here in this year 2020 or of course part of our epic new series front running so if you were made treasury secretary in 2020 what would you do this year 2020 so i guess you would come into office 2021 in january 2021 would be the 1st thing you did to fix this economy or let it sit down with the attorney general and say we're really going to apply the law and of course if you applied the law a lot of bankers would find themselves in jail yeah apply the law debt westray to the charles bronson of economists right i began to underline the quantitative easing but the interest rates rise again and that would leave a lot of banks pretty make good and we would have some wonderful public banks a city bank would be a public bank and chase and let interest rate rises and public banks. wouldn't make lent loans for the stock market and speculation and for corporate takeovers we'd make loans to actually spend into the economy and i would oversee a rebuilding of america's infrastructure questions i'm reading some northern european economists i forget which is it's a fan letter sweden but there's a school

treasury secretary henry morgantown jr.. where the conference tried to stave off flashes of let the one that engulfed italy and germany, the morgenthaler plan focused on plaintiff measures on germany for its aggression towards europe. this event was part of the national world war ii museum's annual conference. session.ed to our next keeping the bar high. row.ve two -- in a my friend, dr. jim lacey, who i have known as a respected years, will bey the center of our next panel named "planning for peace while waging war, a postwar order. it also includes two of my esteemed colleagues, dr. , and newly minted dr. tyler bamford. tyler is our leventhal of research fellow. templeomes from university in philadelphia. we dragged him down here to new orleans, and he and i have been adjusting to the big easy together. we started on the same day. , who leadsth hudson our research services here at the institute for the study of war and democracy, as he has for many years. doctor ford, i leave it to you to lead our next session. [applause]

i'll set that up you think you're ready to do that 2020 i would be a very good secretary of the treasury that's exactly what i would do i have a fantastic i'm not sure that's what we're talking my head into the ring actually we have elections coming up here in this year 2020 of course part of our ethic new series front running so if you were made treasury secretary in 2020 what would you do this year 2020 so i guess you would come into office 2021 in january 2021 would be the 1st thing you did to fix this economy or whatever to sit down with the attorney general and say we're really going to apply the law and of course if you applied the law a lot of bankers would find themselves in jail yeah apply the law debt westray to the charles bronson of economists right i began to underline the quantitative easing but the interest rates rise again and that would leave a lot of banks pretty they could we would have some wonderful public banks a city bank would be a public bank and chase and let interest either. guys and public banks wouldn't make lent loans for the stock market and speculation and

and bydahe way, don regan was good secretary of the treasury. and he was--i think he was probably ronald reagan's favorite cabinet officer. enand they were both irisnd they really related to each other. but d been a leak, and regan got really upset. enand they were both irisand he called me, relachief of staff,er. and he said, "i'm gonna resign. tell the president." i said, "oh, come on, dou're no" i said, "i'm coming over." so i went over to treasury right across the street, and said, "you can't do this." and we chatted for a while. he said, "you're tired, aren't you?" and i said, "are you kidding?" i said, "i've had this job longer than anybodin history that didn't he said, "we ought to switch jobs." i said, "you gotta be kidding." he said, "no, we ought to switch jobs." if the president approves it." and anyway, it went from there. i end been there when presreagan first asked me to take the job. i said, "mr. president, this job's best done in 2-year increments." he said, "fine. we'll do it in 2-year increments." he told susan, "your man's y n

the secretary of treasury becomes chief of staff. whose idea tas that, and was it haconvince reagan of that? that was don regan's idea, and here's what happened. there had been a leak that really antagonized don regan, who was secretary of the treasury. and by the wayregan was a damn good secretary of the treasury. and he was--i think he was probably ronald reagan's favorite cabinet officer. and they were both irishmen and they really related to each other. but there'd been a leak, and regan got really upset. and he called me, chief of staff, and he said, "i'm gonna resign. tell the president." i said come on, don. you're not gonna do that." i said, "i'm coming over." so i went over to treasury right across the street, and said, "you can't do this." and we chatted for a while. he said, "you're tired, aren't you?" and i said, "are you kidding?" i said, "i've had this job longer than anybody in history that didn't go to jail." - [laughter] and "yes, i'm tired." he said, "we ought to switch jobs." he said, "no, we ought to switch jobs."

