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for that that you should. you changed the way we handle this worldwide. bringing it to refugees and migrants -- myanmar is really front and center right now. talk about the linkages between the world bank and health with this new one of the things thate human capital project will show is that countries don't invest in their people at their great peril. if they refrain from investing in their people, if they find excuses, it is at their peril. the situation for refugees is if we don't invest in the health and education of refugees, we also do so at our own peril. the young people who don't have a chance, who cannot compete in the digital economy of the future, i worry they will become -- with the domination of violence and extremism.
years women arguing that we need more grant money, more donor financing and that has all been great. what we knew the human capital project is to say look ministers of finance, we will put on a ranking of where you stand in terms of your stock of human capital and what you are doing to increase your human capital. and where you come out on this list may very well determine how quickly you grow. the dynamicange from one in which the developing countries wait for the supply of funds to come in which they are demanding the best way to improve human capital. tom: take that over to myanmar, how does the world bank as this china ms. institution, how do you deal with one country whether it's a border of turkey or syria or what we've seen in myanmar? >> we are very concerned about
what happens. very specifically what we are ourg is we are continuing lending for programs on health, education, social protection. we are very focused on supporting the poor in myanmar. which wer operation can't go forward with right now because we are concerned about what's happening there. we are working hand in glove with antonio guterres, the secretary general. we want to make it clear that what is happening is not acceptable and while we continue to support health and education, we can go forward with the budget support. infrastructure has been a buzzword. i see the world economic forum doing work on it. , this goes back to my childhood, you are the ultimate ii original post world war infrastructure organization. how do you approach modern infrastructure away from freshwater?
>> the traditional approach is been on the public sector side we provide loans to which countries by sovereign guarantees. on the private sector side we provide loans to private companies. practice ining that a fundamental way because the real opportunity in the world both for investors in developing countries is to get the 10 plus trillion in negative interest earningvery low government bonds in the 8 trillion in cash. thousand euros bills sitting in people saves, get that off the sidelines by derisking investments. can do things like provide political risk insurance, which people are afraid a company might be nationalized. if we did start bringing the thereign wealth off
sideline, this would be a huge new source of investment capital and we just signed an mou with the largest pension fund the world. john: -- tom:. tom: you parachuted into i was a child. you are the walking personification of the success of modern immigration in america , how do you speak to a wall on the mexican border? how do you speak to the new form of immigration debate in america? of the to point out great fortune 100 companies of 30 years ago, 30% were started by immigrants or children of immigrants. high tech companies that are dominated the u.s. economy, 40% were started by immigrants or the children of immigrants. the majority of nobel prize winners debt he nobel prize winners were born outside the
country. last year of the six nobel prize winners who were nobel -- u.s. citizens all were born out of the u.s.. we are trying to change the narrative. ,mmigration is good, japan korea needs immigrants to fuel the next phase of their economic growth. we want to change that. tom: you look fresh and relaxed. the trump administration are going after her on tax reform and initiatives. defend that -- defend christine lagarde right now. is she doing it right? so closely with christine for the last five years, i think she is one of the great leaders in the world today. she has a way of dealing with very difficult situation with grace, clarity and i see no evidence that this particular interaction will go in any
different sort of way. >> thank you so much for joining us today on bloomberg. bloomberg's tom keene live from washington there and the imf meeting with the world bank president. more from theyou imf world bank meetings later today, live remarks from the imf managing director, that is coming up in just a few minutes. you are watching bloomberg markets with myself and mark barton. now to be corporate news. jpmorgan and citigroup kicking off the third quarter season on wall street. both had earnings results played by volatility. joining us now with his analysis is charles peabody, a banking analyst at compass point research. banksting fell on all except for two and the others are neutral. aret is largely because we
placing peak multiples on peak earnings and all we are producing out of all of that is a 10% or minus r.o.e.. bonde: let's begin with getting revenue because it's something everyone rushes to focus on. it is a big shocker of a number down more than forecast. is the bank story all about bond trading? charles: it is not. when you balance out the topline line revenue growth with the we capital markets, particularly trading, the investment banking -- you are getting no revenue growth. maybe one or 2% revenue growth. there is really little revenue growth. vonnie: i want to ask you about credit cards and delinquencies and how that applies to the business deteriorating even as the economy looks to be perking up. wage growth is slow, but it is there. why we seeing a pickup in the
need for reserve? you are seeing increasing delinquencies, and increasing the severity of losses almost delinquencies. you are seeing less recoveries on primus charge-offs and you're not seeing -- previous charge-offs. we are at an inflection point in credit and that's what i mean when we are placing peak multiples on peak earnings because those of not been normalized for higher credit costs and you are seeing very aggressive reserve additions in the portfolio for future losses. the industry knows it's coming. mark: what is priced into these banks when it comes to deregulation, when it comes to tax cuts? i've done a risk-adjusted r.o.e. and book value for a potential tax cut and these stocks are pretty much pricing in a tax cut down to 25%, 24% from 35%.
