Translate into market turmoil. We have only had two, 1 or more and,ffs at all this year most are selling off in a single day, and most, two months. It has been quite unusual to see this kind of market action. Ares as investors reassessing the Trump Administration and republicans oncongress, their chances getting through their agenda, among other things. Droppingones up the, double the upper averages other averages. It is down 2. 5 . Many of the rails are down today as well. Cs x as well. Came when the story first crossed and if you look in the s p 500, it has been making a couple of attempts at balances and has not been succeeded in at those bounces. Continuing is indeed as the s p 500 has been making new lows. Is worstperforming stock Advanced Micro Devices which the out with outlook last night. Analysts said they were disappointed in it and disappointed that amd did not confirm a story that it had signed a new graphic chips deal with intel. Today, andare up big it down in racing begins today. A quick check on other assets. We are seeing the banks spiked , for example, by 28 . The dollar is lower. Gold is catching a bid. The 10 year yield, it is getting bigger. Best 10eeing a ton basis year drop. But get you caught up out of washington with mark crumpton. Mark President Trump took aim at his critics and naysayers. In the aftermath of his decision on firing james comey. Commencement address, the president urged the graduates and the class of 2017 two, fight, fight, fight when the life challenges them with adversity. Beenok at the way i have treated lately, especially by the media. , and itician in history say this with great a surety, has been treated worse or more unfairly. The president made no speech. Of comey in his Paul Ryan Says Congress cant deal with [no audio] president asked him to drop we have an obligation to carry out oversight regardless of which party is in the white house. That means, before rushing to judgment, we get all the pertinent information. The House Committee is appropriately requesting this memo, and im sure we are going , whyar for mr. Comey didnt you take action at the time. The contents of the memo have been confirmed by a number of news organizations. Mark the memo itself has not been made public. President Vladimir Putin is ready to come to the aid of trump. Says russian will provide a transcript of talks between the president and Russian Foreign minister sergey if the white house likes. During that meeting, president shared information said to be classified. The National Security advisor disclosureesidents was wholly appropriate. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. I mark crumpton, this is bloomberg. Back to eric at the conference in las vegas. Market, thank you. You were at the beginning of the fall hour of insight and investing wisdom here at the conference. We have the founder and chairman of Equity Group Investments, a legend in real estate investing, and demand in many viewpoints on , sam zell. Sam, i would like to begin our conversation talking about the here and now. President trump came into the office with broad support from the business community. Are you concerned with what you see coming out of the white house today, yesterday, last week and any recent weeks . I certainly am concerned about a level of attack of aphony going on in washington. Ive never heard of a present having more innuendos and leaks going on than what has happening has been happening here. Im not exactly sympathetic with the president but i am very sympathetic that it just keeps happening, and it comes down to, have you stopped beating your wife . Things that to the , was theeds to know public wouldnt otherwise know, and perhaps which congress wouldnt otherwise know, if they didnt find themselves, didnt find their way into the popular discourse by, lets say, a leak . Do you think the amount of activity in the white house is any more today than it was under obama or clinton, or anyone else . We have never had anything like this. We also have no reason to believe that president obama, president bush, president clinton, asked a director of the fbi to stop an investigation. A memot that based on written by the fbi director to himself . You know they are called contemporaneous notes. I understand, but they are contemporaneous notes executed by someone who is advocating his position. Fine, but that shouldnt be held up as the holy grail. I could write notes about our conversation, that would be a lot different than what you like writing. What im getting at. Im trying to understand how to you see things through the eyes of an investor. Are you concerned about the president s judgment and suitability for office . Youability to do the things want him to do, counting on him to do, as president of the United States . Im a citizen of the United States and im counting on the president to be a leader. I think the president has the and all this unfit for office stuff is a bunch of stuff. Just a bunch of stuff . Just a bunch of stuff. You have 24 hour Cable News Networks that have to have material to last 24 hours. They are creating it. Say thepeople might theng of an fbi director, apparent disclosure of confidential intelligence to the russians, the possibility that fbiay have asked for the director to cease and desist on the investigation, are more than just the 24hour news cycle. There are things for all americans to contemplate and debate on. The reality is, i dont know, you dont know, and everything is being put out there as though it has been the holy