tv Bloomberg Go Bloomberg March 1, 2016 7:00am-10:01am EST
shares are plunging. congress is taking up the apple fbi debate today. the former nsa director ways in an exclusive interview. in, in ans exclusive interview. ♪ stephanie: welcome, you are watching "bloomberg go." i'm stephanie ruhle, i'm here westin and jonathan. drop sinceiggest 2012. he's getting a lot of pushback on the corporate analyst. this stock price says the market does not believe your story. a lot of pushback. stephanie: brutal, maybe.
when you walk in and things are doing this poorly, the only way to go is up. david: you finally get to run a big bank, and what happens to you. stories to parse through. for now, we go to london and are colleague caroline hyde, has first word. caroline: for u.s. residential hopefuls, is the biggest day of the primary calendar. and than a dozen states territories will hold caucuses today. polls indicate donald trump will win most of the super tuesday contest. the big fight is for second place, between marco rubio and ted cruz. on the democratic side, bernie sanders is having to win against hillary clinton in massachusetts. heavilyton is the favored in southern states that are holding primaries. the united nations security council votes today whether to impose more economic sanctions on north korea. the news comes nearly two months after kim jong-un's regime carried on an underground nuclear test. the new factions would prevent
north korea from exporting minerals, and primary source of currency. and german chancellor angela europe'srns disagreement over refugees actually threatens the euro. she says of europe disintegrates into small countries again, common currency will be very difficult. eu leaders have a summit on immigration, next monday. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. i'm caroline hyde, matt. matt: taking a look at features, up across the board. 111 on the dow. gaining .75%. in asia, markets up across the board, listen to look at europe. i'm getting ahead of myself. the stock 600 up .09%. up .69%.
mentioned barclays, we are also looking at the london stock exchange. a bidding war kicking off of both sides of the atlantic. -- door chippers -- glencore down a little bit. he thinks that metals have bottomed here, and he thinks that's boosting commodities across the board. stephanie: of course he says that. we have to go back to the lsc for just a moment. if you think about it, their interest is basically the same argument one would make with regard to the nasdaq. there are massive's synergies. if you think about what i said when they bought icy -- nicely, they build a huge platform in terms of scale. on the london stock exchange, that scale, that offering is deep. glencore, ifack to
he makes this call, it's a strong call. if he is wrong, it does look good. i think it's important that he is saying that. and metals are rallying, all that the glencore. little bit. the sick of it of a look at -- let's take a look at asia now. 1.5%.e the shanghai, up the hang seng is well and the nikkei in japan up .4%. i want to quickly touch on the jgb is. for the first time, japan is selling tenure debt in negative yield. -- 10 year debt in negative yield. as john points out, this doesn't mean you will have a negative coupon, you send in a payments to the government of japan. you are just not going to get paid back as much principle as you got paid to purchase the bonds in the first place. lots of news out of asia, not just in japan, but also in china. the country's official pmi from
manufacturing came in at 49 in february. the gauge hasn't been at little this week since 2009. timmberg intelligence gregor joins me now. i expected to be above 50 every time it comes in now. that it still tracking lower, trying to find a bottom, that's not encouraging. i'm a longer china bowl, and this is depressing. bull, and this is depressing. seeing this trailing at 48, which is a downtick is not good. the components underlying the pmi were also disappointing. new down, export orders down. jonathan: it's not pretty. tim: backlog is down. there is clearly a building
sense of urgency. jonathan: the narrative will be china new year, it week, factory shutdown. we are making this transition from manufacturing to nonmanufacturing. you pull out the nonmanufacturing is trying to gauge worths is heading and gets not good either. tim: it's not good. right, you take all of chinese numbers early in the year with a little grain of salt. because the very big holiday. if you have anywhere from seven to 10 days of channel -- of travel, things do shut down. the february number is always a little weaker. as you point out, the services number at 50 27, the good news is, it's above 50. it's been tracking lower as well, it was at 54 couple of months ago. jonathan: let's talk about the good news and bad news for policy and the policy response i could come from this. the good news is they cut six rate down to 17%. it still at 17% from the reserve rate requirement.
with ave to balance that lot of downward pressure on their currency. 2016a balance that through -- how do they balance that through 2016? jim: they've taken the reserve requirement down. it was interesting with the rrr cuts, that doesn't immediately into lower digits, you negate some of that pressure on the yuan. you continue to think it's more important to look at a basket that look at the dollar. this is a story about dollar strength as opposed to you on -- n weakness. we have the national people's car was up this weekend, the release of the 13th five-year plan. if they have a sense of urgency, if gn league can take this and push through serious reform,
serious structural reform -- there's so much they can do. as a hope over the next couple of years that we see things transition. craighead, of bloomberg intelligence joining us on that pretty ugly chinese pmi grid this morning. david, back to you. david: we turn now to valeant, shares plunging 18% yesterday, up slightly this morning. the drug maker disclosed yesterday it's facing a new fcc investigation. bad string of recovery. what do we know? i know it just came out yesterday. >> we don't know very much. when other investigations, we don't know what they are. the latest is there's a disclosure that the sec is investigating, this goes back to the end of last year. aboutbly this is a thing accounting and financials, but they're not being forthcoming. they are not really telling us
what it is. stephanie: if that information vacuum that valeant continues to put them in that makes investors uneasy. nine months ago, when it was all about m&a, that's no longer their model. --you think about they own alone, which traded at a very high multiple what it was an independent company, take them are underpricing pressure, they have drugs that are not panning out with a thought they were. what is left? >> the bear list for this company needs an analyst to say this is an symmetrical to drug isn't a magical new drug machine, but it's a mediocre product that isn't going to be able to grow its way out of thing. like that that are $60, $70 a share which is where we are after this program. david: what is a middling pharmaceutical company that has accounting and legal departments coming up?
stephanie: no one want to buy them. david: as the market cap is going down, the ratio of debt has gone way up to what is trading at 65 in change, doesn't look so good. if yougo -- stephanie: go longer, the price goes down, the risk is does down -- the risk goes down. if you look at what they are selling with the numbers look like, in the beginning of this year, we started to see more and more hedge funds in regards to go long again. if they are putting mike pearson back in the job after the board put together a special committee and didn't find anything extraordinary, maybe there is an something so negative about him. is there value in the company and the products they sell? drew: those products to sell, -- do sell. they have a high-margin cash business. there is good stuff here. the problem is, is there another sugar drop? i'm coming on set with you guys
to say look at this crazy thing just happened with this. we don't know with the internal investigation found. that's part of the problem. i think if everything was all clear, we would have financials out for this company and we would have new guidance. stephanie: the board a special meeting on sunday. that's when mike pearson took the seat again. mike could've said to the board listen, i just got back, i haven't been inside the company for two months. we need a little bit of time, it doesn't necessarily make sense to release any sort of guidance we don't have a clean payout which is in the highlands -- in the hands of price waterhouse. david: it's hard to do that when you have an investigation with the fcc. you want to make a disclosure that wrong. stephanie: if you are mike pearson, you might say let's hold off. winnie: among the things we don't know -- we don't know what their auditors found. price waterhouse and cooper has to sign off on this.
the sec has questions back and forth. the question isn't whether they can, it's whether they have any idea what the numbers actually are. and that's the bottom line. the question is what this means for investors with the next six months. if it takes six to nine months, this is dead money sitting there. you are to have shareholders sitting in mock because there is no clarity. david: i haven't seen an fcc investigation that takes less than six months. winnie: it can take a long time. valeant has to get the financials out. they're going to be focused in the short-term, investors a lot of letters going back and forth. they're going to try and focus on doing that right away. separate from any guidance they give. in the investigational drug offer long time after that. there's no way this company is going to be clear between the u.s. justice investigation, the pricing questions. even the last day or so, we had hillary come out as a one of
those companies, dress -- drug pricing is a big issue. stephanie: a lot of letters is an understatement. the board has hired some thing like three or four law firms. do you know how much confusion and chaos is around that? david: let me just visualize what this company is worth. markethis is valeant's cap over one month. they lost $10 million, down to $22 billion. if i bring it out to a year, you can see how much they have lost. they were worth $90 billion, and this is a company that is still, these low levels, trading at 26 times trailing earnings. stephanie: that's it for the month? it's down $67 billion from the august peak. put in perspective the biggest investors and their losses. just yesterday, $320 million. matt: a lot of people losing a lot of money on the stock.
