at that time, what we wanted these opec treasury to do was to buy up treasuries, the way for the governmento recycle these petrodollars. arabiaknow that saudi and all of these gulf nations are secretive when it comes to howmuch they really have, much of their stuff we owned. , it was like they had a secret deal. we will buy your treasuries but we cannot -- you cannot tell the world how much you are buying. ago, therew weeks was a debate in congress over u.s. citizens should be allowed to sue foreign governments in saudi arabia. as that was unfolding, saudi officials said if this were to happen, the government would sell $750 billion in u.s. assets. square those numbers for me. >> they claim we have $750 billion of treasuries in the about 100we only see billion, as reported by treasury. , maybe the truth is somewhere in between. there are some holdings that are not tracked by the treasury, not recorded in the official system, but they have been holding it somewhere else. david: thank you, andrea. switching to pharmaceuticals, pfizer has agreed to buy anacor pharmaceuticals. they will give pf

this treasury story around saudi arabia just revealing more detail about who owns treasuries and whereat are your expectations on treasuries? michael: when the sovereign wealth fund space, one thing that has been concerning investors has been where you have had a situation where reserves are declining. saudi arabia -- the breakeven in the government spending is around $100 a barrel. they are in a budget deficit at the moment. then the decline in the reserves leads to a selloff of treasuries. the data from the last year has have that wall governments been selling treasuries and reducing their holdings, private buyers have been buying treasuries to a greater extent. that shows the implications of the japanese and ecb you we. investors in japan and the eurozone to sell their local assets. the yields are so low. treasuries and guilds have been the biggest benefactors. the flow for treasuries has been very supportive. that is the whole point. everyone is saying -- if the japanese do act again in some form and we have yet to work out what that might be, michael, are the proceeds of them sell

treasuries. don't forget the $.8 billion. the foreign holders of treasuries. saudi arabia is still in there with a pretty substantial amount. what shocks me is that they are way behind. $1.2 trillion for china. we didn't know what these words -- numbers were since 1974. a critically important point. this is a big part of the story. how much else to they actually have? 20% of their foreign reserves are in u.s. treasuries. that is rather strange. states havereign around two thirds of their dollar exposure in u.s. treasuries. i don't know whether this answers more questions or raises them. what happens next in the treasury market? yvonne: that story is not quite solved. talking about china's debt. we are speaking to him quite a bit about the mainland. what he thinks is the outlook for the chinese economy. he is very bullish on china. looking at leaders from the mainland. trying to transform this manufacturing export driven economy. into one that is services oriented and domestic. when it came to china's mounting debt he did listed as a concern. larry: we're all w

treasury debt with similar maturities. have you asked treasury if they would consider this? >> i think they really can do that but that will not solve the problem, that will kick the can and we are trying to convince congress to solve the problem, not to kick the can. possibility and it's not in the treasury's view. they think they do not have that authority right now and i think they do. they are right when they said it will not solve the problem. , congresshe problem needs to act. >> your government has also issued a debt exchange proposal. what insurance is will investors have that puerto rico will not read a fault if they accept this new offer from your government? >> two things. craters are one group. obligations and guaranteed by the sales tax and are subordinated -- those guaranteed by the government development banks. there are plenty of groups in the fight a lot among each other. them is asking for deal that solves the crisis. proposalsi received that will bring back the crisis in a couple years. that is something

both short-term treasuries and long-term treasuries. that is why you are seeing this.t happened since 1962. francine: thank you. let's talk e.m. emerging markets under pressure. today they are a little better off. the msci e.m. index is down in the past month. our next guest says a weak dollar only postpones the pain for emerging markets. he is bhanu baweja. it has been quite a week for commodity related currencies. it has been quite a week for emerging stocks. we've been flagging that the fed will normalize. bhanu: to be fair, as recently as march was when yellen signaled a big change in the fed reactionary function. now for fed officials to say june is a live meeting -- of course they would say june is a live meeting. but for them to sound more hawkish i think is wrong footing the market. earlier this year, there were three factors that led to emerging markets doing as well as they did. the first was massive credit stimulus from china. what we have learned is that all that credit stimulus, and mind ue, it has 2009-esq not led to growth. your capital output ratio cont