grail. I dont think that is a valid assumption. Heres another way of thinking about it. The battle cry for president obamas critics in corporate. Erica was uncertainty right . Companies wouldnt invest and hire. A risk taker, that is your business, so i want to know what is worse. Or theertainty of obama unpredictability of trump . Trump ist think mr. Unpredictable. If you look at his cabinet, the decisions he has made, so far, i dont think they create the kind of antibusiness environment that was prevalent in the obama years. Im not sure if that comparison is valid. Ok. As you are well aware, a number of republican senators have expressed concern over what we believe to have come out of the white house. Much of it, remained subject of confirmation. Is goingepublicans, it to be very difficult for the president to advance his agenda. Does that concern you . In thatconcerns me, but question, is the assumption that starts with, without republicans. Without enough republicans. Just as we seen the president s motto views on things, we have seen politicians take strong positions and then reversed themselves. Sam, we have so much to continue talking about, mark mobius will be joining us in just a moment. He is the executive chairman of pregnant resources. Sam zell, a man the needs no introduction. Well be right back. This is bloomberg. You and sam will be taking the stage together at the conference. And not too long in fact. What we talk about . Sam i dont know. Whatever mark wants to talk about. Mark hamill you want to talk about . Dont know, anything sam wants to talk about. [laughter] lets talk about some of the things that you guys both like. Emerging markets, a big part of your business, sam. Mexico, with venezuela and latin america. If we look overseas, india, north korea, what should we begin with . You know what, lets begin with north korea. Sam ok. I think it is one of the examples that the fact that we didnt deal with it 25 years ago, they kept we kept amending over to the administration, and now we are in a very threatening and difficult situation and i dont know what the answer is. It is as dangerous as any place in the world. Mark at the end of the day, we have to have a dialogue with these people. That is why i was pleased when trump said it was an honor to meet this guy. We have to have a dialogue with this guy, and give them some respect. Up to now, nothing has worked. You believe that we need to whom wepect to a man have good reason to believe isnt just a dictator, but potentially a mass murderer . How do we show respect to such an individual . Sam how do we look at what happened in the past, where his predecessors agreed to all caps fuel, all we gave him kinds of goodies, and then they reneged on everything great what would give you any thought to think that the scenario would be different today . Not for me to judge. Sam maybe im too cynical. Lies, and doesnt live up to agreements, over a 25 or 30 year. That,would anybody assume starting today, they would Pay Attention . How much of a risk, could we quantify it, that north korea is in the current state of affairs and poses to finance and investing . Mark it is a very big risk. Its a situation where you are dealing with Nuclear Weapon runs weapons and it is a global risk. If you look at stock prices will get spreads today, and im not talking about the United States specifically, talking about the developed markets and increasingly s, why arearket people not going with the risk . Are saying the world can be blown up with Nuclear Weapons, i will continue investing as world has to go on. It doesnt diminish the risk, just type it. Mark, i agree that this is a special situation because it is nuclear year but the reality is that we have 40,000 u. S. Troops that are subject to an artillery barrage because that has nothing to do with nuclear, that would be devastating and extraordinarily high casualty. Is there any way to quantify that risk . We are on the midst of a 300 points selloff on the dow, but the dow is still close to 21,000. The s p 500 is still close to 2400. If we price the risk, into the u. S. Stock market, where should those indices be . Sam i think it depends on where you think the risk is. The last eight times that they came up with some kind of they were only confronted with it again. It is a question of, what is the risk. Mark, could you put a number on it . Mark no because i think it is just giving it to the given, and e with you about relations and go on with the evaluations that you give them. Sam if the world goes up in smoke, what good are your dollars . Not very good. Asia ande a look at those continents. The Prime Minister has done quite a lot, and how do you look at it right now, mark . Mark i think it is terrific in india. We are gradually bringing these things, and it has been very divided. Theyre coming together, not only because of the tax law that they passed, but because of the internet. Not only in india, but across the world. Excitingt is an situation. Sam i couldnt agree more. It would be hard to find a place more difficult to do business than india, though. Looking foryears the right partner in india, we have finally made one deal, which has gone along and has great prospect, but it is slow. The whole of india has no sense of urgency. Are you committing capital to india now . Sam yes i am. We were always optimistic. This time waseved going to be better or different. It remains to be seen. China . About it is an easy thing to throw into the conversation. The big difference between mark and