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tv   Bloomberg Markets  Bloomberg  February 23, 2021 1:00pm-2:00pm EST

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out who will pay for the crisis that plunged millions into darkness. it will probably be ordinary texans. over a five day period, services sold totaled $50 billion. utilities will likely stick that bill to consumers and taxpayers. security officials are casting blame on the pentagon, intelligence community and each other about the deadly riot at the capitol. they are testifying before two senate committees. three officials have resigned. donald trump's allies have downplayed his role, they blame stakes by congressional leaders and capitol security. grim milestone reached in the united states. one half a million americans have died from covid-19. this is just more than a year ago that made its disease way to the united states.
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u.s. has recorded more deaths than the next country, brazil, with fewer than half the coronavirus deaths as the u.s. still, deaths and hospitalizations have fallen. more people are being vaccinated. the end is in sight, according to prime minister boris johnson. he laid out a four month long timetable for easing lockdown rules. >> this roadmap should be cautious, but irreversible. the end really is in sight. a red shady year will give way to a spring and summer that will be different, and incomparably better than the picture we see today. mark: schools in the u.k. will reopen march eight. outdoor hospitality mid april, and sports stadiums by may. died june 21, remaining businesses will resume
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operations. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton, this is bloomberg did -- bloomberg. ♪ ♪ david: 1:00 p.m. in new york. 2:00 a.m. hong kong. i am matt miller. here are today's top stories from around the world. fed chair jay powell signals the central bank has no intentions of pulling back its support for the economy. we dig into how markets are digesting. the race for new york city heats up. we have a conversation with one of the contenders, former city
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executive ray maguire. plus, an interview with the ceo of lucid motors. see civ getting absolutely hammered in today's trading. first, a quick check of the markets. speaking of getting hammered, we see the nasdaq getting hit hard. right now, nasdaq 100 down 2%, the six day in a row. the 10 year yield is not moving much, but holding at a high level. that number of rising rates in general is a problem. i have bitcoin, also a problem. i am going to show you tesla in a second, but a number of them including jack dorsey's square.
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bitcoin falls 14%. still not a problem if you bought a 10 years ago. the pound, speaking of traditional fiat currencies, 141 on the pound. relative strength for the british currency as well. individual movers, i mentioned tesla. bitcoin hurt tesla, but bmw ceo saying he does nothing tesla can keep up the kind of growth it expects. the stock is down more than 5% to a level below what it started this year at, and even below what it started in the s&p 500 at. falling below its entry-level. i think carol massar is actually talking with kathy would. look out for that interview on bloomberg radio and television. arc down 6%. cciv, churchill capital corp.,
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the spac that is going to complete a reverse merger. the transaction probably won't be done until the first quarter. after the news is confirmed, down 33%. home depot also a big drop even though the company said business has been going gangbusters. it does not want to make an outlook for the full year. as a result, investors have sold off. consumer discretionary is the biggest losing group. if you take a look at groups that are winning and losing, you would think tech shares are the biggest losers, it is actual consumer discretionary. half of that is home depot. such a big loss. infotech, down big today. energy doing well as oil holds steady.
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utilities are doing well also as rates hold. let's get even deeper into the rates conversation. the reflation trade has been front and center for investors. today, jay powell testified before the senate. he spoke about how the fed would handle rising prices. >> inflation will probably be volatile over the next year due to significant -- particular things with the pandemic. i do not expect that will be a situation where inflation rises to troubling levels. if it does turn out that unwanted inflation pressures arise and they are persistent, we have the tools to deal with that. >> joining us now is ira jersey. what -- did anything surprise you from jay powell today? >> not much.
