trading below its 200-day moving average. -- $1.92. ,n the bottom line of the graph spot 1047. looking at it oversold nature. looking at king dollar, the rope hitting the lowest -- the euro it hitting the lowest since january. vonnie: quite the psychological level there, caroline. bc says the rest of the financial consequences of the deepwater horizon incident are behind the company. how are shareholders responding? we will discuss. this is bloomberg. ♪ vonnie: lightbank from new york, i am -- live from new york, i'm vonnie quinn. caroline: --is "bloomberg markets." time for stock of the hour. bp shows are rising. the cfo spoke to bloomberg television earlier. >> at the cash has gone out we have reached the peak of quarterly payments. debt rose. net you will start to see that come down from especially given where prices are today. bring in kelly, who is

a ceo spoke in an exclusive with erik schatzker in tucson, arizona and they spoke about the next distresske a listen. >> given the impressive -- unprecedented amount of corporate issuance both on the bond side and on the loan side, by definition, will the next cycle be bigger than the last? or the mother of them all? >> it could be. it depends on how disruptive the capital flows are and where the global economies are. it is hard to say. that is just one piece. but why the financial crisis was so great was you just had an enormous constraint on globally -- liquidity. hopefully, we will not encounter that again and we will have a more normal environment so, i think, it is not simply a function of the size of the leveraged loan market. you need to look at what kinds of triggers there are with respect to the capital. you know, what kinds of financial covenants and the like. >> in recent years, it has been relatively isolated. health care and some technology. what other industries do you figure are vulnerable? >> there are some media companies like clear channel. been a very large source of ac

volatility has emerged as a theme this year , in value, something will follow -- joining us now is erik schatzkermanager who is volatile.r to : he is the author of a book, and an adjunct professor. good to see you. joel: nice to be here. erik: we established one thing, which is you still believe in value investing. why? joel: our definition of value investing is finding out what a business is worth and paying less. it has nothing to do with -- ofy are ownership shares this miss. our definition is value the business and tried to buy at a discount here definition, that should never go out of -- erik: go out of fashion. joel: it can go out of fashion, but eventually, it should work. erik: value investing, in sensible, is active management. joel: correct. erik: do you believe there is a role for passive products? joel: absolutely. i was asked to give a beach at google -- a speech and google. i started even warren buffett says most people are better off at indexing. i agree with him. i did not stop my lecture there. then again, warren buffett does not index, and neither do i? how come? theree the oppo

gave aargo ceo tim sloan wide-ranging interview to erik schatzker.scussed efforts to restore its reputation and also planssed wells fargo's for blockchain. when you think about blockchain, i think about it as technology, not cryptocurrency. there is discussion about cryptocurrency i will leave to another time for the blockchain as a technology can have applications in a friday bank of different financial -- variety of different financial services-type transactions. we have somewhere between 15 and 20 different projects going on. sometimes they are consortiums with other companies can sometimes investments we're making with -- erik: but it doesn't sound to me like it is a priority. tim: oh, no, it is a priority, but like a lot of changes in technology, it gets hyped a bit come that it will change all of our lives and it will happen tomorrow morning. that is generally not the way it works. but i think this technology can and should have applications in some areas, and we are starting to see that occurred now. when i don't appreciate his the value of th

let's begin with erik schatzker's conversation with david solomon on the topic of volatility. ♪ thinkility and bad volatility, but when i went say is that the environmentr was an where our clients were more active in shifting around portfolios in changing some of the assets they were holding or the positions they had. in that kind of environment, given the strength of the franchise, you start to form well. you look at our returns of the first quarter, clients are more active, and we will benefit. >> does that require more conviction on the client's part? you spent a lot of time traveling, meeting clients. what are they telling you in terms of their convictions? s different clients who get different convictions about different things. it could be conviction but it also could be landscape. there's no question that the first quarter had more of a sentiment that rates were moving, we were heading toward an environment where rates are moving, and that was getting people focused on shifting. in terms of getting around and talking to people, generally speaking, people are relatively -- they

let's begin with erik schatzker's conversation with david solomon on the topic of volatility. >> i don'trence between good volatility and bad volatility, but i would say that the first quarter was an environment where for a variety of reasons, our clients were more active in shifting around portfolios and changing some of the assets they were holding and the positions that they had. and in that environment, given the strength of the franchise, they performed very, very well. if you look at the returns in the first quarter, the results reflected the fact that clients were more active. >> does that reflect more conviction on the client's part? i mean, you spent a lot of time traveling around the world and meeting face-to-face with big clients. what are they telling you in terms of their conviction? david: i think you talk to different clients and get different conviction about different things. it can be conviction but also a shifting landscape. i think there is no question in the first quarter that there was a sense that rates were moving and we were heading to an environment where, in th

