right now with the treasury is -- right now what the treasury is doing is drawing down its cash.t came into the year, in march, the debt limit extension ended and the treasury started using the cash it had and other resources to make its payments to all the folks that get payments from the government. but the point is that by the end of september and according to the treasury secretary, i believe it by september 29, they run out of those financing options. they have no cash left. if that's the case then they have no choice but to spend what comes in in tax revenue because a deficit. somebody is not going to get paid on time. that is breaching of the down limit. if we also really called to sit and they pass a piece of legislation to raise or suspend again, the treasury will start issuing bonds in a normal way to finance itself and it should not have any significant impact. it's not like we get a flood of bond issuance and out of an impact -- and have an impact on interest rates. that is a great question. with cnbc, they are smart guys, both of them. you have to respect them. they

the treasury market, the market for treasury bonds is the biggest in the world. the most liquid in the world and the most important. and investors everywhere in the world want those bonds. it is a good thing. they only want those if they are able to make payments in a timely way. if we screw that up, we will kill the goose that laid the golden egg. that is really important to our well-functioning economy. host: about five or 10 minutes left, thomas is in cincinnati, ohio. line for democrats. go-ahead. thomas: yes, the president didn't give us any confidence in his abilities to lead. he said that he would shut down the government to build a wall. how does that make investors feel? i --zandi: >> he is referring to the president comments last night at the rally in phoenix. mark zandi: you know, i don't think investors are listening too hard because they don't take it seriously at this point. to say you are going to shut the government down to induce congress and taxpayers to pay for the wall between mexico and the united states doesn't seem like a winning strategy.

global investors also own a big share of treasury debt. the biggest investors overseas would include the japanese. about a trillion is owned by japanese and i believe the second-largest owner are the chinese who are just under a trillion or close to a trillion in debt holdings. markets, the market for treasury bonds is the biggest in the world, the most important in the world and investors everywhere in the world want those bonds. they only want those bonds of they continue -- we continue to make payments on them. when we screw -- if we screw that up, then we will kill the goose that laid the golden neck because that is really important to our well functioning economy. thomas is in cincinnati ohio. line for democrats. caller: hello? yes, -- didn't give us any confidence in his ability to lead. he said he would shut down the government to build a wall. how does that make investors feel? the caller from the president's comments last night. don't investors a list -- think investors are listening to hard because i don't think they take it seri

and treasury is expected to have to reduce its issuance of short-term treasuries this fall in order to stay below the debt limit. at a time when the supply is already low because of the shifts towards government money market funds. so my question is do you agree that the uncertainty over when and whether the debt limit will be raised is causing distortions in the market and is impacting treasury's ability to borrow at the lowest possible rate? >> well, let me say that i assure you i am very focussed on the debt limit, as i have said before. i urged congress to work on this before anybody leaves. i said yesterday in my testimony, and i will be alerting congress that my previous letter on special powers will be extended through september. >> mr. secretary, my time is almost up, and i want to know if treasury were to breach the debt limit and start prioritizing interest payments on the debt over the government obligations like social security, do you think the markets would view this as a default? >> i have no intent on prioritizing. i think that doesn't make sense. the government should

we heard treasury secretary steve mnuchin talk about his power of sanctions as treasury secretary.ioned north korea and venezuela but npr is saying that the troop surge we heard about is potentially happening and that will be 4000 army troops sent to afghanistan. that will place more pressure on pakistan and we will get more details from the president tonight at 9:00 p.m. eastern. secretary of the treasury steve mnuchin and senate majority leader mitch mcconnell have also been talking about u.s. economic policy in louisville, kentucky. steve mnuchin says there was zero chance that congress would not raise the debt limit. mitch mcconnell said there is zero chance congress will not raise the debt limit. the senate majority leader has a lot of faith in congress. time for our latest bloomberg business flash. fox sky deal is facing trouble from an activist group. lawyers are demanding a fresh review by the u.k. regulators. this is after a ruling on the merger was fatally flawed and the $15 billion acquisition would give rupert murdoch 25% of 21st century fox and 60% ownership of sky. yo

