oliver: i am oliver renick. markets and finance section, john paulson seeing a huge a off to his bet that donald trump could whitney election. -- win the election. carol: i spoke to reporter joe light. >> he is famous for a big short he made before the financial crisis. subprime mortgage bonds made him famous and made his fund billions of dollars, and now he is moving on to other issues. carol: fannie mae and freddie mac. he's also had some interest in for a good reason. joe: that's right. so, fannie mae and freddie mac are at the center of the u.s. mortgage market. there are a couple companies that were taken over by the government in 2008, and eventually received $188 billion in taxpayer bailout money. now, a curiosity about this bailout is that even though the government took over the companies, they left a lot of fannie and freddie, and preferred shares outstanding. at the time, they seemed worthless. the government has been taking all of fannie and freddie's profits since the crisis, but as the mortgage mar

i'm oliver renick. carol: and i'm carol massar. 1 and washington d.c.. oliver: and in london and in asia on the bloomberg radio plus app. carol: there is a special rehab for one-percenters. oliver: we are talking about people who suffer from affluenza. bob, you wrote about an interesting preamp, an affluenza rehab. what is that? >> it is a very controversial term. it is a term that gets thrown around. the idea behind affluenza is that rich kids grow up in a world without any consequences, so they do not learn responsibility. they actually suffer from some sort of psychiatric disorder. this is not a formal psychiatric disorder, but in court, it came up once in this horrible case. ethan couch got in his a drunk driving accident and killed someone. and his psychiatrist said he suffered from affluenza. the rehab they wanted to send him to was dewpoint academy. it is in orange county and connecticut founded by a young man named jamison munro who started the place when he was 28 shortly after he got out of rehab. it is probably the most l

oliver: i'm oliver renick. focus on the cloud section this week, why some retailers are getting worried about the reach of amazon web services. oliver: here is after christina lindblad. >> the regular part or flagship part of amazon has very low margins. it's a very competitive business. the cloud business has a much richer margin. so the genesis of this story is basically a comment that this founder of a startup made at a conference saying, "look, you are giving these guys business and you are helping them subsidize the e-commerce part of the business with the cloud business. you are fortifying a competitor, so you should look elsewhere for cloud services." carol: that leads us to the next part. there are others doing this. amazon is one of the major players, but microsoft is doing something, and so are a few other companies. >> there are, but the choices are more recent. amazon web services still has more than 40% of the market. carol: huge. >> increasingly what you see people doing is divvying up little parts

guy: i want to bring --jonathan: i want to bring oliver renick.l, and the yield advantage is quite clearly in stocks favor earlier this year. that has changed radically. the reward proposition now in treasuries. when does that breakout? oliver: this is really incredible. i have this chart on my terminal where you are looking at a huge divergence, as guy was pointing out, as the reason for why people are buying stocks. what is amazing, it has not gone and pushed the market lower. there is been a turnover that has been very smooth. i am looking at the earnings yield. it is the same idea. look at the spread diving down -- yields jumping down, earnings yield flat. there is an idea that a lot of people were fearful about how this was going to change the market -- were people going to move out of utility stocks, low volatility funds? there was a lot of money going into that, and they got the switch back to more traditional buying stocks, buying bonds for the yield, would be somewhat disruptive, but it has not been. as long as the tradition happens witho

i am oliver renick. scarlet: i am scarlet fu. erg world headquarters in new york over the next hour and covering stories from washington, chicago, and berlin. fed chair janet yellen faces congress, says we are near a rate increase and opens up about her future in a trump administration. yellen: confirmed by the senate to a four-year term, which ends at the end of january 2018, and it is fully my intention to serve out that term. scarlet: janet yellen may have some company in washington from hedge funds and private equity. why donald trump is leaving on wall street names. -- leaning on wall street names. and what is driving this rally and will it continue? let's get straight to julie hyman with one hour to go until the close of trading, let's start with the russell 2000, at a record high. julie: fourth straight session it is trading at a record level. we had out performance among small-caps in part because they are more domestically oriented and seen as benefiting from trump administration policies. technology shares bounced back.