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he did give details, two of the interesting things he said is that he is not worried if -- yields get negative, something that has been talked about a lot with the treasury department, reducing the tables necessary. the other is, he is not worried about the steepening of the yield curve. yields of 10 year and 30 year bonds going up faster than the five-year note or the two year note, which is probably not going anywhere at all. those two things together were a little surprising. there had been talked that if yields go up in the 10 year sector too much, the fed might come in and buy more of those notes to keep yields lower. matt: did we get any indication as to when the fed is going to hike rates? the market expected to bring
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forward a little. i thought the expectation -- the likely could -- the likely could it could happen in september is rising. ira: that is going up a little bit. we have to remember he said a couple of meetings ago and reiterated it today that they are not thinking about hiking yet. one of the preconditions would be for them to reduce the amount of asset purchases. they are still purchasing 120 billion dollars of agency mortgages and treasury securities every month. they have to taper that. that is the necessary condition that has to exist before they talk about hiking. let's say that happens in december because things are doing better, they say we are going to taper. that taper will last nine months. that is how you get to december
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2022 potential for hike. that is early. bloomberg economics thanks that is too early. i think the market may be is getting ahead of itself and building and risk premia that is unwanted. this is not much different than what happened after the global financial crisis where the market kept pricing a 18 months out. that hike never happened. it only happened after about seven years. matt: i just want to point out that carl is my friend too. [laughter] i have met his bulldogs. let me ask about the 10 year. i have heard investors come out and say, i do not think it is going to rise much above 145. does that seem fair? ira: our published scenario for
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year end is about 1.5%. i could see it going up at some point to 1.75%. at that point you get risk assets that -- yields rising too quickly. similar to what is happening today with the stock market down 1%, seeing a bit of a rally in parts of the treasury curve, that is the dynamic that will occur at some point where you do get fear that rising rates are going to naturally slow the economy even with the fed on hold. that is the market dynamic i think a lot of the people are thinking about. you get to 150, the stock market down 2%, you wind up with a scenario where rates are rallying because of the risk market activity. matt: isn't there a mechanism -- not just the central bank itself, but foreign investors were supposed to just pile in
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here. don't japanese investors have a ton of cash on the sidelines, ready to hold the rate down? ira: there is certainly cash on the sidelines. if you hedge out to currency exposure, your japanese investor , you are not making more than buying a japanese bond. only people who have u.s. dollar liabilities are going to be buyers of treasuries near these levels. i think there is a dynamic where you definitely see interest in buying the longer term of the treasury curve. we wrote a note talking about how people are buying what they call treasury strips more as yields go higher. that shows there is a demand. a lot of that demand may not be from japanese investors but may be from taiwanese insurers, and pension funds in europe who might have dollar liabilities.
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they like the fact that you have over 2% 30 year yields. still not high historically, but higher than the last year. matt: thanks very much for your time. i know you are busy. ira jersey, chief rates strategist for bloomberg intelligence. shout out to carl riccadonna. tesla wipes out 2021 gains. we take a look at what is leading the decline for the carmaker. this is bloomberg. ♪ want to save hundreds on your wireless bill? with xfinity mobile you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network. sure thing! and with fast nationwide 5g included at no extra cost. we've got you covered. so join the carrier rated #1 in customer satisfaction.
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and get a new samsung galaxy starting at $17 a month. learn more at or visit your local xfinity store today.
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matt: let's get straight to our
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stock of the hour. tesla has fallen below its 2021 starting level, below its s&p 500 level. it has dropped $100 billion in market cap. abigail doolittle with a look. abigail: a fall from grace, you could say for tesla. down for a fourth day in a row, longest losing streak since october. i believe down 30% from the peak. people looking for a why, this chart gives it. you see tesla basically flatlining until last year, then up and away. a roughly 1200% move from the law of last march up through the peak. too far, too fast, a parabolic move that must correct. you could easily make the case that tesla is going to quickly go back down toward 500. the average price target is not
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too far from that. here we have tesla going below the price from which it was added to the s&p 500. a big piece of that rally was that stuff -- would get added to the s&p 500. initially folks were buying that it was on the s&p 500, not so much now. if we take a look at tesla in terms of the ranking it received, it did not receive an official ranking from jd power. from the jd power survey released last week, up your alley in terms of reliability, up top is lexus. porsche, kia, then tesla always -- all the way down at 30. matt: i am surprised that buick has done so well. it has been a long time since i have seen a buick on the road. does the brand still exist?
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abigail: right there above cadillac. matt: well, cadillac for sure. thank you very much abigail doolittle. stay tuned, we have a lot more on ev's. we hear from peter rawlinson, his company is doing reverse merger into a spac. this is bloomberg ♪
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matt: the race to become new york city's next mayor is underway. one of the candidates, a former citigroup vice chairman, ray maguire joins us now along with bloomberg's sonali bostick. >> thank you for joining us.