low. the bank slashes dividend announced plans to cut back the stake in africa, which was the former ceos signature. we spoke with the new ceo, jeff dailey, and asked him about the decision to cut back their effort of the exposure -- there africa exposure. >> barclays's has been in africa for over 100 years. it's a great business, with a terrific management team and enthusiastic colleagues. we are across the continent, it's a very difficult discussion. -- decision. africa.2.3% of barclays on the other hand, in terms of how regulators think about ownership and barclays, we are more hundred percent in terms of liability. we look at the capital charges, funding charges, it's hard to own 60% of a business where you have 100% of the liability. the truncates significantly return that are generated locally in africa, when they are translated to returns for
barclays here in the usa -- in the u.k.. we will slowly reduce our stakes , two-on-one consolidated, noncontrolling position and barclays africa. it's a great bank, there are a lot of investors that are clearly interested in africa, clear interested and barclays africa. think they will be significant interest over the next couple of years as we moved to a noncontrolling position. >> significant interest. have you had conversation with the likes of mud banks, with bob diamond, who is active on the continental? have you had any conversations on that front? are just announcing this decision today, there been no conversations with anyone. this is just public now. we're going to get ourselves two years to three years to do this in a way that preserves the share price of barclays africa, and allows that franchise to continue to grow and excel. assets are tied
up in the african business, 9.4% of your risk. where you going to relocate the capital work better for the battered shareholders of barclays? jes: we're going to simple votto bank to be a transatlantic bank focus on consumer business, corporate business, an investment bank. we have a number of franchises within that transatlantic rank better generating double-digit returns today. credit carexcellent position in the united states, a great credit card -- we're the number one credit card issuer in germany. we have lots of investment. what we are doing with technology in the retail banking -- we thinkthe u.k. we are in the forefront, generating great returns. there are lots of places to employ capital, and we will be doing so in a way to enhance shareholder value. stephanie: just a week ago, says he sees
barclays africa is a terrific platform. where's the disconnect? from the currency volatility. the market wanted to report card today, and this is his legacy. of course he's going to defend his legacy steps. it's not adding up. africa is not adding up. that's about protecting capital, the investment bank. i think the market really has slapped the stock today because there wasn't anything aggressive . cost themtment bank 109%. the investment bank has a negative tangible equity. of nearly 4%. i think this is really a case of ley.ng listened to sta your stock price, and what it's telling you is that no one is believing your jam tomorrow
capital story. this is a deutsche bank credit suisse moment. he is going to have to do better in class when he reports again. stephanie: or maybe the argument in that jeff staley -- jes staley was given a parent to go but up. cranny, by the way, your hair is off the charts today. joining us from london, thank you. good to see you. up next, we have talk glencore. is the worst over? ♪
shares have fallen more than 50% in the past 12 months. today, shares are down around 2.5% in london trading. jesse riseborough covers metal, mining and agriculture for bloomberg news. they've had a pretty rough go of it. although in fairness, the stock has bounced back from the lows quite a ways. isinglass and berg says the worst is past. how do we know that? he's taking the view on supply for commodities. he says we haven't seen any massive increases in spending on new mines. timehe first time a long they don't see huge amounts of new supply, that's one support prices. their order from prices, the biggest consumer of long -- raw materials is very good. he said last year is the best year in terms of copper sales for glencore. that he istion perennially optimistic, and it's important to view those comments through that lens.
they do sort of contrast some of the views of other mining company ceos. an ugly year,as 2015. no surprise. the narrative the story post-ipo was that if things went down on the industrial side of business for mining, things would be supported by trading. do you see that the numbers this morning? absolutely. i think glencore carefully try to structure the narrative around -- this is very much a comeback story, a turnaround story. nothing in those numbers today that attracted from that story, the industry had this target of percent. that long-held notion that glencore can navigate through this downturn, that definitely hold up today. i think that is sort of part of the reason why share prices rebounded in the past two months. david: they took on a lot of dead because of coming into mining. where are they in their path to
try and reduce that debt? was about $30ar million in shares tanked 29% of single day. they enacted this debt reduction plan. widener that plan today, dropping the target even lower, and now it's $5 billion. into a place with free cash flow increasing, they can look to return to paying dividends, which they scrapped last year. peter grinberg, a senior nonexecutive director at glencore. up next, an exclusive interview on what alan greenberg thinks it would take to spur global growth. ♪
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having an ugly session, down by 9% this morning. the biggest drop since 2012. that's the story in the u.k., let's get some first world news with caroline hyde. carolyn: the cease-fire in syria is now in its fourth day, and the u.n. plans to take a management delivering more than unitarian eight. caroline: both sides have reported violations of the cease-fire. in the u.n. will deliver more aid to under siege by government and rebel forces. a new study says there is strong evidence that the zika virus can cause temporary paralysis. there has been an outbreak of the got in south and central america. and it's a victory for apple in a court case that is similar to the one involving the san bernardino terrorist attack. a federal judge has ruled the
government can't use it to centuries-old law to force apple to unlock an iphone. this case involves drugs. the government is using a argument in the iphone case. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. i'm caroline hyde. keene is in the nation's capital today, but his interview with former fed chair alan greenspan is a morning must watch. tom and michael mckee sat down with an exclusive interview with alan greenspan and asked him about negative rates and a slowdown in productivity. alan: up to a point, negative interest rates have no effect, why? because people are willing to accept a negative interest rate doubled the claims of these particular countries. that's going to change if this goes on indefinitely, it's going to start to move.
we don't know what happens when that happens. michael: is it dangerous? a dangerous experiment for so many central banks to be doing this? does it call to the bigger your neighbor policies of the 1930's? wouldn't use the word dangerous, but it's clearly nonproductive. to have this type of situation is a distortion, and the big argument about excessive low interest rates for very long times is that it warps the investment pattern on real investments. and clearly, if you have , people interest rates can raise funds with negative interest rates. the capital investment projects are going to be warped. tom: the corporations you follow for your review data analysis -- of the acting and unhealthy or improper manners? because they have a free lunch from low interest rates?
alan: the problem is you can't tell if they are doing it, you can tell what happened when the kiwis opened up and the price for earnings rose. we are getting signals which are distorted. interest rates are too low, people are investing in long-term assets when they do invest in long-term assets. view as toistaken what originate -- what the rates of return have to be. that means we're going to get misuse of capital. michael: the markets these days seem to be telling us that we are in trouble. are we? alan: yes, we are in trouble because productivity is dead in the water. michael: we are not even getting low productivity right now. why is that, where is it gone? : productivity is driven by real capital investment.
the data is clear on that. is waypital investment below average. why? because business people are very uncertain about the future. tom: would you advocate a government policy to spur u.s. investment in the united states? alan: every time you try and spur it, it comes out wrong. he raises interesting points about negative and just rates in productivity. we talked about that a lot on this program. in order to get growth really going again, you've got to get productivity. are we measuring it correctly? on the former, negative interest rates, i find that fascinating. if you think of it from an investor's perspective, as matt was talking about earlier, you are only guaranteed the loss of you to maturity. german two-year notes, you go from -20 basis points down to -60. if you bought that, you made money.
as a consumer, even if they pass as a consumer,es this kind of negativity you will associate with having your money in a bank account. so you wanted my home, you have 100,000 pounds, are you keeping it in cash or the bank? david: you make an important point. japan overnight sold bonds at a negative rate. reports were they all went to speculators, not a long-term investors. stephanie: if you think about alan greenspan, the position he was in verses where we are in the markets, irrational exuberance, is the man who coined the term. there's nothing even like that today. there is so much uncertainty and fear in the markets. we are living in a holding world. jonathan: to david's point, maybe there is irrational exuberance. if you think of the speculation in the bond market right now, if you are buying german 30 years with no intention at all to hold them to maturity, but just the bet that growth is going to go low, inflation is going to go lower in everyone's going to get pushed right along with the curve because the 2, 4, 6, 8 -- deepened their
negative speculative. david: it's a fundamental problem. marketsot sure if the are saying fundamental about what's going on, or the markets just regulating buying back and forth. we don't know. there's a big nose -- there's other big news from washington. will bes director taking the stand on capitol hill today, testifying on the debate to unlock an iphone of the san bernardino shooters. former nsa director general keith alexander is now weighing in. he sat down with bloomberg's emily chang for an exquisite interview. she asked about this debate, and whether apple's code should be considered free speech. keith: i'm having difficult to making the jump from code. it's interesting you make that leap and say code. code is free speech. emily: you have to write code. should eyes a journalist have to
write a story the government wants me to write? keith: future issue around, do you create encryption that terrorists can use to conduct attacks a government and law enforcement can't stop? emily: of course not. keith: how do you help the government solve those? you are now into that dilemma. that's the dilemma that has to be solved. here's where i am, personally. i think it is more important for us to sell this on terrorism and some of those that it is for us to collect on other countries and things like that. so how do we do both? that's where working with countries like the european union -- you could come up with a warranted process that would work for everyone. emily: does this go all the way to the supreme court? keith: i don't know. it will be interesting. i don't know where this will go.
