Yesterday, we were on holiday. Barratt developments today decimated on how you choose to define that word. Most of these declines look exactly the same as far as the size of them yesterday. We had yet again a record low yield. That is really the story of the market. Look at that. Down to 1. 38. Extraordinary decline in yields throughout the world. Matt it has been destroyed in two weeks or depending on what you choose. It means down by 10 as well. Decimated. We see a 130 handle on the british pound. It brings it to less than 170. Joe the 10 year chart has been slammed. It level in nine years. Planting very high levels. Youve also got a look at oil. Day. On the more signs of rising stock. Enoughot going to be hot to use your ac. The chartshow you that ive got here, joe. Pricetobook is less than. 1 . I have compared it with Deutsche Bank which looks like a real winner. This bank in its third bailout possibly right now. And worth less than one billion euros right now. I want to take a deep dive in my terminal to look at the intraday action and markets. It wasnt a very pretty day. It happened just after 11 a. M. When fbi director james komi recommended against indictment of Hillary Clinton in the email scandal. There has been a lot of hype building up to this recommendation. You can see there was an immediate spike. That is that headline flashing the wire. You see s p futures immediately jumping up. Thing. D be one ultimately, it was like s p situation. Sot you thought he was negative. Joe it was fascinating to watch. I am taking a deep dive to Harley Davidson because the on twitter last week rumors that there are the a takeover. And analyst saying there is no takeover speculation and you can see it turned around. I added in sales estimates. If you take this out further, it looks the same. People tighten around toys. Most people think of Something Like a motorcycle as a toy. The latest and u. K. Politics, two contenders. He covers british politics. The firstatest . Round of voting. And one candidate was way out in front. A slightly surprised candidate. Having knifed Boris Johnson in the back. For the fifthplace, they had crowd and fox. He dropped out. He is the candidate with the experience. They can unite the country. You mentioned they have endorsed theresa may. The vote will be put to conservative Party Members all around the u. K. Powerful prospects if she makes the final two. We just dont know. Said that the conservative mps have been the more experienced candidate. Being generally quite wellliked, they would be a shooin. But ive gotten an awful lot of things wrong. The thing that might do for her is she was on the wrong side of the briggs it debate. She argued halfheartedly to remain and it was the wrong side. Conservative activists voted overwhelmingly to leave. Woman even is there though she is a far less experienced politician. Declines in commodities producers let stocks lower today. It rekindled concerns about the exit from the European Union fueling Slower Growth putting it on the break of Global Growth. Lets ask Bloomberg Stock markets reporter what is going on. It is interesting that we are back in a situation where it is down. We can assess what impact they will have. It was ridiculously crowded asymmetric trade. Back last week. This. E investors assess from english and european companies. They looked at where people positioned themselves. And the effects continue to come out. It does tell you that you can expect more. Matt today is just like a positive or refreshing. I think we have the strong that and theetween perceptions of the brexit vote. Over to Start Talking about the fed and the i think we are seeing that. Closely people to look at sustaining the geopolitical volatility. This took a hike off the table and are thinking about going be ard which could catalyst for the market. We will leave that earnings contraction by the end of the year. Happen,hat doesnt there will be a lot of people that want to be wrong about that because its been all year. If that doesnt come to fruition, it could be potentially disruptive. The bonds have been rallying. Stocks have been ripping face. Taking a breather on stocks in tenure and 30 year deals. Will and earnings list pickup ields as well . It is the sort of move that evolves with bonds and stocks. Maybe they are playing catchup. Its a fair amount of people that dont view the bond rally and it is sort of a liquidity move. And momentum play as well. Fueling even more brexit concerns. This is bloomberg. Lets get to first word news this afternoon. James comey says Hillary Clinton was extremely careless handling classified information during her tenure as secretary of state. He at a news conference, said no responsible prosecutor would charge her for violating email protocols. The department of justice makes final decisions but we are expressing our view that no charges are appropriate in this case. It goes to federal prosecutors that will make the final decision about whether to indict misses clinton or her associates. Meanwhile, donald trump took to twitter today to react to the decision. Trump said general