Panel a house panel backed the bill last month. The first lawsuits have been filed against the trump administration. They argue restricting travel for citizens of muslim countries violates the u. S. Constitution. Progressimistic about and divorce talks with European Union but is planning for the possibility of they may break down. We will honor our commitment because ours is a country with laws that obey the of people who obey the law. We will challenge europes claim line by line. Mark progress was being made to a deal, dismissing lurid accounts of crisis and breakdown. Global news 24 hours a day andred by 2700 journalists analysts. This is bloomberg. Julia live from bloombergs World Headquarters in new york, im julia chesley. Joe im joe weisenthal. Is whatd you miss . The response were democrats, tom perez, chairman of the dnc speaks out on puerto rico and shares his thoughts on tax reform. And live from los angeles at 4 30. An of for ilg, the provider of professional vacation experiences. Ist to give you a sense that said to have been made in recent weeks. We have seen Marriott Vacations that showed it would spike on the back of that news. Unclear whether they have responded to that approach at this stage. The team covering m a says the offer at 30 a share, getting closer to that level now. Julia President Trump is an puerto rico surveying the devastation. The commonwealth has been in trouble for months before the inrm, filing for bankruptcy may. To renewal efforts present an opportunity . Lets bring in daniel. Assets. E managed million in puerto rican debt. Great to have you on the show. Both puerto rican and the Electricity Companies in your portfolio . Within puerto rico there are a lot of different investments you can make. Have the general obligations. A lot of different ones. Was lord abbott part of the collection of bondholders for puerto rico . Saying they would loan some money into a swap on the bonds . We were not part of that agreement. You have to do when you join for ayou get locked out number of times. Julia joe if we take a look at bonds you can see the prices are incredibly depressed and have fallen in the last few days. What do you see is the prospect, how much does the prospect for puerto rico municipal finances depend on what policy response and regulations Going Forward . This is a challenging situation. There are a lot of different investments. Puerto rico bonds, for the rest of our investment most refunds are not part of it. Things are tough. Now the focus has to be on the humanitarian situation. Making sure they get electricity. That could be a positive. Julia what it comes down to is how people are able to afford, investors in particular. Affect howe damage the court might listen to arguments on that process . Before this hurricane everything was in the courts. Everything really is going to that point where we will have to get back to that. They created their own constitution and security on the bonds. They created security. They are going to decide a lot. They are different actions. It is a longtime table at this point. Would you accept a moratorium . Be notncellation would something that could be acceptable. Julia what about a writedown . The bonds are worth more than that based on the security on the bonds. There has to be some sort of agreement. You can have different ways to do it. Bonds over time. There are a lot of ways to do it. There can be definitely an agreement. You think a writedown is justifiable given the damage to the country . If it is fair to creditors there could be some way to restructure so you dont have to pay all the amount now. They push a lot more to the future. Scarlet all right. Thank you for joining us. Here, lawmakers are homing in on google as part of the investigation into russian interference in the 2016 election. Now, one of the reporters on this group, mark, give us more details on what you have learned. Congress is bringing in google, facebook and twitter. It is focused on twitter and theyook very this is where have more aggressive targeting capabilities that some may have properties through youtube, google ads, search. There is a litany of channels. Data withshared google and vice versa. They are being held before congress as well. Joe a lot of attention is being paid to paid ads on these platforms. Something you bring up in your reporting is a lot of the propaganda is right there on the main channels. Rt, the russian network. A huge success. That has nothing to do with ads. That is out in the open. They have this tough act to follow. Congress has pointed out russia today is a kremlin backed organization. They have statesponsored channels. Russia today was part of google preferred, premium inventory they sold to advertisers on youtube. Is a directw if it response to investigation but the timing suggests that it is. If we are talking about youtube and google, the scale of the people that saw these things . We do not know. The Google Display Network hit 3 million websites across the they have this tremendous scale. Today, close to 3 million in total viewership. There is a wealth of other channels it. There First Amendment issues here . Have and illegal to promote what they want on these platforms. Even if itsay stuff makes the government uncomfortable. Google has been historically with the Search Engine has said we are not going to police content. But it is an interesting time. Facebook and google took a lot of flak with the highest search result in news. They are playing this game of cat and mouse. People are able to game the system. So that probably is the focus. These actors, where is the line between free speech and propaganda . Scarlet the headline here, the election inquiry by the senate has expanded to google. They are homing in on Google Services such as youtube and