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tv   Trending Business  Bloomberg  January 20, 2016 9:00pm-10:01pm EST

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year. timing is everything. project is ready to come on stream just as energy prices go through the floor. a mixed bag at the moment, a bit of weakness for china once more. it does seem that we have china not getting the note. >> shanghai's office earlier low, still down by .7%. hong kong stocks trading up by 1.1%. perhaps not surprising when you look at the technicals as of yesterday, 60% of hong kong
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, bouncing back after japanese markets fell into bear territory yesterday. that is on account of a slightly weaker yen. a one-year high on the back of the aggressive safe haven demand. elsewhere around the region, taiwan managing to pull out from negative territory, up by .2%. as you said we did get this monster cash in -- injection ahead of the chinese new year. traditionally a place when liquidity gets very tight but this year we had extra downward pressure coming from the yen as well ase capital outflows.
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this is how shanghai is looking. every sector in the red but weakness coming through from industrials, down 1.3%. also weakness coming through from oil and glass -- oil and gas. recovery in of a the oil price in terms of new york oil. rishaad: china's determination to defend its currency, many economist expect that pile of cash to fall by another 3% this year. us,conomists are telling plunging by more than i have tried in dollars and 2016, the first annual drop since 1992.
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authorities have been defending the currency after sentiment shifted following that surprised inluation of the yuan like august. mixed signals, are they defending or selling? record outflows last year putting downward pressure on the china withcould help its export competitiveness regionally, but could also damage confidence in china's ability to contain its economic slowdown. -- $13 billion defending its currency, nearly as much as the entire fx stockpile of switzerland. switzerland is the world's fourth-largest fx reserve holder. 10 of 12 economist survey expect china's reserve to dwindle by another $300 billion this year, perhaps falling below what you psychological threshold of $3 trillion. state economist expect the reserve pile to fall to $2.6
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trillion next your. many economist say china needs to clearly tell the market what its exchange rate policy truly is. right now there is a lot of guessing, adding to the volatility. on the one hand since they had that devaluation in august, they've sent other mixed signals where they want the revenue to go. one official was quoted as saying betting against the yuan would be foolish. one saying let's see if the pboc stabilizingwar of the renminbi which should be a top priority. we will be looking at that story right through the course of the show. after years of delays and cost overruns, chevron's $54 billion
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australian project is about to come online. james is in sydney. one of the world's most it could ventures and not have come at a worse time, could it? james: that's right, it's been a long road but more than six years after chevron and its partners including shell and exxon improve the massive investment, it's finally andoaching the finish line getting ready to export fuel to asian customers. the world has changed quite a bit in the last six years. in 2009, oil prices were trading at $78 a barrel. $37top estimate was about million. price is trading
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at well under $30 a barrel. critical.rices that is what has traditionally driven revenues for these megaprojects. when oil prices tumble, as they have, that eats into the returns andprojects like gorgon negatively affects the economics. keep in mind these are long-term projects. the economics of a project like will be determined over the next four decades, not the next four months. how economic they are going to be. clearly not great timing as you said for gorgon. rishaad: let's have a look at
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one of britain's for biggest banks. a look at that story and more. >> barclays has started a fresh round of job cuts and staff here in asia will suffer the biggest losses. they say the bank plans to eliminate more than 1000 jobs worldwide and to exit several asian countries. about 230 jobs are expected to be lost in asia and the bank plans to wind up is cash equities business in the region. shutting down that business in japan will mean the loss of about 80 jobs. employeesesident told the company will focus on s.rivatives and electronic the bank's bonus pool will be cut by 10%. they will present a broader full-yearupdate and
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results on march 1. touchscreen technology synoptics surged nearly 27% in new york after sources told bloomberg it maybe close to a deal with the china backed investment group. the agreement would come as early as march and diet the company at $4 billion or more than $110 per share. that's an almost 80% premium to the company's closing price tuesday. the samsung and apple supplier had rejected a similar offer last year that gave it a 70% premium. sources say a final bill has not been sealed and talks could still fall apart. they are ironing out details of the transaction but it would require u.s. government approval. may beption scandal looming in japan. the economy minister will he provide an explanation today about allegations of financial
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impropriety by a tabloid magazine. emphasizing he has not personally done anything that would get people pointing their fingers at him. says he and his secretary took money from an unnamed construction company in an alleged violation of a political funding law. the magazine says the payments amounted to $103,000, adding that there are no details in the political funding records. he was the point man in the tpp trade talks. all right website we are looking at this. it is a first, it is the quietest unveiling of an aircraft. ,he release of the new airbus
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if you blinked, you would have missed it. program, later in the more pain ahead for farmers. we will have an interview with the chief executive. after years in the doldrums, or their reason for optimism on the european economy? we will take a look, next. ♪
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rishaad: mario draghi decides on rates today. let's have a closer look at what is going on with the euro area. the head of pan-european equities, thanks for coming in.
