tv Whatd You Miss Bloomberg November 15, 2016 3:30pm-5:01pm EST
wl ross and company is already an economic adviser to donald trump. there is no immediate word from his transition team on the political report. house democrats have delayed their elections on whether to keep nancy pelosi as their leader. elections had been scheduled for thursday but now we'll look on november 30. democrats gained seats in the election but not as many as initially expected. a week after losing the presidential election, hillary clinton was the winner in new hampshire. that brings her electoral college vote total to 232. still officially undeclared is a michigan where trump has a razor thin lead. in egypt, -- struct on the death sentence against morsi. he was facing execution for his role in a mass prison break in 2011. today's ruling means he will get a trial, along with five other muslim of the
brotherhood. their death sentences were also set aside. the legacy of the chicago cubs has reached the vatican. two years after -- two weeks after they won their series, they were presented -- pope francis was presented with a cubs hat and a baseball. he was made a cardinal by francis later this week. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: 30 minutes from the close of trading in the u.s.. joe wiesenthal. scarlet: government bond selloff
unders assets come pressure. joe: but the question is, what's next. >> investors pulling back with base metals facing a huge reverse. what is the market initial reaction to much? good donald trump face millions of dollars. he could dismantle key regulations intended to prevent a financial crisis. plus, what would a federal reserve in a trump financial presidency look like? joe: let's take a look at the major averages as we go into the final half hour of trading. abigail doolittle has more. abigail: a wishy-washy day. with alooking at eanes bullish ending for the three major averages, especially the nasdaq up more than 1% but the dow is red.
this is notable when you take a look at the five-day chart, a nice gain of 3% but what really makes the gain in the dow into the green notable is that it puts it on pace for the fourth record close in a row. real strength there. helping the dow today, different stuff. for verizon, chevron and microsoft and apple. verizon could be higher as we have rates falling with a dividend holding stock. it becomes more attractive as rates fall. chevron helped out by oil. and we have apple and microsoft also trading higher as a bit of a reversal of the weakness we have seen recently in tech, getting a boost today. as for the strength and oil, we take a look at oil and copper and we see a tale of two stories within the commodity complex. up more than 6%, the best day since the end of september. that is on the news that opec
may be close to making a deal for a supply cut that has been in the works for quite some time. time will tell whether it goes through. copper down modestly off the lows. but really, copper is on a monster rally. for the month. on pace for the best month. so the question is, is today's move lower a paz before they continue going higher? or does it represent a reversal? we go into the bloomberg and five-year chart of copper. a monthly chart. each one represents a month. the most recent candle with a huge spike higher, right now a 14% move, it had been close last week, we see that at this point, copper is within this long-term downtrend, a d sending trading range. unless they can go back above actuallye, we could
see it trade back down into the range. time will tell. joe: thank you. insidepower struggles donald trump's transition team are holding up efforts to create a new government. highlighted by the departure of mike rogers, who had been picked by chris christie to lead national security planning. according to two people close to he had been fired, orchestrated by the son-in-law who had one of the most influential voices in the campaign. wayne joins us now. and alex, there is shared kushnerbetween jerod and chris christie which resulted in mike rogers being expendable. walk us back to what happened? quite a bit of insight. chris christie prosecuted his father about a decade ago for yearvasion and he spent a
in prison. so there is a pretty good history of bad blood between these two men. it isn't terribly surprising that kushner and see the opportunity to blend the trump organization of anything regarding chris christie. obama made fun of donald trump at the white house correspondents dinner years ago and now donald trump is his successor. kushner waited years and finally, gets revenge for his father. it seems to be a theme. dish bestnge is a served behind closed doors. to chriswhat happens christie? does he have a role to play in the new administration? have we seen the last of him? alex: i think he is probably done. weref his top aides recently indicted for the shenanigans on the george washington bridge. couple of years ago.