i is that he is much more involved in public stock and i am much more private the Equity Private equity investor. If they were more more could if there were more market activity in china, would you be there . Sam no. The point at which the chinese generated enough resources that they didnt need us anymore, they forgot how to speak english. I think that is still the case. Mark . There has been a lot said about on theks, particularly chinese credit and Financial System. Are the chinese beginning to find a way to control those ,isks and to allow them to ease in an orderly fashion, or is risk still a possibility a of a disorderly unwind of excess leverage in the chinese Financial System . At a company level, there is no question of the risk. When you look at the major state owned enterprises, the banks, there is no risk. In an instance of planned economy, the government decides what is going to happen to the companies and, whatever is required, will be done. Just like the u. S. , eventually, the people are bailed out a crisis. In china, even more so. You have a situation where the government is looking at this and planning for it, to make sure that the major parts of the economy do not get hit. As an individual investor, you have to be very careful. You can get hit badly on an individual level. Sam are showing off a lot of confidence in the Chinese Market . Me or mark . Sam mark. I think you are showing an awful lot of confidence in the chinese and their ability to execute. Mark yes. Dont know that history suggests that they are as good as you take they are. Mark so far so good. I think they have done a very good job. One of the things you did on, i feel will move like we should touch on venezuela and brazil. Sam, you said that one of the things that this president needs to do is come up with a Foreign Policy or venezuela. Because the contagion risk is very real, you are concerned that it could begin to affect brazil, which has a boatload of troubles on its own, lets talk about that more. Sam i think a better example is columbia. Colombia and venezuela have a , a lot of people from venezuela are going into columbia to shop for things they can to get in venezuela. Or,zuela comes apart some both to the south in brazil, and to the west in columbia. I think there is a real risk of destabilization. Destabilization, how . How will that man of how will that manifest itself . Sam we just got over this. In columbia operating out of ecuador to torment the colombian people. Rule of law oro rule of governing, you run great risks, and from an investors point of view, that makes all those countries suspect. Mark, have you think things play out in venezuela . Mark we got out completely. We are waiting for their next change, which i think is in a minute imminent. How will the change be brought about . Mark low oil prices are not helping them, so they have to think about what they want to move forward with to feed people, close people, and run the economy. Theres no question that there has to be political change. When that takes place, is the question. Gentlemen, we had to take a break for a moment, and the sam, your thing with us. Mark, thank you for joining us. Sims out, Equity Group Investments is here for the next conversation. Mark liesee zery will bec la with us after this. Stay with us. This is bloomberg. We are here with sam zell, and i want us to return quickly to new york and julie hyman will take us to Financial Markets. We saw a selloff of stocks and, julie, what is the latest . Julie i want to turn to the commodity first. Here, you have a lot of green on the screen. That is contrary to what we are seeing elsewhere. Is perceived as more risky. The bloomberg commodity indexes up more than half of 1 . A lot of it having to do with gold prices going up to present as they look for things that are perceived as safe today. Up. E oil is also we saw a in inventory here in the United States. If you look at the u. S. Dollar, that is not turning commodities. It is down for the sixth straight session a few madrid measure it. Further declines are predicted for the u. S. Dollar versus various currencies. Getting to stocks, we are seeing losses accelerate in the major averages. Here is where some of the worst selling is concentrated in terms of sectors. You have the Semiconductor Index down 3. 7 . Transportation average and the Home Builders etf. Anything that is rate sensitive going down with rates like the bank, and semiconductors are also certainly cyclical. A look at the dow on the day, and the movement that we are seeing here. We continue to make a new lows. The have been several attempts at climbs from the bottom. The index keeps making new lows, and is near the new low of the session. All three of the averages are seeing their biggest oneday decline in percentage terms going back to last september. Volume is heavy. On the dow, it is 33 above the 20 day average very the s p is seeing up similar uptick on volume. A lot of selling today on the heavy volume, and the heavy selling has been accelerating as the day goes on. Lets get you caught up on the news out of washington. Heres mark crumpton. Mark with the controversy swirling around President Trump, one democratic congressman took to the house floor and urged his colleagues to take action. I rise today, mr. Speaker, to call for the impeachment of the president of the United States of america. For obstruction of justice. Do this for political purposes, mr. Speaker. I do this because i believe in the great ideals that this country stands for. Mark