But his wealthiest donors, not so much. 24 Trump Supporters on the billionaire list have seen their fortunes rise6 10 of a percent since the election. The s p 500 is up almost 15 since then. His wealthiest supporters including donald bren, where a combined 16 billion. A senior russian diplomat warning against expanding sanctions against north korea, saying it is necessary to focus on a political settlement. The Deputy Foreign minister said that the scope of sanctions already endorsed by the u. N. Security counsel is such that any possibilities of expanding measures have been exhausted. China and russia have called on the u. S. To suspend annual military exercises with south korea in exchange for pyongyang halting their missile and nuclear tests. Minister saysior some men suspected in the deadly attacks in spain visited the paris area two days before hand. Speaking images along with in major along with the interior minister, they said that officials are working to determine why the suspects were in paris and what they did while they were there. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Live from bloomberg headquarters in new york, im abigail doolittle. Joe im joe weisenthal. Julie im julie hyman. We are 30 minutes from the close of trading. The stocks are in the red today. The question is whatd you miss . The president threatening to threat down the government over the border wall. Could it be a showdown . And walmart will not let amazon bulldoze after the whole foods acquisition, the bigbox retailer is partnering with google, which could give it the edge it needs. While the rest of the retail world is adjusting to amazon, one thing you may have not noticed his money is still going into the malls. We will take a closer look. Trumpight my president suggested he would veto any spending bill from the federal government if it did not include money for a wall on the mexican border. This could lead to a Government Shutdown and could complicate the job of raising the debt ceiling. Mitch mcconnell just put out a riglernt saying he is in contact with the president and they are working to prevent a u. S. Debt default. Now we will bring in the global head of research for Deutsche Bank securities. Great to see you. Thank you for coming. We have Mitch Mcconnell making these comments and we have the president making his comments last night, meantime we have surveyed analysts and have found they have said if there is a showdown over closing down the government over the border well, it could send rates in the u. S. Below 2 . Do you think it is a risk . Guest i think it is a risk that longterm rates could fall to 2 or below. Obviously the short end will be, look it because if there really is a default, you have already seen the bill rates rising around the dates that people are concerned about. It is complicated. But there is potential that if there is a failure to raise the debt ceiling, depending on how long it goes on for, you could see the impact on the front end of the rate curve for longer. Joe you mentioned we thought reaction in the short end related to the debt ceiling similar to what we saw in 2013 and 2011, but over all none of those having a big impact. Curious on your investors, how much are they paying attention and concern on the legislative timeline with these various deadlines the government is facing . Guest i think they are beginning to take or pay more attention. In the past, we have had these fears and comes down to the wire and in the end you get through it. Itll remember the downgrades that took place when people thought it would be a terrible fall in the treasury market, but it wasnt. The equity market tends to perhaps react a little later and closer to the time. And right now, the rates market and bill market, that is showing reaction right now. The actual markets lagging a little bit. Joe lets say that the debt ceiling, i do not think anybody knows what would happen if there was to be a miss payments mispayment, hopefully we do not find out, but talk about a Government Shutdown. We have had a number of them in the past, not the end of the world. How typically do the markets react during that time . Guest i think a Government Shutdown is more related to a sort of fundamental concern of the economy. There is a direct impact, but it has seemed small in gdp terms but that is where the economists will focus on and say there could be slightly negative growth. It comes down to how long it continues for. I think it is less important than obviously some kind of debt issue, because the Financial System is much more complex than people realize and things that happened could happen to the repo markets, for example liquidity, the banking systems, and those are the unknowns that could have a big impact on growth and economic opportunism and confidence. Will be janet yellen giving what could prove to be her last speech, hopefully not, but it could be at jackson hole. What do you expect her to say . She is in a tight spot in terms of keeping the markets going and staying on the tightening. Guest there is what we expected, what we expect her to say and what she will say, those could be very different. The titleis dynamic, of the symposium will be the dynamic of the Global Economy. Her speeches, she gave us a speech a couple of years ago and it was along the lines of touching on financial and whether or not they were too easy and maybe bubbles were being created. Also looking at the stability of the Financial Systems in terms of banks and getting over the financial crisis. So i suspect that will be the purpose of her speech. How she links that to the dynamic of the economy i think will be monday and, in the sense that it will be about we are doing the sort of things so there will not be a problem in the future, and watching for any signs of excess liquidity, but we do not think there is anything there