that investigation has come very close to chris christie himself. an idol think a president whose campaign is a pledge to throw his opponent in jail can really afford to have chris christie, perhaps -- who knows what he will be facing but i don't think trump wants him to close anymore. ryantoday we heard paul say had today marks the dawn of a new republican government or something like that. how optimistic are republicans, actually, that they will stay on the same page as trump? that they actually can have a unified agenda? alex: they are talking a good game right now. but the tires haven't hit the road yet. we will see what happens on january 20. they are talking about trying to repeal obamacare out the gate, as soon as trump takes office, or to get that through the senate they first have to pass a budget through both chambers and
write up a bill that would repeal the thing. there is a lot of legwork to do here. and a lot of political games to be played. scarlet: and trump has said himself that there are provisions in obamacare that he would like to keep. the republicans are obviously thrilled that reince priebus will be the chief of staff. headder how much scratching there is that steve bannon is the chief strategist. are they on the same page as him? alex: no one is saying anything about him. there are a lot of complements with reince priebus but no complements for steve bannon. , of course, a lot of controversy about him. a lot of questions about his ties to the old right, a splinter political movement of nationalist and anti-immigrants. and antiestablishment and
potentially, racist conservatives. longhat is causing alarm a with a lot of democrats and it is causing republicans to keep their heads down. joe: and brutal towards paul ryan, they have never had support for him. alex: that's right. it is an official yet but the republicans unanimously said paul ryan is their guy in the next congress. betty: -- scarlet: anyone is waiting for the nominations. trumpporter of donald sent out a tweet today regarding the transition. he said "spoke to trump. -- both would be great choices, great friends of mine but they are two of the smartest people i now." joe: these names do not seem
antiestablishment or anti-wall street. is there any common thread? people throw out john bolton for secretary of state. not a name that people would associate with foreign policy. obviously, these finance guys for treasury. is there any threads that make sense? are all trump loyalists. trump is rewarding his friends. it is a bit of a different approach than barack obama taking on the presidency. a lot of his cabinet picks went to people who were not such close surrogates of his during the campaign. hasthe current president not criticized the picks so far. scarlet: the president held an hour-long news conference yesterday. when mike me expect to see donald trump come out and hold a news conference?
alex: i would expect that this will probably be a day or two after the election. i'm not sure what he is waiting for. it would be a great time to announce the cabinet picks. hopefully he won't do it by a simple statement. scarlet: all right, alex wayne, we will see. bloomberg's u.s. government reporter joining us from the washington bureau. joe: coming up on what you missed, -- on what a trump presidency and the brexit vote means to europe. this is bloomberg. ♪
trump. earlier, we pose that question to jean claude trichet a. jean-claude: i would say in my perspective, both are linked. and they signal a level of frustration in people in the middle class of the advanced economies. isn't just the u.k. or the united states, it is certainly a message coming from our own people, which is suggesting that things are going to rapidly. china andition of mexico and brazil, the rise of i.t., all of this is creating a level of anxiety which is for real and we have to accept that message and give the appropriate response. it is a problem for all advanced economies.
jonathan: when you ran the ecb, it was looked at as an opportunity for more euro. are euro on the back of crisis. so you, more europe, is it still an opportunity and answer? or is it now the problem? i think that, in a way, we had a lot of decisions which were taken in the crisis, to cope with the crisis. and i have to stress decisions -- new for example, the macro procedure. decisionsimportant which were taken in the crisis and had to be implemented. it seems to be that more europe is absolutely needed in security role withd a federal
border police. clearly with migration. so we have a lot of things to do , it seems to me. it isn't really disputed. it is difficult. that europe is a historical endeavor. and we are making history in europe. we have to accept that. history is not easy. it is complex and complicated and you don't have a blueprint. the u.s. was not made out of a blueprint. was u.s. citizens that created the united states. butave a lot of challenges, i am optimistic on the long-term success of the european and never. david: explain that optimism and put together the two things that you talked about. on one hand, anxiety about too much change, particularly in the middle class, which creates little headwind for this sort of