global investors also own a big share of treasury debt. the biggest investors overseas would include the japanese. in about $1 trillion is owned by the japanese. i believe the second-largest owner are the chinese, with close to $1 trillion, as well. market, the market for treasury bonds is the biggest in the world. the most important in the world and investors everywhere in the world want those bonds. if they arent those able to make payments in a timely way. if we screw that up, we will kill the goose that laid the golden egg. that is really important to our well-functioning economy. : thomas is in cincinnati, ohio. line for democrats. go-ahead. caller: yes, the president confidence in any lead.ilities to he said that he would shut down wall.vernment to build a how does that make investors feel ? guest: you know, i don't think investors are listening too hard because they don't take it seriously at this point. to say you are going to shut the induceent down to congress and taxpayers to pay for the wall between mexico and the united states

calling long treasury or short treasury is hard because of the structural demand outside the u.s., andnue to see money flowing into the best of markets, which is the u.s. now, so we really like thinking about things from a differential standpoint. we think the currency market with the huge selloff in the dollar versus euro is one way to play it, and the other way is short treasuries versus a duration adjusted amount of bunds. and we think they are likely to outperform. alix: do you see the data starting to roll over? mike: i think it is more that the market is, assuming the ecb is going to be on this significant have to exit, and where we believe that in the u.s. you are moving from quantitative easing to quantitative exiting, and it is clear, we think you are moving in europe from quantitative easing to more quantitative easing over time. what they can do based on significant imbalances that exist across broader europe. alix: the markets are not interpreting something correctly? shocked! mike swell will be sticking with us. in the next hour, andrew slimmon, morgan stanley, will be joi

we are talking treasuries in a few moments. to mark crumpton and the bloomberg "first word news." mark: egypt's president and foreign minister met today with white house advisor jared kushner. after the trouble administration cut nearly $100 million in economic and military aid to egypt and delayed almost , citinglion more egypt's poor human rights record and its crackdown on nongovernmental groups. kushner was in cairo as part of a middle east tour looking at ways to revive israeli/palestinian peace talks. navy has responded to a rash of accidents by firing the admiral in charge of the japan-based seventh fleet. admiral relieved vice -- the vice are more, saying it lost confidence in his ability to command. that happened two days after the uss john mccain was involved in a fatal collision. there have been for accidents under his command this year, two of which have been fatal. authorities in brazil say seven people are dead and dozens others missing after a boat carrying 70 people sank on a major river in the northern part of

jonathan: buy and hold 10-year treasuries or bunds to year end? martin: i would take treasuries.treasuries. matt: i take bunds. jonathan: payroll, a surprise, it's a guessing game? martin: upside. ira: downside. matt: upside. jonathan: great to have you with us on the program. thank you all. a reminder that at 3:00 p.m. new york time, 8:00 p.m. in this is bloomberg "real yield." ♪ so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. left your mother. ginni: it was sudden, and my mother found herself with your kids and no money. david: talk about ibm. ginni: we are the champions for business. david: when you meet with the president, -- ginni: people are respectfully honest. david: do you feel a certain r

jonathan: buy and hold 10-year treasuries or bunds to year end? martin: i would take treasuries.suries. matt: i take bunds. jonathan: payroll, a surprise, it's a guessing game? martin: upside. ira: downside. matt: upside. jonathan: great to have you with us on the program. thank you all. a reminder that at 3:00 p.m. new york time, 8:00 p.m. in this is bloomberg "real yield." ♪ ♪ emily: he was tapped to be heir to the softbank empire. nikesh arora was raised the son of an indian air force officer then came to the u.s. for grad school. in 2004 he got the job of a lifetime. larry page and sergey brin hired arora to help build google into an online ad powerhouse, making him one of the most sought after tech execs in the world. a decade later he was named softbank president with a plan to eventually make him ceo. but as son's retirement approached, arora said it became clear he wasn't quite ready to

they had the most amount of treasuries in june.eserve, they have improved for the sixth straight 0.68.in a row, can they sustain this number one position? strong trade flows, they reckon that china is not done buying treasury. their strong trading relationship with the united states of america. anna: it was down but now it is up against the dollar. some of those flows, maybe they did the trick in the short-term and trying to stem some the capital flow we have seen earlier. on the risk radar, a little bit of calmness on the markets, as a result of less rhetoric around north korea. plenty of politics for us to wait in in terms of u.s. story gh-in on the wei u.s. story. only, we have day a shot of sunrise in london. this is the bloomberg dollar index. the americans spend freely in july and u.s. retail sales rose but what will they reserve say about inflation and the trajectory. we will ask stephen gallo. this is eurosterling. an eight year high for sterling and an eight year low for the pound. where will we go next? anna: we will be w