well this is going on, i think we should be searching for a better solution. discussed, google, facebook, tech companies have sided with apple. this reopened a divide between washington and silicon valley. how sustainable is it for tech companies to be at odd with their government? keith: everyone has the right to an opinion. i think what we have to do howgh -- we have to learn to get our country back together. and take the best of what we represent and put that on the table. great look at the capabilities that are coming out of the tech community -- these are phenomenal. tremendous opportunities. , theat your kids opportunities you have for education. the opportunities we have for medicine. for communications and all those things.
it's extraordinary. but there are tremendous former abilities with it. abilityre outpacing the for the policy community to keep up. i wouldn't say slow down. but i would say, because we've gone so far, so fast -- how do we help policy community catch up? this encryption issues just such a problem. emily: everybody keeps saying the government and silicon valley should work together. give me some specifics. how can the government and silicon valley work together for the better? keith: i would put together a group that addresses that encryption issue. and comes up with a middleground solution that the companies, the governments, and the american people could live with. the rest of emily chang's interview with keith alexander blair on studio in april. she will also be live at four clock p.m. eastern today to discuss apple versus the u.s.
with attorney general loretta lynch. i want to clock p.m. today, tim cook will be attending apple's first congressional hearing today in washington. and today is super tuesday. all editions love to hate wall street greed -- wall street and big business. playings are not defense. why did i not stick up for themselves? stay right here, it's world cup lament today. a good day to be -- a world compliment day. it's also pig day. ♪
coming up, ceo david herro. we talked to him about his business and so much more on "bloomberg go." caroline: this is the bloomberg business flash. i'm caroline hyde. in london, shares of barclays was temporarily halted. they recorded for quarter profit fell 56%, since the first earning announcement from jes staley. he's try to reassure investors. now, the parent of the new york stock exchange they be triggering a bidding war. intercontinentalexchange says it exchangethe stock after they were in merger talks. the announcement sent shares of the london stock it changed to a record high. shares of valeant pharmaceuticals fell 18% after the company announced it was being investigated by the sec.
the canadian drugmaker has come under scrutiny for its price hikes and distributional system. also delayed its fourth quarter earnings report. that's the bloomberg business flash. stephanie: thanks, caroline. it super tuesday morning. more than 11 states are holding primaries and caucuses today. one big thing in this campaign, bashing corporate america. martin whittaker's ceo of just capital, which speaks to market pressure and makes companies more responsive on issues like hiring and pay and departmental impact. martin, welcome to "bloomberg go." these issues are paramount. i find them so important. when the rubber hits the road, people don't actually care. voters, shareholders. you interviewed over 40,000 people about capitalism and justice. what did you learn? martin: we learned that people have a deep sense of faith in business, that may be trusting corporations alone right now. but the face of business can be
a force for good in the country, that still very much in place. a learned that people have surprising degree of understanding about the nuance of business. you have to make money, you have to pay people well, you have to treat people with respect. although we saw differences in age and income level and certain differences in people aredeology, sophisticated. they understand trade-offs, they certainly want a more just economy, and more just business behavior. jonathan: do you equate faith in business to faith in capitalism and how do you reconcile that with the surgeon candidates like bernie sanders? martin: i do equate it with that. if you look at 75% of the people who have a job in this country work for small and medium-size businesses. faith in smes is very much in place. fair day'sple want a pay for a fair days work. they want to be treated fairly. they have a deep sense of economic insecurity right now. and vulnerability.
and that is what the political candidates on both extremes of the political spectrum are picking up on. stephanie: that economic uncertainty is what could hurt you and what you are trying to do. when people don't have the money of the disposable income, the flex ability, they're not thinking about who does the right thing. they are going to walmart for the cheapest thing. martin: that's true. that's what we look to the private sector to start to pay its lowest paid income workers more, provide them with better benefits to create a more stable economic environment within the family unit. so people have more money to spend, but our customers, better consumers. customers -- companies like aetna, the container store, they get this. that's why they are increasing the pay and the extended benefits to their workers. stephanie: they can do that times of global -- of a bull market. but as equity valuations go down, and those employees think
about making their employees feel good when they simply need to make money? martin: in the long-term, yes. i haven't met a ceo yet to simply -- whose mission is to simply maximize corporate earnings. they want to build a company that's going to be around in 10, 20, plus years. i get that we are into short-term earnings. i get that. what they are trying to do -- maybe the market won't let them. the difference between what they want to do and what they are forced to do. those are two different things. martin: what we can do is give the market forces to support that. what we want to provide as the incentives and rewards for leaders in that space. so we are celebrating corporate justness in the hope that consumers, employees, investors start to shift resources towards the better performers. and that creates sort of a reward structure for ceos. jonathan: is there a distinction we need to make for stephanie's point about public and private companies?
you're talking about smes, glencore is a stock that comes under ferment this pressure and all of a sudden management has to do something to cut costs. barclays, down 10%. they want a ceo to be much more aggressive. i can only think of one company, amazon, whose investors allow jeff bezos to go out there, reinvest profits come and spend, spend, spend. you have to draw distention between public companies and their ability to do what you're talking about, and private companies and their ability to do what you're talking about. martin: certainly private companies have more leeway by ownership and account ability. but i do think that leadership is leadership. it'sreat ceos, whether paul taubman at unilever, who has been a leader in these areas -- they are trying to have a more long-term view. economy when we as an start talking about how these companies are performing, we have to draw attention to things their short-term
earnings. if we can focus on justness as a barometer of corporate health, fantastic. we would love for you guys to do that. stephanie: we're going to do it, with your help. jonathan: martin whittaker, thank you for joining us. a couple of hours away from the market open, matt miller, you got the market movers? matt: i want to look at a couple of movers. one of them, stephanie suggest we check out apple before they go in front of congress. they are up a little less than 1% in the premarket. more interest in you take a look at apple year to date, they are down still 8%. over theok at apple full previous 12 months, they are down about 25%. rough time. had a apple investors of had a rough time it. you can see the one-year chart, they have lost substantial, a couple of hundred billion dollars in market cap. take a look at dollar tree. they came out with earnings that
missed on sales slightly, missed on earnings slightly. and their first-quarter forecast was a range in which the top end is with the street is looking for. investors don't like that, shares are down about 6% in the premarket. but they are pretty unchanged if you look year to date or over the full year. sun edison is a very different story. the medicine is facing lawsuits from big hedge funds like appaloosa that may unwind the vivint deal that has driven week,shares in the past as a result of that, shares are down about 16%. sun edison also -- blocked,: once again that appaloosa couldn't block this merger, was nice pop. they somewhat normalized. pop, butsaw a nice yesterday, they said they are not going to put out their 10k. they won't be able to release their 2015 results because of a
number of factors, including a lawsuit. people don't like it when you say we can't show you our numbers. number two, if you look at sun edison over the past year, it has been a poor investment. we have a one-year chart, down 91.3%. you are right, they got a big pop right around here. stephanie: great point, you have to put it in perspective. it's not one that you want to have been holding longer term. matt: there are number of movers we're looking at thomas o much actually going on. especially in europe trade we're going to talk a lot more about what's going on with the lse, what's going on with barclays, what's going on with glencore. and then overseas and asia, when we come back. fewer chinese farmers are moving to cities in search of jobs. we're going to dive and why, next in off the charts. ♪
china's urban only were expanded at the slowest pace in more than two decades. matt miller is going to show us how this changes happening on off the charts. matt: i stole one of these lines over showing you earlier from chart of the hour, which is a great bloomberg function, and you can find a lot of interest information and pictures. china's urbanization. we all hear about the farmers moving from china's hinterlands into the urban centers. that movement has really slowed down. we come down to about 2.8% growth. this is all growth. they are still moving into the cities, just not as fast as they used to. matt: that's right on every thing above the zero line is growth. here's the problem. population growth -- this is 15-year-olds to 64-year-olds in china, has slowed down to the point where it's action turned negative. they are starting to see that rollover that we saw starting in japan in 2010. david: that's not good for conception.
it is still in urbanization story. this is still holding out at 3%. interestingly to me, when it spiked up, the total population, urbanization did not spike up as much. matt: they are trying to boost this so they can boost this i getting rid of the one child policy. david: a major social change. matt: as you take a look at another chart, when i was showing you this this morning, you asked about gdp per capita. that is look fantastic. that's the blue line, it has slowed. there is still gdp growth per capita in china. then we looked at chinese loan growth. outstanding tons corporations and to people. david: we talked a lot to the chronic problem -- to the credit problem. when their gdp growth slows, what they do as a command economy is trying crank up the lending. they hope they can boost gdp per capita with that. it works temporarily. and then it comes back down.