the question is why the treasury, if you get the bad results from trade that the treasury claim, then better results across the entire economy. if you take that results of long-term across the economy because of trade, then you get better results for pensioners and loads of other people as well. quickly, polls are showing it is going towards the remain cap. campasn't the brexit managed to get its economic message across? the treasury message seems to be more prevalent out there. patrick: i think the treasury message is based on this deceit. mark: it is out there. patrick: it is out there. mark: people believe it. patrick: if you tell a lie, or deceit, let's not call it a lie. a misrepresentation. the treasury do exactly the same thing. it is all doom and gloom, but they forget that consumers will have a great time. prices will come down. mark: is your message getting across? patrick: not yet. we have been deluged by all of this message. it has only been now that we've been able to catch our breath and it's going to everyone what they have done. the lie that they have perpetrated, or t

treasuries have been absolutely paltry. both by historical standards and versus what would be safe dividend-paying stocks. in general for the last two years even when the stock market has been getting absolutely pounded bonds stilly haven't represented very good values versus equities, that's why i've so often castigated you about the idea that excessive prudence can be the most reckless strategy of all. because if you invest too much of your money in safe virtually risk-free u.s. treasury bonds you've basically been ening sure you'll get a very low return on your investment for many years to come. all in all, if you want to grow your capital -- and after all, that's what investing is supposed to be about then like i've said before, stocks are still really the only game in town even after, what can i say, so many years. however, i don't want to make it sound like i'm pooh-poohing bonds all together. there's absolutely a place for bonds in your portfolio. it's an essential place. especially as you get older. here's the crux

. >>> next, treasury secretary jack lew. with reporters on the domestic and global economies and his upcoming trip to the g-7 summit. the event was hosted by the washington bureau of the christian science monitor. it's 50 minutes. >> tv reporter from boston. >> good to see you. >> just retired this year. [ room noise ] >> you're going to be right here, sir. >>> we're going to start right on time this morning. i'm dave cook from the monitor. thanks for coming. our guest is treasury secretary jacob lew. his last visit was in july 2015 and we appreciate his coming back before his trip next week to anchorage and then the g-7 foreign ministers meeting in japan. our guest flirted with a journalism career while he was editor of the forest hills high school beacon. he evidently thought better of it and while in college caught the washington bug, working for representative bella abzug and joe moakley, earned a bachelor degree at hafshtd and a law degree at jpmorgantown. between '79 and '87 he learned politics from a master in his rol

and the treasury. why did i think you cannot legislate that away, and part of tensionthe frustrating between democratic legitimacy on the one hand, and the idea of technocratic competence on the other. we want to keep this technically pure central banker doing things with the beeswax in the years so ars, so they are not influence, and i think that is a mirage. i do not think it can happen. this might sound downright churchill, but it is a bad system to have elections influence central bankers at the identifypersonal, but a better 1 -- does it have the chairs of all the economic departments weigh in and decided this to be the fed chair? i don't think that is a good system. we want to have the democratic and put it where you get people like arthur burns, and frankly, thees is one of my heroes, same legislation that takes the secretary of the treasury of the federal reserve board coincides with the most subservient federal reserve history between 1935 and roughly 1951. so, legislation can really matter. t

recently, a treasury spokesperson said as treasury and irs, and previously said come we are evaluating excise tax the provisions of which are novel. it remained under review and the not yet in a position to provide permanent guidance on the credibility of act 154. my amendment season in a ruling from the irs before we go forward. i would be happy to yield back. >> is there any other discussion on this amendment? >> chairman, people of peurto rico are suffering in businesses, schools, are closing. people are leaving everyday. to reverseur help this trend. there is a carefully crafted compromise which seeks to quality of life for families on the island. it will significantly lengthen the time it takes for the bill provisions to take effect. it requires the treasury of secretary regarding the eligibility of companies to take a foreign tax credit in connection to taxes that are imposed on the island was the island. people of puerto rico waited long enough for some action by congress, this amendment is not necessary. all it will do is create harm, and lengthen the process of doing some actu

treasuries and other assets.th is that it comes from the middle with a source saying that the saudi arabian treasury is at least as much as the advertised holding. so there's that. all right, everyone should go online and read a great story. andrea: thank you. off the memorial day weekend we take a look at the driving habits of the american and the health of the u.s. consumer. next. ♪ three charts are giving mixed signals. matt joins us now. fresh off of the memorial day weekend, where a lot of people that a lot of driving you look at the mileage that we were accumulating. >> one of the things we have been doing a lot is the first thing we do when we look at consumer spending data is removed the gas component because the prices have been so volatile. it is pretty interesting because if you adjust for gasoline prices, inflation consumption is actually surging and you can see in the chart that we have had the highest growth in gasoline consumption since 1999, so that's interesting because it parlays nicely with tha

