Trump waving cargo restrictions to help speed aid to the hurricane ravaged puerto rico. He has ordered the jones act waived for shipments to the island. The waiver will be in effect for 10 days and cover all products being shipped to puerto rico. It is a maritime law of acquiring shipments of good between two you a sports to be made with American Flag vessels manned by american cruise. Tokey is warning citizens leave the autonomous kurdish reason region in iraq before it cancels flights in the area. Flights would suspend it follows a similar one by baghdad after they held an independence referendum this week. The European Union will look beyond its impending breakup with britain and how to build a Common Future during the twoday summit that began today. The french president , emmanuel macron, have set out their unions of closer eu integration. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Live from bloomberg World Headquarters in new york, i am julia chesley. Scarlet i am scarlet fu. Joe i am joe weisenthal. Stocks are at record highs. Joe the question is what did you miss . Scarlet tax plan architect gary cohn came out to take questions at yesterdays press briefing. Where should investors draw the line question why puerto ricos crisis is causing bondholders to rethink yield. Theseying it on all issues and more, do not miss our exclusive onehour sit down. We missed joe. But also the 2017 marks its 20th year of the bank of england passes independence. Learned during this time and will the world passes major banks retain independence in the future . Foring us now is robert u. K. House of lords and professor and political fellow of the british academy. Joe welcome. Great to have you on set. Very nice to be here. Joe i thought it were celebrating 28 of independence and my first thought was we think of independence as a core aspect of modern central banking but 20 years is not a very long time. It is pretty recent. What have we learned during that time in terms of what independence means for the functioning of the central bank . The independent Central Banks were set up for two reasons. Take as much Economic Policy as possible out of the hands of those votes seeking politicians and the other is a way of controlling inflation. That was a big problem. They came together in the idea that Central Banks should have control over Interest Rates and governments except inflation targets and leave it to Central Banks to hit the target by manipulating Interest Rate policy and for a time, it all seemed to be going very well and a lot of people said it was indisputable that the low inflation of the 1980s the years leading up to the Great Recession was due to a Central Bank Monetary policy. We now have a few more doubts about that pair first of all, it might have been due to other things as well. Since the crash, they have been completely unsuccessful at hitting inflation targets. We have in hr that illustrates that nicely. Most of the major Central Banks falling short of the 2 target. Of course, a different category given what the pound has done. Or willpendence independence of the central bank continued independence help them or give them the tools needed to raise inflation . They were given some of the tools are first of all, it is a good question. Why didnt they spot affect the Banking System was going in there watch . That has been remedied to some extent and they were given remedy for financial stability. That may not be consistent with their inflation target. Really, when you consider why they failed to hit their inflation targets, for example in the that may not be consistet with their inflation target. States, you have got 4. 5 unemployment and inflation under inflation target. Compared with the 1960s 4 unemployment and inflation was 6, 7, 8, 9 . Why . It shows Monetary Policy alone is not enough. The government has to be involved in managing the economy. Are you saying the central bank and monitor policy is not necessarily to blame for missing inflation targets . I guess my first question is why would we assume 2 is an approach it an appropriate inflation level but also given the struggles most central bankers are now facing in terms of inflation a little bit higher tour their targets, what is the problem and why can they not understand the problem at this stage . You are always fighting the last war. The last war was inflation being too high. Now the war is being inflation too low. It is asymmetrical. I think our Central Banks have shown they are quite good at controlling inflation but very bad at raising the inflation target. That depends on what is happening to the economy. Joe it does seem like a lease thinking about this question may be changing a little bit in the sense that in recent years, people were advocating things like helicopter money, direct monetization of government spending, relinking the central bank and the fiscal authority. Could 20 years from now we say ok, we have this experiment in central bank, independence, and we may not think it is that big of a deal anymore . I do not think the central bank will last. I think governments are going to increase in the department of treasury because they are not doing the job they were sent to do. They havent been doing the job of stabilizing the economy. In quantitative easing, if you think of the money that pumped in, good, they averted the great which happened first . That is what they want them to do. There has got to be an integrated Economic Policy in which monetary and fiscal aspects and departments collaborate and much like a seesaw went when it pushes there is a big question. Why have they not been able to hit inflation targets . Interest rates have been zero and near zero for a long time. We have a labor market, it actually produces falling real wages. Where is that working for you have got best balance of central fiscal policy for the government . An interesting question. 