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given all the stories of green shoots in europe, are you buying into this? >> if we look at europe more broadly, what we are seeing is a slow, gradual but definitely positive direction in terms of the developments of many of the economies in the region. one of the key rings for people to focus on is wage inflation. we started seeing real wage rises in economies like germany and spain. in a way these represent the green shoots you refer to. have the necessary structural reforms taken place in the soft underbelly of europe? it's very different from in the north. surprising how spain has come back, however. >> absolutely. if you look at those countries in the periphery, the most forward thinking, look at an
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spain, like ireland or look at what is being attempted in italy. rishaad: you use the word attempted, of course. >> yes, looking at changes in the tax code and the judicial system, all these things free up the potential for there to be more business creation and more investment. does this mean you're coming to this part of the world because perhaps we should be getting into equities there? situation where most global stock markets, whether developed in europe or u.s., it clearly being impacted centersolatility that around asia and the emerging markets. certainly the equity market seems to be offering on a long-term basis more value today
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than they did even a few months ago. what is going to cause the tide to rise, that is the other question. , thethe way i see it market has settled on a there is kind of a denial or increase of skepticism about the potential for macroeconomic improvements across the developed world over the medium term. the concern is what we're seeing such aa is going to have significant effect it will push of lowe more years growth and low inflation. what changes the perception and the market is more evidence that we are going through and improving employment situation. inflation starting to normalize as we move through the year.
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it's actually a very short distance between people thinking it's an inflationary bus to a dis-inflationary boom. but it's quite an amazing world we live in. we still have concerns about inflation. especially the bundesbank, the legacy of what happened in the late 1920's. why has the world changed where inflation is no longer there, and not even signs of it? >> you have to appreciate that of big part of the disinflationary forces are actually supply driven factors, like falling commodity prices and the fall in energy prices.
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you also have the second factor, enablingnew technology business models that create disinflationary forces, making consumer products and services cheaper than they were previously. again, putting these factors together, it's quite positive. if you think about it from a yourmer perspective, purchasing power increases materially. can consumeden you a lot more music today than yesterday. i think there is too much of a perspective that says low-inflation equals weak demand. rishaad: does it mean were barking up the wrong tree? >> there is a risk that they are.
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we're using unconventional monetary policy to stimulate economies. there is a potential that what it does is undermine confidence. so you don't get the multiplier effect in theecony beus you are effectively providing liquidity but a lot of the money collapses. >> these are the stories making headlines around the world. warning against unrealistic expectations. due to sanctions and to the country itself. minister said riyadh had panicked over the return to the global community. >> it spent millions of dollars in the united states in
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congress. it has done everything it could to undermine us since its inception. i think our saudi neighbor should come to their senses and understand that they have a much better future in collaboration and accommodation with iran, and we are ready for that. people killedree in dramatic explosions at a fireworks plant in an eastern shattered windows and houses nearby. the factoryconfirm did have a safety license. last week 10 people were killed in an explosion at a similar fireworks factory. u.s. and japanese agencies have
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confirmed last year was the hottest by record margin. it was three quarters of a degree warmer than the long-term average from 1961-1990. combined with one of the strongest el niño events ever seen. global news 24 hours a day powered by 24 hour journalist in more than 150 euros around the world. rishaad: up next, twitter is all a flutter on rumors of a potential buyer. that's when we return on "trending business." ♪
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twitter shares were on a tear in new york after rumors of a takeover by a media giant.