i think the treasury market should price in this risk. treasuries are pricing in a fed on hold. they are not really pricing all the risks. i would say business uncertainty. just a week ago we were dealing with u.s.-iran. the middle east is still pretty unstable. we have an impeachment, an election. i think treasuries have room to rally. i would say tens can get below 1.8%, can get below 2%. we have taken out the hiking scenario so there is a gap on the 10-year. if risks increase, it's an attractive risk hedge to any asset. jonathan: you also think the fed comes back in at some point this year? priya: we do. jonathan: how do they come back in this year? pretty much everyone thinks the fed is done. nothing brings them back in. priya: if you tell me growth is indeed 2% and there is no growth, i think the fed is on the sidelines. our view is a combination of slowing business investment in manufacturing is pretty weak. that does affect the consumer through the course of the year. plus, i'm concerned that when the fed stops buying treasuries, which i don't think is happening for the n

banks 4 billion dollars of treasury's net. $254 billion of the treasury's net.he yield differential looks large. lisa: taking a step back here and rip up the script, given the fact that you are pointing to this shift from foreign demand to domestic demand, i do wonder how much the fed is fueling this with their repo facilities. they say that it does not count as quantitative easing, but how much of that is what is really going on? mark: the federal reserve has been concerned about the number of reserves in the system, and we have been good about keeping the target between one and three quarters. there was a big scare at the end of the year about the level of reserves and what we might to see rates do. we thought they did a good job of getting in front of that. we see them continuing to provide reserves whether that is through a continuation of buying bills are repose or some combination. do not think it has been driving a lot of inflows, but it is supportive of the treasury market. isa: do you agree that this supportive but not qe? sam: it is supportive and the

banks buying a huge amount of treasuries.e only have data through the third quarter of 2019, but the preceding year leading into that, u.s. banks, big banks in the u.s. bought $254 billion of treasuries net. they are funding one quarter of the u.s. budget deficit because foreigners are not buying. the yield differential looks large. once you take into account the foreign-exchange market, it is not. lisa: taking a step back, given that you are pointing to the shift from foreign demand to domestic demand, i wonder how much the fed is fueling this with their repo facilities. they say it doesn't count, it's quantitative easing. how much of that is really going on? mark: the federal reserve has been concerned about the reserves on the system. we think they have done a good job maintaining the fed funds level between 1.5 and 1.75. that is the stated target. we are not so concerned about them continuing to accomplish that. there was a big scare at the end of the year with the level of reserves, what we may see rates do over the term

how do you see the average duration of the treasury? lisa: it would be smart to increase the duration given how low yields are. in the near term, they may do some tweaks because they don't need of funding this year, but they will need it next year. one of the do this you will be temporary just to get the issue well absorbed. next year, we will see normal option sizes. this will be a consistent part of the curve for as long as we are in markets. jonathan: still supporting with0 doing euros on their was that ar a steeper curve? lisa: i believe it was. i have been on this show talking about this topic. i think they could do log or debt at this point. it will be bought, there is demand. but i believe the treasury and the fed and central banks around the world want steeper curves. they realize what happens when the market gets into an inverter how bad itrve cycle, is for future growth prospects. they are doing everything they can. buying bills is one thing they can do. issuing a 20-year is something they can do. all tweaks at the margin, but

treasury debt to the private market was around $1 trillion. this year we are estimating about $600 billion. even if you have unchanged demand with my supply of debt to the market is just 40% less. that will keep real rates really low. it is good for risk assets as long as the economy stays ok. george: the technicals are definitely favoring a fixed income right now. i think that is very true. right now the market is operating on liquidity, on optimism and on momentum. it is not operating on fundamentals. that can happen for a short period but not for the long-term. jonathan: we will carry this conversation over to the credit market. you guys are sticking with us. coming up, the auction block. wrapping up its biggest week on record. that conversation up next. this is "bloomberg real yield." ♪ jonathan: i'm jonathan ferro. this is "bloomberg real yield." i would like to head to the auction block and begin in the united states and the treasury market where demand for the treasury's $16 billion, 30-year bond issue dispelled fears after wednesday's

i think treasuries have room to rally. it can get below 2%.e have taken out the hiking scenario so there is a gap on the 10-year. if risks increase, it's an attractive risk hedge to any asset. jonathan: you also think the fed comes back in at some point this year? priya: we do. jonathan: how do they come back in this year? pretty much everyone thinks the fed is done. nothing brings them back in. priya: if you tell me growth is indeed 2% and there is no growth i think the fed is on the , sidelines. our view is a combination of slowing business investment in manufacturing is pretty weak. that does affect the consumer through the course of the year. i'm concerned that when the fed stops buying treasuries, at some point they will put enough reserves into the system and take a step back and you get a tightening in financial conditions and the market says qe help is behind us. the fed says we don't see inflation and we see tightening, maybe we need to put in a little more accommodation. there is no inflation fear, so what is the cost of adding more

