WEBVTT - Bloomberg's House on Puerto Rico Restructuring Debt Bill(Audio) 0:00:04.000 --> 0:00:08.320 Broadcasting live to New York, Bloomberg eleventh, Brio to Washington, 0:00:08.400 --> 0:00:13.400 d C, Bloomber to Boston, Bloomberg Well Under to San Francisco, 0:00:13.560 --> 0:00:17.640 Bloomberg nine to the country, US Exam Channel one nine 0:00:17.880 --> 0:00:20.880 and around the globe the Bloomberg Radio plus SAP and 0:00:20.920 --> 0:00:25.720 Bloomberg got gone. This is taking stock, coming upon taking stock. 0:00:25.760 --> 0:00:28.880 We're going to take stock of Puerto Rico. House Republicans 0:00:28.920 --> 0:00:32.560 have reached an agreement with the Obama administration in order 0:00:32.600 --> 0:00:35.480 to provide Puerto Rico with a path to restructure it's 0:00:35.560 --> 0:00:39.199 seventy billion dollars worth of debt. That will be the 0:00:39.200 --> 0:00:43.120 first step towards ending a decade long recession in the 0:00:43.159 --> 0:00:45.800 island Commonwealth. And we're also going to take a look 0:00:45.840 --> 0:00:48.479 at the stock market under pressure today is traders and 0:00:48.560 --> 0:00:51.520 investors contemplate the possibility of a June rate hike by 0:00:51.600 --> 0:00:53.600 the Fed. Let's get back to the Bloomberg news room. 0:00:53.720 --> 0:00:56.160 Charlie Pellett has a Bloomberg business. Lael, all right, thank 0:00:56.160 --> 0:00:58.640 you very much. Kathleen Hayes, thank you, Phim Fox stock 0:00:58.680 --> 0:01:00.840 Star declining in. This update is brought to you by 0:01:01.480 --> 0:01:06.839 National Realty Returns on Cash and rented real estate. Find 0:01:06.880 --> 0:01:10.520 them at n r I. A dot net SMP five 0:01:10.600 --> 0:01:13.680 hundred index heading toward a two month low amid concerned 0:01:13.720 --> 0:01:16.880 that a Federal Reserve interest rate increases early as next 0:01:16.880 --> 0:01:21.360 month could further burden a struggling global economy. Tesla Motor 0:01:21.400 --> 0:01:23.840 shares turning around today. They are now up two point 0:01:23.840 --> 0:01:26.880 three percent. Tesla planning to sell about one point four 0:01:26.920 --> 0:01:30.440 billion in stock to help pay for an expansion. Colin 0:01:30.560 --> 0:01:33.480 Langon is an analyst at UBS Securities. He's got a 0:01:33.520 --> 0:01:36.120 cell rating on Tesla shares. I mean this is a 0:01:36.200 --> 0:01:38.880 growth stock. I mean I think every time they to 0:01:39.000 --> 0:01:41.479 a capital raise, it's all driven by reasons. In this 0:01:41.520 --> 0:01:44.680 case the model three order demand being very strong, so 0:01:44.760 --> 0:01:46.360 there's a lot of hype into it, a lot of 0:01:46.520 --> 0:01:51.400 higher growth expectations. UBS is trimming some positions at the 0:01:51.440 --> 0:01:54.160 investment bank, is part of a plan to reduce costs 0:01:54.160 --> 0:01:57.600 across the business in response to a revenue slump. This 0:01:57.720 --> 0:02:01.160 according to people with knowledge of the situation. New York 0:02:01.200 --> 0:02:04.240 Fed President Bill Dudley says the Federal Reserve is moving 0:02:04.280 --> 0:02:06.960 closer to raising interest rates at one of its next 0:02:07.000 --> 0:02:10.119 two meetings, and the fact this message is getting through 0:02:10.160 --> 0:02:13.400 to financial markets is welcome news. The tenure up to 0:02:13.520 --> 0:02:17.040 thirty seconds yield there one point eight four percent. Big 0:02:17.120 --> 0:02:21.280 day for American Eagle Outfitters, Urban Outfitters, and Perry Ellis International. 