David Petraeus was in trouble for far less referring to the former director who pleaded guilty to giving classified information to his mistress. Decision unfair and said the system is rigged. A parliamentary inquiry concluded there were multiple intelligence failures. Overlapping agencies should be placed with a unified structure. The Prime Minister benjamin than yahoo has opened a tour of africa. His first stop was uganda where his brother was killed while leading a daring Israeli Rescue mission. Up businessto drum for companies and will travel to kenya, ethiopia, as well as rwanda. Global news powered by more than 2600 and analyst. This is bloomberg. Joe what did you miss . Has been decreasing a lot, outgoing Prime MinisterDavid Cameron talking about reducing the deficit. We have taken huge steps over the last six years to get the budget deficit down to make the british economy more competitive. To make us an attractive destination. Stephanie kelton, economics professor at the university of missouri kansas city joins us via skype. Great to have you on the show, finally. Honestly, they struck me as completely tone deaf. Especially in the wake of the brexit vote. People andidea that businesses and families are most needing to hear at this moment in time is that the government is going to remain steadfast in its commitment to pursuing austerity to bring a budget into balance by 2020. We see a lot of people that are , that we want a yes or no. The answer is no. For many of them, do i want to it was remarkably tone deaf. That is what people need. Disagree on economics and on the understanding of just what it is. Its what people want to hear. Railing against the understanding of the deficit for a while. What is the key thing they get wrong . Beginning point is that talk about the need for behaving responsibly. They get spending in line with income. In the outset and the Public Sector. It is the idea that there is something inherently special about getting the budget in balance. Expenditures to equality. That somehow, all other problems are solved. Fight is not so much a goal of balancing the budget. In the u. S. And the u. K. , there is general agreement that balancing budget is a pot of gold for government. The difference is the pace at which one wants to go about that. Calendar year, fiscal year, lunar year, parliamentary cycle, or budget cycle. It that is where the most intense. Itselfquestions the goal which is something i think is fundamentally problematic. Haveinstream economists been concerned about the wait is vote went and think it is ultimately going to be bad. If this is what it took to deliver a wakeup call the politicians and to get a government that thinks differently about this, could it have been a good thing . I guess so. I think you said that really well. Know that thats going to be the ultimate outcome here. I would like to think that what this has done is grab policy and politicians by the shoulders and shake them into reformulating their current plan. This is not what we want from you and not what we need. We need the intensification of competition for resources. In britain, as the Public Sector shrunk and reining in Public Sector spending, while celebrating the idea of open corners. You have financial welcoming and more people that will be part of europe and our friends and neighbors will be welcome. It is fine unless youre cutting programs and causing forced competition. Increasing anxiety and frustration among the population. We have our own election in november and there is a lot more talk that we need to have more fiscal stimulus here and we have reached the end of our rope with monetary policy. What should the government spend . Oney on economic, where are the multipliers the biggest . There is a strong case to be made for publicsector investment spending. Having a really high multiplier relative to other things the government can be spending on. Spending to promote advancements in innovation. Something high on the list of priorities. We have to be willing to talk about these kinds of things. ,aybe a Government Jobs Program not just infrastructure, which is a problem because infrastructure is mainly creating jobs are having some technical stuff, but thank you for coming on. Looking forward to having you back. Crossing theg news wire, medivation is in a confidentiality pact with santa fe. They bid for medivation and the Company Rejected that bid. It is now saying it is in a confidentiality pact after others have reported that the two are in talks about a sweetened deal. One of the prospects would be that sanofi offers performancebased metrics to increase the bid. We have seen reports that medivation once about the dollars a share. We will continue to follow that breaking story for you. We will take a look at Goldman Sachs. Priced performance, the bank is starting to lend more and more let more and more people go. This is bloomberg. Joe im joe weisenthal. The swiss yield curve is what you might have missed. Lets take a look at bloomberg. All the way up to 30 years. The entire sovereign yield curve is negative. You can barely see it. 073. I