spoke in his first ever tv interview with erik schatzker at the 2018 milken conference. what he said about trouble in the corporate market. >> i think rates being higher is more beneficial than most bond funds. portfolios --our as rates go up, we are getting a multiplier effect while we are going up because it is floating rate at a discount. it is worth saying that at this point in the cycle, i think structured products are a great place to invest in that if we continue with the sort of qe, central bank riven rally that we have seen since the crisis, structured products will participate at a lower level than the equity market but we should be able to generate reasonably good returns, even though they will lag the equity market. if the first quarter's volatility is something bigger, i think you will see a lot more trouble in the corporate market and the equity market than structured market -- products market. the consumer is in better shape than the corporate's. corporate's are more levered than precrisis, and structured products will not be the epicenter. people always f

erik schatzker visited the lab in new york earlier this week and sat down with the ceo, tom caulfieldalk about his priorities as the new chief executive. >> we have an immense set of assets around the world, and part of our sustainability is getting better return on those assets. the priority for this team is, let's take advantage of these assets we have deployed around the world, make sure we are filling them with the best products for us and our customers, and it will crank up our financial return. >> how do you get a better financial return? tom: for me, it is three things, productivity, cost reduction, and efficient manufacturing. >> but they were doing it before. tom: they were. maybe it is best suited for others to manufacture, and we can deploy assets in more value-added solutions. and the value we create, we have to do a better job of capturing that value. >> what kinds of products might you exit? tom: we have technologies and products that were four or five years ago and had a lot more value to our customers. we look to redeploy those assets on different features. for example

erik schatzker is with billionaire investor and longtime friend president trump.be tom barrack, the executive chairman of cali northstar based in southern california. it is a was nice to see you. how are you doing? tom: i'm great. eric: you held an event for the vice president last night at your house in los angeles. how did it go? tom: amazing. the idea was to have a nonpolitical function and let some of our friends in l.a. who are not necessarily supporters of the president get a look at .he man who is one breath away i have to tell you, he rocked the room. he crushed it. eric: what did he say? tom: he is anbang amazing individual began when you -- because when you think of the position, it is so difficult. he has to be the ultimate team player. his fondness and appreciation for the president 's. we talk about china, trade, nafta, dreamers, immigration. health care. may gets the messenger muddled, especially on both coasts, but the message is so clear. ,e went through with this group the thinking process of the president and what's happening with korea. youangel

commit it is the hedge fund world, and greg lippman put a fine point on it in an interview with erik schatzkerhere is f less money to be made, and people have to think about the cost as they think about how they run the businesses, certainly. institutional investors are willing to pay less and less, in part because the have been getting really good returns from a bull market that has lasted a very long time by plucking their their moneynking into index funds. the cost side of running the money management firm or bank certainly plays into this, and it certainly played into alliancebernstein's decision here. caroline: and i sit here in london looking at the day in, day out talk and potentially bankers forced to move to the likes of frankfurt, amsterdam is really what the draw is is how can you replace the vibrancy of the city or the lifestyle, such as london. that has got to be a key issue when you are asking people to move from new york how to move them to a different pace of life. jason: i think that is exactly right, and it is a big question you have to ask. i am an old guy with kids, so i wo

this week, bloomberg's erik schatzker sat down with an exclusive interview with wells fargo ceo tim sloan talked about the public image of the lender and the challenges sloan sees and markets where wells fargo is -- does its business. tim: there are some markets that we are a little bit concerned about. auto, we have pulled back. i think we have pulled back net enough, and now we are going to be growing that business again. erik: where else? tim: we are concerned about commercial real estate activity. again, we are the largest real estate lender in this country. we love that business. but there are some transactions being done today that same a little bit frothy. and again, i do not think anybody is smart enough -- i know i am not smart enough -- to pick the point that credit turns. but you have got to be consistent in terms of how you manage credit, and you have got to be looking for signals. erik: what are you keeping a close eye on to know when the cycle has turned? tim: well, first and foremost, what is the fundamental economic health of this country? most of our business is here in t

trade in the movie the big short, but never sat down for television interviewed when he told erik schatzkerat he think may trigger the next market correction. >> if the first quarter volatility is bigger, you will see a lot more trouble in the corporate market and equity market. i think the consumer is in much better shape than the corporate. consumers are less levered and corporate are more levered precrisis, and i think structured products -- not what will happen this time. i feel strongly that in an adverse environment, structured products will outperform. if you remember in 2002, there were not a lot of structured products, and they were in 2001, up modestly 2002. >> were are you best opportunities right now? >> our portfolio is more diversified than before. down 20%. from a high level, what i am trying to do is construct a portfolio that generates enough returns until the next correction that people are happy with us and satisfied, but it is construction -- it is constructed brutally enough that we survive the next recession. >> what does it feel like to you? does it feel like we are g

erik schatzker sat down with the wells fargo ceo.ol: he talked about the bank's campaign to rebuild trust after a series of scandals. >> there are a lot of things i wish we would have done differently over the last few years, but over the last couple of years, the changes we are making in the company to make sure customers are taken care of, that we are fixing anything that was broken, and we are building a better company by making good long-term decisions, that we are going in the right direction. when i think about the culture of this company, our vision and values, it is fine. the issue is how we are operating, the policies and procedures that accomplish our goals. that is where we need to make improvements. when i mention about fixing things that are broken, those are things we are fixing and we are making a lot of progress in terms of addressing those issues. carol: and the politics section this week, our reporters take us inside the consumer protection bureau. jason: it is a strange place. he wanted to dismantle it, and now he