0:02:21.360 --> 0:02:25.080 They are all rallying. American Eagle up eighteen percent, Urban 0:02:25.160 --> 0:02:29.240 up thirteen point six percent, Perry up fourteen point seven percent, 0:02:29.760 --> 0:02:32.239 SMP down nine points, to drop of four tenths of 0:02:32.280 --> 0:02:34.359 one percent, to Down down ninety three, a drop of 0:02:34.440 --> 0:02:38.200 point five percent, Gold down nine fifty now a drop 0:02:38.240 --> 0:02:41.800 of one and a half percent, And at three thirty 0:02:41.800 --> 0:02:43.919 two on Wall Street, a look at other news from 0:02:43.919 --> 0:02:46.680 around the world. Thank you, Charlie from the Bloomberg News Room. 0:02:46.720 --> 0:02:48.760 I'm David Gura. This news update is brought to you 0:02:48.800 --> 0:02:51.399 by the Jeep Grand Cherokee, the most awarded suv ever. 0:02:51.560 --> 0:02:53.800 The Grand Cherokee continues to raise the bar with its 0:02:53.880 --> 0:02:57.360 luxurious interior and legendary four by four capability. Drive one 0:02:57.400 --> 0:03:00.240 at your local Jeep dealer. Today, a senior Greek air 0:03:00.240 --> 0:03:03.120 safety official is telling the Associated Press that debris found 0:03:03.160 --> 0:03:05.960 so far and the Mediterranean does not belong to an aircraft. 0:03:06.280 --> 0:03:08.720 The egypt Air jetliner was bound from Paris to Cairo, 0:03:08.800 --> 0:03:11.960 with sixty six people aboard. It reportedly crashed after what 0:03:12.000 --> 0:03:15.880 authorities call a mysterious series of extremely abrupt turns, for 0:03:16.000 --> 0:03:18.640 no immediate signs of any survivors. Egypt Air Flight eight 0:03:18.680 --> 0:03:21.120 oh four was an Airbus A three twenty carrying fifty 0:03:21.160 --> 0:03:23.880 six passengers and ten crew members. It went down about 0:03:23.919 --> 0:03:26.680 halfway between the Greek island of Crete and Egypt's northern 0:03:26.680 --> 0:03:30.400 coastline after takeoff from Paris. Egypt Aviation minister says it 0:03:30.440 --> 0:03:32.359 may have been a terrorist attack, but the White House 0:03:32.400 --> 0:03:35.320 says it's too early to say exactly what happened. Ahmed 0:03:35.400 --> 0:03:38.280 Adell is vice president of Egypt Air. We have found 0:03:38.320 --> 0:03:40.840 the wreckage. We confirmed that the wreckage has been found, 0:03:41.800 --> 0:03:45.880 and the search and rescue teams are now uh it's 0:03:45.960 --> 0:03:49.280 turning into a search and recovery. French President Francois Olan, 0:03:49.400 --> 0:03:51.960 speaking to the media in Paris through a translator today, 0:03:52.000 --> 0:03:54.520 said his government is sending planes and ships to support 0:03:54.560 --> 0:03:58.600 the search efforts, but we should express our solidarity, would 0:03:58.600 --> 0:04:01.160 take to the families and also to find out the 0:04:01.240 --> 0:04:04.840 cause of the catastrophie. Frances Lowerhouse of Parliament has approved 0:04:04.840 --> 0:04:06.920 a two month extension of the state of emergency that 0:04:07.000 --> 0:04:09.760 was declared after the deadly attacks in Paris. The measure 0:04:10.000 --> 0:04:12.560 is aimed at covering the European Championship soccer tournament in 0:04:12.560 --> 0:04:15.240 the Tour de France. Government Andrew Cuomo says it's time 0:04:15.280 --> 0:04:18.080 to reform New York State's liquor laws. One suggestion includes 0:04:18.160 --> 0:04:22.080 letting restaurants serve alcohol before noon. Global News twenty four 0:04:22.120 --> 0:04:24.680 hours a day, powered by our journalists and more than 0:04:24.680 --> 0:04:27.000 a hundred fifty news bureaus around the world. From the 0:04:27.040 --> 0:04:31.560 Bloomberg News Room, I'm David Gura, Charlie, and we thank you, 0:04:31.600 --> 0:04:34.359 and again recapping a move law for US equities. The 0:04:34.480 --> 0:04:37.159 SMP five hundred index down nine now a drop of 0:04:37.279 --> 0:04:40.559 five tenths of one percent. I'm Charlie Pellett, and that's 0:04:40.600 --> 0:04:46.919 a Bloomberg Business Flash. This is taking Stock with Kathleen 0:04:47.000 --> 0:04:51.200 Hayes and Pin Fox on Bloomberg Radio. Can it be 0:04:51.800 --> 0:04:56.920 a breakthrough in the deadlock over Puerto Rico's debt between 0:04:56.960 --> 0:05:01.279 House Republicans and the Obama administration. Well, let's just find out. 0:05:01.320 --> 0:05:05.719 From Billy