and then they have to do it again. david: this was a surprise to me. my father would crack of the credit and gp would go up. in fact, they are clearly reacting, it looks like, to the plummet in the gdp per capita, and they loan more. there's a plummet, and a loan more. i used ecw be to check these as out. you can check them out on tv. other oneart, and the is 398. go ahead look in the bloomberg for those. david: back to stephanie. stephanie: coming up in the next half hour, david herro on the glencore crisis and much more. ♪
largest shareholders live. a bloomberg exclusive interview with j.p. morgan chase jamie dimon, what to see view for the future of the bank? ♪ david: welcome to the second hour of "bloomberg . john: there is a little bit of resistance. stephanie: it's a positive, we are finally seeing a little bit of decoupling and trading where fundamental should trade. matt: wow. stephanie: give us the news, not just the wow. matt: this is not unexpected but
we saw the 71st month of growth from the at/clijsters -- the yet/chrysler. at/chrysler, up 11 point 8%. andgrowth topped estimates the jeep brand was up 23% and the ram brand which is trucks is up 27%. fiat was downand 9%. david: if you had predicted which one would struggle, it would have been fiat/chrysler. chionneergio markey has done incredibly with this company. let's start with super tuesday. a chance for donald trump and
hillary clinton to put distance between themselves and their rivals. thep is favored at most of dozen races being held and marco rubio and ted cruz are in a battle to stop him. hillary clinton is expected to extend her lead over bernie sanders for the democratic nomination. nation is25 of the voting today. join us for a two-hour addition later today for extensive super tuesday coverage. at the yuan, the security council vote whether to impose more economic sanctions on north korea. the move comes nearly two months after kim jong un's regime carried out an underground nuclear test and it would event north korea from exporting minerals which is a primary source of foreign currency. it may be a promising sign for apple. a federal judge has ruled the government cannot use a two centuries old law to force apple to healthy at ei unlocking iphone. thecase involves drugs and
government is using a single argument to force apple to unlock the iphone of a deadly -- of a dead terrorist. news 24 hours a day powered by a 2400 journalist and 150 news bureaus around the world. let's take a look at futures, up across the board. s&p 500 futures are adding 15 points and dow jones is up 123. a decent run this morning with u.s. futures. you can mostly look to oil for the reason behind that. taking a look at oil, it continues to climb through the morning and now up 2.1%. correlation between oil and stocks which had fallen off a little is now climbing again. when oil was higher, you will see stocks move hires well. because of the comments this morning -- not because of that when ivan glastonbury said
commodities are coming back, he runs glenn core and he thinks commodities have bottomed out. gold has been a fear trade and that's up more than 1%. 1/3inum is climbing about of a percentage and copper has turned down. taking a look at european stocks, this is another reason risingck futures are with what's going on in europe. the stoxx 600 is moving up 1% and the dax is up 1.5%. what i find interesting is we saw previously such a strong correlation between european posted thatone results, the others came crashing down we no longer see that area and barclays posted ec, results that ubs and hs
those banks are doing well area down,oking at the break financial services are the third biggest gainer of all of these 19 industry groups. we see auto parts doing well on a day when we see u.s. auto sales come out. looking at the banks, barclays is doing poorly this morning after missing estimates after saying it will continue to sell off the rest of its africa stake. ed the dividend. be a littlemight resilient but barclays is down 9% so that shows how badly the banks have been punished since june of 2012. that's how serious of the depths of the libor scandal is. stephanie: that's how bob diamond lost his job to begin with in the libor scandal.
global stocks are shrugging off. joins us now from chicago. you manage the international fund. there is a slowdown in china but how do you gauge china? many people look at the pmi. it's ugly a manufacturing and disappoints. how do you read the chinese economy? >> we are long-term value investors. we try to avoid micromanaging, micro analysis of day to day, week to week, month-to-month figures. in the long term, the value of a business is determined by long-term cash flow streams. ultimately over the medium and long term, we think the chinese economy will be fine. they are taking the necessary steps to move from a producer to a consumer economy. taking these steps does not happen in a vacuum.
you have displacement and some of these things happening in the short-term you see today. traders love to trade on the stuff a true investors who are focusing on business value should use this displacement to really bolster portfolios. that's what we tried to do. david: as a long-term value investor, how do you analyze the urbanization of china? people are betting that the middle crap -- of the middle class is growing but there seems to be a slowdown. less of a rate of movement from rural to urban. this is a structural change and we will continue to see this. you are exactly right, what will drive global economic growth over the next decade is this movement from the lower to the middle to the upper middle to the upper-class in emerging asia
in particular. one of the ways to get great exposure to this is to look at some of the consumer discretionary stocks that are exposed to this upward movement. and luxury goods companies some of the car company like bmw. stephanie: how can you rationalize being a long-term investor and having a fiduciary responsibility? if it's clear china will have bumps in the road before they make this shift, why go long? why not go long later question -- we are not long china but we have had difficulty finding companies in china to invest in. that has to do with valuations and corporate governance concerns. i'm saying that a global investors and met trade their equity portfolio based on chinese it a points. glencore.s talk about you are the biggest holder of
the stock recently. the russ is of a return to dividends as a major investor in the company, is that thing you would support? >> when a management team generates free cash, they have four things to do with it, give it back to the shareholders, they can invest in the business, they can pay down debt, they can by another company. as long as they taken meticulous approach to analyzing what to do with that free cash flow stream an approach that long tim value creation, we're all for it. take downn't want to debt or invest in her business or by anyone, then give it back. at this stage, they have flagged that debt reduction is a major priority. toare going from 40 billion 15 or 16 billion in net debt by the end of the year. this is what we want them to keep focused on in the short-term. once you hit that targeted once
you are at comfortable leverage position, we can look at other ways of dispersing that free cash flow. stephanie: when did you go along so we can understand what you're price point is? international strategy we started last year probably in the middle of last year. in the shareed issuance which took place and set timbre. after the share issuance at $1.25, it briefly went up to $1.35. and ite the business divorces itself from intrinsic value would you can imagine what we were doing when the stock was going below 100 and below 90 and below 80. we bolstered our position. david: when you invested into or you investing in
the management or commodities business? businessell-managed or there is no doubt about that. they are tops in the world commodities trading operation. they are shareholder oriented and managed some of the bigger shareholders. i am not personally a fan of mining business. that does not mean you avoid them at any price. sometimes, there is a price that you will pay for a less-than-perfect business. we assign an extremely low multiple to their mining business even though their mining business is involved in the type of commodities which we innk, zinc and copper particular, are less via -- volatile and have more supply and demand characteristics and iron ore. we are not in love with mining but we like their mining business at this price. in an ideal scenario,
when demand improves, would you like to see them sell out of their mining business and go back to their core trading strategy? >> i think you have to look at each one of the mining businesses in a microcosm. positionsve good cost in the right metals that they can continue through a cycle earning a great return, by all means, keep those operations. if these operations are not able to generate through cycle returns, it seems to me the obvious thing to do would be to divest of assets you cannot get cycle returns. david picked a good month to up his state because february was the month in which he took as thean glasstenberg second-biggest shareholder and it was the second-best month
glenn core stock is ever had. these are the daily price changes. is february, january, december, etc. david: it is a bar chart that you cannot see. >> it's going on in my head right now. matt: i'm sure you have seen a number of times because the stock took a 50% jump in the month of february. it's amazing how much it has gained. obviously, it has come down a long way. you are not a lover of mining companies but you like the valuation of glencore. i can think of other companies with a similar valuation. a good look at anglo american. we liked what they were doing. focused on assets where you can make a through cycle
rate of return. that management team became focused on that. to gets is a long time comfortable with a company and we do our work on that is us and it shot up. it's less attractive to us but we think they are doing the right thing and if they get rid of iron ore and the non-economic iron ore assets, you are focusing on the areas where you can make money for the cycle. for anglo american, they have diamonds which is a good place to have exposure. john: if you had to pull back on , would you look at the company again? >> yes, we are interested in the company but probably not at this price. this is one we missed, unfortunately. some of them you miss and this inone -- i met with mark january.
