we have seen this at epa, treasury, interior.cabinet members admitted they take private travel even at times where it appears there is commercial travel available. president trump is now instituting an internal review and says there is to be a halt on all private travel while this review is going on. he willy price has said no longer take private travel. president said he is not happy about it. it's clear this is a growing scandal within the trump administration. they are trying to get their arms around it, trying to put it gets wider. but now several members of congress have put in requests for information. the oversight committee in the house has asked for every private and military flight to be documented and sent to congress. this could be an ongoing scandal that envelops the trump administration for weeks to come. it was interesting to talk to former treasury secretary jack lew about what planes he took where. there was a flight with the elaine chao, transportation .ecretary what are the rules for cabinet secretaries? >> the

treasuries just north of 2%.ring up a chart of real yields, real yields are completely rolling over. you guys, and i've got to say everyone from pgim who sat around this table out front on treasuries, bullish like there was no tomorrow, the curve is going to flatten, we got exactly what you anticipated. so where next? robert: i hate to say it, but this basically is not over. all the instances of when yields have rushed to 2.5% or 3%, you had an unrealistic expectation about growth. if you go back to the first half of last year, we were 1.30 or 1.90 on treasuries, the economy was ok. we were not overheating. before the trump trade pushed yields up to 2.65, you had a steepening program put in place, a revamping of policy, in japan. japan is a very important buyer of treasuries. that was pushing up yields here, and you had the ecb going to taper. you had their taper tantrum. you had the boj revamp, and the trump trade that was supposed to, people in the extreme are very good at panicking in the short-term and gettin

and secretary mnuchin is representing the treasury department. he is here today. to prevent sanctions evasion, the order also includes measures designed to disrupt critical north korean shipping and trade networks. for much too long, north korea has been allowed to abuse the international financial system to facilitate funding for its nuclear weapons and missile programs. the united states has had representatives working on this problem for more than 25 years, and they had done nothing. that is why we are in the problem we are in today, in addition to, frankly, other countries not doing what they should have done. tolerance for this disgraceful practice must end now. the new order will give the treasury department the discretion to sanction any foreign bank that knowingly conducts or facilitates significant transactions tied to trade with north korea. again, i want to just say and thank president xi of china, for the very bold move he made today. that was a somewhat unexpected move, and we appreciate it. the new authority in this area applies to any activity that

look at this past tuesday's full week treasury auction.rs demanded the highest rates since december 2008. $20 billion in bills sold at 1.3%. over in corporate's investors clamoring for bonds now that august is over. blue-chip u.s. and european companies lined up to sell. one of those was apple. they sold $5 billion in four parts. the longest portion of the l -- a 30 year security with the yield of 1.4 percentage points. comcast, investors still buying media debt in a big way. discovery communications sold six point $3 billion to help finance its takeover of scripts. the largest portion $1.25 billion of bonds maturing in 24/7. joining us robert tipp, eric stein, and trey parker. i want to begin with eric and ask him about the four-week treasury bill earlier this week. why 1.3%? why higher than the debt ceiling experiences that we've had previously? eric: i honestly don't have a perfect answer for you, but to me it is one of the issues with the debt ceiling. i think we need more responsible government in washington, but the debt ceiling is a

the treasury department is requiring -- positions in the treasury department requiring senate confirmationen filled. steve mnuchin says this is keeping trumps economic agenda moving forward. who is shouldering the burden as the result of not having a fully staffed treasury? >> what we have seen so far is that there is no deputy secretary. that has been filled in an acting capacity by a career staffer. the undersecretary is also handling deputy secretary responsibilities in an acting capacity. another key position that remains vacant is undersecretary of domestic finance. they oversee debt management, financial regulations, and a host of other issues. shin: how is the new dealing with this a vacuum? lexi has four counselor -- mnuchin dealing with this vacuum? >> he has for counselors. -- four counselors. bothistrations across parties have used counselors, but they have to rely on senate rules, which have more power the and counselors do. the coreaffers do functions and can be relied on. they have been there often for 10, 20 or more years. they have overseen transitions and financial crises.