17 of the Banking System is now national nationalized. Before what we call normalization, if we look lifted up and immediately they have to go back and the calls started coming for quantitative easing, we know how toxic that could potentially be. Could the next downturn be the catalyst for a fundamental rethinking of the role of Central Banks . I am sure you will need another one and i think it is quite likely. The new normal is worse than the old normal. The oldest worth than the previous normal. Hell of a lot of money in the hands of a small group of people. It is feeding asset doubles. Ne day, these look crash i dont know when. Probably sooner rather than later. Then i think policy will start to move. In many cases, we blame things Like Technology for having this debt, for having disinflationary pressure on these economies. It is taking some element of the independence of the bank away. It is the wrong way of tackling this. It is a good point about technology. That is a slower moving thing. Really, i think it is the way the economy has been working. The economy in one sense is at full employment. It is full employment with a very degraded structure of jobs and because you have big and a degraded structure of jobs, you do not even get a push. The government just has to do more they have as much as they can. About theu say it is government, it is about economics. Because all of this was based on up to date leading edge. Economics going back to Milton Friedman and going forward. All right. Thank you so much. We are talking about the bank of england. Robert says perhaps you may not see the this in 20 years from now. We will discuss the future of europe next. This is bloomberg. Quite heading down different paths. Emmanuel macron seeks deeper european integration but his partner Germanys Angela Merkel has seen her as we can after the elections. A member of u. K. s an american professor of clinical economy at the university of warwick. Thank you for joining us in staying with us. Do we see a move toward a more fractured europe with the lead the recent election just after the european economy seems to be hitting at every cylinder . There will be more fractured. The idea the of greater integran is a bit of a pipe dream. It has always been, but now there are so many groups opposed to it that it will be hard to bring about. Without bringing in about, the whole project is in danger. Treasury, itntral needs a central bank that can act as last resort, and all of that is opposed by the nationalists in the alternative just scored spectacularly well coming from nowhere to 93. The euro skeptic movement is growing. The only answer the officials to have moreis integration. That does not deal with the problem of democratic deficit. It does not deal with the problem of innovation. It does not deal with the problem of integration or the control of borders. A stalwart of the eurozone now but if you go back a year ago, it was seen as a basket case. Tie the things together for me, the challenges you mentioned. You have got a president in france talking about a eurozone budget, a eurozone finance minister. Angela merkel says we need to stop using slogans like that. Jeremy is not the only company against more euros. How does this play out . One thing is clear. Germany runs europe. Merkel says given her domestic position, even more so, france is not a code we hope partner in this. What happens if there is no further agenda . You talk about the common treasury and the greater budget and all of that. Movement toward that, what is the future of the eurozone . I think members drop off it by date. This is the german finance wanted, has always which actually can have these institutions. Britain has already dropped out. Maybe others will. The thing is the greater integration necessary to make it work also challenges the democratic upsurge in the nationalists upsurge. You have got two contradictory imperatives. Is another thing we will see in the next downturn . Bits from the post word order are drifting away. Know, a new stable world, what it will be, and how much strife we will have to go through to get there. Is not a comfortable situation. Elites are losing control. People are fighting on many fronts. Parties are being cannibalized. Conditions for the next five years . Boy, always, events, dear will decide. I do not think economies are particularly stable or healthy. If there are more shocks to economic stability recovery, i think the populist movements will be strengthened. I spent a lot of time reporting crisis countries. Underlying is always dont underestimate the desire to keep this together and the importance of the eurozone and the currency as well. Do you believe that even in the current situation, the fact that she will hold the same together germany is together in one thing, told the European Union together. That is a thing they dont want any memories. Not prepared to discuss leadership and responsibilities. Responsibility for looking after they do not want to pay except for in an emergency. They do not want a European Clearing Union to settle the imbalances. So what they are compared to do withut in an emergency good collateral. That means gradually, they take over more and more of the property. That is not viable. Joe you have literally written the book or books on the history of economics. All the questions out there, the failure of Central Banks, questions on how budget