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it is a crowded race, very crowded for mayor. i want to start with the polls. i want to know what you are doing to get on the radar. i want to know why you think people should pay attention to you. >> i think lessons learned from the 2013 race -- it is still very early. what we are doing is talking to people. ia was coming yesterday, in brooklyn, the bronx, queens, staten island. i am talking to the people. what i find is that when i connect to the people and they understand my story and they understand what is needed today in terms of leadership and experience, and in whom they can
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trust and believe in bring this city together, the amount of support we are getting is resonating across the city. from the mother of eric garner, who you saw today some of the iconic athletes who have stepped up, patrick ewing and charles oakley, the matches eggs -- the message is getting out. i am talking to people. i am excited about where we are. sonali: talk to us a little about who is the base you are looking for to become your voters. there is talk of you branching out outside the financial community to reach more new yorkers. who are you reaching? ray: i am reaching all new yorkers, especially those that grew up like i did, on the others of the tracks. i didn't know my dad. my grandparents and my mother
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raised me. we had half a dozen foster children at the home. i know what it is like to not have any money, wash tinfoil, get all of the bars of soap together and convince yourself you have a full bar of soap. the sacrifices my mother made for me to get an education. it is those people, especially the younger people whose lives can be determined about -- determined by the experiences they have, that is the voter i am feeling. they want something different. they want somebody who has got things done and has a track record of leadership. if i take my lived experiences, what i have been able to accomplish in managing budgets that are bigger than state budgets, and extending the ladder down so that others get the opportunity i had. i am a soul brother.
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people recognize that. the recognize we have the relationships to pull this city together. sonali: speaking of public-private partnerships, we have been hearing a lot about the business community in new york threatening to go to lower cost locations. when you talk to colleagues in the industry, are you telling them anything to get them to stay? ray: yes. this still is the most attractive, culturally rich, most opportune to give people the opportunity -- city in the world. if you aspire to perform commit you have the opportunity to get to that. this city is it. what people need is leadership. people are concerned whether or not the leadership has the vision and the experience to
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carry this city forward. that is what they are looking for. the relationships i have developed across the spectrum. i can speak the language of the streets and the schools which is what is needed to bring the city together. we are too divided. matt: can i ask you about the crime situation? i grew up way up north on the upper west side in the 1970's, it was worse than it is now. we hear ceo's talking about security outlays all the time. it is an issue that is difficult to address while also trying to address income inequality and racial inequality at the same time. ray: i have in my safety and justice plan, addressed this. it is the culture i have talked about, a culture of respect,
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accountability and proportionality. we need to return that's -- that respect. there was once an relationship between the people in the police, that has been breached. on one hand, we talk about accountability. those people who are serial misbehaviors, we need to make sure they are held accountable. if the only thing you have is a hammer, everything looks like a nail. in many black and brown communities, it is a sledgehammer. my pillar on which i am standing for safety and justice has been informed by having conversations with people in the community. sonali: speaking of the community, black voters were crucial in democrats securing the most recent georgia c. they were so crucial in the presidential election as well. do you think the same will hold true in new york? ray: absolutely, the black voter has been and will be fundamental
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to the results of this election. no candidate can win this election without the support of the black voter. that is accurate. that is the area in which i am focused. there is a future that includes them. my economic plan is the largest, most inclusive economic recovery in the history of the city. we have to focus on that. matt: thank you so much, ray, for joining us. new york city mayoral candidate ray maguire. sonali bostick, thank you as well. coming up, we dig into the tech selloff as nasdaq hits for its sixth day of loss.