House from Bloomberg Politics, Bloomberg News. He's joining 0:05:05.800 --> 0:05:08.360 us from Washington, d C. This is a story he's 0:05:08.360 --> 0:05:11.040 been covering very closely. In fact, I just tweeted out 0:05:11.040 --> 0:05:14.000 the story he co wrote with Laura Litvan at House 0:05:14.000 --> 0:05:18.480 in session. Welcome to taking stock. Good afternoon, So what's 0:05:18.520 --> 0:05:20.960 going on, what's in the deal, and does it look 0:05:21.000 --> 0:05:25.320 like this time this is something that's really going to pass? Well, 0:05:25.440 --> 0:05:29.080 the boat counting begins. So the latter question there is 0:05:29.839 --> 0:05:34.120 is still up to two mendual members to decide how 0:05:34.120 --> 0:05:36.599 they're going to go on this latest rewrite of a 0:05:36.680 --> 0:05:41.120 bill to rescue Puerto Rico from its financial crisis. It's 0:05:41.160 --> 0:05:44.040 this bill, like the previous one, creates an oversight board 0:05:44.880 --> 0:05:48.279 UH and also creates a restructuring process for the island 0:05:48.400 --> 0:05:53.560 seventy billion dollar in debt debt UH. So it's it's 0:05:53.600 --> 0:05:57.320 brand new. It was dropped right before UH midnight, introduced 0:05:57.320 --> 0:06:01.320 in the House, and all the the Treasures Department, along 0:06:01.360 --> 0:06:05.640 with top House leader Speaker Paul Ryan in the top 0:06:05.680 --> 0:06:10.279 Democrat Nancy Pelosi have signed off on that. Now. Of course, 0:06:10.400 --> 0:06:13.679 as we've seen in the past, will rank and file 0:06:13.760 --> 0:06:18.040 members join in cryan support of this as outside groups 0:06:18.360 --> 0:06:22.360 still called the bill out billy have they? The lawmaker 0:06:22.360 --> 0:06:24.520 has been able to figure out how to handle the 0:06:24.560 --> 0:06:28.720 appointments to that seven member board that's supposed to oversee 0:06:29.200 --> 0:06:33.720 Puerto Rico's finances. Well, yeah, that's that's absolutely was one 0:06:33.720 --> 0:06:37.119 of the hang ups in the last few weeks, even 0:06:37.160 --> 0:06:41.040 involving constitutional questions about whether the administration or the White 0:06:41.040 --> 0:06:45.039 House could be to congressional appointees and vice versa. What 0:06:45.120 --> 0:06:48.680 they've come up with as an elaborate system where there's 0:06:48.760 --> 0:06:52.719 categories of the board number seven and which they have 0:06:52.800 --> 0:06:57.599 overlapping rights and authority and different ways they can be 0:06:57.640 --> 0:07:01.440 appointed or blocked. But it's a cat home of rules. 0:07:01.839 --> 0:07:04.440 But they think they finally gotten that Reich cube that 0:07:04.560 --> 0:07:10.560 will allow it to be passed. So this bill is 0:07:10.800 --> 0:07:15.120 already of your story points out being perhaps at least 0:07:15.160 --> 0:07:18.720 objections are being raised. Rather it means that he's going 0:07:18.760 --> 0:07:21.600 to vote against it. You quote a Representative John Fleming, 0:07:21.680 --> 0:07:24.200 a Louisiana Republican, he's a member of the ultra conservative 0:07:24.200 --> 0:07:28.560 House Freedom Caucus, saying they have to consider whether Congress 0:07:28.560 --> 0:07:33.040 will hold these states and territories responsible for their obligations 0:07:33.080 --> 0:07:35.480 at cetera. And I guess what this is when I'm 0:07:35.480 --> 0:07:39.640 really driving out is the politics, because it's it's encouraging 0:07:39.760 --> 0:07:42.520 to see any kind of bill, you know, emerging now 0:07:42.560 --> 0:07:44.920 in the midst of this heated presidential race, and they're 0:07:44.960 --> 0:07:48.000 important races in the House and Senate as well, that 0:07:48.080 --> 0:07:51.480 could get a problem that's been festering for some time solved, 0:07:52.320 --> 0:07:54.040 is that when you hear from someone like Fleming, is 0:07:54.080 --> 0:07:57.000 he just posturing for the folks at home. Well