. >> i am oliver renick. carol: how vulnerable is america's energy infrastructure? more pipelines the answer? oliver: paul manafort is back. the controversial first campaign mananger for donald trump never reall went away, though. carol: how the military is inspiring ibm's cyber security training. ♪ carol: jim, i want to start in

oliver: and i'm oliver renick.ry secretary, earlier today, he briefly outlined an economic agenda. >> our number one priority is going to be the economy, get back to 3% to 4% growth. we believe that's very sustainable, and focus on things for the american worker. hat's absolutely our priority. oliver: meanwhile, donald trump reached an agreement with carrier. let's bring in our white house editor. let's start off with some of the appointees here, the people that trump has tapped. he's keeping the sort of billionaires and bankers up front in his cabinet. tell us about the choices that we now are for certain. alec: mnuchin for treasury, tom rick frets chicago is going to be deputy commerce secretary. trump is staffing his administration, these top financial jobs at least, largely with people who look like him. and i don't know if his supporters are getting the government they quite expected. he was driven to office by a real populist movement, people who were discontented with the way washington and the way wall stre

. >> i am oliver renick. carol: how vulnerable is america's energy infrastructure? g more pipelines the answer? oliver: paul manafort is back. the controversial first campaign for donald trump away, though.nt carol: how the military is inspiring ibm's cyber security training.

oliver: and i'm oliver renick. carol: let's begin by talking about shepard stewart. who is he?he is a fake op-ed writer. his byline appears on a website -- websites, particularly politically conservative websites. whoever is behind the identity is very much intent on criticizing elon musk, the very well-known tech entrepreneur and mobile affiliated with companies withgul affiliated companies like tesla and spacex. he has some enemies in the world who want to attack him but do not want to do it in a straightforward way. oliver: you delve into one corner of the internet which seems like opposition he faces from an industry-specific standpoint. people whose best interests may not be aligned with elon musk's. tell us about where these people are from. >> my strong suspicion is his commercial competitors perhaps at a couple of levels removed have hired firms who have higher firms who are putting websites up, hiring fake op-ed writers, and so forth. but i was not able to connect all the dots so i can tell you the coal industry is behind his thing. in some instances, you can identify

is oliver renick and priya misra. how are stocks reacting? go there was a big break emerging with clinton taking the lead in polls substantially, which i think we have talked about before, markets consider to be a more protectable outcome. when you see polls get tighter, you have to start thinking about what if this trump presidency becomes a reality -- where will the impact markets, and are we ready for that? it looks like what was happening with brexit polls, it is not quite apples to apples. alix: that was the theme -- by long-term treasuries. now we see less buying. does that mean the global bond selloff is intact despite the short term blip? have bank of england tomorrow. i think the bank of england is not going to be that hawkish. the ecb is telling us they will not taper that fast. our view is the bond selloff is largely over. what we are seeing right now -- to oliver's point, the repricing around the election risk. the uncertainty. having analyzed elections, rates, the economy -- normally i would say elections do not matter. business c

joe: oliver renick, bloomberg stocks reporter. awesome chart.rlet: we want to reiterate the headlines we broke a few minutes ago. jpmorgan said to settle its investigation into its hiring practice of hiring children of chinese decision-makers. jpmorgan will pay about $200 million to settle these allegations. you're looking at jpmorgan shares. the first back-to-back decline for jpm since the election of donald trump. everyone -- it's time for the bloomberg business flash, a look at some of the biggest business stories in the news right now. cleaner michael platz, blue crest capital management, is having what he calls an exceptional trading year. hedge fund is up 40% so far. platz is trading with high levels of leverage and he has returned all client money. now blue crest only manages platz's fortune. ceo of lending club is planning a return to the industry he helped pioneer. he has started a new firm called credify finance. credify was incorporated in maine. -- may. that's your business flash update. scarlet, you're looking at walmart ahead of to

oliver: i am oliver renick. the dollar moved on anxiety over the election. is, what dostion mess? scarlet: we will wreak it down in just moments. while investors took comfort in the labor picture, anxiety has waned over stocks. even -- we will take a look at how current is are poised to react to as political risks rental markets, more managers are hedging their rest -- risks either candidate. the manager said the trump victory could keep the vix a 30. >> abigail doolittle is standing by. abigail: it has turned into another volatile day. from a standpoint of percentage change but from the fact that we been flipping from green to red into the close, both the s&p 500 and the nasdaq turned slightly red. on the week is a very volatile week, we have the three major averages on case to finish lower on the week and more than 1% for the second weekly decline in a row, the worst decline since september 9. the fear gauge and affected. also the vix is going to the putting in a record nine days higher. so a tell on the idea and right now on pace for that record. the idea that on -- investors a

david: counseling caution, all of forensic -- oliver renick. he joins us now to explain his take on this. looking back at the referendum vote and the way that markets reacted then, you are wondering what's going to happen. why are markets -- why should they not be as worried? oliver: history shows us that there's no connection between the day after the election and what happens in the next year. the long-term portfolio manager -- you alwayss talk to these guys, it's always -- stay bullish, short-term moves. but it's very true. even though talking about one day sets a precedent for a long-term move and that sounds ridiculous, this is what people trade on and there are a lot of folks out there who are going to look at this and try to project out. january, we talk about the january effect for small caps. let's talk about the santa claus rally in december. it's all sort of idiosyncratic in the market from time to time. it shows that people pay attention to the short-term moves, extrapolating on what it could mean. it's oftentimes a flawed process.