>> there is a treasury borrowing advisory committee.ome sortably of inclination on what they are thinking when we get the minutes from that. harriserg's alex keeping us up-to-date on the new bond issued by the treasury. coming up, more cuts for deutsche bank. this is bloomberg. ♪ romaine: time now for a look at what stories are trending across the bloomberg universe. a hedge fund set up by a former investment manager which has more than quadrupled its assets , sandbarlast year asset management, which started trading in 2018, had about $130 million in assets a year ago, and surged. story on aom has a snow storm headed to the northeast. it will be the first time since december 2 that new york has gotten more than an inch of snow. it follows a weekend when temperatures reached into the 60's fahrenheit. this season, only 2.7 inches of snow has fallen on manhattan's central park. and bloomberg has reported that starbucks is planning to open more stores in lower income neighborhoods. there are plans for 85 stores by 2025 in these communities,

we have a treasury refunding announcement february 5.is one of the details investors will be looking for. what sizes are we talking about? it is treasury cutting back on other sizes to make these new bonds? amanda: what about the demand picture, which will be pretty important, as funding requirements only grow? do you expect a healthy market? katie: i would expect so. analyst of holy see the case for issuing the bond at this point. as i have said, there are $11 trillion of negative yielding debt globally. this will be a nice offer for domestic investors who have been supporting the treasury market throughout 2019, 2018. we will probably see even more demand from that community in 2020. vonnie: how will it impact yields given up to now it's been mostly federal reserve? supply is a big thing for the market as well. katie: we saw a little bit of a. today. the long and is selling off. -- end is selling off. td securities made the point that when these bonds hit market sometime before june,picture jue newness of them will cause them to trade

created by the government you understand how banks work you understand how the fed works how the treasury works is it possible for a policy to be enacted that selectively raises only the margin rate that is the rate that speculators is to borrow to speculate with in other words you wouldn't change this. rate it would change the prime rate you're only waiting the margin rate which would apply to speculators can you selectively just raise that rate as a way to taper speculation this proposal has been made for the last 60 years since i was in school it was being made of course you can have differential rates and differential reserve requirements you want to minimize unproductive lending you want to minimize takeover lending speculative lending derivatives gambles is what matt wanted to encourage is consumer you know lending to the real economy to real investment but as they say just said that's not what banks do that what the textbooks say happens is not at all what banks do and certainly not what i experienced when i was in but when leon cooperman hedge fund manager or warren buffett they g

treasury secretary of a resting bankers and charging them for their crimes that it would crash the economy and the reason why they think that would happen is because they believe i think you'll probably say falsely that bankers lend to businesses and help entrepreneurs and help the startup economy but what they perhaps don't realize is that up to 85 percent of all bank lending is actually property speculation that's right but it's the bankers that have already crashed the economy since 2008 that's why the economy has not grown in 12 years because the banks of been bailed out not the real economy so i would put the real economy 1st main street not wall street that simple and applying the law all you would crash would be to roll back the immense amount of capital gains stock market and bond market gains that have been made in the in the last 12 years without the bankers doing anything at all it's all been created by the government you understand how banks work you understand how the fed works how the treasury works is it possible for a policy to be enacted that selectively raises only the ma

treasury. to go into hiding amid a furious debate on free speech rights teenager received death threats. videos on social media discussed whether there should be a line between hatred and freedoms. the british prime minister gives up wanting to have a carbon emissions at the u.k. africa summit striking an interview that almost entirely centered around fossil fuels. and could the tables be turning for italy's biggest party head of a key role in the north of the country this sunday the anti establishment 5 star movement is seeing a major shift following its lead his resignation. live from moscow watching all the international. tribune from welcome to the program. following a recent trend against iranian media fasts news agency says its international website has been taken down soft apparently falling foul of u.s. sanctions this comes as tensions continue to build between the 2 countries and it seems the u.s. treasury department had a major role to play. the photos news dot com websites is being b