in terms of the regulation, i think there is a multiple expansion story that's laid out in these talks. you will not get any sort of deregulation until maybe early 19 -- 2019 at the earliest. mark: given that you say investors are paying peak multiples on peak earnings and you say future estimates are normalized by high credit costs that a time when nine years into an economic expansion, what do you need to see to change your largely negative slant on the big banks? charles: some pickup and financial economic activity. it's drop from a high single-digit rate of growth to maybe 1.3% rate of growth. if you look at activity in the trading market, it continues to be fairly anemic. on top of that, all the various other metrics are saying end of cycle. in the capital markets we usually rotate from thick as the
driver to equity and m&a at the end of the cycle. are losses taking up usually the leading injured -- indicator of end of cycle. there are a lot of indicators we are at the end of cycle dynamics. cannot continue for another year? we could. >> this shows move index and the lowboth extraordinarily points. you talk about if volatility picks up it might be good for banks but it depends on whether it's good volatility or bad volatility. >> right now we have relatively a liquid situation where client engagement is pulling back. recently goldman sachs was stock with some stock in intesa, a sao paulo bank. deutsche bank and citibank got stuck with always ran stock they were trying to place. we saw a leveraged buyout deal at goldman become a hung deal. liquidity in the markets that makes the risk-taking and these guys are
taking more risks. they are taking more risks in their pop-ups right now at a time where illiquidity is building. vonnie: nothing to make it finish it. i want to ask you more about collateral and how that's deteriorating and what does that for bode? charles: we are seeing one-off. audit was the obvious example of where euros in collateral values deteriorate. jpmorgan today knowledge they took a special million-dollar right off that was regulatory induced related to the delinquencies. what's tough is third quarter seasonally is an improvement in credit and you do see that seasonal improvement. the secular trend is what's changing. mark: which of the big five is in the best shape? -- isn sachs as neutrals neutral.
why does it stand out? theses: what i set about big banks is this time around if we go into a down cycle, i think they will come out of that cycle much better than they have in the previous cycles. their balance sheet have been repaired, their liquidity is strong. they are derisked. ant i'm talking about is earnings recession and i think we are looking at one for the big banks. vonnie: have to ask you about the federal. whether or not leadership changes, how much different will it make to the banks if we see another quarter point this year and up to four next year? is it going to help? charles: we are at the point of diminishing returns from higher rates and any bet on a net basis. higher rates will help net interest income or topline revenue grow. but it's growing slower and slower each time they raise rates. what's happening now is the higher rate is hurting to
impinge on the leverage of the system. from a credit point of view that will prove to be negative. charles: charles looking for more buyback activity? we are buying back 100% of earnings which is new for them and i think that will continue next year as long as we are not in a recession. charlie peabody of compass point research and trading, thank you. let's check in on first word news. here is emma chandra. and a: president trump could not get congress to repeal obamacare so now he is after himself. in a little more than an hour from now he will sign an executive order to the white house says will promote health care choices and competition. it's likely to allow people to band together and five cheaper unsubsidized coverage outside the of portable care act. critics say the plan would raise costs for the sick. the death toll is rising and the wildfires -- in the wildfires that have raged in the california country. hundreds have been reported missing.
the fires of destroyed at least 3500 homes and businesses. 8000 firefighters are battling the blaze is. the european union says brexit talks have had a wall over how much the u.k. will pay when it leaves. that increases the risk the british the part will be a messy one. it is up to premise or theresa may to unlock deadlocked talks. -- prime minister theresa to unlock deadlocked talks. woman, her husband and three young children have been freed after being held in pakistan by a group linked to the taliban. the woman was pregnant when she was captured five years ago. the couple had three children white -- while in captivity. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra, this is bloomberg. mark: thank you very much. the imf raising its global growth forecast this week.