jonathan: buy and hold 10-year treasuries or bunds to year end? martin: i would take treasuries.suries. matt: i take bunds. jonathan: payroll, a surprise, it's a guessing game? martin: upside. ira: downside. matt: upside. jonathan: great to have you with us on the program. thank you all. we will see you next friday. this is bloomberg "real yield." ♪ ♪ julie: coming up on "bloomberg best," the stories that shaped the week in business around the world. president trump gives investors plenty to think about. pres. trump: our support is not a blank check. >> i don't think this is going to have a big effect on financial markets. julie: and perhaps to worry about. pres. trump: believe me, if we have to close down our government, we are building that wall. >> plenty of investors are are worried that maybe president trump has termed the way things are going. julie: a big deal rocked the energy sector. warren buffett sees a big deal fall apart. samsung's new phone gets a good deal of attention, and carl ic

jonathan: buy and hold 10-year treasuries or bunds to year end? martin: i would take treasuries.suries. matt: i take bunds. jonathan: payroll, a surprise, it's a guessing game? martin: upside. ira: downside. matt: upside. jonathan: great to have you with us on the program. thank you all. we will see you next friday. this is bloomberg "real yield." ♪ got you outnumbered. the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. find your awesome with the xfinity stream app. included with xfinity tv. more to stream to every screen. ♪ david: what was the strategy that you used? paul: i was completely determined to recapture my parents' money. david: how does somebody raise $5 billion in 24 hours? paul: it was first come, first serve. david: you have the image of being a person that strikes fear into a lot of ceos. some people are probably afraid they will get a call from paul singer. paul: it does not bother me. david: if somebody invested in the very beginning, what would the rate of re

government bonds followed treasuries higher. investors trying to figure out what the reduced odds of another interest rate hike mean for them. euro drifting lower before the ecb releases minutes of its latest policy meeting. zinc trading near a 10-year high. that is a very quick snapshot of the markets. now let's get to the bloomberg first word news. sebastian: south korea's president says donald trump has agreed to ask for consent before taking any military action against north korea. gameirst news conference and he said only his country could greenlight a strike. he warned that kim jong-un's regime is approaching a red line. white house chief strategist steve bannon has gone public with his long simmering feud with some of trump's top economic advisers. prospect"he american that he often battles with steven mnuchin and gary cohn. benin did not immediately respond to request for comment on the interview. minutes from the fomc's july meetings shall policymakers scratching their heads about why inflation remains low. officials st

there is a risk that the treasury decides to extend the maturity a lot more.re's always demand from the rest of the world, but at what price? maybe you want a little more price of supply. jonathan: do you really think the average maturity is going to change with treasuries? we look at it now and it's 70 something months. the u.k. is 160 something months. michael: if i were an issuer of debt or a borrower of money, i will want to be on the front end of the curve because consistent with our view that the fed will not hike that much. the lowest yields will continue to be at the front of the curve. i think it is expensive to issue on the backend, especially if you issue a 40 or 50 year at a premium to where the 50 year trades. jonathan: michael collins, priya misra, and nick maroutsos will be staying with us. coming up next, the auction block erupts, proving the thirst for risk in yield is very real. you are watching "bloomberg real yield." ♪ ♪ jonathan: i'm jonathan ferro. this is "bloomberg real yield." i want to head to the auction block now where there is an a

jonathan: buy and hold treasuries to year end? martin: i would take treasuries. ira: treasuries. matt: i take bunds. jonathan: payroll, a surprise, it's a guessing game? martin: upside. ira: downside. matt: upside. jonathan: great to have you with us on the program. thank you all. a reminder that at 3:00 p.m. new york time, 8:00 p.m. in london, e.c.b. president mario draghi will be speaking in jackson hole. bloomberg will have full coverage and analysis of the headlines from his remarks. that does it from us from new york, we'll see you next friday at 12:00 new york time and 5:00 p.m. in london. i hope in hong kong you're doing something a lot more interesting. bloomberg "real yield." ♪ p.m.:30 in new york, 5:30 in london. welcome to "bloomberg markets." i'm vonnie quinn. ♪ from bloomberg world headquarters in new york. here are the top stories on the bloomberg and around the world that we are following. the federal chair janet yellen speaks at jackson hole. ae says any rollback financial reform should be, quote unquote, modest. plus, it's not always easy to outdo your boss. we l