they have come back to on spread with treasuries and funds.asic risk has rallied about 50 basis points. respects, they market has become a little bit more optimistic about the remain. caroline: does that include the pound? >> the pound has sold off about 9% on a trade weighted basis. we thought originally, if we we wouldan exit view, see 20%-20 5% depreciation -- 20% to 25% depreciation. that is our view. guy: that is making mark carney and the mpc's job just that little bit more difficult. ireland bracing for the brexit. is there a european union without britain? that is next. ♪ caroline: welcome back to "bloomberg markets: middle east ." -- welcome back to "on the move." our next guest says a deterioration in sterling is making it tough for irish exporters. what you're not joined from dublin, where bloomberg is holding a brexit debate. we are glad to have you on this show. give us a sense, where are your views at the moment as to whether we will feed thsee the u.k. brexit? >> the line is pretty indistinct, to let me try to answer what i thin

the treasury stagnates as the dollar dominates the month of may. that are the markets prepared for the fed shift? as investors turn on china. short interest on chinese equities jumped to the highest level in a year. it's the big short back in china. we are less than half an hour to the european open and that all lines are open as we open for futures trading where up just slightly. for the w toing cross at any moment this morning before the market opens. also take a look at the amazing story unfolding in asia. the nikkei to 25 getting about 1% right now but it is really in china that the interesting story is unfolding. you can see the chinese if i 300 up 3.1%. this is an index keep in mind that was limit down overnight in less than one minute chinese stocks dropped 10% and then bounced almost immediately back. it's interesting because we are also watching the incredibly high levels of short interest in china. it doesn't seem to have stopped a quick recovery for what looks like it may have just been a technical glitch or so-called bad finger. in curr

our guest today is treasury secretary jacob lew. his last visit here was in july 2015, and we appreciate his coming back before his trip next week to anchorage and then to the g-7 foreign ministers' meeting in japan. our guest flirted with a journalism career while he was the editor of the forest hills high school "beacon." he evidently thought better of it and while in college caught the washington bug working for representatives bella abzug and joe moakley, earned a bachelor's degree at harvard and a law degree at georgetown. between 1979 and 1987, he learned politics from a master in his role as principal policy advisor for the house speaker tip o'neill. as a speak assistant to president clinton in 1993 and 1994, our guest played a key role in helping design americorps. he was later deputy director and then director of omb. between 1998 and 2001, when he led the clinton budget team, the united states government posted a surplus for three consecutive years. he was chief operating officer of new york university and then chief opera

treasury. the demands is high.nd we're still in the 1.70s. >> 1.7% on the u.s. 0.115 on the german. absolutely -- continues to correct me that one. >> not all mispronunciations. the german yield is at .17%. why on earth would you buy the german yield when as you rightly say you can pick up the yield. >> right, yields are so much higher. you get so much for more the u.s. treasury. >>> isn't stocks to watch, corvex with pandora. pandora says its core business is up. and office depay may sell some of its european operations with staples due to antitrust concerns. they expect disruption from the deal to continue into this quarter. lending club received a grand jury subpoena from the justice department. the ceo was ousted after an internal probe showed that the company falsified documents when selling loans. several large investors have halted business with the company down 8%. >>> more stocks to watch, twitter is adding leb bra lee, the ceo of b.e.t. networks to its board. jack dorsey added pepsico's hugh johnson and t

and it should have been done by the treasury undersecretary. it would never have happened to be done about it fed if paul volcker was, as he later became, the undersecretary of the treasury. so we need to know more about why a fed staffer was used. i oppose his, peter's idea of having a president appoint staff members because it further harms what remains, what little remains of the fed's independence. also there is a good discussion of the rewriting of the rules governing the fed's operations. these changes over time change the very central issue that congress discussed was not how should monetary policy be conducted? that was the gold standard. no one disagreed with the gold standard, at least no one openly disagreed with the the gold standard at the time. what they argued about was who was going to control the printing of money. the bankers thought it should be them. and the politicians thought they were the people most responsible. and they argued about that. that held up the legislation for a long time. woodrow wilson came up with the comp