deficits were, what do you think of the economics profession right now . Is it in need of soulsearching . It does need a lot of refashioning and refreshing. It is stuck in a paradigm and it is slowmoving, behind the curve. Textbooks only get rewritten once every 15 years or something. Met inin trench fortification of orthodoxy. For people who attacks it attack it from the outside, either they are being incompetent or they are idealists format. Been as Much Movement within the profession as one would like because politicians are consumers of ideas and if they get that ideas from then they do bad things. Some fresh thinking. Thank you so much. Professor professor of political economy and fellow this is bloomberg. The stock as of the head of the report by 3 , is here. Tell us what analysts and investors are looking for. One of the largest homebuilders in the u. S. , they are expecting good results for the Third Quarter and the sales are likely to rise 22 year on year driven by an 11 increase on average selling prices. There are peak headwinds facing them largely due to Hurricane Season. Take a look at what i pulled up here on my terminal you can see the central u. S. As the second biggest Revenue Source and that basically means mostly texas. 9 and another big area for them is florida. I was talking to colleagues who it be dealhould not on the Third Quarter because of the timing of the quarter and the hurricanes and it could be something that goes more until the fourth order. Joe is this the type of thing investors will recognize as temporary or can pull forward or putback demand because they will have to rebuild . Exactly. It will be a little bit of a delayed reaction and then there can be compensation one building starts to happen. Another thing i want to talk about was the number of people shorting the stock. It has actually been quite a big target. 4951, youk at g btv can see the Short Interest over 11 . It is actually down from peaks there. A lot of them have now been covered. It seems the homebuilders keep going up. You look at the index having the best year since 2012. Just kicked everyone out, i remember. Absolutely. We have another confer that to show all of it. I will put it up. It might be too not enough time to pull up. We were trying to get it up there for you. It looks like they should do well. They should do well. I will post those results in about five minutes. Thanks for the preview. The market closes next. Than four minutes to go before the close. The dow upndexes and by 36 points. The s p 500 above that level. The nasdaq at the moment looks like it will close down. This is bloomberg. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. Smp fluctuating in record by putting in p record territory. Fluctuating in record territory. I am julia chatterley. Scarlet i am scarlet fu. Joe i am joe weisenthal. Scarlet our market minute, little changed for the major indexes. Gains,looking at small nasdaq finishing unchanged literally at the moment. Joe another day of no headlines changes. Scarlet plenty of news under ,he surface, especially roku making its trading debut, ipl at 14 per share, gaining ipo at 14 per share. Write a down 11 right eight down 11 . Blackberry with Record Software revenue and says to investors it will hit growth targets this year. By almost 4 on a report it will be sold to Sports Direct of the u. K. According to the new york post. Joe a quick look at the Government Bond market, starting with the u. S. Twoyear and 10 year, a little bit of a decline on the short end. 0 year yield ending flat it had been rising early in the day and ended unchanged. , it hasnese 10 year been creeping up a bit lately with the global rise in yields. Heading towards the end of the month and and of the quarter which will dominate some of the flows. Softness in the dollar, denting a weaker gain of more than one present, the strongest week since december. Fromdollar, overnight 11721 and trading 11781. Softness in dollar yen. What is going on in dollar a threemonth chart, the bank of Canada Governor suggesting the bank should proceed cautiously with Global Factors created uncertainty after rising raising rates by 50 basis points in the last 1. 5 months and it regained footing on oil jumping to a fivemonth high. Joe real quickly, on the commodity, not a lot of action. Oil falling by 1 , but 51 and west texas intermediate. Copper has done pretty nicely and continues to pick up, 1. 6 . Below 12. 90 1290 per ounce. Those are the market minutes. Scarlet the moment investors have been waiting, President Trump unveiling the framework for tax reform legislation. Republican of tennessee senator bob corker told us that this will make Health Care Look like a simple thing to do. What investors perspective, shortseller of pimco associates will be with us. If you look at the tax plan president has proposed, 20 percent Corporate Tax rate and a writeup of Capital Spending for five years and three tax brackets for individuals, this is the starting point and things will get water down. Do you think that congress will buy it and do you buy it . It will be a hard sell. Senator corker may be right, i pland the Gop Health Care gop stalingrad because it was symbolic and just a morass. I do not know if it will be better, i do not know what they are trying to accomplish, Still Campaign promises. Corporate tax rates while 35 nominally, effectively are much lower for the s p 500 in the high 20s. Overall corporate profits, public and private, high teens. You are not on a test basis point to get a lot of help on a cash basis going to get a lot of help. Gary cohn said that maybe they get 1000 for a family with 100,000 in combined in