congressman green previewed his action on the house floor with an earlier tweet saying it was the houses duty to take up impeachment. Two members of the Judiciary Committee are asking the fbi to provide memos from james comer james comey and for the white house to turn over any audio have they that might now fire director in them. Two senators sent the letter to the Justice Department and the white house today. The letter came after the Senate Intelligence committee made a similar request for mr. Comeys memos. Israeli officials are tried to downplay any damage caused by disclosure ofps classified information to senior russian officials that reportedly was provided by israel. The minister tweeted today praising the deep, meaningful, and unprecedented relationship between israel and the United States. States. News, 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. Back you, eric. Mark, thank you very much. Lets return to our conversation with sam. Sam zell. And marc is with us as well. Julian mark is bringing us up to date on Financial Markets and were expressing some surprised at how long it is taking for Financial Markets to become sensitive, if you will, to development in the white house. Why . Tion mark Everyone Wants to sing kumagai and they want to sing the melody they want to see exploding through. It happens all the time. Was why did it take so long for the stock market to react to the wash white house, but it is much more than the white house. North korea, the chinese islands in the south china sea, it is venezuela, ukraine, the middle and, they are all headwinds the New York Stock Exchange pretends they dont exist. When i spoke earlier with ben people aree said blase about these kind of things until it is. Too late. Everybody believes there is no risk in the system. Sam mentioned north korea. What dont we do one simple thing. What do you think the risk read risk free rate should be to invest in south korea. Because they are right there. Pay, if youd took a look at treasuries, i think youre getting paid an ips to push off south korean debts. Do you think that is enough . He is saying that it is not quantifiable. You cant say, do we have enough knowledge to be able to quantify thats risk. Do we know enough about the decisionmaking process in north korea. We operate on the thesis that they dont care about their people. Do the people not care about themselves . Do they use an antiaircraft gun to assassinate an uncle . This is all crazy stuff. We dont know what the facts are , so how can we make an accurate assessment . Eric how do you behave as investors . Stay away fromou things that dont make sense. If i dont understand it, i wont invest in it because other people say its fine. By dont think im getting paid enough for the risk, i will stay away. Eric do you agree . Sam in our office, the most frequent question asked is, are we getting paid for the risk . We are on the business of taking risk. You need to get paid for it and you need to get paid adequately for it. Eric what doesnt make sense . Not getting paid adequately for the risk that you would be taking, beyond korean sovereign debt, for example . It is another way of saying, what is overpriced . Sam amazon trades at 125 times earnings. If you do the math, in five or seven years, in order to justify that pricing, it has to be 25 or 30 of the entire u. S. Economy. The last time that calculation applied was a Company Called cisco in 1997. Why is it any different . Eric so, this is a good segue into retail, the subject i know you both care deeply about. Short, amazoner or retailers . Sam if amazon were a rationally opposed to a as cult, i would imagine amazon, toch is not altered retailers, that have. Eric if amazon is overpriced today, and we know that traditional retail is collapsing sam it is priced to collapse. Eric traditional retail . Sam yes. The only question you are asking is is it discounted enough . Eric correct. Where is your money saver . Retail at current prices, or ly safer with amazon . Sam each situation has a different answer. Me that doesnt understand any Company Trading at 125 times earnings, it is not a hard decision. Marc i would agree with sam. The problem is that, in our core ofiness, there is a Lot Companies that are invested in a less we can buy them in a three or six multiple. 10thing trading upwards of times, 20 times, 30 times, that doesnt make sense. That is not my world, so i will focus on where im getting paid the most for the risk. To twoure talking valued characters, different kind of approaches. Eric do either of you see value in traditional american retail rates now . Sam generally speaking, no. Again, tell me what the impact of the internet, only with the impact of somebody, a friend of my wife, was telling us the other day that she belongs to thathing on the internet sense or eight dresses a month, she picks the want to once, sends back the rest, without any cost. How does a store compared to that and can beat with that . Marc when we look at it. When we look at it, it is equities of these companies have gotten hurt quite a bit. Eric what about the bonds . Marc far more. The ones that are leveraged more than that, j. Crew, rue21, a of those are having real issues because those bonds are trading around 40 and 50. The problem or opportunity for us today is, which of these companies is going to survive, and what is their cost structure . Sam and, at what point do you want to play . In a way, were describing a falling knife. He wait until it bounces off the ground and then