the treasury's bonds in the open market as soon as they were issued. the two prohibitions designed to protect the public from inflation or deflation were completely gone by the 1930's, and no rule replace the gold standard until the u.s. agreed after world war ii, and i will come back to that. we can probably accept that financing the two world wars by inflating was exceptional -- was an acceptable violation of the independence. unfortunately, the violations continued. treasury secretary morgenthaler would not tolerate the slightest interest in market interest rates. peter referred to eccles as the most aggressive or independent federal reserve chairman. the opposite was true. the fed mostly accepted morgenthaler demands, and his frequent threats to use the profits from devaluing the dollar that he had gotten when the dollar was devalued, that he would use that to purchase debt in the market and engage in his own open market operations. if it was an 8th of a point increase in interest rates, he thought the u.s. would shake. he did things like invite al

after that treasuries rallied.o months on a 10 year. 1.79% on the u.s. 10 year. what a 24 hours it has been for the fx market. the fed presidents start chuck working up -- talking up a june rate hike. down today. all of this building up to payrolls friday. adp a mess. does it tell you anything about the upcoming report? most people would tell you no. the open is next on bloomberg go, just under four minutes away. ♪ jonathan: this is "bloomberg ." i am jonathan ferro. two point $5 trillion of assets around the table. have chris from bank of america joining us. titan seconds away from the open. -- 10 seconds of it from the open. teachers go little bit lower. -12 on the s&p 500 and europe heading toward the close for a fourth straight day of losses. quicklyut the boards and treasuries advancing. on the one basis point 10 year and crude up 1.8%. let's call it or the four dollars $.42 a barrel. -- $44.42 a barrel. oil and miners have been big movers today. they were gainers in europe. points.s off by 60 s&p 500 inde

treasury market. i think it will be pain release slowntil we -- painfully until we get clear acceleration. a more substantial selloff will be delayed until 2017. 2017 could be quite a difficult year. if we see headline inflation 2.5%-3%towards 2.5-debt by the middle of 2017, that will put pressure on the fed to move away from this moderate policy. we could see it move more aggressively. the answer is, not yet. manus: as you say, that could put a lot of fear in market participants. bob parker, senior advisor over at credit suisse. our next focus is india. a backdrop of uncertainty into the global economy. that will not stop india from growing according to the finance minister who spoke exclusively to rishaad during a visit to tokyo. >> if you look at the performance of the government over the last two years, we took over at a stage where the rest startedorld had almost disregarding india. we were off the radar. the government started virtually on a clear slate with an image that india ended -- entered

in terms of investors, he says the treasury will look at the tools to curb investors. lots more coming up, we will bring you the full interview treasury secretary jack lew, later in the hour. we will be right back. ♪ mark: hello, i am mark crumpton and this is bloomberg first word news. an american servicemen killed in iraq identified as a marine seal. he was killed during an attack by islamic state, outside the city of mosul. death of an american serviceman since they launched their campaign against i.s. militants in the summer of 2014. an election official in central indiana says software problems created long waits at some polling places for today's primary. a clerk of the courts said long lines formed at 12 voting centers. no voters were turned away, but some left because they were worried about being late for work. investigators say last week's helicopter accident was caused by a technical failure and not human error. visual evidence, including video of the rotor propelling into the scene moments before crash, indicating seven mechanical failure. aboard the airbus

treasury that was going to be passed into law.long japan on a list, with four other economies, germany is another one. and the u.s. treasury says they are watching these economies, china, taiwan, korea also. and they could take remedial outon, if they do not sort some conditions. now these conditions the u.s. is watching, including whether they have a trade surplus with the u.s.. the current account position, and whether that has been intervening in the market. none of these countries have breached those conditions yet. they are watching them. and they are pushing back against the currency. what the u.s. is saying is that we want to hike interest rates, but the u.s. treasury is saying we do not want dollar strength managing that. manus: good morning, two questions. what action to the u.s. take? part to go with the voices coming from japan over the weekend, more or less staying to decide what is happening on our currency on our watch. jane: if these countries do breach these rules, first of all, there would be more ballot talks to