if we start out with the treasury bond market, just the treasury bond index, since february 11th, 08,gative its return is very close to zero, but it's negative. let's just call it zero. other government-guaranteed assets and very high-rated assets in the united states, like mortgage-backed securities, that are government guaranteed, have a return of about 1.5 investment-grade corporate bonds, which are high quality, have a return of 12% against a backdrop of a 0% treasury market and that's with interest rates having risen and the corporate bond index has duration interest rate risk, that is higher than the treasury bond market. so, to have this incredible 12% outperformance during rising interest rates is only possible with sort of catastrophically huge spread compression. but it doesn't stop there. junk bonds are up, get this, the jnk, 29% over that time period emerging markets, the emv, are up 19% over that period in bonds. the s&p 500 is up 40% over the last 18 months my spatter beta equity strategy, the shiller dsx is up 50% since the bottom but this is the real eye popper. i've g

bonds, what a wimpy week it has been for treasuries.close the week very close to the close at around 2.6 on a 10 year. about $2.20 on the 10 year. from new york, still ahead, the final spread features janet yellen and mario draghi, the annual conference in wyoming. this is "bloomberg real yield." ♪ ♪ jonathan: i am jonathan ferro. this is "bloomberg real yield." time now for the final spread. next week, military drills involving tens of thousands of troops from the u.s. and other allies. if you want military risk watch, that is something. president trump will be speaking in arizona. and the big highlight is a with janet helen and mario draghi. the big highlight is actually monday -- my producer forcing this in the solar eclipse on monday. solar eclipse or jackson hole for you, sir? >> solar eclipse. jonathan: the ecb or what is happening with mario draghi? it was meant to be the main event. we weren't getting the kind of news in terms of tapering. then, we saw the accounts from the ecb's last meeting, but they are concerned about a euro

. >> thank you soech i'm inside the treasury department in the diplomatic room with the treasury secretary of the united states, steve mnuchin, thank you. >> thank you very much >> the president made it very empassioned plea yesterday, support for the tax package. but many on wall street are a little confused fwlauz is no package. can you explain to us why there is no package or details about rates and things like that coming from the white house? >> well, first of all, there absolutely is a package. i think, as you know, i have had the opportunity to work with the president on tax reform for over the last year. we started on the campaign we're looking at the issues. he did two major speeches during the campaign both in new york and detroit. and since january, i've been working with gary cohen and the leadership on this plan. so we have a very detailed plan. what yesterday was about and we couldn't be more excited that the president kicked off the campaign for tax reform is taking it to the people. and what the president is focused on is explaining to the american public why tax reform is

david cotter to serve as assistant secretary of treasury for tax policy. mr. cotter, welcome to the finance committee. we appreciate your willingness to appear before us today. we also appreciate your willingness to serve in this capacity. and i'm sure that the significance of this position at this crucial time is not lost on you. it's not lost on any member of this committee. tax reform has been a major focus of our committee for some time now and we are grateful to have you here to discuss your thoughts on these matters. on a number of occasions, i stated my view that presidential leadership will be a key component to any successful tax reform effort. just the last week i quoted president obama in a speech on the senate familiar back in 2012. he said things like, quote, our current corporate tax system is outdated, unfair and inefficient, unquote. the problem was that president obama never really got around to truly leading out on tax reform. i expect more from president trump on tax reform. that expectation comes in large part because of knowing him and kno

there is a risk that the treasury decides to extend a lot more.here's always demand from the rest of the world, but at what price? jonathan: do you really think the average maturity is going to change? we look at it now and it's 70 something. the u.k. is 160 something months. michael: if i were in issuer of , i will want to be on the front end of the curve because consistent with our view that the fed will not hike that much. lower yields will continue to be at the front of the curve. if you issue a 40 or 50 year at a premium to where the 50 your traits. michael, priya, and that will be staying with us. coming up next, the auction erupts, proving the thirst for risk in yield is very real. you are watching "bloomberg real yield." ♪ ♪ jonathan: i'm jonathan ferro. this is "bloomberg real yield." i want to head to the auction block now where there is an appetite for long dated bonds. lastly, at&t. this week. , gm the automakeeek, gm. the automaker sold $3 billion in bonds. united states treasury says it will maintain the issuance of longer-term debt