dont even know what to say. Just more incredible numbers in the world of government. Matt the question is, and you have been asking it, why so low . People say because they are broken. Bonds continue to rise in value. Favorites wed worry about are getting no yield. Iowas always think the people saving for retirement, if youre looking for stuff that will pay you in 10 or 20 years, it is matt a good point and a good distinction. People that dont need to worry about retiring his executives at Goldman Sachs. Week, we had reports of 150 job cuts. Not a huge amount because they have 36,000 employees. The first we have seen since 2012 this year. The salary and bonuses. The last five years, a climb there along with the climb. Matt we focus on a new path with Real Estate Investor tom barrack. This is bloomberg. You guys be good. Ill see you later [ bark ] [ bark ] bye. See ya pal. Ever wonder what your pets do when you leave home . [ laughing ] aw you cutie pie. Aw. Aw. Aw. Aw. [ barking ] [ washing machine running ] partys on know what your pets are up to with xfinity home. Xfinity. The future of awesome. See the secret life of pets, in theaters july 8th. By switching to xfinity x1. Rio Olympic Games show me gymnastics. X1 lets you search by sport, watch nbcs highlights and catch every live event on your tv with nbc sports live extra. Im getting ready. Are you . X1 will change the way you experience nbcuniversals coverage of the rio Olympic Games. Call or go online today to switch to x1. Lets get to first word news. President of obama and Hillary Clinton on the campaign trail in north carolina. It marks the first joint and comesppearance hours after the fbi said it would not recommend charges over thers. Clinton improper handling of classified information. Meanwhile, donald trump is also in north carolina. The united kingdom, theresa may with a clearly in the race to succeed David Cameron. She won big today in the initial round of voting to leave the conservative party. The Transportation Security Administration plans to use scanners to inspect carryon bags. The agency will test the technology at the Phoenix Airport by the end of this year. The process is automated and security workers were only checked the back if it is something suspicious. As former secretarygeneral has had his band cut. Fired over world cup ticketing and broadcast rights candles, plus expenses abuses. He was banned by the Ethics Committee over several charges. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Lets get a recap of todays market action. Sawmost interesting thing i were not in equities today. We did see equities fall around the globe. The ftse rose, of course. As the pound came down, so the pound was one of the most interesting aspects. I have a chart of the pound back to 1971. You can see it is at the lowest since 1985. Unbelievable chart. He made his fortune investing in real estate, amassing an eclectic collection of properties. Is applying what he learned to his 1300 acre ranch in california. Here at happy canyon vineyards, it is easy to mistake tom barrack for an ordinary one maker. The vine is capable is capable at every level. He looks and sounds like an expert. Each is hand sculpted to create the right umbrella area to nurture that particular branch, and as the season goes on and they become more arrived, then it is getting to that perfect sugar content of knowing when they will be harvested. Is anything but typical, a billionaire investor who made his money in real estate. He could have bought a trophy property in napa or france. Instead, he built a vineyard from scratch on this 1300 a Karen Schneerson of barbara. Buying a great vineyard is the same as competing against Goldman Sachs and Morgan Stanley in the auction of a company. So when people come back and say we updated Morgan Stanley and Goldman Sachs, i say, are you kidding me . Thats a you make money by paying the highest price . On wallns learned street applied here and sundrenched a southern california. Is exactly like investing. You may have a great year and get a little confident and thank you from the tools, and then you get arrogant and that next year Mother Nature says let me teach you a lesson. He started growing grapes 20 years ago. How did you decide what kind of wine you wanted to make . Well, its like all things i knew that i had no clue. Liked toew what i drink, but what id liked to drink was anything with a cork. I did not have the taste level, so i surrounded my self with the smartest people who did have that level and said, you guys figure it out. He knew who to call. His Investment Firm previously owned one of bordeauxs top wineries. Exactly thee has same characteristics as bordeaux , soil, temperature, sugar content at the end of the season. We have about 60 planted acres split between cabernet, solving. A four wines that are a blend of it all. Commercial wine producer would timese five or six because they go for yield. Again, its like investing. You can buy 10,000 mobile homes or you can buy one great apartment in brooklyn. , a dealmaker since the 1980s it finds era levels and does is for everything