francine: that is tom barrick speaking the bloomberg's erik schatzker.ing some breaking news. this is rocco's capital. if you look at the assets under that have been reported by the group, overtaking brevan howard. okos made profits of about $4 billion between 2002 and 2012. he left in 2012. it is always fun to put them against each other. asos overtaking howard assets under management have grown. plenty more throughout the day. we were talking with andrew sheets of morgan stanley about the u.k. construction pmi and i promised him to look at trade weighted pound. here it is. this is trade weighted pound. we brought it all the way back to 1998. is this the right and only way we should look at pound? andrew: it is not the only way. valuation is often in the eye of the beholder. is weaker because a number of emerging-market currencies are stronger. pound, think about the valuation is part of it. it is still a cheap currency. is an economy that is running a large current account deficit. interest rates are still near the lowest in the developed world. i thin

. >> that was greg litman, cio and erik schatzker at the conference.mazon pay may not be as well-known as paypal but if amazon has its way, it will be. it is offering discounts to retailers to expand the payment system. paypal and visa shares are moving lower on the news. i want to bring in jenny for the stock of the hour. should i say stocks of the hour? amazon pay is kind of like paypal. and sayclick something amazon pay. >> i think a lot of retailers might feel a little uncomfortable having amazon know the revenues moving to their system and the competitor. you can benefit a lot from the trust people place and we already have these stored on file. there is competition. >> what kind are we talking about, potentially, giving back? networks like lisa and mastercard there is a whole world of payment processors. is a big business. gets a discount already with these guys. what they're looking to do is transport the discount and amazon.o sell on >> why do they want to be on the business? i guess they want to be everything. discounts tove grow it. >> i thin

let's head over to erik schatzker in california.iewers and listeners worldwide here to wells fargo headquarters in san francisco, california. i'm here with the ceo of wells fargo, tim sloan. thank you for having us. tim: good to sit in front of the stagecoach. eric: let's begin with you new ad campaign. for a company as big as yours to say effectively, we screwed up on national television. ,hy draw attention to yourself attention to your mistakes, let's say, by meeting that you lost your customers trust instead of just moving on? because we are telling the truth. we've been very clear, and it's not the first time we made those statements on national tv. i been interviewed by you when we talked about it. i think it's us -- it's honest, it's saying what made some mistakes, there is no question about that. we have taken responsibility. we are not perfect, but were going to move forward because there's a great history of this company, we done a lot of really terrific things, which we talk about in the ad, and we focus on what we are doi

with erik spoke schatzker in arizona. began by asking if the next episode of distress will be bigger than the last? >>. it could be. >> it could be. it depends on where the capital flows are. that is just one piece of it. why the financial crisis was so great is you had this enormous constraint on the global liquidity. hopefully, we won't encounter that again and we will have a so it'smal environment not simply a function of the size of the leverage loan market. you need to look at what kind of triggers there are with respect to that capital. what kind of financial covenants and the like. the: in recent years, stress has been relatively isolated. one industries do you figure are vulnerable? >> there are some media companies. clear channel, we have been .nvolved with clear channel weinstein, for example. shipping has been a large source of activity for us globally. erik: does it look like anything is poised to be next? >> we look at transactions and the leverage associated with those transactions. that, health care, certai

sales as it seeks to move past recent scandals and controversies and polish it they tolderest -- erik schatzkerome markets that concern them. >> we tend to be more conservative than many of our competitors. that is one of the reasons we are here. during the financial crisis, we are not a bank that created a concern in the industry. there are some markets that we are a little concerned about. auto, we pulled back. i think we have pulled back enough and now we will be growing that business again. erik: where else? >> we are a bit concerned about the commercial real estate activity. we are the largest commercial real estate lender in the country. some transactions are being done that seem a little bit frothy. again, i do not think anybody is smart enough -- i am not smart enough to pick the point that credit turns. you have got to be consistent in terms of how you manage credit, and you have got to be looking for signals. you keeping a close eye on to know when that cycle has turned? is what isd foremost the economic health of the country? most of our business is in the u.s., so are regrowing from

erik schatzker, scarlet fu enjoying the beverly hills hilton.a huntington, and steve ballmer on basketball. mer on basketball. ♪ tom: "bloomberg surveillance." francine lacqua in london. i am talking in new york. made a today. like two thirds of the country shutdown today. francine: we have stripes, just , theng people celebrate only day we can sleep in by asking for more holidays and pay. tom: head of global rates strategy at oppenheimerfunds, brian levitt. there is this great summer mystery of technology in america, the impact of technology on our economy and your world. is technology suppressing the real rate? the bottom line, technology feeds into wage growth and all that, is a keeping the real rate down? it feeds into inflation growth. it is freezing productivity breast-feeding productivity. -- it is feeding productivity. actually making a large part of the workforce useless. tom: it is a great earnings season once again. technology is the reason. brian: it is a very good earnings season, not just on the bottom line. not just the tax cut, s