it was probably near an all-time low. you have to do your research and it takes time. you said you're not in love with mining but it was a good price. are you in love with the trading as a long-term business at glencore. absolutely, their position of trading in world commodities in most areas they are number one or two. tradeee both sides of the as relatively low risk and they don't gamble on commodity prices. they are a facilitator of movement, of key commodities, minerals, metals. it's almost an unassailable position. it's a business that earns anywhere from the mid-twos and threes consistently, an annuity like income stream and when we see that with high barriers, that's a good thing. of bloombergairman
david: he co-manages close to $55 billion, david herro, you have a global views so how do you make your capital allocation decisions given the turbulence in the market? >> the turbulence has been good for us. prices have been moving more erratically than the underlining intrinsic value of those businesses in which were invested. in the european financial
sector, you breed the words negative interest rates and that causes a decline in many of these financial service companies. in the short-term especially if you are a commercial bank, it's true that low rates and negative rates do not help lending spreads. however, that's not the whole story. you have increases in loan expansion. you have lower costs, lower loan losses and combine this with the way the prices have been slammed since the beginning of the year, we think there is great opportunity especially when you consider that most of these large banks are in a stronger capital position than they have been in a long, long time. you have a much safer balance sheet, lower loan losses, lower cost, better credit expansion and yet you have a collapse of these prices mostly due to the fear of negative interest rates
which we see as more of a transitory factor. stephanie: where's the opportunity to make any money? >> in the banks? through cost cuts and credit expansion. also fees. the prophet, yes, on the loan spread itself which is one major channel where banks make money, that will be narrower. but it's going to be narrower not forever. narrower until the central bank keeps the momentum going and jumpstart some of these economies. of the banks we see losses from his credit suisse. you've got holdings there. the pullback of the last couple of months, will you up your stake in that bank? >> you can only imagine i don't like to comment on the day to
day week to week trading but we do not believe the intrinsic value of credit suisse has dropped anywhere near its share price. if the price drops aggressively, intrinsic value does not. it almost always means an opportunity to increase your position. do you see the intrinsic value in a company that cannot make its bottom line. >> if they cannot consistently generate free cash flow, i don't pick the business is worth anything. you referred to the time when banks will jumpstart and the economies will get going at dan. is that coming up anytime soon as opposed to a recession? >> it's slowly happening in europe. you know have a consonant that d in negative and 1% growth growing at 1-2% in the credit goes to two things, the lower european currency and more
expansionary policy of the european central bank. but it's almost contradictory because the european central bank has been trying to encourage credit expansion and it has happened somewhat successfully. basel same time, the three banking rules have almost been discouraging credit expansion. they have to fight that. this is happening around the world -- the central banks have all of a sudden been the goto player for economic policy. what we have to see is better economic policy from policymakers around the world. deregulation, lower taxes, that are labor market policies -- we need to take away the structural impediments to rove and focus on more supply-side solutions. you cannot just rely on monetary policy. i think japan and europe to some degree are guilty of that and
stephanie: you are watching "bloomberg and we are back with david herro. super tuesday. you have been a supporter of marco rubio and chris christie but by all measures, it seems like donald trump is leading. if he comes out ahead, what does it mean for the market? >> some of this has already been discounted. the market is a discounting machine and constantly takes information and reacts based on it as it happens. since this donald trump a nominal on, the switch is not turned on today, the market has a two -- has absorbed some of the possibility of trumpism the
sending upon us. stephanie: what would it mean for the markets? he is possibly the most pro-business candidate. >> who knows? who knows if he is pro-business. i think he is a bit of a mystery. i'm not 100% sure where he's coming from. 100% where youre are coming from and thank you. for joining us from chicago. it is super tuesday in we will dive into politics. ♪
voting in arlington, massachusetts. the cease-fire in syria is now in its fourth day. the united nations plans to take advantage by delivering more humanitarian aid. both sides in the civil war have reported violations of the truth. in the next five days, the u.n. wants to distribute aid to more than 150,000 people in areas under siege by government and rebel forces. a new study has found strong evidence that the zika virus can lead to temporary paralysis. has been an outbreak of the virus in south and central america. president obama meets today with senate republican leaders who promised to block anyone he names to the supreme court. they hope to keep the seat open for a republican president to fail. the president will discuss the historic president for confirming justices in an election year. global news 24 hours a day, powered by her 2400 journalist
in more than 150 news bureaus around the world. matt: a quick look at futures with gains across the board. you can see a couple of stocks in the premarket but the major futures indexes are also gaining. s&p futures and dow jones industrial futures and nasdaq users, they are all gaining. oil, it is upat right now which is part of the impetus for the gains in futures. we have casinos up as well. sandssorts and las vegas and win are up more than 2.5% in the premarket. for anie: it's time little power go. who better to join me than the managing editor of bloomberg politics, john hilum and.
helaman. mean for us, this super tuesday? -- is he a phenomenon or a reality? >> he's boat. by the time we wake up tomorrow, unless there is some where it statistical anomaly, donald trump will win the vast majority or maybe all of the states that vote in the republican side today. hillary clinton will win the vast majority, not all, but the vast majority of the states that vote tonight. we will wake up with the two of , they willhibitive not have the nominations officially but they may be de facto nominees. may force ted cruz out of the race if he wins in
texas. marco will conceivably not win a state. leavey clinton will bernie sanders a we could wake up tomorrow with two presumptive nominees and that the likeliest outcome. stephanie: in terms of fundraising, does it make sense for the contenders in the republican party to even raise money? johnw last week that kasich is being back. possible's towo stopping trump. to --ican boners do want republican donors do want to stop trump. they are freaking out about a guy who does not repudiate the ku klux klan. there is a john kasich an area. he gets some delegates tomorrow and wins in michigan next week and wins his home state in ohio on march 15 and in a one-on-one
race between him and donald trump, that could at -- that could get interesting. neither one of them could get to a majority so you can have a contested convention. same sort of scenario for marco rubio who comes in second in every state. people say he beats donald trump in florida. stephanie: he is trailing 20 points in his home state. is it possible? comes atrubio, if he the conclusion after today -- donald trump will look like a freight train tonight. it's hard to overstate the psychic impact of seeing donald trump run the table tonight. if marco rubio way except i will lose myys home state, he will not stay in the race. it would be devastating for his long-term political future if he were to lose his home state and a presidential contest. if he decides he will lose
florida, he will get out. wow event,without a is there a catalyst that could stop trump? there is a very own -- a very narrow path for marco rubio to force a contested convention. they are very narrow paths. happen isthat could some on expected unforeseen event and that could happen on the democratic side as well. it could happen to hillary clinton. the same thing is true with donald trump. something could happen. forave been saying that nine months that something might happen to derail donald trump. if ild not hold my breath were a republican establishment person. stephanie: i feel we are in
"dumb and dumber." you say there is a chance. >> it's a little like that. stephanie: thank you so much. how many zeros in a zillion? >> a couple of less than a gazillion. there will be a two-hour special kicking off at 5:00 p.m. because of super tuesday. thank you so much. >> i am going to take a nap right now. stephanie: no napping to do, you have work to do. >> we will have a little snooze. let's look at these casinos that are moving in the premarket. revenue in macau was down the month of february 0.1%. analysts were expecting a drop of 2%. macau has been weighing on these businesses.
wynnas vegas sands and resorts are all gaining. salesom is a direct website in china that sells appliances. up 3.4% because it's sales were better than estimated. it had a loss per american depositary share of seven cents. analysts were looking for a loss of only three cents but sales beat by such a wide margin that investors liked that today so it's gaining 3.4%. story, showssler they had a 71st consecutive month of sales and beat estimates with sales of 11.2% and we were looking for 9.2%. that has boosted though shares in the premarket. general motors is rising in sympathy and ford shares are
indicated up about 2% right now. general motors and ford will put out sales and about 30 minutes a we will get you those numbers. john: our editor in chief sat down with jamie dimon, chairman and ceo of j.p. morgan chase. he joins us now. thank you very much for joining us. why jamie dimon? thee wanted to get one of most influential people on wall street to talk to is and we wanted to do it as a q&a so there was no filter between us. it was an all access interview. john: what did you talk to him about? >> the future of finance with competition and where does he feel vulnerable. one of the things we took away
from the conversation was him saying we are either going to compete or partner which is what they have done recently. i read about the startups and the regulation they get. what did he have to say about that? >> he said anything systemic will eventually be regulated like a bank. he said i have been regulated my whole life or it i thought that was a hilarious way of looking at it because he is used to this conversation. he said if you look at this, there is no way we will not all be treated the same. stephanie: it's a race against the clock, the guys were not regulated are eating up market share and eating jamie dimon's lunch. >> he said bring it back to the client. give the clients what they want. built, he says we satisfy the clients over and over. isn't that why they
have had to pay extraordinary fees over the last four years because they did not do that? back to mistakes and he owns up to his mistakes. he says bear stearns was a was a mistakemu and the whale was a mistake. he takes personal responsibility he takes and he says personal responsibility for all of it. businesses will make mistakes and that's part of being a business. he says people need to understand business are going to make mistakes and they should not be shot and hung every time. >> only he can say that. atn: bob diamond said that work please in the u.k. several years ago. i get the same kind of feel from this quote. stephanie: they say that on the banking industry has done a heart riffing job of getting themselves out -- a horrific job
of getting themselves out. populist opinion is still so anti-wall street. >> he also says that. -- one thing is he says when you are a customer and you want to buy a car, you can walk out with a car and if you want a loan or credit card, the bank might say no and that's a different dynamic. stephanie: that's not why people hate banks. >> it's probably part of it. it goes to the populist elements. post financial crisis, the auto industry got a time of money from governments in the u.s. and governments in europe as well. the banking industry got a ton of money as well. some governments made money on those stakes. is a blue-collar/white color thing going on here? >> what do you think?
stephanie: i think it was a big short. if you think about sub prime and the americans that hurt, that has an anti-banks. and re-sold and that's why people hate ranks. -- hate banks. the populist sentiment is what he goes back to again and again and he says we have to earn this for our customers every day. he brings it back to his own employees. they are on the front lines feeling that resentment. some of his employees were the highest people inside financial institutions during subprime. they made that money because they were doing so well on that specific trade. >> he totally says there were tons of that apples out there. -- dad apples out there. stephanie: in his defense, every business has had apples. it's not just banking's.