he does at happy canyon. Like polo, another passion. Everything i do as an investor is about risk management. The main thing is avoiding disaster, so the game itself became a place to practice risk. The polo season from may to september, he hosts three matches a week at happy canyon, and players regularly practice on his fields. Wine, two expensive pastimes. Barrack says he is not to bother that the winery does not make money. Whats more important is having a project his children can share for decades to come. If my family is interested and passionate and leaves it a little bit better than the year before, we have been successful. What do you say to somebody who looks at this and says, that is raisingrack, he polo ponies, growing wine, but not doing it for a living. He is just a rich dilettante. What do you say to that person . I would say come and live with me for a week. If you can keep up with me, you can be here and think you are a rich dilettante. You better wake up every day and get out there and compete. Because of the doubt, somebody with cleats on will run right over your back. To take anything for granted, so i am very grateful. Barrack billionaire. Barrack tom barrack yields fall to an alltime low. What does this mean for the feds great timeline . This is bloomberg. Time for the Bloomberg Business flash. American express will debut an online loan platform for Small Business clients. The venture will approve loans in minutes for cardholders who can use the money to pay vendors. Potential yahoo suitors will submit a third round of bids tomorrow. The final Selection Process is expected to take place in july 18. Remaining bidders include ver izon. Blackberry will no longer manufacture the beloved updated model of the original that made the company is smartphone leader before the arrival of apple. The ceo introduced the classic and 2013. Alas, it is gone. That is the Bloomberg Business flash. Whatd you miss . Policy approaching a potential if Event Horizon according to our next guest. He joins us with more. Thank you for joining us. Here and talkome about how rates are going lower and lower on government bonds. Where does it end . , thelike the equity market bond market is not rejoicing at 150, 140. It is deftly a search for yield. Why not . Be wouldnt the bond market super psyched about this incredible momentum . I know a lot of people who are long bonds. The issue is that at some point there is a lower boundary, even though we have tested those lower boundaries in europe and japan with rates going under zero. There is a point where there is only so much total return left. About thetalk different factors, why yields continued to plunge, centralbank policy, longterm secular stagnation, is there a momentum factor of play . Are people jumping on the bond wagon because it is going up to the moon . There are valid concerns about where growth is heading. The fallout of briggs it is still unknown. I brexit is still unknown. Mean itt necessarily is a great longterm investment strategy. It is obviously a great trading environment when it is momentum driven, but you have to take a step back and think about what we are signaling here. Buy bonds before other Central Banks by them, is that an environment we want to foster . Markets wouldthat like to see stability. Then you have confidence and other markets. I get that. I understand. Andns continue to soar rates go negative, then the world does not make any sense anymore, but at what point do you see a signal that that is going to turn around. So far we have blown past every signal. Everybody has been on the wrong side of this trade for years. This has surprised even me to great extent. I think that, look, we need to ae, people realize it is political process that will take a long time to play out. You can see a return of inflation and return to more sustainable economic backdrop, are getting nervous that we are at the end of the business cycle. You could get to a point where they dont go anywhere, yields, either. Basically this environment has gone too far too fast, and no one ever catches a falling knife. 1. 375 on the u. S. 10 year today, meanwhile the s p 500 close to record highs. People talk about differing messages, on market saying one thing, stock market saying another. Is that the right framework . I think you need to have rates where they are to keep your other assets as highly valued as they have been. An order to have a continuation of the risk market rally, central bankers and policymakers think that will foster growth and more earnings, and that also investors having to put their money somewhere, but i think you need to have both. Vote,er the brexit markets initially dipped, but then the ftse rallied hard, and not just the footsie, equity markets around the world, but it was clearly because the bank of england and the ecb were saying we will now buy anything. It had nothing to do with the economy. It wasnt attached to the fundamentals of the economy. What do you see as far as the fundamentals here. This chart shows the cleveland fed preferred indicator of growth, the 10 year minus the threemonth spread, and we come down to a level we have not seen since before the financial crisis. 