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murdock is here. >> this is another great example of how nervous markets are. these were vague rumors and then twitter jumped as much as 14%. twitter, it for ended 4% higher. about news corp. taking over. saying oneson guarantee in the way of -- killing off twitter. rumors of denied the twitter bidding but this person rupert murdoch looking for myspace 2.0? it didn't really catch on.
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rishaad: it did until they took it over. they called it a huge mistake. calling ittter user a way to control public opinion. rishaad: thank you very much for that. woodside petroleum has a target range between 86 and 93 million barrels of oil equivalent. 92.2, towards the higher end. it could be up to $1.2 billion. having a look at those shares, down .8% in a rising market.
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osman surging announcing 80% saidand the company also it's considering a full-year .ividend in line australia's finance ministers said businesses are doing something right. he says the challenge now is for australia to remain competitive. , china is oura most important trade relationship and has been as long as we been focused on the export of resources. what we see moving forward is an and fromty to expand, , itustralian point of view
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, but ouronsequences economy continues to grow. our economy is transitioning quite well. other parts of the economy are becoming more competitive. forward, the government is doing a whole range of angst to ensure were competitive internationally with tax reforms and ambitious deregulation and free trade agenda. china, wea, japan, pursued an agreement with india and we are pursuing and innovation agenda. there are a whole range of things that will assist in the
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transition that needs to take place. i'm optimistic about the outlook. rishaad: coming up, defending the peg. why some say bets against the hong kong dollar are misplaced. ♪ the only way to get better is to challenge yourself,
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and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.
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>> us stocks rebounding. the downturn in global equities may have gone too far. have in mining companies been driving australia more than 1%. the shanghai composite is recovering from some early losses. the bank of china injecting the most cash in almost three years. central bank and conducted
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more than $17 billion worth of repurchases. 44 billion on a 28 day contract. at a time when capital outflows are mounting. crude making modest gains. it actually sank overnight. october the $28 a barrel level. with the weekly stockpile data expected to show an increase. it probably dropped at least 42% in the last quarter. let's look at the market action. haidi: we are not doing too badly. and the rest of the region we are seeing extended gains. coming back from yesterday. closing in a bear market. it is a by 1/6 of 1%.
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about half of them are technically oversold territory. nikkei felle the into negative territory was in june of 2014. key to see whether we can sustain this momentum. so far so good. fromweakness coming in southeast asia. malaysia trending to the downside. singapore stocks giving back earlier gains. i have been up by over 1% at one point. of construction names and industrials driving mainland markets lower. we are seeing a real recovery in some of these oil stocks. commodities stocks. coming back from yesterday's hefty selloff. putting on 4%. gainer on the asa. up by him was 9%. in japan we are seeing a slightly weaker yen after it hit
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a one-year high in overnight trading. of thateeing some pressure coming in off the exporters. down over 7% yesterday. sony about the same. one of the leading gainers there. we are seeing this broad-based rally. some of these riskier commodities popping up. assisting the australian dollar as well. rishaad: the hong kong dollar having its biggest two-day loss since 1982. this comes up every year. matthew: pretty regularly yeah. it does seem to go on a lot. we need to keep a bit of perspective on this.
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got the currency peg. i'm not sure what the size of the biggest move whether it is 10 years or 15 years or whatever, whether it means that much. when you pick the currency it means every move has to be fairly broad anyway. if you want to test the strength of pressure and one degree or the other. you can look at interbank rates. if you look back it was 5% back in 2003. in the asian crisis it was around 16%. which is around 30 times when it is now. rishaad: how much worse would things have to get before there is actually real pressure on this peg?