here with us now are oliver renick and joe weisenthal. what does history tell us?keep a cool head. if the market pops because of a clinton victory with a lot of people expect, don't get too excited because there are still a lot of things to parse out. wins, flip side, if trump the common assessment is that the market is going to fall. how much? anywhere from 5% to 15%. don't sellline is everything because either way, history has shown it is a coin flip in terms of what the market does the next 12 months. jon: you came around this table and the first thing alex asked you is are you staying up? you said of course. but markets stay up as well. market participants have to stay up to provide some liquidity. has been eroded by a ton of regulation? you just wonder where the liquidity is going to come from if you are going to headline? there is some tail risk. >> absolutely. remember when the brakes and results started coming in and the first hint that the u.k. was , someto vote to leave extraordinary moves in the pound and in japan and in the s&p futures. if any headlines

i will quote oliver renick's wonderful story from earlier in the week.r holds up half the time. it is up in the air whether it means anything in the long-term. the fact that i was being correct move for the markets. just insideas not the beltway, it was a response to a broad center across the country and people were pushing the hardest for it, the core of donald trump's support. the core of donald trump's support was to let goldman sachs do what they want. we will see if the trumpet ministration wants to listen to what the voters said that i don't think that was the main issue they were pushing for. looking at issues like international trade, things are louder. thanks very much for being with us. that is it for this program. let's wrap up the market so far. it is an all-time high. jonathan: within that, the financials are very much on the move. they lead the gains in the united states. switch of the board, treasuries backed up yesterday. the yield up six basis points. that is your yield on the u.s. 10 year. that does it for bloomberg daybreak. bloomberg

i oliver renick. i am julie hyman. orld headquarters in new york for the next hour. and we will be covering stories from washington, paris, and switzerland. the nasdaq hitting a new record and the dow and s&p hundred trying to follow suit. pledgeill donald trump's be a windfall for the real estate business? we will also be joined by managing partner in the hour, how he is positioning his portfolio under donald trump. public group for to the president-elect as "conpublic ge president-elect as "con man don." let's get a check on the markets with abigail doolittle. abigail: modest date -- modest gains. the dow, s&p, nasdaq, all trading higher. abigail: modest date -- modest the dow and the s&p 500 trading -- perhaps after these averages traded around earlier today. the nasdaq has been flirting with record highs all day. off pays a record lows ever so slightly. we will have to see whether or not the nasdaq can put in a record high. the s&p 500 may not be on pace for close to record highs right now. there is strength for the

carol massar and oliver renick spoke with elsa hoffman. >> california is the largest state in the nationemocratic run state. it's also 2700 miles away from washington and the democrats in sacramento, since the election, have been trying to figure out how to basically -- they joked about building a wall around california. over: it's very apropos -- oliver: they are talking about a legislative wall about what they already built. tell us how they defended their existing legislation. >> they really want to make sure they can keep the policies and programs they want for themselves. they are really very interested in trying to figure out how to defend emissions legislation that's targeted at climate change. california, because it's such a giant market, connections that standards that are in action edges for california, but for the whole country. automakers will follow california emission standards. california lawmakers are trying to figure out how to do is follow the models they set with emission standards that were higher restrictor than the rest of the country. ago andn a decade carmakers ha

carol massar and oliver renick bloomberg businessweek.bout his specific bigts there are three things. the first is his international licensing agreements. he has licensing and management deals with developers in uruguay, the philippines, south korea. and that could influence his craft. another big thing is his hotel in washington. the federalnsee to government in there. he pays rent back to them to be able to run that hotel. the third one is deutsche bank, with is in negotiations the department of justice. other settlements are coming down the pipeline. trump has about $630 million in debt and half of that is with deutsche bank. oliver: what do we have in terms of precedent and how to deal with a president who is going into the white house with all of these assets? do you know what he has to put into a trust, do we know what axis he can -- access his family can have. guest: the closest we have is nelson rockefeller, the newest laws to deal with this came after he served as vice president in 1978, which has a bunch of conflicts of interest