further integration and developments you need in europe. how do you put them together? is it politically doable? thatclaude: again, i agree life, in all advanced economies, is not easy. it is complicated. and it will become located for a long amount of time because the and mexico and china, it is therefore long amount of time. and i also think that you cannot expect that you would prevent a science and technology to search magnificently. so everything is difficult. but what i am reasonably confident in is the fact that most of our challenges in europe are continental challenges and not single, individual country challenges. continent, there is a
difference of a u.k., because there is a strong sentiment that we engaged in a historical endeavor. has beenuropean union an endeavor since world war ii. historical endeavor. we proved resiliency in a crisis in a way that was always underestimated in the u.s. and asia. proved to be resilient in the worst financial circumstances. this is also part of my intimate conviction that we are resilient. joe: that was former ecb president, jean claude trichet. falling the most since
february, even after the profit topped analyst estimates. the reason here is that the home-improvement chain failed to raise before your forecast. deceleration in the curve. let's take a look at home depot. the retailer has posted at least in eps over the last six years. pretty consistent. and the pace is expected to slow down a bit at an estimated 15% so we are still talking double-digit's. driving the earnings performance is 22 straight quarters of comparable sales growth. this topped estimates as americans continue to pour money into making their homes better. home spending is critical as it often correlates with the remodeling market index. line.s the blue it surveys modelers on a quarterly basis, asking how much
work they are getting. anything above 50 represents an increase. we have whirlpool saying recently that they have seen the cfor demands and home depot says they are not seeing a slowdown. and -- rose 11% in the recent quarter. a big driver. increaset purchases the value of homes. this tracks home prices since the financial crisis while the orange bars show the supply which has trended lower in the aftermath of the crisis. with the increase in property values approaching a fifth year, the concern is that americans may be running out of projects to complete or they are diverging their spending elsewhere. we find out if home depot's lows is a trend when it reports tomorrow. it is time for the bloomberg business flash. a look at the biggest stories in
the news right now. potential sticking points have emerged in a possible merger of cbs and why a comp. people familiar with the situation. potential obstacles include members of the board and the names of the merged company. trump's proposal to levy a 35% tariff on cars made in mexico would hurt the u.s. economy according to the head of ford. trump has criticized ford for planning to move all of its north american small car production to mexico where wages are 80% lower. he sent a congratulatory note to trump. google is moving forward with delayed plans to expand london offices, saying it will build a 10 story building. the u.k. government calls it a vote of confidence in the post-brexit future. the company said it would be able to house as many as 7000
scarlet: i am scarlet fu. to reachrussia looking a deal. they agreed to cut production but details had not been worked out yet. leading an effort to get this done. right now, you are looking at oil prices extend. through the day they have been gaining strength and now oil prices have now moved up 6%.
a two standard deviation move. the biggest gain going all the way back to april. for pretty sizable move crude oil. traders are saying there is a lot of shortcomings going on here. sincea race all its gains it came out with the surprise announcement that they would cut production. again, no details since then. joe: pretty remarkable spike today. what i'm looking at the probability for a rate hike in 2017. we know that since the election there has been a rise in rates. people think there will be fiscal stimulus and more inflation and a faster pace of rate hikes. this chart was put together by bloomberg intelligence and it shows what the market is expecting for the number of rates in 2017. i want to bring your attention to this blue line at the bottom. because this is you there will be three rate hikes in 2017, which is now almost 10%. it doesn't seem like much, 10% but consider the fact that not
long ago, people were saying that maybe there would be one more hike in 2017. now there is a nonzero chance three ratel get hikes in 2017. this is how much the election has changed the outlook in the u.s. for growth and inflation. scarlet: a nonzero chance. and it is notable that people are talking about wanting it. joe: it is a huge change about how people view the prospect of a hike. scarlet: and something like said officials on the docket. he market close is next. with less than four minutes to go before the close, targets have rallied to session highs. a gain of 35 points for the dow. yet another record high.