catch it on the rebound, or do you try to catch it while it is still falling under the assumption that you know how far the ground is . What i would do, especially with retail, i want to see it bounce. I dont want to catch it. Want to see where because the know, youyou dont and i, or salmon die, used to go to the stores and shop. My kids, have zero interest. Knowi dont know, where is the Tipping Point . I dont know whether to be point is. True j. Crew, is there a bounce for traditional retail, or do they go the way of blockbuster . Issues thatthe real everyone is looking at today, and trying to quantify is, are we at the Inflection Point where now on2 or 14 of retail the internet . Is it about to go to 25 . Im afraid it is. As a real estate guy, i look at these companies i mean, already, maybe 50 or 60 of the space in america is obsolete. The truth of the matter is, there arent enough churches to fill the big empty boxes. Speaking of Inflection Point, people thought that 50 was an Inflection Point for oil. Oil is proving to be a much more challenging industry to figure out to then that. You have both been active in energy. With where oil is today, what interests you . Sam for us, we are still bargain hunters. We are still looking for situations that are less dependent on the problems of oil , and more dependent on the problems of the producer. I think there is a lot more opportunity today in, frankly, great dancing overleveraged players then betting on the price of oil going to 60 or 40. I would marc i would say the other issue and why we are investing in that sector, is you are seeing the cost of extraction has gone down dramatically. It continues to go down. In the stack where you had to have oil at 50 two end up breaking even, now, the karst is probably 40 or going down. Really, the opportunity is today what the opportunity is today, it is not a commodity. Ist you are doing today, saying im going to deleverage these companies, and i now have the optionality that, even if oil goes down to 30, i am fine. Int im doing is, investing a really good company that, even if oil goes down, i will do fine. If oil stays where it is, i will stay exceptionally well. To do that, you have a massive deleveraging happening today, and everybody borrowed money when oil was at 100. We have been able to refinance some of that debt. Wiping out a are lot of the debts, and as you do that, that is high you create to the value. The real play in the Energy Sector today is on the restructuring side. As well as playing at the top of the capital structure. And it be anybody that plays in the bottom, they make commodity back. That is the only way they will get paid. So, you are looking for opportunities over Leverage Companies . Sam yeah. We bought a couple refiners this year. Acids that are energy related, i and when i was focused on real estate, the issue was reflection cost. When we were buying a refinery at . 10 on the dollar, which is going on, or Something Like that, that creates a lot of optionality. Marc we you marcs are investing on a couple and, part of that is, for these rigs, they costed 750 million when they were first built. If you look at companies today, in the same industry, theyre going for around 450 million to 500 million. A third of the value has gone away because of oil prices. We are able to buy into companies that are creating the same rigs around 250 million dollars. Youre creating a 50 discount because you have to do huge restructuring. Youre getting massively overpaid to end up doing these restructures. Marc, thank you for joining us. Samis saying with me zell is staying with me. We will talk about the Trump Administration. Stay with me. This is bloomberg. Eric i am erik with the incomparable sams theyll. I want to get back to an issue we havent touched on. I know it is important to you. ,our parents were immigrants and you write about it in your book. You have argued that immigration has been and should continue to be the lifeblood of america. Position ondents immigration and the actions he has taken thus far putting the countries prosperity and future at risk . Sam im not sure i could tell you what to the president s policy on immigration is. Eric fair point. Sam he talks about a lot of subjects that have come up with. Ariations subsequent i think the bigger question, extent, the to some immigration is much more security oriented than immigration oriented. About the lot mexicans, but the reality is, since nafta went into handling illegal immigration from mexico, there has been barely anything. What makes america exceptional, is that immigrants are selfselected. Risk, and,aken a therefore, they are much more significant to society. Toc perhaps a better way phrase the question or address the issue, should the administration or any administration be working harder to try to attract the best and brightest to the country . Whether it be through the h1b visa program, or others. Eric schmidt said we bring people here, educate them, and get them out kick them out. I dont support that. I think we should always be an attractive a place as possible. Everything that has gone on, the u. S. Is still the number one attraction on an immigration point of view, worldwide. In the bush era, when everybody was complaining about bush, what i thought was so funny was, they would give you five minutes of complaining about bush and then they would say, where is my visa . That is the attraction and that is what it is. Should this administration be undertaking highly skilled workers . To have ank we want