. >> we wanted an overarching look at his career on wall street. years in as ceo of j.p. morgan and has been doing this for three decades we asked him what the scope of his career is. one thing he came back to was the idea that when he started out, this is a completely different world. he said finance was a small place in this comes down to the growth of the world well. stephanie: you have to give him the financial crisis, the loyalty within jpmorgan and the corporate pride in that organization compared to its banking peers. idea or you to speak to other bankers and traders at other banks what sentiment has been an jamie dimon has been clear since the crisis. you're going to get paid less and it's a new normal, get used to it. truthfully, you have seen that play out in a positive way and jpmorgan that's a different story than other banks.
>>'s message is simple which is for him it's about the clients. he comes back to the clients again and again and that makes it very clear that when you work for jamie dimon, you know what you are doing, you are appealing to your clients. who owns the future? he knows there is competition and he is not blind to that. people are trying to eat his lunch. i think they feel they know there is competition. competing or partnering is what he said. stephanie: everyone wants to break them up so he is not will improve. this is a great piece so read the whole interview, check out bloomberg markets. thank you so much.
congress. we are joined by the chairman of the judiciary committee from virginia. good to see you again. >> good to see you. david: what is the purpose of this hearing? possibleticipate legislation coming from this or is this an oversight hearing? >> we have been working on this encryption issue for a long time. we scheduled this hearing before the apple/fbi court dispute became public. therefore, it is fortunate that we were able to raise the public's attention about the importance of encryption by having the fbi director james, in the general counsel of apple testify before the committee today. i think the most important thing to stress is this is not a new issue. that has been going on for the entire distance of our country, certainly since electronic
communications which started with the telegraph and the telephone, balancing and protect ring privacy and keeping people safe through their communications with law enforcement need to get out information is not new. encryption has become available only in recent times. it's important we understand how good an important it is and it's important to make it stronger not weaker. david: do you think it's possible that legislation could come out this year? apple says the courts should not decide and we should leave it up to congress but is that likely? >> the court should not the side this. yesterday, the new york u.s. magistrate ruled the opposite of where they seem to be headed in the california u.s. court case, saying you cannot use the 220-year-old statute to decide these modern technology issues that were never contemplated when that law was written. -- appleright of apple
is right and the fbi is right and addressing the issue is right but we need to do it in a careful, thoughtful way that promotes increasing strong encryption while attempting to solve law enforcement problems and not by creating new backdoor in thisfront door keys particular case. these keys are not just of his one cell phone. they will open access to hundreds of millions of apple devices and other technology companies have the same concerns. with respect to the fbi director, he will appear before you. what do you want to hear from him? i think he will say it not for all apple iphones. the fact of the matter is, no matter where the key is cap, the creation of that key creates a new vulnerability for the technology that key gives access to. yes, you can put it one place in
another place but the existence creates a problem. i can point to government agencies and retailers and financial institutions that have all suffered massive breaches and theft of important information about their customers and citizens because of weaknesses that are created by having various types of weaknesses in their protection systems. and christian strengthens that it we should look for ways to strengthen it. -- encryption strengthens that and we should look for ways to strengthen it. they want to create stronger encryption while looking for other ways for law enforcement to prevent crimes and terrorist attacks. david: we will watch the hearings with close eyes and there will be a lot of drama there. thank you very much. thank you. david: up next, battle of the charts with matt miller and jew
is baffling of the charts time and now julie hyman is joining matt miller. matt miller always makes a lot of noise. matt: please, go ahead. chart.this is a simple we have talked about china this morning coming out with manufacturing and services a tip. manufacturing data is in white we sought contract for a seventh straight month -- we saw it fall for the seven straight month. their economy is larger but it's at a seventh year low. this chart spells trouble. the government has been adding stimulus that will it cause any up tick in these two lines? thus far, the stimulus they have
put out has not done any good whatsoever. stephanie: simple yet lovely. matt: this is a really awesome chart. this chart shows long -- short-term debt in europe. we have use the german to year and the ecb deposit rate which is the active rate we are watching for them to move or not. right now, the german two-year gap to the ecb deposit rate is at eight, though they just spread since 2011. this would indicate we will see a move. on december 2, it blew out. some people but i believe goldman sachs early this morning put out a note saying they expected to go down 10%. the spread is a seven so the market expects more.
david: mats looking forward to next week when we are from mario draghi. john: i will go with matt miller based on next week. policymakers are not out there the same way they have been. this time it is mr. and mrs. market. stephanie: i'm siding with matt loved julie's chart. that will do it for today's apple of the charts and you can get these charts on your bloomberg terminal. ♪
that sent shares down 18% yesterday and one analyst still thinks it's a buy. hour is theor the chief math growth strategist and his views in the credit cycle with negative rates and the u.s. elections. ♪ ♪ 30 minutes from the opening bell in new york city. i know you hate it but there is enough negative news to take your pick, china, the earnings. stephanie: i will find positive revenue was down for
february but it was more of a positive. fiat/chrysler, sales were better. so there that far out are bright spots. john: that's why you are here. david: we are waiting for the big hearing in washington about apple. 29 minutes away from the open so let's go to matt miller. are up 15futures points right now and the dow jones futures are up more than 100 points and the nasdaq judges are gaining as well. we have breaking news from honeywell. pursuing is no longer it's utech bid. they have an unwillingness to engage in talks or negotiations. honeywell is no longer pursuing the bid of united technologies. you aren't getting
her toys and bringing them home today? matt: we have heard the ceo of honeywell really wanted this deal to go through. however, he was not willing to give up the ceo spot or give any indication that he would give it up down the line. that does not usually make managers happy. david: he made his point that we could have been a great company together. you go try it on your own. $108 for united technologies and they are trading at $93 and down in the premarket. stephanie: the dance will continue. up inhoneywell is trading the premarket so it appears investors are happier to see honeywell dancing by itself. stephanie: does that make the argument that united tech analogies, can you handle it? good luck. matt: looking at the rest of the we see oil is the reason
the rally in stocks. the correlation has been strong. oil is up 1.5%. it has been up more than 2%. one reason you see oil and currencies putting up gains is the weakness in the dollar. we have weakness in the dollar for everything except the yen an d the krona. months,ove it out 12 you see dollar strength against everything here. chart so lookng at what's going on in europe. continues to gain and showed more strength area it's up about 1%. banks are doing well in europe even with the 10% drop we are
seeing in barclays. the bank picture over there is still strong and you don't see the kind of correlation you once saw when big thanks take losses. it does not bring down the entire sector. let's go to julie hyman. julie: bernie sanders says he needs high voter turnout to do well in the super tuesday races. he voted in his hometown of burlington, vermont and he trails hillary clinton and most of the states being contested. to puttrump is hoping distance between him and his rivals in the republican race. he is leading in almost all of the super tuesday states except texas. that is the home state of ted cruz. join us at 5:00 p.m. for extensive super tuesday coverage. i victory for apple in a court case that a similar to the one with the san bernadino terrorist attack. a federal judge has ruled the government cannot use a two
centuries old law to force apple to help the fbi unlocking iphone. this case involved drugs and the government is using a similar argument. the last will and testament of the al qaeda leader osama been laden has been revealed. he wanted his fortune to be waged in holy wars. he was killed in 2011. dayal news 24 hours a powered by our 24 hundred journalist and 150 news bureaus around the world. david: it's time for three stories that matter to markets. we have been talking about the chinese emi report showing a deepening slowdown. manufacturing dropped to 49, the worst reading since 2009. the service index have been outperforming but also else was lois but it's still above 50. markets seem to be shrugging off the numbers as the shanghai deposit closed in the green today. is this pointing to a deepening
slowdown? should we read these numbers that may be the growth is slower than we thought? china isal news out of not that the world is slowing down, it's that china is slowing down. we know this. the wild card in 2016 and going forward is the policy response and what it will he. -- and what it will be. the chinese banks and we will keep the currency stable and the market paid some attention to this. i think that's the kind of thing that the market needs to see to get more stable and hopefully start going up. keep can i cut rates and the currency stable at the same time? but the one thing is that they have a very big warchest.