scarlet: moments away from the closing bell. stocks ending the day higher. treasuries and emerging markets halting their selloff. welcome to our viewers tuning in live on twitter. you can watch our closing bell from 4:00very weekday to 5:00 p.m. eastern time. scarlet: we begin with our market minute. the dow gaining for a seventh straight day, the longest winning streak since july and closing out another record high. you can see a big gain there as well. a mixedaround after read. joe: we see tech had been getting slammed. there was the selling of government bonds. reversals on some commodities. let's take a look at
how this has fared. this was driven by energy stocks. we're looking at 11 major sectors within the s&p 500. energy up as crude oil jumped almost 6%. clearly oil and gas dominating the leaderboards. you also see telecom utilities that have been dragged down to recent days. financials which had gotten a huge shot in the arm pulling back. as for the names in the dow that continue to drag on the index home depot we mentioned earlier. it did not raise its revenue forecast. as for dupont, dow chemical expecting regulars to object to their $60 billion merger because
of antitrust concerns. boeing is off by one. it mention here, these tech names. bank stocks have recovered. maybe so much for netflix. amazon up by third. apple that gaining 3% as well. joe: we have 10 year yields in the u.s., down a little bit. we are seeing relentless selling of government bonds. german 10 year yields down. japanese 10 year yields are rising. it's a positive number on japanese. i want to bring up a chart of two-year yields. it's going back 10 years. actually at 1% right now. we were higher earlier in the day.
we have seen some climbing recently. low byincredibly historical standards. it is reflecting this believe the fed may take off before too long. >> now rio 1%. let's take a look at currencies. spreads even as the come in just a bit, well above 108. approaching 110. the dollar has gained against the yen in seven of the last eight days. the british pound under some pressure. u.k. inflation explodes pride bank of england says he would not read into that. he is going to keep inflation contact. currency, we will
get to that. they gain for the first time since donald trump's election. declinehe dollar's against those currencies. ,oe: interesting moves here tumbling 7%. ins has been a huge trend the postelection environment. people bidding up the commodity like rin or like there will be a huge infrastructure boom. copper is another one that had been doing fantastically down today. day, to salvage a deal. snapchat will follow
for an ipo according to reuters. they will file for its initial public offering. more details when we get it in the bloomberg. joe: today was an unwind day to wrap it up. what strikes me over the last week is the degree of confidence markets have created this new scenario of more stimulus spending, higher rates, more inflation. all of these traits have been driven out for the heart commodities. all of these traits have been intense. you think the markets have the environment right? >> i think there is room for surprises still to come. one is the infrastructure commentary. that was the second surprise.
this huge nothing was going to happen politically. so they would be stagnation. the vacuum. bit of there could be treasury secretary, in the absence of that hard news, is the path of least resistance higher? >> let's take russia. we have been bullish on russia. it has outperformed the emerging markets. -- thatpossibility would disrupt that positive russian trade. we don't know yet. that is what we mean. joe: the markets of taken this narrative and run with it despite all kinds of mixed signals on what the administration plans to do. >> they want to have a holiday
and a month. they have to get it done now. joe: we have seen this huge surge. iron ore and copper has gone ballistic. is there a line to be drawn? bridges and hospitals, does it make sense to go long against commodities? >> it won't be roads and it will be hospitals. was -- it it is trouble ready stuff. how long is it going to take? two or three years? we're going to get a retro at the tax cut. that money will be spent. that is not necessarily commodities. scarlet: you are seeing this rotation with money moving out of the treasuries.