♪ vonnie: live from new york and london i'm vonnie quinn along with mark barton. this is bloomberg markets. we are broadcasting from new york, washington, dc and london. in d.c. for the imf world bank meeting. we are voice seven minutes into the trading day in the u.s.. julie hyman has kept an eye on banks trading. julie: overall we are not seeing much of a change. very small daily moves.
if you look at the bank stocks themselves. they too were not moving in response to earnings. citigroup is off by a third of 1% as traders traders weigh .hose positive and negatives if you look back at bank earnings overall, it looks like they are going into the reporting season. this is one way of measuring it. looks androup index upgrades to estimates versus cuts to profit estimates from analysts. at one point we found largest margin since the financial crisis of upgrades to cuts in that was in the past month or so. explain whylso help jpmorgan and citigroup are not much changing. we have seen some optimism from his earnings reporting season. moving onto one of the other groups is really holding back
gains in the s&p 500, that's telecoms. that's after we got an update from at&t. a preannouncement of its earnings reports. the company lost 90,000 video subscribers because of heavy competition and because of weather-related disruptions. that more than offset the growth of its new online service. it provides phone, tv and internet service in the houston area and parts of florida. that explains the weather affect. verizon down a bit. it's been down more out of the gate now, backing off and contest as well. craig moffett, a well-known telecom analysts said this is bad for the industry, he says indicates there is cord cutting that is going on and obviously -- and not in -- and att at&t specific issue. particularly fascinating
♪ mark: i'm mark barton in london. vonnie: in the new york times vonnie. tax reform is a hot topic at the imf world bank meetings. the imfe spoke with director of fiscal affairs. have a listen. ofwhat is going on in terms u.s. tax reform is extremely important. i think it's important to underline that the positions of the imf on the u.s. tax reform
year afterade public year on our article force less time this july and we have advocated strongly for u.s. tax codem because the u.s. tax is badly in need of a simplification, in particular when it comes to the corporate income tax. the corporate income tax rate is too high. there are too many exemptions, too many loopholes, complexity is tremendous and complexity is particularly relevant on the international dimension which is a core issue. lastin the uproar of the 24 hours, here is dan fleming in the financial -- financial times. this is a quote from dr. gaspar, the idea here of a response to
mick mulvaney of the trump administration. the idea that one would produce additional revenue by lowering tax rates is something that being a conceptual possibility is rarely documented empirically. we do not find systematic evidence that increasing taxes progressivity hurts growth. is ofy thing in your work tax reform over to fiscal debt dynamics. do you assume a larger u.s. debt and deficit with a tax reform as proposed by the trump administration? >> at this point in time, we don't have sufficient details to factor in the plan for u.s. tax reform so we cannot really estimate its macroeconomic impact on employment or growth. its impact on the debt dynamics. the plug-in here is critical with what you did for president obama which was
guesstimate gdp. feet were possible is hinged -- world is based on what will be gdp. as we heard from the director of omb. >> i would love to see 3% growth. i his wooden building up -- economic plan with the assumption we would get there. if we do we will be pleasantly surprised. that is a perfectly good thing. to make an area of other direction is a big problem. the biggest source of our slow growth is our demography. nothing in a tax plan is going to change the fact that the population aged 25-54 is not growing. it used to be growing at 2%, now it is growing at about 0%. they cannot be repealed. notable that a lot of what the imf -- administration is objecting to in the imf is
things the administration themselves say they agreed with. they stated sacked for tax reform to be revenue neutral not even counting the dynamic effects of tax reform. that's what mick mulvaney said. i think a lot of what the imf is saying, i don't want to speak for them, but it's doing you said you are going to do, not something different. vonnie: that was former white house economic adviser jason furman in the imf director of physical affairs speaking earlier on bloomberg. christineng director lagarde talks the global economy , central banking and much more live from washington. this is bloomberg. ♪
markets a little changed after falling from two days. barely budging on a three-day bases resources. j.p. morgan asset management both argued that a strong economic backdrop a long-awaited recovery will continue support european stocks is the ecb begins to withdraw its stimulus. let's continue, this is the spread between the spanish and german ten-year yield narrowing for a third day. a little change. as of now, 1.1 77. a week last sunday a position of 19 basis points. the prime minister has given he is declared independence from spain or not as the country celebrates its national day.