treasury.t capacity, he's responsible, among other things, for the conduct of legal and economic tax policy, including having the honor and the burden of representing the united states in bilateral and multilateral interactions with other countries. before joining the government, mr. stack served as head of international tax, at the law of firm of ivans, phillip and barker. he graduated from georgetown law in 1984, where he was editor in chief of the georgetown law journal. he also clerked for at the the supreme court. let me turn it over to bob, . we're delighted to have you here and we look forward to your comments. [applause] bob: thank you very much. i want to say before today i have not had the pleasure of meeting mr. lubick, but the outpouring of affection and support that we see at the beginning of the ceremony demonstrates i think the great affection you've been held in and the fact that you've been a giant in tax policy and i want to express my appreciation for that. i fully appreciate

the treasury did not forecast one scenario.oted for brexit we would have a populist government. in the event of brexit they would basically veto every eu treaty. a massived be argument between britain and our european colleagues. i think it would be worse than what the treasury said if we went down that line and that is what we would end up with. and i understand why because there is no sort of blue on blue allowed in this debate. i see another scenario that i'm sure liam would not like to talk about. liam, paint me the picture, pose the vote of the instability we might see within the government. liam: within the government i think there is a leave vote. if there is a big remain vote, i think that is quite stable. the problem comes with a very small remain vote, especially of people feel that the election was in some way rigged toward the remain campaign with the public -- the government spending public money for one argument. the most -- mark: why are we talking about this or is it just sour grapes? the fundamental backdrop of

larry summers is the former treasury secretary for bill clinton.rvard, knows what he's talking about. ashley: he's got the credential. >> larry fink, very well respected in the markets. a guy that you hear about every now and then, tony james, the coo of blackstone, the big money management firm. ashley: i thought hillary thought these guys were the early doers of wall street. >> she loves these guys. bernie sanders hates these guys. the last is tom who now is at morgan stanley. hillary's former deputy of state. considered a really smart guy. so those are the leading contenders. it's interesting we can name easily -- i can name five more who might be hillary's treasury secretary from wall street. one of the established players. people that the markets like. very hard to do that with donald. the names i put up there -- >> that's the good news. >> go ahead. >> aren't established players exactly who we don't want? isn't larry summers exactly who you don't want making -- >> listen, i'm not a big larry summers fan. >> no. not at all. >> i'm not a big la

the treasury pamphlet. 08 is more than a pamphlet.ly chunky, they have two scenarios, that or very bad. it, shock andd shavit -- shock and severe shock. this is slightly tricky, but they say gdp would be down 3.6% or down 6%, but you have to upset that with the fact that the office of budget responsibility is currently forecasting around 4% growth over the next two years, so it sort of flattens down, or down, and unemployment up half one million or a hundred thousand, house prices down, real wages down. mark: it is pretty grave. balance,terest of let's hear from -- who resigned as pensions secretary in march. >> we have a treasury report giving you just the downside and not the upside, no recognition that the eurozone crisis is the biggest threat that we face and remaining in the eurozone or the eu will tie us into the eurozone that is in big trouble. , youof all, this report cannot trust treasury reports by the chancellor's own words. mark: is that fair, you cannot trust treasury reports? forecasting is notoriously tricky and there a

the treasury things -- i think that they do. when theyy are right said it would not solve the problem. to solve the problem, congress needs to act. >> your government has been involved in negotiations involving a debt exchange proposal, what options do ricansrs have it puerto default? guest: two things. first, what i am asking of creditors, they are in one group. --y are that is plenty of groups fight among each other. them to come up with a deal that solves the crisis. a proposal could ring back the crisis in a couple of years, no. on general a second of next year, i will not be the governor. that i am not saying i can do this to solve the crisis and then kick the can to the next seven or. i am asking them to solve the crisis. -- to the next governor. i am asking them to solve the crisis. puerto rico would be liable through other measures, if we do not comply to the plan that i proposed last september. it is already in place. it is already part of a five-year fiscal plan. in september, i extended it to a tenure fiscal plan. i a

recently a treasury spokesman said quote, as treasury and irs have previously stated, we are evaluatinge excise tax, the provisions of which are novel. it remains under review and we are not yet in a position to provide guidance on the credibility of act 154. all my amendment does is say that we need a tax ruling from the irs before we go forward. i'd be happy to yield back is there any other discussion on this amendment? mister grimaldi. >> people of puerto rico are suffering in businesses, schools and hospitals are closing and young people in professions are leaving the island by the hundreds every day. they need our help to reverse this trend. the bill before us is not perfect. it is a carefully crafted compromise which seeks to improve the quality of life for families on the island. this amendment should be defeated because it will significantly lengthen the time it takes for the bill to take effect by requiring the secretary of treasury to issue guidance regarding the eligibility of companies to take a foreign tax credit in connection to taxes there imposed on the island. the peopl