yet. Some people are trying to argue that just because financial conditions have eased over the last year or so, the fed should continue to tighten and even accelerate tightening they have done. One analyst talked about the easing of conditions. I think that is completely the wrong response. You have to understand why financial conditions are ease d. The bigger issue is low inflation. If you go down that road, you cant answer the question, ca answer the pressure, whichn should be how you foster the economy . You allow financial conditions to do it they are doing, which means the markets do even better which means the fed is not raising rates. They can take a timeout. You can accept that the yield stay low because of inflation. The stock market is not in a bubble, he can improve because yields are so low. And you made an interesting article earlier today on comparing the 1999 and a big difference was the rates were higher, so valuation seems a tight. Can be stay low, stocks better. And if you go down that road, you can get into things like investment booms and recovering productivity growth, because in an aging economy, where else do you get the growth . You will get it from productivity, nowhere else. That is what we should be doing to foster dynamic growth. In the Global Economy. Julie we will continue this discussion. Is sticking around. We will discuss more of the thorny issues central bankers will reckon with tomorrow when they meet at jackson hole and for the remainder of the year and beyond, the issues are not going away. From new york, this is bloomberg. Abigail whatd you miss . Mario draghi said today that Central Banks and governments should not be resting easy. Policy actions undertaken in the last 10 years and Monetary Policy and supervision have made the world more resilience, more resilience, but we should continue preparing for new challenges. Julie we are back with Dominic Konstam from Deutsche Bank, and certainly there are multiple challenges that are presented along with the various central bankers around the world. I want to button up what we were talking about before the break, when it comes to the fed in the u. S. And their struggles to understand inflation. When you look at those struggles, where do you think the fed will come out . Will they acknowledge that inflation is not going up right now and keep the rates where they are . Will they come around to that . Dominic i think they will. And it is a problem on Central Banks have had, they have struggled to justify inflation targets they have had, even though the ecb does not currently have a target. They keep on missing what is the target and pretending that this is part of the memoranda. And raising the target does not do anything either. You are not reaching it, just raising it, so there must be a point where they change the discussion they have and recognize it for what it is. Abigail we have a great chart here. Everybody talking about the unwind of the Balance Sheet as related to the rate. This is a longterm chart. And the 10 year yield in blue, we see the Balance Sheets at 4. 5 trillion. What is your view in terms of rates, if they are going to unwind could the chart suggest we see those rate come back lower. 2 . Adjusted 2 suggested dominic the Balance Sheet is very important. The first thing in the unwind that they have, the signal that they are going extremely slow, even by my expectations they are taking an extra 45 years to unwind it. It is what we would consider normal levels. The important thing is when they ratesbout interest rose at the same time, so when people remember the damage on the Interest Rate market, it was less about the talk about taper, it was more the rate expectations going up. What i think we are doing is the Balance Sheet unwind is in the context of not having many more rate hikes up their sleeve. Especially in our world with inflation. That is why it will be less of an issue. The s p is very interesting because i sort of agree with the view that the s p has the premium metric that has been rather cheap to bonds relative, partly because the Balance Sheet shows the yields low so there is concern it will not do well as the balance she comes down. But with low inflation recognized for what it is, the yield behave well. You do not have that problem with the s p either. I think it will be ok for both s p and bonds. Joe i want to go back to the question about inflation from a metaphysical standpoint. All the concerns about why or why it is not manifesting itself. This particular cycle aside, how much overall soulsearching well there have to be in terms of trying to understand the drivers of what has caused the inflation in the first place . Dominic in my world, the phillips curve is more important than just regarding the wages and unemployment, it links to the inflation targets, the central bank basically telling workers and employers what they should do with wage increases and price increases that would be acceptable. If the phillips curve has broken down and it does not recover, and we do not think it will because of structural forces, then the logic of the inflation target is no longer valid. Now you have companies and employers deciding what they will pay. And the central bank is in the background saying, listen to me, i have in inflation target and you should be asking for higher wages and putting up prices for more. That is a problem. Joe before you go, i want to bring it around to the u. S. Again and the legislation and the rates market. There has not really been any policy, i think people are skeptical that they will get meaningful tax reform done, but they will still try. We have seen the u. S. Rates sort of at the bottom end of the range, despite the Economic Data around the world looking solid, so to what extent do you think that reflects politics . We have nothing politics show up in volatility