how long does a rotation tend to take? days or months? risk.re is a lot of it is uncertain yet. there is going to be issues. starts this is not going to have legs. joe: we are going to be talking more about the emerging markets. obviously one is the idea trade may be diminished and the other is the u.s. environment, higher domestic yields. overall, looking at e.m., does this make sense? >> we have seen in brazil and in south africa, there has been
unwind of that. rates go up. sure that is really enough. theink yellow will derail trade. she doesn't need the high rate super aggressively. that actually keeps that trade in place. some countries are just and effective. egypt. there is no local foreign money. >> no logical reason why there should be a connection. >> egypt looks quite attractive from here. joe was referencing this new report. u.s. dollar is a near fear gauge. a shocker dollar can depress demand for credit while reflecting less appetite for risky assets. the surge should not be interpreted as a sign of
confidence. argumentk there is an the u.s. economy is going to have a stronger growth story next year. markets are going to reward that growth. in terms of equity markets. i don't think it is a negative trade. we have seen parts of that. joe: one more question before the break. know the frontier markets better than anyone else. do you have to study governance in those countries to make investment decisions? do you see signs of deterioration along the likes of which you see when you go around the world? >> i have seen a lot of investors that they have made this playbook before. agenda,onventional having some positives for
including top national security posts. can -- heen minogue declined to comment if he had and offered the job. he is working on the biggest tax changes since reagan. voted'sn has been bigger of the house and he got unanimous support during a private meeting to select leaders for the 115th congress. if but will be held in early january by the entire house membership including democrats. united nations officials are denouncing the inhumane treatment of the could access pipeline protesters. 28 were arrested in north dakota during the day in which .ctivists held demonstrations the are seeking to finish four state project. angela merkel will run for a
fourth term according to cnn citing an interview with a lawmaker in her christian democratic union party. she has not said whether she will run in the federal election. her government has lost to the anti-immigration alternative for germany party and her open-door stance on refugees. global news 20 for hours a day powered by 2600 journalists and analysts. this is bloomberg. scarlet: we're back with charles robinson. he's joining us in new york. we want to start with the idea of the central bank. on populous leaders when a mandate, do you worry they will start questioning the independence of the fed, of the bank of england, setting rates? >> that is the mirror image of what we saw.
we had a shift toward policies and globalization. we are seeing a mirror image. trump is the opposite of reagan, not the parallel of reagan. , when there was protectionism and a different story, that part of central bank independence, i think that could be questioned in the next 5-10 years. >> let's talk about specific markets and how they are affected by trump. one of the big ones potentially is russia. people believe there could be a conciliatory approach. how you call that one? >> a negligible chance of sanctions next year. with trump i would say 50-50. it depends on the secretary of state.
make it easier for investors to get involved in equities and bonds. joe: if it is ball and as secretary of state all bets are off. >> indeed. it puts it off. this is where we need to be much less certain than markets have been. scarlet: what about south africa, which some worried was teetering on the verge of being a failed state? >> i am more positive than that. i'm positive on the currency. it is cheap. bet gives you some reason to in the south african brand. but the political changes are going to get the end of next year, you may not see the change for president before 2019. >> does it become a value trap as a result? >> you may not see much of an acceleration in growth.
you are not going to get an acceleration of growth much beyond 1%. joe: you mentioned earlier egypt was an example of a country that shouldn't be incentive to domestic rates. where else may people be throwing out the baby with the bathwater in this postelection selloff? guest: egypt is special. it is not exposed to trade. exposed toeast globalization story. unaffected if we have a problem. you have local rates, the currency in 20 years. cheap currency at 30% cheap its own history, i think it is a great story. you have seen a big currency in. shift. russia could be a beneficiary. these are classic stories that are irrespective of the concerns we have seen. nigeriare looking at
being at an inflection point. you were surprised by the optimism towards africa. areust because i think they saying we are going to see over 20 countries growing at 5% or more in 2017. this is as good as it was in 2014. only two years were they going that fast. i don't think they are fundamentally wrong but the story has changed dramatically. it's is why we're seeing this strong growth. the commodity hit is going to play out. the country like nigeria has not moved yet on the currency. countriesnumber of that are still going through the shift that egypt has gone on. joe: in other words that are positive stories but they are not from an investment standpoint exciting yet until