treasury yields popped a little bit.rospect we might not h ave a debt ceiling anymore in the u.s. if we bring up a chart of real yields, real yields are completely rolling over. everyone from pgim who sat around this table bullish like there was no tomorrow, the curve is going to flatten, we got basically what you anticipated. where next? robert: i hate to say it, but this is not over. all the instances where yields 3%, youhed to 2.5% or had unrealistic expectations about growth. if you go back to the first half of last year, we were 1.30 or 1.90 on treasuries, the economy was ok. before the trump trade, you had a steepening program put in place in japan. japan is very important on b uying treasuries. you had the ecb going to taper. and theboj revamping trump trade that was supposed to, and people on the extreme were good at panicking in the short term. what was the bad news? you could have inflation on import tariffs, tax breaks to bring you growth, infrastructure spending, everything you can imagine, and things were up

what is important about this is the additional authorities the treasury has. reporter: can you put this in a context of the president's speech earlier in the week, when he talked about more military action? how do these things work together, and what you expect north korea to do in response? secretary mnuchin: i'm not going to comment on what expect north korea to do. what we have said is the objective is for them to stop their missile test and give up their nuclear weapons. as it relates to -- this is something that has been in the works for a while. i alluded to this a couple of weeks ago, that i had been discussing with the president, and this was part of the president's strategy at the u.n. this week. reporter: secretary tillerson has said it took a while for the last round of sanctions to have an impact, for north korea to feel them. is there a timeline that you are looking at, in which case? secretary mnuchin: there is no timeline we are looking at. this is forward action on this. again, i would emphasize we hope that there is voluntary cooperation, but

thank you, everybody. >> treasury secretary steven mnuchin, on u.s. plans to apply new sanctions on north korea. president trump announced those new sanctions in new york earlier today. here is the president, with the president of south korea. president trump: it is a great privilege to be with president moon of south korea. as you probably know, we have had discussions over the last several months, and i think we're making a lot of headway and a lot of different ways.

return is no way treasury secretary, steve mnunchin, to talk about his day job. thank you again mr. secretary. >> thank you chris. >> chris: let's start with the effective hurricane harvey on donations finances. the white house is asking congress for $7.8 billion in immediate aid plus another $6.7 billion within weeks, the head of the house freedom caucus, mark meadows assists not want to see the disaster aid tied to a bill to raise the debt limit. can you guarantee him and others that that will not happen? >> no, i cannot. by the contrary. the president and i believe it should be tied to the harvey funding. our first priority is to make sure that the state gets money. it is critical and to do that we need to make sure that we raise the debt limit. so if congress appropriates the money but i do not have the ability to borrow money to pay for it we will not get the money to the state. so we need to put politics aside and we will be urging congress to get both of those things done as quickly as they can. >> chris: i want to make sure because this is new news as they say. there is talk

from a treasury standpoint, we think 2.20 is not the right number..50, 2.60, we think that is possible. we are just not in the camp you percent on the 10-year, we don't see that happening. jonathan: we will look back on the last week and 20 minutes and ahead to next week as well. a rapidfire round. one question, one word answers or limit those if possible. first of all, the next central bank to hike, the bank of england or the federal reserve? george: bank of england. kathy: the fed. matt: bank of england. jonathan: buy and hold to year-end, to take a stand -- tajikistan 10-year or austrian bond? tajikistan. matt: none of the above. jonathan: you've got to pick one. matt: i am selling january 1. jonathan: is shorting the german two-year the new widow maker, yes or no? george: yes. matt: yes. kathy: yes. jonathan: thank you for joining us, george rusnak, kathy jones, and matt brill. we count down to that reserve decision with janet yellen next week, full coverage and special programming right here on bloomberg tv and bloomberg radio. from new york for

treasuries offering more than $200 billion in notes and bills this week.m our studio in new york and london, this is "bloomberg: real yield." ♪ ♪ tom: tom keene from our studios in new york. this is "bloomberg real yield." i want to head to the auction block right now. this past monday, the united states treasury issued more than $130 billion in notes and bills. they did that in a 90 minute span. we focus in on the five-year $30 billion debt sell at 1.742%, the lowest since october. with a digit cover of 2.58. primary dealers took just 17.5%, an all-time low. the next day, four-week $25 billion treasury bill auction in what may be the final moments of end tradersshort look at the politics of washington when congress returns to work next week. that debt matures september 28, the day before the deadline that the treasury secretary has laid out for lawmakers to raise the debt limit. and then looking to the north, thanks to a recent canadian dollar debt auction by apple, harper issuance near a record level. that is in important item. foreign companies issuing