philosophy that says we want to attract the best and brightest. Eric and not limit it to a quota. Sam and if we do, we will prosper accordingly. Eric and if we dont . If we go down the road we appeared to be going down now . Sam i think that there is a serious risk that we become adjust to unable to what is going on. Eric sam, it is an honor for you to be here. I will be back in just a moment from las vegas, to tell you whats more is coming. This is bloomberg. What more is coming. This is bloomberg. Eric live from las vegas, im has left for zell me. Im going to be back in an hours time talking to troy of sky bridge capital. It will be with us at 4 p. M. Eastern, 1 p. M. Pacific in vegas. Therrows lineup includes chanos. M thats an plenty more. We are taking a quick commercial break. This is bloomberg. Politics the Trump White House in crisis. Well hear from a former fbi who say trumpl should dread the day james comey truth come out. Equities Holding Seven day rally. Investors be looking to put money now . Well go back to the interview with the ceo. The close of trading. Its pretty slight here. Seeing bounce off the low. Have a little bounce. Each time they tried, they have failed. Were seeing heavy volume today. Volume on the dow and s p running more than 30 above the average. There is selling and a lot of it. Im putting rest of 2000 up here. Its selling its even more notable than the other major averages. Russell outperformed post election. Benefiting more from Trump Administration policies than even the larger caps. Selling off today. What we to make of the events in effect on the the market . You can use a couple of different proxies. You can look few different proposals that the Trump Administration is put forward. Them is tax reform. Taxot the goldman high stock basket. We seen initially after the stocksn, hes high tax were outperformed. They were seen as benefiting from tax reform. The political turmoil hit washington, we are now sighing that basket under perform. Is repatriation. Passingd chance of under President Trump. Overve a custom index repatriation in stocks. S p 500 in flu. Seeing that repatriation in neck. Ning neck ratio of the two is lowest that its been in a year. Is one of the biggies that has a lot of cash overseas. Cash in reserves held overseas. Today. F more than 3 its not just in stock this this is being felt. Vix hiking. Year yield ten plunging by 11 bases points. One day dropggest since last summer. You got people buying gold. Where are people looking to put their money . At least for today, theyre looking for safety. The primary to be driver. Thanks. House in full damage memool mode as the comey royals on. It was first reported by new york times. Confirmed the cone tent. For lawmakers are calling james comey to testify while said he has ryan full confidence in the president. Our National Political reporter sahil kapur. Speechsident did give a today in new london, kentucky. Tweeted. Sean spicer did not hold a press briefing on camera. A lot of getting at th information from the white house. The president has not mentioned the latest revelations asked thes in he had fib to stop look fbi to stop into Michael Flynn in connection to russia collusion probe. Is a grim moment on capitol hill for republicans. Its the grimmest its been since the access Hollywood Tape released last year before the election. Republican agenda is facing many questions right now in of how far it can go. Republican committees in house and senate, are mobilizing. Both of them are run by republicans to demand answers the administration. In terms of the overseas trip planning,resident is thats still going ahead as scheduled. On friday. Ving has there been attention to turn to that . Theres been reporting that the president is sort of dreading this overseas trip. Giving what he might be facing. Hes going to saudi arabia to about to the muslim world. Its hard to know how thats going to play. Particularly well over there his image in that part of the world. Its his opportunity to look president ial. Its his opportunity to do what president s do and to speak for the globalstates on stage. Its difficult to see how that can take away whats going on questions thames coming from this white house. Our National Political sahil kapur on capitol hill in washington. Our nextt to bring in frank retired fbi senior montoya. Thank you so much for joining us. Well get into more of the intricacies of the fbi. You, you said trump should dread the kay comeys truth come out. Closely with james comey. How closely do you think hes here . Ing the fall out when do you believe he will speak out . Theres no question hes to it or others paying attention to it. Him. Volves hes a central figure in this. Wered like to add to it, talking about individual highest character. Nd moral this is really about speaking out when its the right time to speak out. I would remind your viewers as well, theres Ongoing Investigation and hes going to be conscious about that. Therehink soon enough, will be appearances before congress or in other venue. Wherel be before congress he is asked these questions and he will respond to them as he knows how to do best. Hes turned down a request from the Senate Intelligence to provide evidence in private. They have asked him to do in public. Why do you think hes turned down the opportunity to speak now . Doing it publicly, theres an opportunity to put out this piece of the information. Venue orin an official forum, in conjunction with the out ofgations rupp capitol hill. At the same time, he