civil serva nts probably because treasury civil servants are concerned about where the money will cometo pay for it. it is felt over the past few weeks that politically it is impossible for boris johnson weeks that politically it is impossible for borisjohnson to do anything other than continue given he has made such a big show of levelling up the british economy and investing in infrastructure notjust in the north but to the north to cancel hs2 now despite the cost and uncertainty about it on the tory back benches would be a major breach of that first promise. not really any suppressant that sajid javid has got on board. katie, do you agree and is this both bits of h52 or is this london to birmingham? they're still waiting to get the exact detail again because there is no formal decision. i think that when it came to hsz if you look the government commission before the government commission before the government which was helpful to the government which was helpful to the government because they get to go into an election not sing either way what they would say doing each as to but si

repo markets are important because that's where treasury securities, the purchase of treasury securities -- which is the way, you know, part of the way the federal government is funding its operations -- the way those are financed. so these are largely treasury securities that have been purchased by dealers for distribution to, and buyers to a substantial extent. that's what's going on in the treasury repo market. so it's just financing for that. again, we don't -- that activity a market activity. we're not looking to eliminating volatility or protect anybody from volatility at all. what we care about is that roll tilt in the repo market can affect the transmission of our policy decisions to federal funds rate, and that really is important for the public. >> [inaudible] >> nancy -- sir is, with marketplace. chair powell, is the fed going to vote tomorrow on changes to the volcker rule restrictions op on banks investing in venture capital funds? what can you tell us about what the fed considering, and why make those changes? >> sure. so we will be looking tomorrow and voting on a new part

jonathan: if that dynamic is trip treasuries, what does it mean for buns -- bonds?regory: you have any cb in transition, but absent that yes. transition, but absent that yes. that asks risk into the curve across europe. jonathan: let's talk about the shape of the curve in the united states. we inverted the last summer. how do you see that materializing in 2020? gregory: i still believe the bias for the curve is to flatten not to steepen, which points back to this real rate argument. when rates move higher, there is a bid for u.s. assets. that pulls down. it is not representative of a decline in economic growth or anything like that. it is a need. to the point where there are negative rates everywhere else, the higher it is above zero relative, the more attractive it is. jonathan: andy, your thoughts on how much steeper this curve can get in the united states? we had some steepness come through into 2020. cannot continue? diana: i think it -- continue.think it can anytime you get any reasonable yield anywhere, people pounce on it, which limits the move higher. it mak

supportive, though, of the treasury market. lisa: do you agree, sam, that this is supportive, but not qe? sam: the debate about whether it is qe or not, the balance sheet expansion is undeniable. orther you want to kona qe term repo, it is what it is. the key is the fed is committed to expanding the balance sheet, along with the powell pivot, which fueled fixed income performance in 2016. then you have the term repo at the end of 2019 which further fuel the rally we saw in traditional fixed income. that spilled into 2020. it's very important that the fed is expanding the balance sheet. they had a midcycle easing campaign long before we had a recession. that is positive for risk assets. that is why you are seeing the global macro data turn here. lisa: do you agree it's been supportive of risk assets? time, soid no less this time i have to say yes. what has offset a lot of the fed liquidity release has been a buildup in the general account. lisa: we will have a three-part series on the tga. coming up, the european bond markets st

treasuries orders and emails sent to followers newsagency by the provider clearly stated that the treasury's office of foreign assets control as i did the agency to the sdn specially designated nationals list. now if you go on to the internet and type in fars news dot com nothing will come up the website appears to have been removed and now it is important to note that there is now a web site that has been launched with fars news dot i r for islamic republic and that can be freely accessed but that website is only available in farsi in the iranian language and the agency's twitter feed is still active we do see that now fars news is a news agency in iran describes itself as an independent news agency it is frequently accused by western countries and western media of being a government mouthpiece and it is one of the most up to date sources for breaking news taking place within the islamic republic of iran now the trend of you know removing outlets from iran from the internet and from social media is longstanding we recently saw press t.v. the english language t.v. network based in the islami

his back.nd bit >> the treasury market rallying. >> rally in treasuries. >> fixed income yields keep falling. >> we don't have any major inflation risks. >> what inflation? >> global growth will be relatively weak. >> the fed is on hold. >> the fed is ready to do what it has to do to keep things going. isthe coronavirus scare completely dominating the conversation. >> we can still go lower. >> the message for investors is to find yield. keep your yield. >> you cannot be scared away. once you give the yield away, it is hard to get back. around theoining me table is subadra rajappa, kathy jones, and rob waldner. kathy, when we start a week with sentiment like this, the next week things look the other way and we are vulnerable to a squeeze. are we vulnerable now? kathy: it doesn't feel like it. the squeeze was people were not prepared for this. anyone who was in heavily in leveraged fixed assets has been squeezed out. it doesn't feel like it because there is no magic wand here. and comeg has to peak back down. that is likely to take time. thethan: one person at table feeling pretty good