one of the things that treasury does or did when i was treasury spokesperson was they usually pre-notifyountries with which they have diplomatic engagement. my assumption is they pre-notified these countries, weeks if not months earlier. >> is it your sense these things dealing with north korea could have some impact? >> yes, definitely. >> good to see you again, former spokesperson for the treasury department and u.s. mission to the united nations. >>> coming up next, the white house revealed today president trump's son-in-law and adviser jared kushner is leading a tell allegation to the middle east to explore the possibility of resuming the israeli/palestinian peace process. hmm. he's expected to be in israel tomorrow. he's going to be meeting separately with israeli prime minister benjamin netanyahu and palestinian president mahmoud abbas. he last met with them in june. also in this week's itinerary, leaders from saudi arabia, qatar, and jordan. busy week for him. >>> coming up, what steve bannon has up his sleeve as he rallies his troops to unleash revenge on donald trump. you were m

andakes substantive detailed expertise and craftsmanship in the treasury department and we have got areasury secretary who said at first there was not going to the reduction in taxes on high income people and then changed his mind about that and set multiple deadlines that have already been missed. i do not think we have the presidential popularity, the legislative skill or the technical expertise in the treasury department that makes it terribly likely that we will see any kind of substantial and comprehensive tax reform, maybe cutting.l be some tax but, i think the prospects for structural reform, which was the aspiration of the president laid out are minimal at this stage. david: larry summers, a distinguished economic professor at harvard. thank you for joining us. vonnie> vonnie: that is david westin. we'll have more bloomberg markets, next. vonnie: i am vonnie quinn. huge -- im never say am nejra cehic. target forecasting full earnings that beat estimates, the of the discount chain said sales were better than expected. -- the discount chain said sales were better than expected.

they say, ask the treasury secretary. and the treasury secretary would say nothing.i'm all for people talking about stuff that matters and i never really was a big fan of the ruben rule on that. >> he seemed to hedge a tiny bit on the 15%. >> yeah, you picked up on it. >> what? >> you picked up on it. >> do you think this administration is so desperate for a win, that they will -- they'll get anything done, kind of no matter how watered-down it is just to say we've passed something in 2017, and then second, would that be retroactive to january 1 >> i would say that's a little pessimistic how you put that, or a little cynical here's what i think. 15 is a goal that the president would like it makes the united states very competitive. i think the president will take almost anything. we actually have had debates about this some people would say the president, he said 15, he wants 15 but you're right i would point out the president on thursday are said, ideally it should be 15 indicating that maybe he's got a little play with this. but i also know from talking to treasury

the treasury in the background, and between them, the white house.he home of the president was painted white in 1814 after the british had partially burned at. but it was roosevelt who gave the structure its delightfully descriptive name officially. it was the earliest building completed in washington. john adams and his wife abigail were its first occupants. nearby lies dupont circle, center of a district of magnificent homes and embassies of foreign nations. it is a historic part of the city, known with the memory of great names. this striking building of grecian design is a government patent office. millions of inventions are kept here. here is the world's largest printing plant, the government printing office. thers of ink flow here into congressional record, and how the congress and love it. within this decaying building was committed a crime which shocked the world, here in for theater lincoln shot down on april 1960 5 -- w again in the air we fly over the mall now being actively developed into the sweep of beauty dreams by its planners a quart

the treasury market was surprised that gary cohn quit the white house.ng to an advisor leading the effort to overhaul the u.s. tax code will remain in the position as the director of national economic council, but why has goldman sachs president seen as such a critical figure on wall street? why is he seen as all that is good for wall street? >> there is a significant amount of expectation built into the equity market for tax policy here at the center of initiative is typically the treasury in a typical administration. that's not the case since the -- since mnuchin became the secretary. the center of that is gary cohn. that is for the policy issue is coming from. i think that is important and it is real. jonathan: do you think it should be moving this much. the white house has denied it at the potential direction of one policymaker? >> the movement hasn't been just because of the gary cohn story. there has been a lot going on on the geopolitical side as well as on the political side in the u.s. i think the market is waiting for meaningful tax reform. he'

if we don't have a crisis in in may impact treasuries.n a bear market, the euro has different dynamics because it has become a funding currency. i would not be surprised and we have seen that in the recent turmoil that the euro has kept up and strengthened. i would not be surprised to see it in the high one 20's by the end of the year. vonnie: you talked about that earlier in the cycling europe -- talked about that we are earlier in the cycle in europe than in the u.s.. things be positioned? i am negative on risk assets something because of the balance production because of where we are with valuations, including tweets by the president may get us into an environment with lower risk assets. i do think the way to play this is more on the beside. being short bonds, which in my view --that maybe something. investors, doing what ray dalio is proposing with his current portfolio, including a very substantial -- he is considering -- he is proposing what investors may consider. literally that missiles might go off, or this could pick up momentum