if he is found to be in violation of the law, he will begin another three days to back down after that. he will trigger the legal procedures before the catalan administration. the yield is looking like that on the spread between the two nations. this is euro-dollar marginally lower today. rose earlier for the third consecutive day. the highest level also since september second. it is marginally lower. finishing off of a chart on the day. jpmorgan and citigroup released earnings. last year eurozone banks have lagged their peers. 40% for european banks, 90% for the u.s. peers. roughly banks valued at 12.79 versus 14.51 for u.s. banks. vonnie: good is stopped. we want to go to washington d.c.
where global finance leaders are having for the meeting of the international monetary fund and the world bank. we have an amazing lineup. tom keene joins us with the head of the imf. tom: thank you so much and welcome to all of you on bloomberg radio and television worldwide. the most important interview with christine lagarde. meeting after meeting of the international monetary fund, i can honestly say no meeting more interesting this morning over the last 24 hours was controversy with the trump administration. i want to go back to his speech you made in 2013. you quoted the american economist walt whitman, keep your face towards the sunshine and shadows will fall behind you. have you felt that way in the last 24 hours? christine: i would say that is a bit of sunshine in washington and there is no sunshine. let me just address this
controversy. for a few years now we have repeatedly said that tax reform was absolutely needed and necessary in the u.s., in particular a corporate tax reform and there is no doubt in my mind and absolutely no that point.out it is necessary. we've call for it and we welcome the decision to actually think about a tax reform that would make taxation that point. simpler, that would reduce the new -- ,oopholes and many deductions that would be focused on labor activity, help the middle class. it would be progrowth and i'm not going to pass judgment on the current draft that will be for consideration by congress. i've done my tax reform in my days and i know what those drops
just drafts go through. they go through iterations, denims, it's not the end of the day. as: it should be clear finance minister you've received every the mastech headache you can. the nuance to me and olivia came to your defense two days ago and jason furman came to your defense. you can defend yourself, but they defended you as phd economist on the theory. the distinction to me is between the blue book and the green book and the redbook of the imf. the linkage of tax reform to fiscal responsibility. how does the imf link constructive tax reform with the worldwide idea of getting our debt house in order? christine: what needs to be done is to look at the evidence of
the data and the numbers and then to determine policies on that basis. with that in mind, two things. the revenue, the spending, the political perspective of being progrowth, of funding to improve the situation of the middle class and reducing excessive inequality is if that's the case in that country. that is what needs to happen. in those countries that have a heavy debt burden and those that have entitlements coming to fruition, that will probably increase the spending. it is necessary to take into account the term and to make sure any tax reform is -- tom: what's important is the tone of the imf. obviously the u.k. is up again. with the battle over brexit and everything. serious issues are improving
emerging markets. you marched down the u.s. because the imf is doubtful on successful tax reform legislation in the short-term? christine: we have marked up the u.s. economy compared with our july numbers and then we marked up a few other countries, it including advanced economies. what we hope to see is implementation of the reform that we have called for for many years, a good, solid tax reform that will be simpler, where corporate rates will be lower with a base that is much more solid and clear, that is what we hope to see. the sooner it goes through, the better. would you be willing to meet with the secretary of treasury or the president to clarify the imf's stance on it? thestine: i meet with
secretary of treasury on a regular basis. i will see him tonight. i will be very happy to explain to him exactly what i have explained to you. when you speak to him tonight, what will you advocate that the trump administration do? whawt hat ould be the next step forward? christine: i would say resist lobbying efforts. will not belagarde having a cigar tonight at the willard hotel in new york with lobbyists. let us move on. it is a more optimistic meeting. velocity?ached escape christine: let's hope so. not guaranteed. we have certainly better growth at better growth forecasts, 3.7% for next year, it is not shared across the world. you about 25% of the world measured in gdp which is not