so is the treasury secretary going to be forced to change what his plan was?arns is on the island right now. he's got an exclusive interview with the treasury secretary. it's going to hit after the bell. but, peter, give us a sense of whether he's going to be forced to change his tone. >> well, they're threatening that, liz, because, you know, as much on capitol hill, that would allow puerto rico to structure $70 billion in debt, of course a big issue for investors in this debt. and also to investors in tax-free municipal securities and state securities in general. so a lot of folks are watching this. but right now we're down in puerto rico with treasury secretary who is securing hospitals and secures because the territory has had to cut funding for them as a result of the financial crisis. but secretary also trying to get support for this legislation on capitol hill that would provide this relief. and right now at least governor of puerto rico says that if this law does not pass, he says that it could cost u.s. taxpayers a cash bailout of $20 billion or more.

my first guest says if you are the the treasury, now's a good time to be selling.ead of fixed income. of the yieldmake in demand, which seems to be the highest in january. >> the strength of the three year note, most from domestic and foreign accounts, leads you to believe there is zero fear out there of a rise of inflation or even falling prices now. if you look at where the fed fund futures look, a 4% chance of a rate hike or treasury buyers looking for safety and in >> in, best investment, are finding it sure in the three year and likely will find it in the 10 year as well. if you compare the action today, you compare that to what we have heard from various fed bitcials, are they a little too complacent? >> yes, i do not have so much a concern on the market and the quality of treasuries. my greatest concern is going further out and taking on more credit risk and that is where complacency lies right now. people are taking on more risk than i think they are. that a red flag? how do you view that? >> we have put these flags out before only to see them pull down as

treasury.this time a report on the exitt-term impact of a br reports how earnings could decline by more than 4000 pounds by 2030, and says gdp would be 6.3% lower in the first two years, while inflation and unemployment would climb. the prime minister says of all to leave the eu would be a do-it-yourself recession but some are calling the treasury report cap again appeared -- treasury report propaganda. the shock would take the country into recession. this could be the first time in history a recession brought on ourselves. as i stand here with you, it .ould be a diy recession >> they are rattled on that side of the campaign, putting out more propaganda than we have seen at any time 1992. they said it would be an economic catastrophe, that this country would be left with a european exchange rate negative. that is what the treasury said it what happens? liberation for this economy. delano: boris johnson speaking there. let's get a check of the markets. on wall street, and mixed picture on the ma

treasury staples. once you can get that in your market account, in your portfolio, you tend to look for it less in the equity portfolio. betty: are you surprised also someyou have seen certainty in filings, but the recent data in the last couple thatys and recommendations people are ratcheting down equity portfolios, they are taking money out of equity. it is a harder and harder case to take equities. are you surprised by that? the contrary in view. a large major asset classes, bonds in the two percent range, and giving and earnings yield of six or 7%, if you are trying to think stocks, we are a key component of portfolios. hurt --our equity holdings and razor capital holdings. >> we give it a few weeks ago and we took money out of small caps and higher multiples, and out of the markets. betty: they are late to the game. >> i would just say it is not a bad time to rebalance. it is now a time to get out of equities. much, thenk you so global quantitative strategist at wells fargo investment institute. c

department of the treasury. in that capacity, he's responsible, among other things, for the conduct of legal and economic aspects of tax policy, including having the honor and the burden of representing the united states in bi-lot raleigh and multilateral interactions with other countries. before joining the government, mr. stack served as head of international tax at the law firm of ivins, philip and barker. he graduated from georgetown law in 1984, where he was editor in chief of the "georgetown law journal." he also clerked at the supreme court. so let me turn it over to bob. we're delighted to have you here and we look forward to your comments. >> thank you very much. i just wanted to begin by saying that i have not had the pleasure before today to meet mr. lubick, but i would like to say that the outpouring of affection and support that we see here today at the beginning of this ceremony demonstrates i think the great affection you've been held, the fact that you've really been giant in tax policy and i wan