gmail. Julia you kind of know what you are getting with al jazeera or rt. There is a certain perspective. Scarlet this is bloomberg. Isi believe a successful fed a Federal Reserve we dont have to talk about that often. Thed played a major role in 2009, 2011. If we have a normalized economy to goeither going to have back to not worry about the Federal Reserve as much. The Federal Reserve played a significant role in stabilizing our economy but if we have a normalized economy the debate we have about what the fed is going to do is less important. It is going to be more important about how we are driving innovation and jobs in our economy. Scarlet seen and not heard. Markets closely watching President Trump search for the next fed chair. Two names are at the front. Jerome powell. Nd next guest prefers one of these picks. Joins us now. Joe wash and powell. Thinkis the one you would would be a good pick . Warshont think kevin would be a good pick. He has an open mind. And a steadyence hand. If you love listen to his speeches he seems reasonable. Warsh was a governor. Ben bernanke relied on him as a liaison to wall street. He hasnt distinguished himself that much since he has left. Some criticism that cover the pages of the wall street journal havent been well thought out. Joe specifically what did he say that you think was not logical . He argued about how the fed should be focusing on nonwage prices. One flaw in that is the fed already does focus on nonwage prices. The fed focuses on Inflation Expectations. They are driven by goods and services households spend frequently. Like food and energy. If Inflation Expectations are incorporated into the forecast, then they are focusing on nonwage prices. Yellens inflation model incorporates goods prices. Washington said the fed doesnt have a strategy. That is not entirely fair. Strategy. S a there has been research, not just on wall street but within the fed looking at how the summary of economic projection the fed puts out every quarter, you can make a systemic, systemic update on the fed funds outlook based on changes. Do you think he has discredited himself based on everything you have said . How do you think the market would react . Bernanke used to talk to him about the markets. Someone thinks he has a reason to be good at this job. If bernanke have the choice between paying stuck on a desert want to haveuld his buddy with him on the island. Like military leaders, they want to get the respect of people under them. Warsh would have that. That was a strike against him. This is anrd individual who is keen on financial markets, looks at market indicators more than other fed officials. When the credit markets were in disarray he was squawking about inflation and things that never materialized. Alan greenspan said the job of the fed chair is an Economic Forecasting job. He hasnt been a very good forecaster. Scarlet does that matter to President Trump . Loyalty. If you look at the first two names we have gotten from the white house, that could have been someone that came out of a jeb bush. Randy quarles. He has not been formally nominated. Those are sound picks. There is a lot of disarray within the cabinet recently but ,ook at who resigned last week you could have seen that in a runofthemill administration. Your point. My view is that maybe some of that is overdone. Julia if you had your choice, who is the best guide to do the job of anybody out there . I think it is important, we have seen president s nominate. [inaudible] calling for janet yellen to stay on as fed chair. Dont miss tom keenes interview tomorrow at 6 30 a. M. We are hoping you would say Stanley Fischer said it would lead into this tease. s Livevladimir Putin from the energy week in moscow, that panel starts live at 6 00 a. M. Eastern. Dont miss it. This is bloomberg. Julia welcome back. Time for the Bloomberg Business flash. Goldman sachs Lloyd Blankfein undecided on bitcoin. He said he was still thinking about that coin. Paper were skeptical when money displaced gold. Goldman is in talks with experts on cryptocurrency for a trading venture. Stoporporate leader should fairies. Profit first during phase one, disparity was brought down disparity brought down civilizations. That is your Bloomberg Business flash. What investors are going to do about it. Lets move on to our stock of the hour. Shares of Delta Airlines on pace for the best day since 2015. Big move. It cameeport this versus 3 . That is cost per revenue. All actually worse that is weighing on the airline. Less bad numbers. A relief rally based on that it hit guidance. Scarlet we see that all the airlines are rallying. Is that based on deltas numbers . It is. That the other airlines are rising on this. There will be follow through. I think this is volume add. It really should not be carried through to united. Others,irlines and some the fact that delta came in better than expected, better than expected. Bloomberg,to the this tells the story. This is a year to date chart on the airline. Orange and blue, take a look at united. They are saying it just doesnt make sense. Person, onechnical the verge of 10,000. What does that tell you . Transports and the industrial is there a bigger meaning . I am not an expert but we have the new highs. It is a confirmation whether or not it carries. Julia Warren Buffett is going to talk about that as well. He has been reducing positions. He has had a nice profit. Scarlet the market close is next. Major indexes at record highs. This is true. This is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Julia whatd you miss . U. S. Stocks adding to records. The s p 500 had a record after american carmakers report the best month on the year. I am julia chatterley. Scarlet i am scarlet fu. Joe and i am joe weisenthal. If you are tuning in that live on twitter, we want to welcome you to our closing bell coverage. Scarlet lets begin with our market minutes. Record highs yet again for the major indexes. Nasdaq. Doubt, and you can see there are modest gains. We are looking at tight ranges for the major indexes, even as they climb. 