treasury issued more than 130 billion in notes and deals. -- and bills.ocused on the five-year 1.72%.lion debt sell at just 17.5%,ers took an all-time low. the next day, four-week $25 billion treasury bill auction in the final moments of calm. congress returns to work next week. that matures september 28, the day before the deadline that the treasury secretary has laid out for lawmakers to raise the debt limit. , thanks tothe north a recent canadian dollar debt auction by apple, foreign companies issuing in loonies, the canadian currency, have sold more than 15 billion canadian dollars worth of debt this year, the biggest year for maple bonds since 2007. chorlton, me, andrew david riley, in london. we will keep it going here. and lisa abramowicz from bloomberg radio. here to translate. there are two items i want to talk about in this section. i want to get to the canadian apple thing in a minute, but that low ratio at auction. what does that low ratio mean? nobody wanted the paper? lisa: there is a lot of question right now about what the real rate should

i want to talk about issues also related to the treasury department. it's an important part of what you do what the country is trying to achieve. specifically north korea. david petraeus was just on the stage saying others are discouraged about the trade numbers with china, still trading with north korea. new sanctions were applied last week. confidencer level of the sanctions will change the chinese behavior, and can you clarify, because there has been different reporting on this, what exactly chinese banks are and are not doing forward with north korea? sec. mnuchin: thank you for bringing that up. i think it is an important topic. i did have the opportunity to go with the resident to the human general assembly last week. it was an incredible experience sitting in the general assembly and listening to his speech. he also signed last week in new york, an executive order which gives the treasury department the most extensive powers on sanctions that we have ever had. specifically, it allows us out -- us atto sanction treasury to sanction any entity tha

the treasury staff has given me a ph.d.hese sanctions work they works with iran the president i fundamentally believe that we had iran on the five yard line and we could have cut a better deal, that a ten-year deal was not good enough on iran in north korea, economic warfare works. i made it clear that the president was strongly considering and we sent a message that anybody that wanted to trade with north korea we would consider them not trading with us. we can put on economic sanctions to stop people trading we worked very closely with the u.n. i'm very please the with the resolution that was just passed. this is some of the strongest items. we have more tools in our toolbox and we will continue to use them and put additional sanctions on north korea until they stop this behavior. >> we haven't been able to move the needle on china. which seems to be the real mover on this in terms of able being e to apply the pressure. >> we have moved the needle on china. what they agreed to yesterday was historic i put sanctions on a m

you never get rich from owning treasuries, though even if you invest in 30-year u.s.s, our government's longest dated bonds with the highest yields, their lower term simply don't produce much in the way of capital appreciation let's say simplefy for the sake of this sample that 30-year treasury bonds, say they're yielding 3 president.5%, relati level for historical standards higher than the 3.25% range we saw in the first nine months of 2015 with that 3.5% yield, as long as you reinvest your coupon payments back into treasuries, you might double your money in 20 years remember, the average historical return for the s&p 500, the benchmark for u.s. stocks, is 10% annually which will let you double your money in a little more than seven years. so if you're under the age of 35, and you own a bunch of bonds, with the idea that they'll slowly but steadily make you money, see, i think you're being way too cautious i know it puts me out there, but you know what, i've been around. that's how i feel. even in your 401(k), your i.r.a., you want to be very heavily weighted toward

treasury market is it is the only safe haven in the world with liquidity. will still get that did with the risk from geopolitical events, you have the fed taper and ecb delay. that is appropriate. should they said 2018's qe before they know what to 2018 will look like? tom: let's go to the chart now. this is two-ten spread. we have been using this time after time. the blue circle in the middle is the trump election, up we go. steeper yield curve, then we rollover. you have done this really only on gadfly. the ramifications of the rollover and the clarion august moment is a retest of new curve -- nuclear flatness. it is not recession. lisa: this flies in the face of a lot of optimism we are hearing from a lot of analysts saying the stock market has more to go, we are accelerating, people dismissing the disappointing jobs report this morning, saying we will see better wage growth next year. this flies in the face of that . this contradicts that. this says you are wrong. this creates real tension in the market. tom: i love that. david, are you wrong? the idea

whatever happens despite treasuries. manus: it -- having been battered in that traded number of times, when treasuries turn, it can be feral in and that can depend whether the fed pushes through what they see in front of them in terms of armor, and terms -- in terms of harvey. the banks are buying bonds, that rings a bell but the dollar, the quid pro quo is treasuries are did -- bid. is it losing its hallmarks of haven status? to be.t up this people seem to be diversifying a bit of yen, a bit of gold, even the euro to some extent. that is partly because you have a leader in the u.s. who is not sure he wants a strong dollar himself, that reflects on performance of the currency on a day-to-day basis so people are looking for a basket of things to protect themselves. under that scenario the u.s. dollar is not going to perform that well and it would probably for some extreme event people to go back into the dollar as a currency and they will continue to use other things. gold is a good illustration, it has performed extremel