in traditional ways, but is there a sense in your view that the stagnation in the u. S. Is dragging down the rates in the dollar . Dominic it definitely drags rate down without question, because it was easy to justify is the most, remember the border tax that could have raised inflation expectations. All of that, the lot of that has been unwound because of the failure to do tax reform. I think the politics is helping. Whether or not we are going to go a lot lower because of politics, hopefully not. I think a lot of that euphoria has been taken out of the market. Whether we can go high with something as possible, but basically rates are not going anywhere except to maybe maximum 250 range, but there are other things to worry about. Abigail good stuff. Thank you. Dominic konstam, from Deutsche Bank securities, thank you for joining us. Julie time for the Bloomberg Business flash, a look at some of the biggest business stories right now. Blackrock Vanguard Group lowering uber valuations by as much as 15 . The company has struggled with lawsuits and boardroom battles and the ceo was ousted in june. The company did not respond to requests for comment. Bill gates, Richard Branson investing in a startup called memphis mea which will producets animal cells not with slaughter. Analysts say there is a possibility of sustainable cruelty food, especially from millennials. Wholeld foods the foods deal needs approval from regulators. The 13. 7 billion deal with amazon is expected to close before the years end. And that is your Bloomberg Business flash. Fascinating story. Self generating meat. Abigail as a cruelty free person i do not know how i feel about it. Time now for our stock of the hour. Lazboy, the committee known for the recliner is falling over 20 today, the most since 2009. Emma, what is going on . Emma poor earnings. Full disclosure, i do not think i am the lazboy customer, but i did read today that some of them to have a drink cooler and a heat system. Joe absolutely. I used to have one. And i am remembering how awesome it was. Now i think maybe i want to go get one. Emma the problem is people are not buying them. The stock in the below expectations. I want to show you the terminal for a moment, because Trading Volume is at about 13 times the average, on pace for more than 4 million shares to be traded today, so that is interesting on what is happening with the stock. In terms of what happened with earnings, revenue missing estimates. Higher costs and a squeezing margins, and while the sales did grow, they do not grow by that much. We have another chart widget shows the written sales, when people go into the stores and at place an order, put down a deposit. Those hardly group at all and they have been grew at all and they have been choppy. Delivered sales have also fallen, so that is not good. The ceo said that the earnings were lackluster. Joe i wonder if there will ever be anybody that youd a cruelty free that eats a cruelty free hotdog in a lazy boy chair. That could be a venn diagram. Julie if this industrywide furniture issue is this an industrywide furniture issue or is it just lazy boy . Emma it has pulled the whole sector down. Practically off of the charts. Ethan allen has fallen, restoration hardware, even way fair the Online Furniture company, they have all fallen today. Joe thank you very much emma chandra. Basically we will see lazboy if you have a bloomberg terminal, check out tv go, you can watch is online, click on our charts and graphics and interactive eckley. Go on your terminal, here is the lazboy conversation right now. You can see all of our charts, get a quote on lazboy, and anything you want like that. Check it out. From new york, this is bloomberg. Im julie hyman. Whatd you miss . Lets say how buybacks relate to capital spending. This is from civilian global markets, which said we could see a curtailing of the stock buybacks as we see more u. S. Capitol spending and it could lead to gaps. They looked at the First Quarter of 2016, showing them exceeding by cash on hand. This is according to figures comes out from the federal reserve. Civilian said the trend is accelerating in 2017 as Global Growth is firming. We are looking at capital spending, that is in white. Internal funds in blue. As you have seen, but of them going up. Underpinnings of the u. S. Equity market has been some of the buybacks, so if you start to see that abate to some extent, that could be one more thing that is perhaps limit teen this limiting this bull market. Abigail Financial Engineering has certainly been a tailwind. Taking a look at my chart. This is out of the election, the bloomberg dollar index initially spiked, then it started to drop around the time that President Trump took office. This is the gallup poll disapproval rating. As it climbed to about 56 right now, the dollar index has dropped about 4 since the election, down 9 this year. The worst year ever. Interesting relationship. Joe i am also looking at the intersection of market and politics. After the fiery speech last night, it little more concerned coming into the market about september and the debt ceiling that we were talking about with Dominic Konstam. This is the yield curve analyzer and i want to focus right here, because this is comparing todays rate curve on the treasury market versus yesterday. Mostly across the board, the rates are lower except at the onemonth where they are higher. Not massive but we are starting to see in the shortterm bills market, more concern about the debt ceiling and people demanding more of a premium to hold those assets. Julie at the very least, people want to hedge against that possibility. The market close is next. Leslie and four minutes away. Less than four minutes away. We are red across this grain. All three down. From new york, this is bloomberg. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. W