so theye a big surplus have two ways to fight the depreciating currency. they will do it on their own schedule. david: we talk about capital outflows but they liberalized capital inflows. that's another variable? >> yes, they are trying to do that. increaseallowing investment to their bond market. you would expect to see more things like that. terms of your confidence in investment, if you are waiting to see if there will be policy changes, that's a long-term goal. >> it is and this is an election year. going -- the world is no central bank or policymaker will do anything to aggressive because they have seen the polarization of the u.s. electorate and don't want to do anything to unorthodox. radicalshold of a
action, that threshold is hired to them that we are in the midst of an election year. given all the points you just said, what do you do? how do you invest around that? my tendency is always to buy things that pay. say that's a carry trade but there is nothing wrong with that especially in an age when nominal growth is slowing down and demographics are pretty bad and you got the global recyclers of pumping money back into companies. what's wrong with owning a bond at 12-14%. stephanie: you are preaching the howard marks there a. john: number two is the japanese market and it has been pretty crazy. the japanese government sold 10 year bonds with a negative
yield. we expected this. we already had negative yield. auctioning debt with a negative yield, $20 billion worth. what does that tell you about the world? >> it tells me that people are frightened. they are locking their money up for 10 years. they say the bonds cannot go below zero. there is a shortage of this in the world. i think it goes back to if you have 10 year say assets yielding 0%, what about tenure assets that yield 12%? the need for coupon still exist and may need to make return on their money. charti put out a yesterday on the swiss curve and the german curve. how are we going to look back at this era in 20 years?
how will he look at this bond market? >> those were crazy times. saidr three years ago, we i think overnight rates might go negative a. i think the market is sending a strong signal. fact that evenhe u.s. interest rates, the world is crying out for some sort of fiscal policy. the market say you can are omani at these ridiculously low rates. i think we are in the midst of an election cycle and you will not see anything radical. the demand and the japanese on market is interesting. matt: take a look at the bids to cover. and the 10 year
coming down to negative territory. what number is this? you can see it at the bottom of your screen. this is a bid to cover ratio which had come down from the beginning of 2014 but still slopes up when jgb goes negative. it's unbelievable that the demand is there. the only reason they can go negative is because the demand is there. that's a reason we are where we are. chart tell you that negative rates are not working? >> i think that's one side. the bank ofout japan cut rates to negative and the initial reaction was great. and we are a month later it's the lowest it's been a long time. that's not what they want to
see. it's a bad reaction and you have all this money flowing into jgb. if you look at the history of investing in japanese government on's, there is only two or three years that you have lost money for the investor. : it's called the widow maker for a reason. stephanie: number three is an m&a story we're watching, intercontinental is exploring an offer for the london stock exchange. it boosted shares as much as 9% in london trading and a talksial bid could upset with deutsche warsaw. best, what doyse you make of it? matt: they recently started running a new magic engine which brings together all of the different pieces of their exchange and lets them work with each other and is a great
selling point. that's what it's all about. stephanie: in terms of the operation, they have cleaned house. they have pulled out layers of middle management with says -- which has changed the face of the organization. matt: i will miss those middlemen. stephanie: that's a whole lot of chicken parmesan on you enjoyed for a long time. this platform,g being part of the iconic new york stock exchange. if they compare that with the london stock exchange, it bolsters what they can do. they had alibaba getting those international ipos that means so much to them. opposite is also true. you cannot be left out in the cold fighting for survival. if you don't get that scale, you get less relevant and it's about the volume and the flow and if you don't have any scale, you cannot get that low. john: the first talk that was brought up was that deutsche wanted to get in there.
, much longer can this go on for? will there be a bidding war? matt: i would not predict that but it would not surprise me. this is one of the crown jewels that is left out there as an independent operator. stephanie: if you are deutsche se it's like competing against nike or apple. you simply cannot win. a niche for the new balances out there. stephanie: those are the stories that matter to markets. we've got much more ahead on "bloomberg ." we are 50 minutes from the market open so let's check on one stock that is moving. , shares fell 18% yesterday. we are seeing a bit of a comeback in the company's stunning investors with four quarter results. but the an sec probe
matt: we have breaking news on auto sales. ford is reporting that light auto sales were up 22.2% in february. the numbers, this month could be the best february we have seen since the year 2000. it could be the best beginning of the year for automakers we have seen so far in this millennium. these are usually months that
andhampered by bad weather tax rebates have not come in yet and we are all broke from buying toys for the kids. some of us are buying cars and that works out to the benefit of the ford motor company. they have a new high margin, all aluminum f-150 which is why you see the big numbers and part of the reason it will earn a lot of money. you had chrysler out with the numbers that eat the street estimates. we were looking for 12% and we got 20%. general motors is due out in 15 minutes and we will bring those numbers to you when they cross. honeywell, this is a story that has been developing for a long time. it says it will walk a way from talks with united technologies. it had offered $108 per share to buy the company.
united tech knowledge is apparently was not willing to negotiate so honeywell said they will go it alone. united technologies will have to do the same and investors have less confidence in united technologies than honeywell. marathon oil is down big, 5%, in the premarket. the company says it will sell 100 45 million shares. previously, it was going to sell 135 million shares so it will raise more capital. it will raise $1.3 billion to get through this route. oil explorers and producers, if they have cash, they think they will be fine as well as they get through these low prices. if they don't, they are in trouble and many of them are out raising capital. stephanie: i will take it. i will talk about chrysler. the company's winning
streak in terms of sales as lasted almost six years. it posted its 71st street monthly sales gain in the u.s. and chrysler sales were a 12% and nissan u.s. sales were at 11% and that beat estimates. more problems for greece, creditors hit a roadblock over conditions for the next portion of emergency loans to the greeks. in order to unlock more aid, greece and as creditors have to agree on this goal reforms that would lead to a it's are plus. the prime minister blames the imf for that hold up. tomorrow, the persian all air emirates will capture the title of the longest schedule flight. a plane to travel more than seven hours to new zealand but the record will not last long. airways will fly to chile.
david: you are watching "bloomberg ." to talk about credit and specifically high-yield credit, structured credit and there has been difficulties. what's going on in that market? oil and energy commodities were part of the high-yield market and we have seen what they have done. 20% of theo be high-yield market and are now about 15%. because of what was happening in the energy sector come you saw it leading into other sectors. the credit markets are not very liquid and people were forced to sell and sold what they could rather than what they wanted. the effect across the credit
market is the entire high-yield market went down. stephanie: we have seen stabilization in the last week. >> we have and that's driven by stability in stocks with a couple of good data points in the people's bank of china said they would not do anything to crazy. that has slowed down the volatility. it's stable but in order for it to start going up again, we need to get a better picture of not just the u.s. economy but the globally on a me and what the potential policy response would be from the other central banks. what is the key to it? >> they track each other closely and we have just come out of one days where you saw the equity market rally and the other selloff. that ended at the end of last year. asld like to think of that
phase one or phase two and the next phase is they tend to move together in the final phase and we saw this happen after 2000 , what tendster 2002 to happen is the credit markets need to normalize. the credit market is the oil that lubricates the u's economy and that needs to come back in line before equities can rally again. the carry policy put it into an out of whack scenario where spreads were so tight and things traded well because of the safety net. >> yes, but when that was happening, both markets were going up. with whatno dichotomy credit was doing and what the equity market was doing. market andgh-yield all markets got a little crazy but we did not get to the levels of the craziness of 2007-2008. i don't think we will ever see that again. david: what would come with a cleaning out of the debt market?
timeen it's a question of because we are just starting to see defaults and companies talk about restructuring. it's a great opportunity for us because we tend to invest in situations like that. you need that to carry on for a few months and let the market start to clear before people say it's safe to get back into the water. stephanie: let people believe. are: next up, central banks using negative interest rates to spur growth. is it working? we will hear from the former fed chairman, alan greenspan. ♪
as 2% at one point in today's session. just roaming into negative territory. you can hear the opening bell. i'm jonathan ferro alongside stephanie ruhle and david weston could we are joined by ashland and its chief economist at oppenheimer funds. it's great to have you on the program. look at the correlation with crude and stocks. we have been talking about this for days and weeks if not months and when it will finally break down. when does it in your mind? >> it's a puzzle because it's supposed to go the other way. higher capital return should mean higher stocks, so it's going the wrong direction. i think this is holdover from 2008. we are haunted by the ghosts of 2008 and you are getting close to this a few minutes ago, but there is concerned that if collateral oil in the ground is
not worth as much, is that going to show financial weakness or financial trouble someplace else? until we get through just to is in serious financial trouble and who is going out of business and what the bank results are from this fall, it's not in the value. it's not in the fall of the price of gasoline but the decline of collateral. that is where this will shake out. we are buying a lot of cars. matt is telling us how we are buying all these cars. companies should be able to make more money. time to shake out, but we have to understand the financial side of this. stephanie: companies in the s&p are feeling at this morning. we are seeing green. matt: stocks are climbing into the open. the s&p 500 up 7/10 of 1% right now. 45 there. ,f you look into the bloomberg you see what the imap function that the biggest gainers are
material stocks. commodities and we did see commodity rise, although jonathan pointed out that oil fell before the open. consumer discretionary stocks are also gaining as our energy stocks. if you break these industry groups down even further, i've move, yout with g see the biotech names and tech names rising. you are seeing a lot of those tech names climb today. take a look at oil. the correlation had been climbing. it looks like we have a little bit of a decoupling today. even thoseanged stocks continue to rise both here and over in europe. they were higher overnight in asia. gold also interesting to watch because gold had the best month in what -- four years? stephanie: why? matt: it was a fear trade.