sanctions according to fars news the block was ordered by the us treasury treasury . the photos news dot com websites is being blocked on us treasuries orders and emails sent to fall as news agency by the provider clearly stated that the treasury's office of foreign assets control as i did the agency to the sdn specially designated nationals list if you visit the website fars news dot com it is unavailable the web page does not load now it's important to note there is a website fars news dot i r that i are standing for islamic republic that has just been created fars news calls itself an independent news source generally it has been labelled by western media outlets as being a mouthpiece for the iranian government it's one of the primary sources for breaking news within the borders of the islamic republic the fact that it has been taken down and does not appear to have its website up and is blaming this on the us treasury seems to fit it on standing a long standing pattern for example earlier this month press t.v. the english language t.v. network based in the islamic

because secretary of state mike pompeo is speaking live in the briefing room in about 40 minutes the treasury secretary will join him as well. it is possible that they may announce new u.s. action against iran as the administration this morning faces another pressure point in the international face-off. that's because tehran overnight is now is denying allegations that one of its own missiles shot down a ukrainian passenger jet. iran says if the u.s. and others have evidence, show it. >>> on capitol hill, lawmakers are telling the administration if you have evidence about that imminent threat from general qassem soleimani, show that too as the house votes to limit what the president can do against iran. coming up, we'll hear live from the member of the senate foreign relations committee and we have a member of the house intelligence committee joining us on a busy morning. we're on the ground in ukraine and covering both ends of pennsylvania avenue. bill neely, tom costello, kelly o'donnell at the white house and garrett haake is on capitol hill. this isn't the first time we'll hear from the s

larry o-uppercase-letter in treasury secretary steven mnuchin. i had a chance to speak with both of them this weekend starting with larry. i began asking him to expand on the president's message of booming american growth that he brought with him to europe. gerry: the president's message in davos is growth. how the u.s. has achieved growth and what it means for the rest the world. once you flush out that message for us. >> i like to call the blue-collar boom, and america is working, and the president's policies and tax cuts and deregulation and opening energy, and reducing trade barriers, and really for there's time, jerry, at least since the '90s if not longer, the middle and lower end of the wage earners are outpacing their bosses in terms of growth, and we think that's terrific. if there is 3.5% unemployment rate with no inflation just shows you that liberalizing the economy can work and create stronger growth, hopefully other countries will think about similar moves and we'll be talking to everybody here of course. and of course the point is

money moving into treasury futures as well. japan closed the 10 year yield flipping yesterday dropping back below 190. the yen hitting a two month high. gold at a four-month high. oil rallied strongly as well. brent and wti approaching $17 a barrel, hitting its highest since the attacks on saudi arabia and infrastructure in september. our top story, iran's supreme leader has about super -- severe retaliation after the united states killed one of the islamic republic's most powerful generals. great to have you with us. what do we know so far? >> what we know is the strike and the hours ago pentagon came out shortly after and said it was at the order of president trump. general be killed. they said it was a defensive posture. they had been concerned after an attack on the baghdad embassy, the u.s. embassy in baghdad. there could be attacks on u.s. personnel and service people. this was a coordinated attack done by the u.s., a direct hit. this was a general who is revered in his country. there been a top official perhaps second on

this year, according to secretary of the treasury stephen mnuchin.en says a lot can be done steve mnuchin says a lot can be done at the same time. >> there will be certain issues that perhaps they need to resolve with the eu before they finalize our deal, but a lot of the issues can be dealt with. we look forward to a trade relationship. >> israel is allowing its citizens limited travel to saudi arabia for islamic pilgrimages or business trips. been now, israelis had prohibited from visiting the kingdom. it will still be difficult for israelis to travel to saudi as no airlines flight directly between the countries. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. thank you very much. the u.s. is facing the busiest week for earnings. at the heart of it is tack. it means that we will be getting updates from some of the largest companies. tuesday, apple's numbers hit the wire. the results of last quarter of the year. we will get a read on the shi