treasury for assets that are being held in the united states it's also possible that the u.s.treasury could try to levy fines on chinese financial institutions that are doing business with north korea the main message here is a major deterrence message to the international financial community that there are real costs of doing business with north korea. that may preclude maintenance of access to the global financial system how in practical terms would it be possible for the u.s. to be able quite to be quite as harsh on china in the event that it is fine that chinese banking is still going on with north korea because as i understand it as of december twenty sixth in china had something like one point zero six trillion dollars of the american national debt that's a lot to unpick in the event that china doesn't do what it says it's going to says it's going to do. well i think the focus is going to be on a case by case basis the u.s. treasury is holding chinese firms accountable for whatever business they do with north korea going forward so it's not retroactive and also i think t

treasury secretary rolling out the new sanctions.ury secretary also saying he want this be a global effort here's what he said earlier today. >> we call on all countries around the world to join us by cutting off all trade and financial ties with north korea in order to achieve a denuclearized korean peninsula as president trump stated in his speech to the u.n. general assembly, it is time for all nations to work together to isolate the kim regime until it ceases its hostile behavior. >> reporter: so here's some of the details underneath those sanctions. the treasury secretary laying out some specifics including the idea that this is going to target shipping and trade networks, and it's going to feature a 180-day ban on vessels and aircraft that visited north korea from visiting the united states also targeting industries including construction, energy, textiles, information technology, mining, and manufacturing. that is large group. it also gives the treasury department authority to impose sanction on any foreign financial instituti

tapper: give it up for treasury secretary steven mnuchin. [applause] ♪ here we are,

. >> chris: independent experts, including your own treasury department says that shareholders, people that own stock get 75 to 80 percent of the burden from higher corporate tax rates and if the corporate tax rates are lowered that they will get some 75 to 80 percent of the benefit, not the workers. >> chris, most economists believe that over 70 percent of corporate taxes are paid for by the workers. and the fact that the treasury department, i think was eight or 10 years ago put out a piece otherwise, i do not believe in that. our current economic team did

i want to talk about a couple of issues also related to the treasury department because they are an important part of what you do and what the country is trying to achieve. specifically with north korea. saying he and was others are discouraged by the trade numbers indicated with china still trading with north korea. new sanctions applied last week. what is your level of confidence those sanctions will change materially the chinese behavior and can you clarify because there have been different -- there has been different reporting about exactly what chinese banks are and are not doing going forward with north korea? thank you for bringing that up because i think it is an important topic. i had the opportunity to go with the president to the u.n. general assembly and it was an incredible experience sitting in the general assembly and listening to his speech. he signed last week in new york and executive order which gives the treasury department the most extensive powers on sanctions

he was working in the treasury department and while he had been working in the treasury department, turns out, he was keeping a diary. >> several members of this committee have commented on my personal diary and if i might, i'd like to make one brief point about it. i started keeping this diary nearly six years ago. i would write in it fairly infrequently. sometimes two weeks, other times six weeks would go by. before i made a entry. i made no effort to check the accuracy because this was nevada intended to be a precise narrative or a verbatim account of what took place. it was more than anything, a way to reflect on events and draw lessons from my personal and professional experiences. >> so there he is. 28 years old. testifying to congress. not because he had done anything particularly suspect or worrying, just turns out congress heard that he had a diary and they decided they wanted to read it. >> mr. steiner i want to start with you and the diary you kept. which i think is a important document that we have before us. >> senator, as i said in my opening statement, i used my diary as re

treasury secretary steven mnuchin on tax reform. but first gerri willis standing by with news from wall street. gerri: investors feeling the heat after a short but busy news week. hurricane irma barreling through the caribbean claiming at least 23 lives and destroys thousands of homes. the hurricane is on a collision course with south florida. north korea says it detonated a hydrogen bomb. a tough week for investors. the dow, nasdaq and s & p all closing down for the week. equifax the latest victim of a security breach. they say it happened in july of this year. it includes birthdates, addresses within in some cases drivers violence numbers and credit card numbers for 200,000 consumers. they detected the breach a month ago. amazon announced it's looking for a second corporate headquarters in north america. it will provide 50,000 jobs and cost $5 billion. back to you, maria. maria: the market took a hit on north korea fears and quickly stabilized. when yield on corporate bonds are lower than corporate stocks, blankfein said that unne