wants to be careful about anything that he might say that could have an impact Ongoing Investigation. A little bit of tight rope there. But at the same time, its about truth out. I think that, especially if its toe, i have no reason this memoelievable it, if out there, they need to see the public light. They need to see it in the proper form. Until he speaks, we have the with here. K give us background context. How important the fbi memos like james comey wrote . Some have noted they can be used a trial. Ce in what situations would an intelligence official like james memos like that . Thats a great question. Said in another interview, none of us were deaf and dumb to what could be happening. Was an investigation that was ongoing. He sits down with the president and the president may say some things that are in jims mind, concerning. He may not pull his notebook out at that moment and start taking notes, hell was said. Hat hell make a record of it. Stress this, there are Ongoing Investigations. At the same time, we teach our all the time that if it didnt write it down, then it didnt happen. Thats important. Testify to,hat we there are direct result of wengs that we report once hear them. Those are things that are going to happen. Those are things if he had about them, hes going to notate. The going to report for record. Hes going to do if, knowing at some point, it could be theyverable information or could be things that can subpoenaed and appear before matter. For that frank, you wrote an. Oed what is the difference when the president of the United States is doing the asking. I ask an additional question to that. Is it the fbi directors job to know the difference here when its offhand comment, let the versus a threat . Thats a great question. Is an offhand comment from the president of the United States . Especially when hes talking about an Ongoing Investigation. One of the things that was that, the reason why he asked. Because he was a good guy. The director didnt disagree with that. But at the same time, should the president of the United States be making those kinds of statements whether they are request or order given the position that he occupies. Is essentially an official meeting. Its in the white house, its between the president of the United States and the senior oficial the director of one his premier Law Enforcement and intelligence agencies. When i asked that question, the reason why im asking, is there really a difference . Keys to me, one of the issues in this discussion. One think thats been noted, theres a conventional wisdom in washington. The way things work. Wisdoms, you dont pick a fight. You never pick a public fight with the fbi. Do you presume that this leak of the james comey memo is just the tip of the iceberg . And theremore to come will be more strategic leaks in the days and weeks ahead . There maybe. The things that you have to look at in this regard, this isnt the about institution. This president has been very personal on a number of instances. He compared us to nazis at one point. Verye are taking this personally. Comey was of james something that struck everybody stunning or unbelievable or as the fbi Agent Association said a gut punch. Was visceral. Some of this may be reaction to on james comey character. Calling him a grand stander. This too, the word is going to get out one way or other. I think that primes the pump. Im not a fan of leaks. I will tell you that, when i have something to say, i will identify and stand up and say it. The matter is,of sometimes Congress Needs a push. I want to turn your attention now to a comment that was made public by the acting director. Said nothing have been done to impede the russian investigation. With the acting director had said that if ultimately anything have been done to impede it . I think what you have to take out of that message it was part of his testimony and to congress. What hes really saying, nothing is going to impede this investigation. Not a comment or a statement from the president of the United States. Anther it was request or order or whatever it was. Not from any Public Opinion out street. Not from resistance or issues, questions from congress. This is going to be one of its full speed ahead. They are going to do everything they can to resolve this. Call bring the investigation to a logical conclusion. Frank montoya joining us from salt lake city, thank you so much. Its important point, context is everything. Frank said that. Say,because you ultimately, i will make the watchinge, that were donald trump coming down the force oneis plane air there. Hes arriving at the joint base andrews there. Coming from new london, kentucky where he was giving the theencement speech at United States coast guard academy. Medians,discussed the did not mention james comey by name. This is bloomberg. This is bloomberg markets. Turmoil engulfing President Donald Trump is spilling in financial market. Stocks fell. Spikeds the vol toilty higher. S p 500 is how much of the trump the is already baked into outlook. Joining us now is bloomberg equitygence chief strategist gene martin. We had this great rally that ended on march 1st. We sort of waffled along. In my opinion, the trump bump the past. Y in record high just about 2400 it was so far above the march high. Now evidence suggest that we triple top the 2400 in the short term. A really greatad season it wasnt enough to get out of that consolidation phase. Weve been questioning how much of the optimism will manifest itself. Earnings optimism is