that's 0:07:57.000 --> 0:08:00.360 a good point. Uh. First of all, the back as 0:08:00.360 --> 0:08:03.800 a campaign here, as you point out, and the backdrop 0:08:03.920 --> 0:08:07.840 is also that some outside groups worried about their classifications 0:08:07.840 --> 0:08:11.720 of bonds or whatever, how they might be prioritized or 0:08:11.960 --> 0:08:17.240 bumped down in this restructuring process, will turn out that 0:08:17.280 --> 0:08:19.520 they are ads. They are running ads. In the past, 0:08:19.600 --> 0:08:23.720 they've classified this bill as a bailout. Now, Speaker Paul 0:08:23.840 --> 0:08:28.040 Ryan that will have the task of convincing his rank 0:08:28.080 --> 0:08:33.280 and file members two come to the realization. At least, 0:08:33.280 --> 0:08:35.280 he argues, this is no way a bill out, no 0:08:35.440 --> 0:08:38.000 tax fair money will be used, and you have the 0:08:38.000 --> 0:08:41.280 political courage to vote for something he says, is absolutely 0:08:41.320 --> 0:08:45.880 necessary for the territory. UH already the House Freedom Practus, 0:08:45.960 --> 0:08:49.560 which of course was the the group that was always 0:08:49.679 --> 0:08:54.760 UH in in conflict with previous Speaker John Bayner says 0:08:54.800 --> 0:08:56.680 it is not ready to commit to this new bill. 0:08:57.640 --> 0:09:00.760 But to be fair, the chairman Jim's Or in Ohio 0:09:00.960 --> 0:09:03.120 says that he has not read the new bill yet 0:09:03.160 --> 0:09:09.320 and he's withholding his judgment. Billy, the sort of battle 0:09:09.400 --> 0:09:13.720 that that goes on, it's because the island is spending 0:09:13.760 --> 0:09:18.040 a third of its revenue servicing its debt. Does this 0:09:18.520 --> 0:09:24.200 agreement do anything to alleviate the pressure on the economy, Well, 0:09:24.240 --> 0:09:28.240 it does it, uh. First of all, it will it 0:09:28.679 --> 0:09:33.280 provides a short stay of any litigation from creditors to 0:09:34.040 --> 0:09:38.600 otherwise go outside of this deal to to to get paid. 0:09:39.200 --> 0:09:43.680 That that's a brief rest. It lasts toll at least 0:09:43.800 --> 0:09:45.920 February of next year. And now, of course that would 0:09:45.960 --> 0:09:49.560 be just a month after the elections of a new 0:09:49.600 --> 0:09:53.280 governor or governor at the same time. This, uh, this 0:09:53.360 --> 0:09:59.240 will allow categories of creditors to decide whether as a group, 0:09:59.400 --> 0:10:04.360 if enough of im agree to accept a prioritization scheme 0:10:04.760 --> 0:10:09.440 or some sort of uh you know, haircut. Uh. So 0:10:09.760 --> 0:10:14.559 it's all those were combined with other financial oversight uh 0:10:15.280 --> 0:10:19.040 benefits at least in the view of the bill riders, 0:10:19.080 --> 0:10:22.880 that could help aid the territories government to to kind 0:10:22.880 --> 0:10:27.400 of wade through what it can on this enormous, enormous pressure. 0:10:27.440 --> 0:10:30.800 It's it's same. Thank you very much for spending time 0:10:30.840 --> 0:10:34.959 with us and clarifying the situation. Billy House, House, reporter 0:10:35.160 --> 0:10:38.120 on our congressional team for Bloomberg News, coming to us 0:10:38.120 --> 0:10:42.160 from the capital in Washington, d C. Home to Bloomberg 0:10:43.400 --> 0:10:46.520 one and one oh five point seven h D two 0:10:47.000 --> 0:10:51.960 in the Washington metro area. Talking about Puerto Rico and 0:10:52.440 --> 0:10:56.240 House Republicans and the Obama administration reaching an agreement on 0:10:56.360 --> 0:11:05.840 restructuring Puerto Rican debt? Is it time to buy Apple? Google? Facebook? 0:11:06.280 --> 0:11:08.559 Keep it right here on Bloomberg Radio, we're gonna be 0:11:08.559 --> 0:11:11.520 speaking with Loo Pianta Dosi from Eating Vance. He's added 0:11:11.559 --> 0:11:14.000 to those holdings to his portfolio. Was recently. This is 0:11:14.000 --> 0:11:14.800 Bloomberg Radio.