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mark: i am mark crumpton world news. fed chair jay powell underscore
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the economy's ongoing weakness, speaking virtually to the senate banking chair powell also suggested the fed sees no need to alter its ultra low interest rate policies anytime soon. >> we expect readings on inflation to move up, that will be a temporary effect and will really signal anything. you can see spending pick up substantially in the second half of the year. that would be a good thing, but it would put pressure on prices. it does not seem likely that mr. powell's comments contrast analysts increasing optimum -- optimism. a potential surge of inflation and long-term -- a sharp increase in mortgage rates. a half million americans have died from covid. the u.s. has reported more deaths than any other in the
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country. new mexico -- mexico has nearly half as many. even still, that is as hospitalizations have fallen from the peak in january. many republicans oppose linda thomas-greenfield. they say she is -- soft on china and will not stand up for u.s. principles. in her confirmation, she rejected those concerns. she's the third african-american and a second african-american woman to hold that job. lem says political unrest in that colony is for beijing to ensure -- take steps next month. global news 24 hours a day on air in our by bloomberg could take and over -- this is
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bloomberg. ♪ >> welcome to bloomberg. >> here are the top stories we are following around the world. here's the latest -- tesla, square, all humble. it has a $24 billion valuation, kind of. we will discuss that. plus we will speak with
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crestwood equity partner ceo, bob phillips, about the failure of the power grid in the companies earnings. amanda, would you want to take a quick look at the market? amanda: some of those stocks are in the route of the limited market. it has seen a bit of volatility, it seems a bit of rotation even though they were -- they reinsured -- they ensure the economy has a long way to go for recovery, and they will maintain support for the economy. do not tell that to the bond market. it is at a one year hi, and i got that -- wiping $1 trillion healthy value from everything
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from specs to head funds -- headge funds. what do the markets know that we do not? is it perhaps that they're going to be sure -- going to be reassured from what they are hearing from the central bank? >> yes. you did get a message of stability from jerome powell, but also he is not very concerned about this race. you can see that clearly if you look at growth versus value. this is the year -- this if you dig in, you can see that sectors like energy, financial, our big components of value benchmark,
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and they have been getting inflation expectation dry, but on the others of that trade, you've got growth stocks and texts getting slammed his higher yields make it more difficult to justify. take is generally thought of as a duration sensitive sector, and that is what has been playing out over the past few weeks. >> what is the story with churchill capital corp. for question mark it's been up for hundred percent or 500%. today, when we finally got the news, stock got slammed. >> >> think it could be tied into this event, but i think it is part of the broader markets
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that we have seen. that is because if the yield dries, it takes away that there is the no alternative argument. one theory out there is that if yields start to rise and investments, you're seeing the frothy areas of the markets get hit first. the stores will deftly fit into that narrative -- definitely fit into that narrative. >> it is interesting timing. it speaks of an issue that is true of this market i think more so than any time in history, you tell me, but the sheer amount of capital looking for a home. but to put a floor under the value of these assets, unless you're going to encash that
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won't go negative on you, you are going to have to stay on somewhere. that is one of the most interesting things we have to follow, people like myself get very excited to see the 10-year treasury yield at 1.3% or 1.4%. that is also important to keep in mind that rates are historically low. the average is over 2%, so we are still a good way away from that measure. you're able to lock in cash at very low barring rates, and investment creating all the way down to junk has been on fire. >> katie, you know i look at -- the first thing i thought after looking at it last night, and perhaps i'm spending too much time on reddit, but the first thing i sought -- thoughts about
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tesla last night was, "by the dip." is this a sentiment that you think a lot of retailers are expressing these days? >> if you look at twitter, you could see by the dip start trending in a big way after the nasdaq erase its numbers. by the dip has also worked across the board whether you are a day trader or in hedge funds. the nasdaq 100 and s&p 500 index's are still lower for the day. over the past year it was very shallow and we will see if this will plays out as well, if it will in up in the green or if it is the real deal.
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matt: all right vicki, thank you very much. here to talk with us about some really exciting, but one of the downsides of today's market, one of those is cci p, the spec that loses its backend to go public. the deal was confirmed today and leaseback was absolutely crushed. our own ed love low got an exclusive interview -- ed low got an exclusive interview. this is bloomberg. ♪
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matt: this is bloomberg markets. i am matt miller alongside
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amanda lange. everyone has been excited about this story, at least my gearhead friends who are also robin hood addicts because here you have a challenger to tesla who was going to be like tesla. the problem is, they said that when they confirmed the deal that there pushing production back. so not only can you not buy the car, and they are going to be earning $10 billion over the next few years. amanda: it is where you get this
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jumpiness right now. in this case, i feel like the momentum of this market, the timing was bad. if it had hit on another day, this is not a day or maybe even a we go to for this kind of news. matt: to be fair, there are some smart people involved with this fact, not just michael klein, but alan mullally. if you could turn onto that -- listlessness into the exclusive -- let's listen in to the exclusive interview. >> took him out and drove the car, loved it, very first car for the production line.
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we had a very good meeting of lines. we recognize, peter, why are you pushing like crazy for something artificial in the spring. what is really important here is to get the volunteer right. they freed me. they said look, get the product right. don't work for the artificial construct of a specific date. if it rolls on into the second half of the year, we are ok with that. the capital, you pull the trigger when the time is right. trust you to get it right. we know you want to make it perfect, but we are making a luxury car. when tesla came to the market at
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least 4-10 years ago, a lot of slack was cut then. electric car was such a fun experience, people forgave the -- you get things right. the impact of covid is not to be underestimated here. we are chasing down and number of suppliers from around the world, we have 250,000 suppliers and 30,000 jobs our operation has been affected by covid. >> has the shortage had any impact or caused this delay in production?