0. 2 . The 2000 is up by yesterday, the small caps were outperforming. But today they are in line with these modest advances. The brussels 2000 is up at a record high. I want to highlight the automakers, gm, ford, gaining on auto sales. That indicates things are going pretty well on that front. They are poised for the best month of the year, thanks to that postharvey bump. This is falling results for the month of september. Breaking news we told you about earlier Marriott Vacations has reportedly made a takeover offer for ilg, the timeshare operator under pressure from investors. According to people with knowledge of the matter, marriott making an offer that values ilg at 30 a share. It is not clear if ilg responding. But hilton grand getting shares close to 40 a share. Joe lets look at the Government Bond market, not much going on today. To year yield going down. 10 year yield is down to 2. 33 . The jobs report friday will probably be the next major macro mover. We will keep an eye on that. 10want to take a look at the 2 spread. Part of the story, a comeback for the dollar, reflation is not much. But may be the spread, which has been narrowing since the beginning of december, bottomed earlier in december and has been picking up a little lately. Still the longterm trend is down, but some signs of life over the last month. Julia we are seeing stock growth for the u. S. Dollar. But this was dominating the dollar trade. Numbers we gathered wednesday, payroll on friday, lack of data was the dominant theme. A bounce in the euro, after the catalonian election. As you can see, softness in sterling. That construction pmi data weakness weighing. , want to show you g btv 2512 showing the South African rand. It reversed all the gains it had made since 2017. It posted the biggest monthly drop in december. Obviously we have concerns about the Federal Reserve, if it goes high, not necessarily great for emerging markets. And we have the African National congress at the end of the year. A lot of people looking at the South African rand and saying, hmm. Joe lets take a look at commodities, starting with oil and gold. Oil has been pulling down. Yesterday the selloff was larger. Hanging in there, about 50 a barrel. Gold futures continue to selloff, also modest, but the momentum is to the downside. I want to look quickly at the ,res mullet and gold party in the Front Business in the rear , i forget what it is. [laughter] they are calling it the shape of as a resultuture, of harvey. You see the longterm prices. In frontof a contango of the west texas curve. An interesting shape. Julia we will have to discuss that in the break. Scarlet do know what a mullet is . Julia we have a different term in the u. K. Scarlet whatd you miss . The s p 500 making new highs, yet again. Investors feeling optimistic about tax reform and the slow said right schedule. What to expect for the Fourth Quarter . We are joined by jeremy siegel, joining us from philadelphia. Fessler, what is your outlook for markets . A lot of things are coming together for gold. I think it looks like a good quarter. Earnings look very good. The earnings season will start in a week, 10 days. So far we have had very few preannouncements warning of earnings shortfalls. Firms have been fulfilling their earnings promise this year, better than any of the last three years i have seen. I think tax reform is icing on the cake. If we do not get it, there will be disappointment. Not think a mammoth selloff, given the earnings and motorist Interest Rate. I do not thinks, it is a done deal for increase in december. You layfessor siegel, out several bullish things, but people will say the markets reflect that, valuations are stretched. Tapepoint to the schiller to say we are at levels we rarely see, if you go back a long time. In your view, do those tools help you in terms of lightning up on the market or knowing when the future returns will be weaker . Mr. Siegel i have written a published paper and done research on this. To show what it is not a good indicator and it has not been for quite a few years. Years, for future returns, mainly because of the distortion the change in accounting. He has a 10 year average that still includes the earnings of the financial crisis. That will wash out in a few years and make the cape ratio look better. I do not think the cape ratio is something i would point to. We are selling 20 times this years earnings in a low Interest Rate environment. That is nothing to be scared of. The fact is, i think we will be staying in a relatively low Interest Rate environment for quite a while. I think we should not be a normalabout 15 as p e ratio. We should be thinking about 20 of them more normal p e ratio. Maybe even a bit higher than that. Joe lets talk about the relationship between race and equities. Lets of interest in these days in the big tech companies. Crowded trade into the fangs. I have a chart here showing the inverse relationship between the 2s stocks do versus the 10s spread. We have seen a touch of weakening in tech. How much are some of these popular equity trades essentially duration trades . Is hard to match that up. A bigger spread is supposed to mean a stronger economy. Obviously, i narrower spread or flatter inverted that is something to worry about. We are not there. As you pointed out earlier, we basically have been flattening the spread until the last couple of weeks. One should also note about this spread that economist that had been looking at this spread normally caused by risk premiums on th