1. 12 right now is the spread, so what does that mean when investors are willing to take the same amount of money to lynn the government for three months that they are willing to take to lend the government for three months . Some people really have no choice. There is an element of that going on. As we all know, negative rates are forcing money into our markets, so there is that capital grabbing. Is probably the flight to safety region to go into. I think it is benefiting all asset classes. Said thisveland fed may forecast less than 2 growth this year, maybe a 10 chance of a recession by 2017, which is not that far off. What do you think . The challenge facing whattors is to disentangle is being communicated from the yield curve as being flow driven and this move towards you pick up versus what kind of signal the economy may be heading into. I think that the jury is still out on that one. Could we see 1 on the 10 year, 2 on the 30 year . We trade on price, and bond markets go up in value. ,n order to broach those levels completely disconnecting from , we would need to see another crisis unfold, not just this chasing of yield and people covering shorts. If for example france or italy were to vote to leave the European Union . Even the concerns around the italian banking system. It could push the 10 year yield closer to closer to one. The price of silver surged over the weekend. Next, who was behind that move. This is bloomberg. Whatd you miss . Silver stars why you are enjoying your fireworks and barbecue this weekend. Gestmetal posting its big twoday advance. There certainly were some fireworks and the commodities market. What a horrible pun. You started it. I thought you were going to tell me what you barbecue this weekend. Was it on facebook . I will look at it after the segment. Why was silver so heavily traded . There is a lot of speculation that chinese speculators have come back into the commodities market. Earlier this year, they drove up commodities in general and the chinese regulators had to clamp down. It seems like that is the case again. Can you bring up the chart . The reason why people are saying day traders are getting back into the market, it has the given quite precipitously some of the concerns we had about Global Growth and brags it brexit. The volume of the futures traded in silver, you can see how high it is. In particular that spike during the last few days here in june and july. Analysts say that is a classic case of day traders coming in. These futures are not open for long, a lot of volume, and it happened overnight. It is likely to be chinese retail investors. Talked about the surge in iron ore, these are localized prices and localized markets. Silver is a global market. One pricedes at essentially all around the world, so theoretically you can time it and make money from that. You could. Some analysts say that even with billionge of 180 attributed to these day traders, it is still not enough to move the prices. All it means is that commodities are going to be volatile. It doesnt necessarily mean they will push a certain price trend. Is of their a big wall street bank that runs the silver market . You been reading the blogs . Somebody has it in their vault . Conspiracy theories about j. P. Morgan running the silver market. Are the chinese so interested in commodities . Where does it all come from . Why suddenly this year . The theory is that a lot of investors thought that with more stimulus going to the chinese economy, there would be an industrial boom and lack of supply. Big day there were traders and stocks. The chinese put a lot of regulations down, so they look for new markets to go and access. I think that is pretty understandable. It is. One of the quotes in the bloomberg story which is i trade these futures because i am bored. If there was ever a reason to bed to money, maybe that would be your reason. Thank you very much. Tune in at 7 00 p. M. For a daybreak asia with betty liu in new york. What you need to know to get up tomorrows trading day, next. Whatd you miss . German factory orders, no, you didnt miss them yet. Arewould miss them if you not paying attention at 2 00 a. M. This morning. We are expecting a 1 gain month over month and a 0. 9 percent gain for the year over year figure. Dont miss this tomorrow, u. S. Trade balance due at 8 30 a. M. Eastern time. What effect the Global Economy and the dollar has on trade. Minutes fomc are due out. It looked like there was going to be a hike, but were looking to see what the fed was thinking about the balance of risk. We will pore over that for you tomorrow. Today. K you for watching we will see you back here. Have a great evening. This is bloomberg. The candidates who run for office and the fbi investigators who decide whether to prosecute them, these are their stories. John tonight, a political noir starring Hillary Clinton. , North Charlotte carolina, where president obama and Hillary Clinton made their debut on the trail. Mark is 160 miles away with donald trump, a competing rally