>> definitely treasuries. the higher end quality of the bond market. we would rotate out of or row dues the position and use that, proceeds to buy stocks here today which are on the cheap. and i think that the bond market, the high quality -- six months ago the market was very fearful of rising interest rates. how far and how fast would the fed go to raise rates. that was throw bonds off. at that point the ten year was at 2.6%. bonds have rallied with the ten year at 2.1% on yield. the perception has pushed from fear of interest rate risk to wanting safety and capital preservation. what happens if the hawks come back and they come to raising rates? bonds will sell off very aggressively. >> if you do not have a position in the gold market, i want to go back to that. how would the average investor best invest in the gold market? what's the average investor's strategy? >> so we like the gold miners, and we own a basket of gold miners. one stock is the asa gold fund, the closed end fund that owns a basket of miners. that's how we play it. >> john, thank yo

thank you, steve liesman our thanks to treasury secretary steve mnuchin as well.irst on taxes, still on track there say package, he says it is being socialized through we're focused on the energy sector gasoline and oil spike traders are zeroing in on several names. we'll share them with you. bite yoe tech breakout several key stocks jumping again today. how do you play that sector which just hit almost a two year high and the legislation that may soon hit activist investors like a ton of bricks. all that is on the halftime report at the top of the hour. we'll see you then >>> we're on a track to get this done by the end of the year. you're going to see the details come out later this movement it's going to go through a committee process. and we expect the house and senate will get this to the president to sign this year. we couldn't be more excited about prot grthe progress we've. >> stephen mnuchin joining steve liesman discussing the president's new tax reform plan saying we're going to get it done by the end of the year. though, he also admitted the original t

move in thee a treasuries.ting to see now is the market again starting to respond to some of these tests. especially if you see a nuclear test you will start seeing some market movement. what could determine that is how president trump or china response to that. great to speak with you, thank you very much. korea, nancyorth soderberg is the former deputy national advisor under president clinton. former u.s. ambassador to the united nations. she is currently running for a house seat in florida sixth consecutive -- congressional district. change the vote over the weekend represented? what that tells us about the direction of the diplomatic options. it's a very big deal to get china and russia to go along with the united states is a real diplomatic victory for nikki haley and the entire trump administration. it's hard to get china to squeeze north korea the way these sanctions do. the chinese don't want north korea to collapse because millions of refugees would flood in. they are walking this tight rope. these are

gary: i say treasury. i have been able on treasury since 1981. the yield is now 2.8%. an area which is more reflationary than anything else. -- which is more than anything else. treasuries are higher than almost any other developed country. i say that is the biggest, but that has been in my forecast. i have been on it for 36 years. alix: gary shilling, thanks so much. jonathan: 25 minutes into the session. downside on the dow. the s&p 500 ♪ going further back from record highs. ♪\ ♪ vonnie: from new york, i am vonnie quinn. from london, i am mark barton. ♪ vonnie: the bank of england report this morning but first, breaking economic data. >> nonmanufacturing index, a measure of the services industry. the 56.9orse than estimated by analysts. we also got factory orders for june coming in with a rise of 3% in line with estimates as may was revised to a small drop of .3%. 6.4%, the final reading from drew -- from june. the biggest one just cannot hear.

you'll never get rich from owning treasuries, though.30-year treasuries, our government's highest ye esest yh lower terms don't produce much in the way of capital appreciation let's say 30 year treasury bonds are yield ing 3.5% with that 3.5% yield, as long as you reinvest your coupon payments back into treasuries, you might double your money in 20 years the average historical return for the s&p 500 is 10% annually, which would let you double your money a little more than seven years. so if you're under the inof age3 and you owe a bunch of bonds, you're being way too cautious. i know that puts me out there, but that's how i feel. even in your 401(k) and your i.r.a., you want to be weighted towards stocks while you're young. these retirement vehicles, a lot of them avoid paying dividend taxes, allowing your gains to compound tax free year after year but as you get older, owning treasuries becomes essential because unlike the stock market where you can lose enormous amounts of money in the blink of an eye, bonds are safe once you've used t