secretary of treasury was not. as a matter of practice over the years secretary of treasury and his dez knee. has been present for meetings. and deputies meetings what have you. it's now a reflected in law that treasury is in the nfc. there's a appreciation the sanctions tool is a key part of what we do. in terms of the what has changed between the obama administration and the trump administration, one of the things we tried hard to do in the o palm administration was to use sanctions as a tool for broader policy objective. we were very cognizant sanctions are not a policy unto themselves. don't apply sanctions and hope something good will happen. you apply sanctions to troy to to do one of things. either to effect behavior, to try and persuade whoever is on the receiving end of the sanctions, to change what they're doing. whether it's a policy or conduct. and the other aboutive is to disrupt and disable. in particular you look at the counter terrorism financing sanctions. it's the principle objective was to cut of

treasury for assets that are being held in the united states it's also possible that the u.s. treasury could try to levy fines on chinese financial institutions that are doing business with north korea the main message here is a major deterrent message to the international financial community that there are real costs of doing business with north korea. that may preclude maintenance of access to the global financial system i think the focus is going to be on a case by case basis the u.s. treasury is holding chinese firms accountable for whatever business they do with north korea going forward so it's not retroactive and also i think that the u.s. treasury is going to look at each case by itself rather than hold the entire trading relationship with china risk. the death toll from mexico's earthquake has risen to two hundred and seventy three the country's president believes there could still be people alive in ten collapsed buildings but hope is fading in the nation's capital officials say the number of people killed will probably rise rescue crews are working around the clock

advising him,aff i was about to be treasury secretary. geithner was in the conversation, and it is a small circle. the head of the nec, treasury secretary, chief of staff, that is the circle that in my experience talks to the president about that kind of appointment. ultimately, it is an appointment that is of unique importance. arguably, the chairman of the -- it is in that list of the very most important economic and inns in the world, my experience we have had extraordinary individuals chair the fed, who have done so with integrity and intellect. we do not always agree with them, but i have never had concerns about their capacity and their dedication and integrity. >> it does not matter if you -- inn active in mission mission or part of the business group? it is quiet, like the university without students. you could have -- hear a pin drop in the hallways. as a matter of personal style, i have talked to people who want to go to the fed who wonder if it is an environment they want to spend their days in. people talk about technical thin

now, the treasury secretary went on fox news and said the tax plan is going to cut down the deficit by $1 trillion. now, mr. mnuchin is doubling down on the failed experiment. the idea that tax cuts for themselves, in effect, paid for themselves through economic growth. history shows that just is not true. tax cuts don't pay for themselves. the 2001 and 2003 bush tax cuts were billed as tax relief for the middle class that would spark economic growth. instead, the benefits skewed to those at the very top and they added trillions of dollars to america's debt. middle-class wages fell, unemployment increased. this is a pattern that working families, middle-class families cannot afford to have repeated except now the secretary of treasury's claim is that, well,

garrett: give it up for treasury secretary steven mnuchin. [applause] for as long as i live, i will never forget, that in no other country in the world, is my story possible. it has made me the most unconventional of candidates, but is the story that is seared into my genetic makeup, the idea that this nation is more than the sum of its parts. that without the many, we are truly one. >> for the past 30 years, our video library has been the source for politics and public affairs. whether it happened 30 years ago or 30 minutes ago, find it in c-span's library at www.c-span.org. c-span, where history unfolds daily. >> in the news, rice took jets -- took took just to europe for over $500,000. that would not include the cost of the military flights. earlier today on the health floor, three congressman introduce a bill calling for the secretary to resn.

the ten-year treasury note back below 0.5% 2.04% this morning mario draghi didn't really say anything that bullish for the euro they lowered their inflation forecast for next year ecb has a single mandate either way, it sparked a broad selloff. >> because he didn't jawbone the euro weaker in a stroke enough way, so everybody took it as a license to keep buying it. he talked about how the strong euro is impacting inflation, they have to work on it, incorporate their analysis and decisionmaking but he did not say anything about extreme moves, or anything -- >> but that's not in his mandate. i didn't expect that personally. it was an odd spot for it. if we look at the euro/dollar pair, yes, yield differentials between treasuries and bunds have moved in a way the last three, four months to suggest the euro needed to rally, but not to this extent i don't see what spark was yesterday to see it jump up again. >> we talked to strategists about this, it was happening on "squawk on the street," beyond the euro factors, the fact that draghi's lack of stronger words was a license to buy north kor