fading. Earning season come to a close. Retailers have not done well. Its not a huge influence on the 500. Estimates along. Ith the s p 500 you can probably tell from that in blue. S you see since beginning of the year, analyst estimatings flat. En they came down right before earning season. They came back up reflecting expected q1 earning season. Not a lot of change. Better thanr was expected. That resulted in better 2017 expectation. They didnt increase their estimates for forward growth. They took that First Quarter for is. It but wasnt anything in First Quarter that said i should have increased expectations that solidify the rally weve seen. Got to find in next one. In my opinion, theres a close time,onship over especially between the economics index and the s p 500. Trigger pointhe for stuff to start experience weakness beginning of magic. Earnings brought you can back to that march peak. Takes strong improvement to make investors feel a lot more confident. That. Havent seen another trend that you brought been groups that have losers from the trump trade are prevailing. Well. E doing fairly here,llow line at the top this is the tech index. People thought this was the sector that would lose out the trump economy. Its kind of interesting to see the rotation thats occurred march 1st. Its been leadership by tech, by sector, even healthcare has been in this rally. S pg the leaders in the s p 500. Even though theres so much uncertainty. Seen since march 1st is a shedding of expectation for the supposed winners. The financials the industrials and material name. Back or a bit of optimism embedded in the prices rally. Es that didnt so far we havent seen markets react to the political headlines. Does that mean its a whole new when negative headlines come out, you will see stocks go lower . Lot of this depend upon what happens in the bond market. A big riskinly is off day. Months. Weve seen in nothing would indicate were entering a trend. 500biggest loser in the s p is financials. Why financials . Well, lot of that is reduced for fed fund and rally thats gone on. Repeal of argue, the regulation as well. Gene martin adams thank you so much. Still ahead, its been the worst stocks. It doesnt mean you cant trade the 2000. This is bloomberg. This is bloomberg markets. Optionstime now for insight. Thanks so much. Todays option a day we dan, what have had. Finally that long awaited spike in thetility, big plunge markets. Tell me, when you guys are onking about whats going today, what is this really about . Is it really about a concern trumps political future . Has going on . The catalyst. Ts we reached Critical Mass in washington. The markets is adjusting for the price movement. We had volatility, now youre seeing the price movement. Up in theick percentagize from a level wise. Still pretty low. Well have to see if it continues. Definitely readjustments in the volatile space. When you talking about whether whether this will continue, something you pointed look at vix futures. You have that on the bloomberg looking at the vix curve. For viewers, today is in green seeing the up you look at tick in volatility today versus yesterday. Month out or two months out, its not as big an increase. You . Does that tell really what it looks at, pushing that risk towards the front of the curve. Its outlier today. Vix you look at the futurings theyre not reacting in august or september or back month. Now, all this risk is being priced towards front end of the curve. Perceivedeing something that will be perpetuated through the summer and fall. Just quickly here, i want to get to your trade. Noticing nikki haley small caps under performing. What are you thinking today . Im looking at protective spread. Financing that put spread with a sale. Lower. Markets move it protect each the downside. Goes through movement. This kind of plays to that 135 to 130 move. Think that small caps center will continue to be more vulnerable than large caps in the market . I do. I think if this trend continues, do see slowness in economic, certainly the bond that today. Cing also the fact that were seeing the dollar weakness. Also the leadership over all has been in the large cap space. The russell under performing to some degree. Thats another reason i think vulnerable. Dan, thank you so much for what hass today on been julia, a notable day in terms of volatility and risk aversion. Finally, thanks for that. Were watching markets. A look at where things are trading. By 311 points. W down 1. 5 . Got yen quality. The yen rallying from gains of 1. 8 . Losing 10 bases points in bonds. Show you gold there as well. By 1. 8 . From new york, this is bloomberg. The Senate Intelligence committee has invited former fbi testify james comey to before the panel. Also requested copies of his emmow memos of conversations with President Trump. Warner wouldnt say if comey accepts the invitation. The formerident detector will appear. The committee sent a letter to director Andrew Mccabe requesting notes or memos on his talks with the house or the department of justice related to the russia investigation. Democratic congressman al green today became the first member of Congress Take to the floor and call for President Trumps impeachment. Siting obstruction of justice and circumstances around former comey wasor james fired. Mr. Speaker,cause theres a belief in this country law. No one is above the that includes the president of america. D states of congressman green previewed his action on the houseoo
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