enjoying that stronger recovery. while we see the sun shining, we are also seeing the clouds on the horizon and countries and people not having the benefit of it. my message to the policymakers in the next two days, they are all coming in as of today, will be take the decisive actions to secure that recovery and to make sure the people have the benefit of it. i saw you intom: new york with our editor in chief on the idea of advocating for women and women's rights within the world economy. one of the overlays of that challenges technology. how does the international monetary fund look at the future of technology and link it into a better inequality across income and -- better equality across income and wealth? christine: it's important to
help young people to get acquainted and fully adjusted to what is coming. that is reasonably easy. it is -- it also should apply to those of us in advance and emerging other countries to also take ownership of those technologies because they will be destructive, they will be changing the way in which we manufacture and provide services. the way in which financial markets are organized as well. what we do with the imf is try to anticipate from a financial stability point of view what is the impact. we are seeing it, it is happening. christine: china has these incredibly important meetings coming up. weaver interview after interview , comparisons of 20, 30 and 40 years, what do you need to come out of these important political meetings in china? christine: i hope they continue
the reforms they have started. writing in credit is a nest -- credit is a necessity. continuing to improve capacity in certain sectors is a necessity. we hope this will be continued from an economic perspective. christine: a little more on europe if i could. we saw the far right in germany take a bit of a popular vote to join in the last election. we have seen the historic election in france. within it all we've seen a lift in the european economy. when you read the blue book, the world economic outlook. can you say europe has reached escape velocity? that europe is beyond euroscler osis. christine: europe goes in episodes of soul-searching and examining the future. i think there is an impetus, there is a momentum that has been created.
macron's election generates. continue to be stronger. what that takes will be a debate between them. when they be moments will -- there will be huge hope. kindmodel is a different and needs restructured, strengthened and must be one of the options available for those developing. to circle back again. outl 2013, you were way front of the coming challenges of the united states of america politically. , youritizen of france work in chicago years ago, how you proceed the path forward for
the people of america, given the turmoil of our politics right now? to thise: i/o a lot country. i came here when i was 17 shortly after my father's death and i've only met hospitality, warm, support, respect and tolerance. that is deeply ingrained in the american spirit. i have full trust that this is the real nature. you so much, madam lagarde of the international monetary fund. vonnie: our thanks to tom keene, a wonderful interview with the imf managing director at the imf world bank meeting. interesting to hear her say she would be happy to explain the imf position on tax to said -- treasury secretary mnuchin who she will be meeting later on. mark: she will not pass any judgment on the gop tax draft. coming up we will head back to the imf and the world bank meeting in washington.
♪ live from london, i'm mark barton. vonnie: this is "bloomberg markets." on u.s. tax policy, president trump is promising his plan would save money for millions of american families. hastax break in question emerged as a key flashpoint in the debate. -- brings us the story from capitol hill. a great story and the question it raises is why does it take until now for the president to suddenly be surprised by this? >> is a great question and is
part of a pattern with president trump. he's not paying attention to the fire -- finer points of his proposals. he looked about house version and that it was too mean, you look to the senate version of that it needs more hard. .e think we caught off guard theeems a bit surprised by state and local tax reduction that ending this break would hurt some middle-class americans, including his home state of new york and states like new jersey and connecticut where it is used extensively. this was going to offset some of the others. 1.3 trillion dollars over 10 years. if the biggest one republicans put in their plan. most senate republicans want to end this tax break. it mostly affect states represented by democrats and are not expecting votes.