these countries take a hit on the currency. guest: egypt is exciting. rush is probably good. there are good stories. timing is important. scarlet: thank you for joining us. joe: goldman sachs and citigroup says the iron ore and copper was too much too fast. -- barclays commodity analysts ways and next. ♪
davis. extraordinary rally on this idea that donald trump was going to do this stimulus. we would need a lot of copper from that. does this make sense? >> i think it does but it is important to back up. when we talk about markets it's important to distance angle causes. we've had a flurry of news. the election, various things around the world. when we focus on the metals, the analysis is to say it is trump. but there was a rally starting prior to the u.s. election. we saw copper take off we saw iron or go from 50 to just under 70. i think it is a lot of different causes. >> disruptions were why the metal who was started to turn around. it did start to search before the end of october. scarlet: absolutely. the election accelerated that but i wonder, these labor
disputes in indonesia and peru, does it increase once a country like the united states elects a populist leader? >> i think you're right with enough by on the supply side for the metals the situation has changed. coming into 2016 it is quiet. then we start to see different action. whether it was storms and ouster idea or labor disputes in indonesia. we have seen the supply situation change. that was one thing. the other factor is that china has worked that coming into the second half of 2015. scarlet: the revival of economic data, serving data and the hard notures has picked up getting any attention for obvious reasons. >> there is another story going
beenhe market has double-digit price gains. we are seeing copper rally. i wonder if iron ore is still a good investment in china. >> the government has started to crack down. exchanges.arious they used to be down in contract negotiations. now it is going to be more to an exchange platform. it is still immature in many ways but it's being driven by
fundamentals. this is a classic example of where commodities are following them. saw an extraordinary surge pretty can we go higher? >> what is next is going to be the tone of the trump presidency. we don't know what stimulus we will get we don't know what will be the global trade from tariffs . going forward i would say the risks are skewed to the downside. we have gone too far too fast. give backly prices their ground. we are in a new world of metals. it remains to be seen. scarlet: what nuances are investors missing? this narrative of a trump presidency means more infrastructure spending. >> let's take trade. one of the big stories in this election campaign was carrier
air conditioners. they wanted to build them in that code. that has a huge copper component. railroading -- rewriting the global trade that has a huge effect on how much copper they assume. that is the markets not focusing. coming up the banking in the donald trump era. street one albeit death to trump that may even like him. this is bloomberg. ♪
mark: time for first word news. according to politico, people familiar with the matter said the 70-year-old founder of private equity firm wl ross and company is already an economic advisor to the president-elect. no word on his transition team from the political report. barbara boxer plans to introduce legislation to eliminate the electoral college. the democrat says bills inspired by winning the presidency despite hillary clinton taking the popular vote. she calls the electoral college outdated and an undemocratic system.
the families of some of the victims of the sandy hook elementary school massacre are repealing the dismissal of their lawsuit against the gun manufacturer. the families of remington marketing a weapon it was an assault weapon designed for combat to civilians. 21st-graders were killed in the shooting in 2012. police clashed with demonstrators marching through athens to protest obama's visit. 3000 people and students took to the streets. authorities have deployed 5000 police for his two-day visit. there is anti-american tradition among greek leftists who resent u.s. support for greece's 1967 to 74 military dictatorship. dayal news 20 for hours a powered by 2600 journalists and analysts. i'm mark crumpton. this is bloomberg.
recap oflet's get a the market action. there was a turnaround in stocks. closing higher for a seventh day. the s&p 500 gaining three quarters of 1%. energy is the big winner here jumping 6% on signs the numbers are moving ahead with their plans. reversals ofking trade today. nasdaq surging 1.1%. tech had been the one sector not participating much in the rally but bouncing back pretty strong. >> what did you miss? bank of america stock has surged 17%. they say they can cut costs under donald trump's administration. know,is a little early to but there is this sense of
toimism there may be more supply the foundation for growth that we as a bank can optimize. theor more on how conversation on regulation in wall street has changed we are joined by bill: -- cohan. what is driving the optimism? just that it is not hillary ?linton what's that is a big part of it. elizabeth warren and bernie sanders have been in the ascendancy. if hillary one they would be taking control of the debate of washington. no one from wall street being able to serve in washington. he see how quickly that turned around. we have cut any number of people being considered who worked at goldman or other firms. i think it is a different dynamic now than it was.