get the 10 year treasury, for example. that has gone up and down independent of the fed. it is true the fed lowered rates, but this is how i think about it. they lowered rates in late 2008 because the economy was going down. the fed was following it down. this is the reason i think we are having a hard time pushing rates up. the recovery really has not taken hold. i would not put the saie blame n the fed for a rates, other than they could have gotten a better recovery going, but that would put it on people who buy and sell treasuries and invest. is a lot of risk aversion out there. host: todd, go ahead. caller: thanks for taking my call. i just wanted to comment that the past 104 years, the wealth has been distributed from the 1%, and that top is the direct result of the federal reserve and 16th amendment, which brought in the irs. an amendment that was not ratified, and was ready much done in a closed room, a backroom deal. that is what i want to say. and then this guy you have got on, he thinks we need more controlled by the federal reserve, or control of the economy. i

treasury moment -- treasury market. we will look at tencent earnings later.libaba later this week, they will give us an indication as to whether the rise in the share prices, trading higher, whether it has been justified, if the risk has paid off. the balances on sheet. get the fed rate hike before the end of the year. but go over to sophie. >> kicking it off with hong kong, hang seng. stocks, energy and utilities are leading the drop. energy shares are down. given the earnings, let's shut cathay arecent and faring. tencent has outpaced apple. alibaba reports later this week. china unicom is scheduled to report, but it has suspended trading in hong kong pending an insight announcement. autoan see, we have geely up. for the homes income you have in terms of what is -- we hung saying, you have a mixed bag. let's refresh that quickly. auto movingy slightly. let's look at what is going on this country. the profit fell 60%. the company says intensifying competition in china and sluggish corian vehicle market korean market is to blame. asian markets very much looki

bloomberg's treasury reporter joining us on the phone from louisville, kentucky, where the treasury tech- treasury secretary spoke earlier today. coming up tonight, live coverage of president trump's presidential address. look for that at 9:00 p.m. in new york, 2:00 a.m. in london. ♪ joe: you are looking at a tweet from goldman sachs ceo lloyd blankfein. he says, which the moon was not the only thing casting a shadow across the country. we got through one. we will get to the other. what is he talking about? he does not say. maybe he is talking about the fed rate hike. we don't know. you basically stunned us into speechlessness. it is pretty clear. it is time to get you caught up on the bloomberg business flash, a look at some of the biggest is the stories in the news. activist investor bill ackman is calling adp "insular" after the his threejected nominees, including himself, for the board of directors. ackman said he could double the stock price by 2021. adp said the move would not improve the board, and will nominate its 10 existing directors for reelection later this year. u.s. homes

securities are lagging behind treasuries.yield to buy the bonds instead of treasuries. mountingks face pressure from regulators write off a loan. authorities have received the biggest i wish lenders -- and the biggest iris lenders are losing patience. angela merkel is going into six weeks of election campaigning with a commanding lead in the polls. she has a 16 point percentage lead ahead of the official start of the campaign tomorrow. don't miss our 30 minute special a.m. u.k.ay at 8:30 time, germany decides. google has canceled an all hands meeting to address gender issues and the firing of an engineer that stirred controversy with a memo about hiring taxes, citing concerns over staff safety. the ceo said he called the meeting off after questions to be asked were posted online, raising concerns that employees identified would be harassed. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i want to come back to that story relating to google in a mome

david: you have covered the treasury department and i've been with you to cover the treasury department. what about steven mnuchin and what he is saying in the department? >> what we are seeing is that the chaos in the white house has not directly touched the treasury department, but tuesday night was the first time it really did, and there is no disputing that. mr. mnuchin was standing right next to the president on what was supposed to be a press conference on infrastructure that dissolved into a different kind of what is now a mess. mnuchin had to face his career staffers from his political appointees and the department with a lot of people wondering, what are we doing here? the message to them was, look, i didn't know -- mnuchin didn't know trump was going to make those remarks. his message to his death was needed in go of their his staff was he did not go up there to put is making it has conference with intention to support or lend credibility to the comments. then it was just, hey, let's move forward. there is chaos, but we need to look through it, we have a lot to do. treasury, a