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matthew: just look back in history. the short answer is it has to be worse than it is now. i think the asian crisis was really when hong kong was looking into the abyss. you think about what was happening then. it completely collapsed. you had revolutions and regime change. a lot of people were really worried about point. that is when you had three round highball. we are long long way away from that. rishaad: linking itself to the rmb would be one alternative. matthew: the list of possible exchange rate regimes is fairly short. pegging to the rmb is one of the obvious ones. probably the most obvious one. in the short-term it is just not realistic. it is not really a convertible currency. i don't think any of them are viable. the idea that hong kong would be
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considering change and certainly the way things are overseas this far-fetched. rishaad: let's check on some of the stories we're following for you. glencoe has a stake of potential buyers of its agricultural business. it is trying to pay down $12 billion of debt. we could be seeing another tie up between asia and technology companies. in talks to form a joint venture although nothing has been decided yet. been looking for ways to develop the medical technology earlier this month. they are trying to strengthen their partnership with novartis. internet conductivity for inhalers. open its owng to
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stores in india. the indian government relaxing rules for foreign companies selling a single brand in the company. it may help apple cap into a fast-growing market in india. just when sales appear to be peaking. apple needs to make inroads against samsung in asia. apple shares are up 1/10 of 1% today. the banks are enjoying their fair share the headlines but for different reasons. deutsche banc has different results. barclays this morning is grabbing the attention. the high street banks in the u k , barclays is really trying to scale down when it comes to corporate finance. part of what sources are telling us is a wider restructuring effort of the bank. i wouldn't be surprised if it is happening at the moment because
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based on the same sources the job cuts they have already started. we understand and you can see the full details in our story on the website. it was actually announced at town hall meeting this morning in tokyo that they are closing out the cash equities business there. 80 jobs will be cut there. in tokyo. as part of the 230 people that are being cut. new york, u.k. and asia are 20%. they are looking to exit those markets at the bottom of australia. taiwan and malaysia. the derivatives business is there. the cash equity belongs to be affected in japan. they will beses keeping prime and derivatives. and of course the bank may actually come out and make a formal announcement as early as today.
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they are reducing the bonus pool by a further 10% at least. earnings are out. sachs revenue was down 5%. it still exceeded estimates. i think the story for revenue was just another banner year for mergers and acquisitions. 40% revenues for the full year. -70% that is down to them having to reflect the settlement for the mortgage investigation which i think was $5 billion or so. that was announced last week. preliminary numbers for deutsche banc.
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a fairly hefty amount of revenue. that is because of this money that was provisioned for litigation and the restructuring so we're looking at perhaps more shrinking of the deutsche bahn group. rishaad: let's look at the foreign-exchange reserves of china. most economists expecting them to fall by another $300 billion this year. this is got some people concerned that it may undermine the ability to stabilize the currency. is this thinking well grounded? tom: for the first time people policy makers
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theyl of the youan. still have a lot of foreign exchange reserves but it does seem like potentially we could oflooking at a people's bank china that faces some difficult choices heading into 2016. rishaad: it could have levels just under the $3 trillion level. that does exactly set off alarm bells. they have been injecting cash in an unusually large amount, the biggest in three years. just to get things moving. tom: it is the normal seasonal demand for cash ahead of chinese new year. everybody needs cash to go home to their families and to buy train tickets. they have to mean that demand. big capital outflows
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so they each offset that. finally continued concern about growth. continued concerning global markets. in china we have stability. rishaad: we may be ruling out further interest-rate cuts as well. is that seen as essentially now china pushing on a string? no. we saw significant easing going into the economy at the end of 2016. before we started to see that. more stability in the gross numbers. we think there will be a tailwind heading into early 2016. where expect firmer numbers in the first quarter. next, an exclusive interview with the head of the world's biggest milk exporter timeless why there could be more
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short-term pain for the industry . back in a couple of minutes. ♪
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he will not ben accused of a crime but he wants more time to check the facts. the article claims that akita violated little funding laws by allegedly taking around a hundred thousand dollars from a construction company. he says he is not sure whether his secretary made what was alleged. vietnam will announce its plans for the next five years today. a newmmunist party picks leadership and charges the country's path with the challenges ahead. they include reforming state-owned industries, anduding trade pacts,
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vietnam's relationship with china. congress pitches conservatives against reformers with outgoing prime minister seen as being prepared to stand up to beijing. say they havers found evidence of a ninth planet in our solar system. named planet nine, it is said to be about 20 times farther away from the sun than neptune. claim isrs say there based on computer simulations. it is not actually been seen. that would make up for the loss of pluto which was downgraded to a dwarf 10 years ago.