>> why doesn't it bother bankers and investors, from railed against the financial system, used janet yellen and blank find in his final ad? should there be no concerns at the talks about it? should they be so confident that is determined to nothing? >> i'm loving markets right now. they are telling us so much. have got to a trillion dollar infrastructure spend. you have cutting taxes. repatriating trillions of dollars of corporate profits. among other things you have deregulation, how much applies to wall street remains to be seen. whether they let donald or not you have to like what he has said publicly at the new york economic club about his financial proposals. that is all we have to look at.
the markets are saying this is great. the bond markets are freaking out. this cool responsibility seems to be going up in the air. by and large this is the big break wall street has been looking for for eight years and now they are getting it. they may not like it and what practicing business -- i may not like doing business with him. scarlet: one of his promises was to repeal dodd-frank. it is cumbersome and. there are parts of it have worked, the have made the system safer. therapist preserving. >> first of all, throwing the bone to wall street by repealing dodd-frank is low on his priority list. whether it even makes in the first 100 days who knows. will dodd-frank be repealed? , i thinkof it
absolutely. i think wall street likes that. did the vocal rue after make sense? proprietary trading or investing in private equity funds has nothing whatsoever to do with the 2007 crisis. howou look as i did about goldman got through that time, it was proprietary trading that help them get through that. so banning that makes no sense. important arrow in their quiver. to be able to make the trade goldman put on, beginning in 2006, it save that firm. >> is there a specific aspect that is most important? proprietary trading can live again? would bankscally like to see rolled back that in their view justifies this huge
rally? what has been happening is there has been a quiet regulatory revolution going on under daniel tarullo who took control five years ago of the management of wall street. basically nobody even knew that happened. he has quietly and consistently and without making a lot of noise changed huge swaths of regulatory landscape on washington. when mary jo white says she was going to leave early yesterday, mentioned, dans tarullo. his contract wasn't up until 2022. he's got plenty of time left. janet yellen goes and mary jo white goes, who has been neither wallnor there, if he goes
street is going to be dancing. joe: what are the regulations preventing them from making money? >> basically bankers have not been, by having so much capital tied up, which we view is a good thing, but it's too much capital tied up. bankers used to make markets in debt securities for clients. now they get taxed to make those markets. the bond market is much less liquid than it used to be. part of this selloff is because there is much less liquidity that used to get made by the market makers who now get penalized for making those markets. rally?: this is a market >> as result the securitization market is down 50% year-over-year.
is aecuritization market good thing. regulating it out of existence i don't think is smart. that is the role that he put in place. that is one of the things he has been doing quietly. scarlet: what do you think of the names being floated out there for key posts? instance.s for he wrote the book on goldman sachs. ok --know steve was an his father was a big deal at goldman sachs. one of those early partners. steve has less of an impact that goldman sachs. low footprint. he was fine. he was smart. was buying success the banks in california. he made a fortune.
he turned it around and sold it. eight himself a billion dollars. invested in hollywood and became a player. next thing you know he signs up to be trumps finance chairman and now he is talking about treasury secretary. it is typical donald trump. taking people who are loyal to him and rewarding them. that is different than what he said, i'm going to find the best people. we are one a take them forever. i'm not sure he is doing that yet. i wish he would do that more. there is a lot of talent out there. maybe jim and -- maybe jamie dimon would but he said no. people will be happy to be considered. joe: the common thread is people who were loyal to trump, and beyond that we don't know about how he would be a treasury secretary. >> i have little idea. he would be good for bankers.
remind us what a confidential ipo means. >> if you make less than $1 billion in revenue annually you can file secretly and it gives to test thee chance waters and have conversations they were not allowed to have prior to sort out valuation and do some of these things. joe: what is the timeline between a secret tiling and a public filing? a this could be on file for bit of time confidentially. we have reported they're looking to go in the first quarter. march is what our sources are telling us. we will see them file closer to that time. then you see them set terms and then actually list. scarlet: is there any urgency to go forward? a lot of companies have 20 of crash coming to them. >> it seems like this is a capital raise. giving their investors liquidity.