on henryan to lean morgenthaler, who became secretary of treasury. they were all in favor of going off of the gold standard to tackle deflation by raising prices, allowing roosevelt and the united states government through the federal reserve dollar, tomanage the ease booms and busts. >> world war ii comes. how does that affect the economy? eric: roosevelt uses the idea of antifascist as an alliance in the war. it carries over into the late 1930's and they use currency loans and antifascist measures during the time when the united states was not yet a belligerent. vigorouslyegan to aid britain and used currency devices to send aid to the brits in 1941. it was done with american aid. the american administration ase and it was-le part of the deal they would sign onto a currency program, which would be an international agent for peacetime. >> roosevelt is concerned about the global economy and the american economy. eric: he is concerned about andnging an economy avoiding fascism. he believes that depression gives rise to fascism and that movements would

recently a treasury spokesman said, quote, as treasury and irs have previously stated, we are evaluating the excise tax. the provisions of which are novel. it remains under review and reare not yet in a position to provide permanent guide aps on the credibility of act 154. all my amendment does is say that we need a tax ruling from the irs before we go forward. i'll be happy to yield back. >> is there any other discussion on this amendment? >> mr. chairman, people of puerto rico are suffering in businesses, schools and hospitals are closing. and young people and professi professionals are leaving the island by the hundreds every day. they need our help to reverse this trend. while the bill before us is not perfect, it is a carefully crafted compromise which seeks time prove the quality of life for families on the island. this amendment should be defeated because it will significantly lengthen the time it takes for the bill's provision to take effect by requiring the secretary of treasure to issue guidance regarding the eligibility of companies to take a foreign tax credit in connection t

sometimes we say, give it aboutk to the treasury. this is the treasury itself. well, don't terminate this thing and give it back. we might want to use it for something else. that's a classic way of describing how washington often works. spend all the money that's been appropriated to you or they will reduce the money they give you next year. i previously sat on the appropriations committee, and this is not a one-off proposition. every year we have to scrub through these agencies' spend dhiewrs, and we-- --spend dhiewrs, and we -- expenditures and we find that -- so they don't get a reduced amount of funds sent to them for the next fiscal year think of the ways that this money could be used. if it was put back into the treasury. number one it could be used for essential federal functions. i wouldn't -- wouldn't n.i.h. like to have $7 billion to be able to hopefully break through on a wonder drug that would address alzheimer's or diabetes or something else? wouldn't the department of defense want to have this money for the shortcomings that they've had with the dr

but she was a treasury minister and stood at the stump. she's asking me while we've done to household tax -- did she ever raise as the executive secretary of google we should notice before she asked questions of this government. >> mr. speaker -- mr. speaker. >> members must calm themselves and remain calm. they should taked order on both sides take the lead and gentleman, the member but always sitting calm in are a statemente manner -- >> mr. speaker, mr. speaker, we all have a great deal of respect for the right member. now, chancellor will know that the secretary builds taxes on vice not google and i did my job when i was in the treasury. now he will be judged on results -- on results he's been in office for six years are. and what demanding ten times more than google than he is, the public will make their own judgment. mr. speaker, well labor is campaigning to ensure that u.k. remains in european union because it's the best way to defend as well as jobs and prosperity. the part of the office is split right down the middle. and, and mr.

treasury notes, yield and bonds are closed world today. german consumer prices halted their declining may. deflation rates rose from zero after minus point 03% in the previous months. good news to ecb policymakers struggling to revise growth in the euro area. the ceo of singapore's commodity trader noble group has quit. they have accepted the co-ceotion with replacements. noble has plunged over the past you with questions about the company. alliance trust received a theover approach from capital partner. goal lines trust said no detailed terms of been provided by our i.t. and the camp -- by rit and there is no certainty that the transaction will take place. mobile news powered by our journalist and news bureaus around the world. dark it to close in the u.s. and u.k., -- markets are closed in the u.s. and u.k., but let's check in on markets opened, starting with european equity. the dax up there, the cac 40 posting gains as old. a couple of stocks moving on m&a, so bayer gaining after the sunday times reported they may put forward as early

elder statesman, george schultz, ronald reagan's secretary of state, richard nixon's secretary of treasury and much more. we're also going to talk about international amaeconomy and th presumptive nominee. >> i will build a great wall on the southern border and i will have mexico pay for that wall. >> terror and frightening lineage. i will tell you about the direct line that can be drawn from the most recent jihadi attack on american soil. all the way back to the founder of modern radical islam. finally, does the united states need a new cabinet member, a secretary of the future? maybe. i'll explain. but first, here's my take. silicon valley has more than 23,000 starbucks. at least according to the net worth site angel list. it certainly feels that way in paolo alto where i spent most of the week but turns out this place is the exception to a worrying trend. it is by now well documented that start-up activity has been slowing down in america for about three decades dropping sharply over the last ten years. even as american culture has turned entrepreneurs into rock stars, the american econ