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rishaad: the dairy market had a tough year. he says demand will remain slightly slower thanks to china slowdown. show veryll still tough in my opinion. although the weather is going to be an important factor. we have seen some rain. will stayelieve it behind when it comes to milk production 86%. you see the europe is slowing down. capacity issues. is kind ofside adapting to the new world of low prices. it will depend again on demand. demand is sluggish at this point in time.
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somewhere somehow, whether it is china or lifting the sanctions. an uplift in importing. prices can pick up pretty quickly. theve underestimated slowdown. competitors are keeping it at a relatively high level. what happened in china at the same time was that a massive on ther liquidity burns stock exchange. people have a lot of money in the stock market. trying to make money. and they lost money. consumer confidence was lost as well. that came on top of the higher prices. there is actually going to be pain. it is a question of which supply
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pool or which country can adapt best to the volatility and to the lower prices. farmingealand we have systems that are based on pastors around the year. we have a very low-cost system. we can breathe in and out relatively easy. .lthough there is pain the farmers have high cost prices are uncertain. that puts added pressure because it affects the influx of hard currency.
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the purchasing power of consumers who work in those industries. very much about building infrastructure. everybody can see that the debt would slow down and it had to slow down. it is slowing down for the right reasons. it will affect people who work in those industries. the minimal industries from where i am. in south america or australia. into china. that affects the whole balance itthe country and in the end affects fast-moving consumer goods as well. the purchasing power increases and decreases and hard currency is available as a multiplier to import goods. rishaad:
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air india is making headlines. some desperate measures to raise cash. we will get the details as we head over to mom by right after this. ♪
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rishaad: the collapse of oil has been a hot topic at those gathering at the world economic forum in davos. >> we have a floating exchange rate and so we have immediate adjustments. that is an automatic stabilizing mechanism. it is designed that way. it helps to transition the australian economy and helps the australian economy deal with
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this other challenges we we've been dealing with in recent times. the correction in the financial significanthina is and i would say welcome. anyone who has excessive air in it will find a way to get a complete explosion. the embarrassments for china is that they actually are pretty competent but nobody can control these exchange rate attacks when you have capital flows going up. nobody can control the stock market. so if you're trying to get your credibility on controlling things you're in trouble. >> two years ago i talked about the dollar going down. we come from 142 110 i think we will see currency challenged again sporadically throughout the year.
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we are strongly focused on the united states and on china. approve.s. continues to i think the dollar will continue to flow into dollar denominated assets and that will keep the pressure on the dollar. rishaad: india.mumbai in air india is trying to repay some of its debt. having a rough time of it isn't it. there has been a new set of problems for air india. the national carrier has been seeing deep losses for years now. it now faces a series of issues with the fleet.
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only 21 of the dreamliner's are currently in operation. it has been running those financial losses since 2007. the government spat just to stay afloat. it didn't have a 20 15 happy ending. a member of the crew died after being sucked into an engine. it made an emergency landing after the cockpit windscreen cracked. a bus collided with an air india flight on the tarmac. there is also theinancial aspect of having these huge rcft and the airliner just saying we're looking at about $900 million for the leaseback of its dreamliner's. it has been forced to use this method. of dreamliner's given the multiple technical snags that the airline has been seeing. huge cost overruns. rishaad:
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a quick look at the market action. hong kong positive. shanghai composite is coming back. we have the people's bank of china inject a record amountf cash. a bit of a relief for the nikkei to 25 after falling yesterday. seeing some gains for taipei as well. check on kuala lumpur, manila and indonesia. that's whate had at the moment. a bit of a xed bag. we are better off than we have been in recent days.
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that is it for trending busiss. i am back in one hour. ♪
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part two of my conversation with sean penn, the actor and writer. guzman's cartel is said to be the largest distributor of drugs to america. law enforcement authorities it is made him a very rich man and a much feared drug lord responsible for thousands of deaths. guzman made a dramic


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