the biggest pile of money they can use. it has caused consternation among several dozen house republicans who represent new york, new jersey and some in california as well. an example is peter king who represents long island. he will not vote for something that and that state and local deduction. he is constituents who pay high property tax. republican leaders will meet with their members today on this issue and try and hash out a compromise. we heard talk of there being an accommodation. negotiations have gone dark and they are waiting to hear it update. mark: we are hearing president trump is due to sign this that could got obamacare. what are the details? >> the details are yet to be seen. they are aimed for deregulation aspect. they will try to let the policies that don't necessarily comply with regulations as set
currently under obamacare and the previous hhs. this is been done in conjunction with rand paul, a kentucky libertarian in the senate was called for all sorts of deregulation to lift the burden on businesses and employers. we will hear more about that. vonnie: sahil cohort, thank you very much. don't miss an interview with senator rand paul later today on the bloomberg markets. that interview was at 1:30 eastern, 6:30 london time. mark: the u.k. preparing for the worst in brexit negotiations after the fifth round of negotiations showed little progress. migration and refugee crisis, our next guest has target investment in those. he is live from the imf and world bank meetings in washington. he is president of the european .nvestment banking
mr. hoyer, thank you for joining us. can we start with brexit. how will brexit affect lending by the eib? werner: the united kingdom is a member of the eu bank and that remains from the european union, we will see. capitalosing 16% of our with a fantastic acid book -- asset book. in addition to that, the u.k. is a particularly good partner for climate change activities and energy for innovation. we certainly regret that. how are you going to cope then without the financial muscle of the u.k.? will others pick up the slack? werner: i'm convinced there will
27.nconditional -- by the with the do business u.k. anymore as soon as they are out so that will release -- reduce the problem little bit. u.s. -- with of the loss of capital, we have to reuse are lending and ship some of the capital into -- capital. that is the good story. it does require cash, but instead requires some maneuvers. mark: i know the statute says no, but it seems i'm here in the u k might want to remain a part of the eib despite that it won't be allowed if it's not a member of the eu. do you see a situation where it could remain a member? the eu bank is important
for the united kingdom because other than france, poland or spain, the u.k. does not have a national commercial bank of a size the others do. they rely heavily on the eib. on the other hand, that would require a treaty change. it is very unlikely that for the time being the member states will commit to a treaty change in order to keep them in. vonnie: at what point do you anticipate the u.k. anti-e.u. will sort this out -- and the eu will sort this out? werner: the department of the , the life of the eu bank will continue. it will continue without the business we do in the united kingdom and we will lose an important supporter, that's for sure.
mentionsn of the die of other issues in the u.k. they presently pose, we have to wait until the negotiations move can close thet we old chapters and open new ones for the future and only then will it be possible to talk about what kind of relationship between the eib and the u.k. will exist. innie: you are operating circumstances of uncertainty. are you concerned about your aaa credit rating? vonnie: >> not really. i'm not worried because the long form is excellent. the conditions of our lending is excellent. the borrowing on our funding side. it is important to know it's a unique business model the bank consists of will be preserved and i expect our shareholders to make that clear. mark: can we talk about german
politics briefly? your name has been thrown around as a potential successor to mr. , theang schaeuble are german finance minister. are you committed to the eib? have you got one eye on that job? would you be interested? werner: being invited to step into the big shoes is quite an honor. i think it as an honorary mark. my contract with the eib has kids will -- to 2023 so i don't consider any changes there. vonnie: cap -- mark: how do you see the integration process within the eu be affected by the outcome of the german election. germany will certainly stand firmly on the integration front. -- over the --
does collections we had will bring the other 27 eu members closer together than ever. there was an effect of these unfortunate developments and from that point of view it's important that you nasty new initiatives, new dynamism. i welcome very much the president macron has offered new ideas that might be unconventional, but it brings more intellectual debate that is in stock for too long. vonnie: you invest about $80 billion a year -- billion euros a year, it is quite a lot. much of it as public-private partnerships. a quarter of it is climate related finance. where geographically are you seeing the most returns on your investments? the eu bank was the
driving force behind the commitment in paris two years ago. we are now approaching cup 23. they must stay the course, domestic to the commitment they have taken in paris two years ago and we are in close talks with banks that this is going to be made sure in the next couple of weeks. vonnie: in terms of other investments, you are obviously at the imf world bank meetings with the outlook for various countries yesterday, where do you see the need for more investment within the eu? haver: in the eu we different fields where we need to be particularly active. importantly, for the long-term development of the european union, its competitiveness and i must say we must invest into innovation and cleanup our infrastructure
in particular, but not only that. my own country are trailing far behind the rest of the world and that needs to change quickly. there is a huge need. mark: werner hoyer, thank you for joining us today. coming up, it is the european close next. we are 35 minutes away from the end of the thursday's session. for three straight days, the stoxx 600 has finished barely changed. gains for the ftse. let's leave you with the currency board. this is bloomberg. ♪ retail.
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quinn. this is the european close on bloomberg markets. we have breaking u.s. oil inventories. crude oil lower ahead of the release. julie has the data. have 2.7 million barrels. a little bit more of a decline than estimated. for two inventories point 5 million barrels a drawdown estimated by analysts. a drawdown of distillate inventories of one and a half million barrels. the crude oil number looks bullish. on the flip side the built in gasoline inventories does not. there was a build in cushing specifically. that can offset the effects of the overall drawdown. we will see what th m