be a significant anchor to seeing treasury yields higher. even though the fed is ready to hike at least once this years and twice is possible. it is still hard to say 10 year treasuries can move above 2.10 this year? >> do you think they are starting to pay attention to washington and the white house as opposed to just look a fed. you could argue political risk globally is picking up. does that become a risk. >> i think it becomes one more. brexit and opec meetings and there is a lot of risk that makes it very complicated to trade. i think what having now it seems the two clear nominees come through. i think it is probably too early but you will get to conventions in july. you will move to august and i think markets will have a bit more focus there. >> jeff also saying, full employment. at some point the amount of new jobs has to slow down. >> absolutely. and participation rates picking up. and keeping the unemployment rate flat. >> thank you. have a lovely weekend. great to see you. >> and just ahead of that countdown underway, we'll give y

nick and i went to puerto rico with the secretary of the treasury earlier this week -- rep. bishop: oh, fine, you wouldn't go with me, you went with him, great. [laughter] ms. jalonick: we saw schools dealing with bug infestations, electricity problems, hospital having trouble getting drugs for children. what you say to people there who might be suffering under these economic problems about what congress is trying to do and how congress might have help coming? rep. bishop: you know, there are some voices saying you have made bad decisions for the past several decades, suffer, live with it. that is not an appropriate response to it. yeah, there are bad decisions made, but we have a chance of doing it the right way and we will do it the right way. for puerto rico's success, they not only have to get financially sound and structured, but they also have to have economic growth that takes place in the island. one of the biggest problems they have with jobs that have left is because of the extremely high energy prices, and that is one of the reasons why our committee's dealing wit

treasury. 40% in treasuries. if you compare that percentage to saudi arabia, it is around $.20. what i find intriguing is the fact that it was disclosed now you they kept the secret for over 40 years and now it is disclosed. any information on why the u.s. government that now we will tell >> people have mentioned the time and is interesting -- timing is interesting. january, it was like 100 p it we wanted to know whether buying or selling treasuries. request? they resist a >> put it in a way that maybe we just not on an open door. it has been 42 years. that agreement has been in place for 42 years and china and japan ase replaced saudi arabia biggest debt holder. we got lucky. megan: what has been the most fascinating detail on this for you? >> you're right that in the late 1970's and early 1980's, a committee looked in to it, why is it secret, and that was very rigid and determined to not give it to the public. that is what is fascinating, became a legacy and it was ok for them. many thanks to andrea, great story. the rally is up, losing gas. stick around. our next guest is goi

the 20-year treasury bond, etf, we have a chart of the ten-year treasury yield. just look at that.ook at it over the last ten years. it tells you something structurally has changed here. if we get a 25 basis point raise whether in june or july or september, i don't think this economy can handle meaningfully higher rates at this point. and that chart is telling you everything all about it. to me, the trade sets up kind of interesting in the tlt. that is the 20-year. it's not that chart, but we also have the tlt in a massive uptrend, off of the lows here. i think that will continue. when i look at the options trade in tlt, it sets up pretty good looking out in my mind to september to do reversals here. i think there could be room to the down side. maybe the mid-120s here. maybe it's a one and done, maybe they just get dovish again because of global conditions. so to me, i look at the tlt when it was trading at 130 today. the trade is a risk reversal. i want to sell the september 1 26 put. buy one of the september 133 calls for $2.50. it cost me nothing. i make money on expiration abo

very soon after i joined the treasury department in 2004, we saw with alarm the progress that iran is making in its covert nuclear program and understood this was a national security threat of the highest order. from that time, the talented women and men in my office have devoted literally tens of thousands of hours to address this threat. working with the intelligence community to identify and track iranian front companies and their movements of funds through hidden accounts. working with law enforcement and regulators to hold sanctions violators accountable. working with diplomats and foreign counterparts to make clear to iran that the price of their nuclear program was complete isolation from the international community. congressng with you in in a bipartisan effort to sharpen our sanctions tools, deepen their impact, and bring iran to the table. after nearly a decade, the accumulated pressure had its intended effect. the rainy and people rejected the course of government had charted and elected president rouhani. was a tremendous breakthrough. it represents a peaceful solution to