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>> did not affect us because we have a pretty savvy team who actually predicted this. i do recognize that some of my neighbors and had to be a push for over -- the investor deck in terms of bridge financing before the deal which actually closes later this year. >> we got a great, primary investor from saudi arabia. they're very supportive of us as strategic investors. they are attracted to validation points and we are validated
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indeed. we went for validation and that is exactly what we have achieved. >> you say you are going to spend about $10 billion. that is a lot of money. how are you going to get $10 billion? >> we've already got nearly a half billion dollars. that gives us an absolute clear runway into 2023, and in that time we can build out phase ii and phase 3. we are investing because we are vertically integrated and it gets us through the situation
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where we baby nearly ready for introduction. amanda: we've been talking a lot about the role that stacks has played in the equity market. just a comparison of their performance relative to other forms of ipos and the s&p 500, in his -- it is quite something to behold. >> yeah, it is. this is a great illustration. he went through every single's back and added the rua should together on an excel spreadsheet and the growth that we have seen has just ramped up in terms of how much investors are willing to give to these specs.
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here it is right now. adding $80 billion over the last four weeks. lucid is going to need it if they want to 10 con tesla. -- want to take on tesla. amanda: we getting the lights back on in texas, but how do we prevent a similar crisis in the your? future? this is bloomberg. ♪
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>> the moment you sponsor a job on indeed, you get a short list of quality candidates. claim your first $75 credit when you post a job on indeed. >> well we have a safety net -- >> we will be ok, right? ♪ amanda: this is bloomberg markets. i am amanda lange with matt miller. millions are still without power in texas. with the lack out, many are left wondering, can it be prevented in the future? i want to start
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their bob, because people have learned a lot about the texas grid and how it works in the vulnerability. can you tell us what happened here and how to make sure it does not happen again? >> people are getting back out there, getting back to work, fixing landscaping, things will return to normal shortly. i think most important it -- most importantly, this was an unprecedented weather event, given its scale across the united states. you had the oil and gas industry start through north dakota, wyoming, the texas panhandle, and south texas. during the week, we saw shut-ins of as much is 40 percent.
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nine pc of data processing, refining capacity was operating at rates, and of course the most important, over $2 million, a seven pcf a day, about 30% of the production, the big challenge. >> i understand, this is a huge surprise in a way. it is like a earthquake hitting chicago, it just does not happen. on the other hand, we hear from climatologists that this may start happening more often. climate change is pushing the cold fronts around north america -- do we need to be inflating all these networks? do we need windmills that have
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heaters in the blades? do we need to completely rethink the infrastructure down there to avoid something like this happening again? >> ercot was hit with a record over 69 gigahertz of demand which exceeded their generation capacity, and when they lost 35% 40% of generation, they lost coal, they lost a good leader and obviously we did not have enough supply to meet demand. our organization will take away a lot of the lessons learned from this and begin to invest more capital in these facilities to try to protect from that once in a generation type of event. whether it is oil, gas, liquids, all refining, we all need to be
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aware of the fact that the climate is changing and we are seeing more winter events in the summer and summer events in the winter. get prepared is the next one comes. amanda: we've got just about a minute, bob, but where do renewables fit in? >> i am not an expert on renewables. we are a traditional player in the business. about 70% gathering and processing and 30% storage and logistics. mlb's cannot own renewable aspects at this point in time, but we are hoping that congress will take a hard look at the -- so we can see traditional oil and gas companies in the midst rings as a start investing in renewables in the future. we know that will take place. >> wow, that just amazes me.
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mlp cannot own renewables in this day and age when they are so reliable, so instant. bob, it was great having you. we hope to get you back on again. from amanda and myself, this is bloomberg. ♪
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mark: i'm mark crumpton, with bloomberg's first word news. the former chief of the un's
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capitol police told congress he learned of this week that his officers had received a report from an fbi field office in virginia that forecast and detailed a chance extremists could commit war in washington following the day of the capitol insurrection. >> high in the last 24 hours was informed by the department that they actually had received that report. it will received -- it was received that one of our members assigned to the joint terrorism task force, a task force with the fbi. they received it the evening of the fifth, reviewed it, then forwarded it to an official at the intelligence division at headquarters. mark: the head of the fbi's office in washington said once he received the general reef with warning from the virginia office, that information was quickly shared with other law enforcement agencies through the joint terrorism task force, including the capitol police.


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