it is not that old of a business. it has been around less than five years. it's a quick time for them to exist and go public. historically, it seems like it is more of them getting out there, getting the capital. they have a lot of different pools of capital. the we have any sense on at company is profitable or how it is from a revenue perspective? >> they're not making money now. they are aiming to generate $350 million this year. joe: that is massive revenue. >> massive but not really. it's not really massive amounts of revenue. they are looking to $1 billion next year. that is still not a lot of money for a company with the fanfare of $18 private valuation
billion, and the aspiring public valuation. there is some justification of valuation i will have to go on. joe is always on his phone using twitter and facebook. what else is snapchat doing besides the app? is there something more to it? is there a bigger story? >> that will be a bigger photo sharing thing. cane are stories were you link your photos and videos together. they can actually put stuff into it. that seems to be we a lot of the focuses. that is what they are going to make in their money. it will be extremely important for the company to lay out to
investors how revenue is going to come in. when you look at the comps that are out there you have twitter and facebook. facebook has been able to make money off of its users. we have seen how twitter has fallen off of a cliff. scarlet: thank you. joe: up next, what janet yellen and the federal reserve will be in the crosshairs of president-elect donald trump. ♪
trump could spell trouble for the federal reserve. columnist wrote today research has documented central banks around the world have been better under control if they enjoy independence from elected officials. the election of donald trump is a good time to remind ourselves historically the executive branch is presented the greatest threat to the independence of the u.s. federal reserve. professor andhe senior director of the organ economic forum at the university of oregon, thank you for joining us. you have been warning about the threats to central bank independence under a trumpet ministration. why in your view does a trump administration present a threat -- independence? >> we have seen trump offered differing opinions on what good
monetary policy should be. she has gone back-and-forth to low interest rates are good and bad. , the shell question expected to just follow his lead? joe: do you think investors are looking for the possibility -- bloomberg intelligence had a chart we showed earlier showing there is a 10% chance of rate hikes next year. a trump administration in the face of three rate heights is a low possibility. they may perceive they are working cross current giving the economy up. what could arise if the tension builds? >> that is exactly the issue. is this going to be an antagonistic relationship? the concern would be we have two
governorships. the trump administration will take members that would in fact push for dovish policy. that committee first thing. pressure is there on them to leave? legislation that should be taken on the fed to change the makeup of the fed should congress want to work with donald trump on that? >> with all aspects of trump policy there is a significant mixed signals, monetary policy seems no exception. last summer he was talking about the fed should not raise rates and that a weak dollar was good. late in the season he slammed janet yellen for artificially keeping rates low. one of his own advisors comes out as the hard money school.
how hard does this make your job was the administration antagonistic and seems to have so many views on central banking? >> it makes the job difficult, trying to make any predictions on what the federal reserve is going to look like under donald trump. virtually impossible. we don't know what kind of people you will ultimately appoint to these positions. the best case scenario is we consistent with best central banking practices, that we pick people for the position that are competent, not that they have been friendly to the administration. joe: let's ignore politics and talk about the economy. we have a strong retail sales report today. it suggests a farming economy. we got the atlanta fed wage
tracker year-over-year by that measure of wages. trump aside, what kind of economy is the fed looking at right now? how may it affect rate hikes going forward? >> the economy looks fairly solid. we are seeing growth bounceback. fundamentals are looking good on housing. that definitely december is still on for this rate hike. the fed is going to have to consider whether they want to accelerate from 2-3 to four rate hike next year. the date is pointing in that direction. joe: we have seen a repricing at the long end of the yield curve on.ce trump w
does that make sense? is this a logical market reaction to this? >> that is my opinion. republican administrations have tended to be deficit friendly. that deficit friendly type of environment is going to mean a blast of fiscal stimulus. monetary policy, all of that falls in line with my thought process right now. joe: all right. awesome to get your perspective. >> happy to give it. >> coming up, what you need to know for tomorrow's training day. -- trading day. ♪
scarlet: james fuller it and patrick harper are scheduled to speak. everyone is looking for insight into where they stand next year. joe: and there is going to be more economic data. tencent earnings tomorrow at 7:00 a.m.. a huge guest on what did you miss tomorrow. on chanos will have a take this postelection rally is too much too soon. what his pixar in terms of individual companies. joe: it should be a fascinating conversation. looking forward to getting his perspective. peopleeas of the market
mark: i mark halperin. john: and i'm john heilemann. benwith all due respect to carson, you had one job. john: on the show tonight, conflict about conflicts of interest and the secretary of more transitions for trump's transition team. resign from that team today. he called his work with team trump a privilege but report suggests warring