when you look at treasury rates, we think treasury rates are about right. is some normal volatility, especially for august. in terms of what is priced into the markets, we are not pricing in significant tax reform this year. i think you are seeing a lot of uncertainty being generated and i think that uncertainty -- it's easy to have an opinion, but you cannot have a lot of conviction behind it. jonathan: the other tug-of-war added into the white house volatility is financial conditions. we touched on this. the federal reserve has been hiking, but financial conditions have gotten easier, and easier, and easier. is it a problem for them or green light to keep going? subadra: it's a good thing for the fed, but it's a problem for the ecb. if you look at things in europe, the euro continues to strengthen. inflation is still a problem for europe, but for the u.s., i think it's a perfect situation, especially as you are getting ready to unwind the balance sheet. there's indications that they will continue to hike and possibly deliver another hike in december. jona

we have learned the treasury department is taking action to isolate north korea even more. diane gallagher is here with the details. diane, what are you learning? >> clarissa, this is about china and russia, but in reality, north korea. the treasury department in the past hour, announcing a new round of sanctions on chinese and russian entities. ten groups, six individuals who they believe could be assisting in some way north korea's nuclear missile program and the energy trade there. the treasury department, the secretary, steve mnuchin saying the individuals may be allowing them to access u.s. financial system or the exploration of workers. obviously, you are aware, over the past month or so, as it has rhetoric is ratcheted up, the united states admitted they need china if they are going to work through diplomacy here but they may have that on their side. the past month, earlier, the united nations security counsel voted unanimously, including russia and china to add additional sanctions on north korea. >> all right. an interesting update. diane gallagher, thank you so mu

treasury has to be with the congress on that.e end of the day, the congress writes legislation. i don't see a problem with the ship. i would've been concerned with the white house just said to the congress, it's all yours. that they worked out a framework, i think that puts us in a better position than in previous legislation efforts. joanathan: business administration a big them of their own goals? we've been told that august was the month. it is september next week. >> they are learning that it takes more time than people expect to get things done in washington. our founding fathers set out to create an inefficient central government and they had lived under brutally efficient monarchies. they set up a system that was assigned to make it difficult to do things in washington. they may have exceeded their expectations. what you have to do in washington is separate the urgent rummy important. tax reform is very important. they need to address spending. there is not much time to deal with the debt ceiling and the spending. it doesn

treasuries. china's holdings of u.s. bonds trillion.n$1.15 1/3a and japan account for of all foreign ownership of treasuries. amazon has a $16 billion of unsecured bonds to fund the acquisition of whole foods market. it was sold with the yield of 1.45 percentage points above treasuries. the sale marks the first bond 2014. sale in global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. salek, and this is bloomberg. anna: when donald trump said over the weekend there was blame on both sides for the deadly clashes in charlottesville, he caused a national uproar and ceo's quit his advisory council. now he has returned to his controversial position. donald trump: that was a horrible day. i will tell you something. i watched those very closely, much more closely than you people watched it. you had a group on one side that was bad and you had a group on the other side that was also very violent. w wants to say that, but i will say it right now. -- nobody wants to say tha

i think when you look at treasury rate, we think they are about right.in, there is normal volatility, especially for august. in terms of what is priced into the market, we are not pricing in significant tax reform this year. i think you are seeing a lot of uncertainty being generated. and i think that uncertainty -- it is easy to have an opinion, but you can have a lot of conviction. jonathan: the other push and pull added into white house volatility is financial conditions. the federal reserve, they have been hiking, but financial conditions have gotten easier and easier. is that a problem for them or is it the green light to say keep going? >> it is a good thing for the faeds -- for the feds. it's a problem for the ecb. inflation is a problem for europe, but for the u.s. it is a perfect situation. for thee indications balance sheet and also delivering another hike in december. jonathan: financial conditions are easy and that is a green light to hike, but the inflation data is softer here at the real tug-of-war is the soft inflation data versus the easy

but i think the treasuries could very well be right here. there's some very powerful structural forces in the technological innovation that are keeping inflation down, and that's the key. i think inflation is dead. i mean, maybe an extreme statement, but all i mean by that is i don't see it going up from here. in which case the bond yield is probably going to stay around here as well. jonathan: drew, is that your thoughts as well? drew: i think we'd look at higher yield. in my opinion, we'd be closer to 3%. you know, i think you can't hoover up a trillion, trillion and a half dollars worth of debt and not have it affect the supply and demand. jonathan: 3% from 214, when you remove all the central bank stimulus, it's not a dramatic move, and it's worth exploring. when you think about it, we're getting the nervousness around the e.c.b., federal reserve, the balance sheet policy. a move to 3% and a removal of everything, it goes to show you where we are in the world, doesn't it? drew: we'd be moving up from there, given everything you just laid