gold was up 17% year to date because all the volatility around the world and interest rates around the road don't negative as global growth slows down. people were getting into gold as insurance. they are still buying it today. a very interesting trade in gold continues. a few stocks i want to highlight that we can watch in the open right now. wynn resorts is one. there so much concerned whether it's wynn resorts, las vegas sands, or whatever. in expected to see a drop revenue, but we actually saw a drop of only 0.1%. stephanie: do you want to put that in perspective of how important that is to wynn? las vegas is only 50% and it was much how that was the golden ticket. thinking about the millions and billions invested there.
sorry -- math is hard. matt: the international stock exchange has also been bidding for the lse. we have door chippers a coming across the other side. ande could be a price war that is why you see intercontinental down today. ouch.t pharmaceuticals -- there has been an sec investigation. they cannot give any guidance. stephanie: it was actually in the green earlier. this has fallen so much. it got decimated yesterday. it was in the green earlier today and we see them start to trail off. matt: after they dropped a fifth of their value yesterday. finally, apple dos it is the -- it is the heaviest weighted stock. we are waiting for them to testify in front of congress today. we will take that live and we will watch bloomberg television for that. we're going to go to mastec right now and it is heading into
march on a three-month losing streak. abigail doolittle is live with the latest down there. abigail: at least nasdaq is heading into march the right way. the three-month losing streak is the worst since 2011 and hopefully it can be turned around here in march. one stock trading higher is j.d..com. shares are storing after the chinese online retailer beat fourth-quarter revenue estimates by 6.4%, 54% year-over-year growth. the chinese consumer is alive and well at least online. they added a lot of accounts in 2015 come up to 155 million for the year. 71% above analyst estimates. they did not tell us a lot for 2015, but they are scheduled to go green the first quarter of this year. love all these
positives, but they are still not making money. matt: that is a tough one. there are a lot of stocks that have not made money and continue to do incredibly well. that is possible as long as you're betting on expansion. investors are willing to play the game. jonathan: if you bought in to buy government bonds sale over in japan, you're guaranteed not to make money if you hold that to maturity. central banks in the eurozone have put some key interest rates into negative territory and effort to stimulate growth and inflation. mike mccue sat down with the former federal reserve chairman alan greenspan and an exclusive interview. here's what he had to say about negative rates. alan: up to a point, negative interest rates have no affect. why? because people are willing to accept essentially a negative interest rate to hold the claims of these particular countries. that's going to change if this goes on indefinitely, but i assume it's going to start to move.
we don't know what happens when that happens. you listen toand, the comments from greenspan and people are still willing to hold securities with a negative rate. my question to you would be -- the lower bound is no longer zero. does this mean the effect of lower bound is much lower from where we are at? >> depends on what you are trying to do. we have seen what negative interest rates have done and we have had them for about six weeks. david: want to break one piece of news on general motors. matt: you can see this red sticky headline for general motors. ino sales for gm fell 1.5% february. we were expecting to see a gain of 5.1%. as a result, the shares although they are still positive -- the shares have turned around later. sorry, that's gp. i'm looking for gm. fiat chrysler came out with 11% gain.
ford came out with a 12% gain. general motors shares -- let museum in. they have only been trading for six minutes, but they are turning down. there is still again there as we way through the numbers. i will figure out why they posted a drop rather than again. investors are doing the same or now. david: i apologize that i interrupted you. ashwin: negative interest rates? i think with the central banks are trying to do is force people to invest in other assets. the fed called it the portfolio channel. when i think the real issue is is that it's not about cheap money anymore. it's about treating demand. it's not a shortage of demand. it's a shortage of liquidity. how are we going to progress? monetary authorities have done what they can. the rates have been close to zero in the u.s. and rates in the rest of the world have enclosed a negative.
what you need a structural change and some sort of physical push like i was talking about before. if japanese government bonds yields zero and the u.s. tenure yields 1.75%, we are not dropping off the face of the earth, but what i think what the world is telling these policymakers is go ahead. you need to do something proactive. do the thing no one wants to talk about, which is borrowed to spend. david: you are talking about oil and we are looking for growth and demand. with both the oil price and negative interest rates, we are signaling to real investors -- wait a second. things are bad. instead of putting money to work, they go to refuge. jerry: that is a real risk of central bank saying things are worse than they are. even the fed holding off on moving normalizing rates here creates that problem. ashwin is right. is politically
unacceptable all of the world. the other thing about negative rates over europe is that one of europe's big problems is the lack of bank lending to get companies that can actually grow. one of those reasons that happens is a weakness of capital. you do not restore banks capital by taking money away from them and putting it into the european central bank. i have a skippable about this negative interest rate policy. academically and you have central banks for professors. if the mathematics, they work, but the business reality to me does not make a lot of sense. stephanie: they try to put a lot of people into the central banks to have experience, but they can't get confirmed. jerry: we're going to talk about politics today and we will see if that gets any easier. i'm a former professor. i don't want to be on a central bank. maybe i should be by now after 35 years. [laughter] jonathan: to tie this
conversation together, the point there on demand that you make -- if you are a bank and demand for credit is not there like in the eurozone and some countries, it's a tax for you. see the fed adding all this liquidity to the system and ec regulators actually taking liquidity out. we have had a liquidity situation in a mutual fund a few months ago. stephanie: 3rd avenue. later, theew months sec says look, we're going to make things tougher and abide by a stricter set of liquidity rules. this is not helping liquidity situation and not helping the banks. this is the aftermath of 2008 and all the banks being forced to pay the price a little. it's a little vindictive and my point, but that's what seems to be happening. david: jerry, thank you for being here. ashwin, you'll be staying with
matt: this is "bloomberg ." emily chang will sit down with u.s. attorney general low loretta lynch for an exclusive interview at four clock p.m. eastern right here on bloomberg television. key players from a global international gathering motor show including yet chrysler ceo -- fiat chrysler ceo sergio marchionne. ryan chilcote spoke to him in a one-on-one interview.
we did that back in 2015, what came along was a separation and there was a range to sever all financial connections with ferrari. started it on january 1 and they are an independent house. part of that debt needs to be refinanced so it's probably a half a billion that needs to go in, . >> and now is the right time because? conditions are right and the brand has no problems sinc in terms of establishing credibility to borrow. we were although road for a long time placing the initial 10%. i think the street knows the name out. interest rates are right and markets are benign. >> you said you weren't expecting great numbers for ferrari in china.
how far does the leak i weakness go? sergio: we have to be very careful in china with ferrari because china has played a part with the development of ferrari come a but it has never been the single largest driver of growth. it has not been a repository of .he engine of growth hasa as a country represented a relatively small portion of the overall volumes. matters a lot, particular japan. it's a much bigger country in terms of coverage than china today. over the long-term, we tend to rectify the market as available, but it's our way of looking into the future. we will make it as the chinese market continues to grow current
levels. >> i think investors don't understand about for errari. sergio: nothing changed structurally from the pitch. when we took for ari to the u.s. market. what happened on janeway fourth is that 80% of the capital of massei was distributed en to the shareholders who understood that for ari was old butpart of the f never appreciated for robbery as a luxury goods maker. we need to go back and reinforce that with a class of shareholders that is different from the sca bunch. the rightot holders of a luxury maker.
this is a different is this. you can see from the product behind me that this is a different thing. >> speaking of fiat chrysler rari iszing that fer outstanding, february numbers came in better than expectations . is that people holding off and purchases in december? you had that discounting going on. sergio: look, i mean, there was nothing abnormal done commercially in the month of february in the u.s. market that would justify any typos unique -- type of unique reading of the numbers. the market is in good shape. i think we did well. i saw the numbers coming in from fort. d. they have done well. the market is all right. it's a confirmation of what i've been saying all along. i've seen no
indication numbers that toy 16 will be material less than before. >> 71 consecutive months of sales gains. sergio: one month away from six years. >> how far can that momentum go? sergio: there's a point where you need to stop. [laughter] >> you need to stop. sergio: we need to stop because it cannot go infinitely. but it's going to happen. i think we will have momentum as long as the market supports it overall in terms of volume. i think we will be all right. >> you mentioned this earlier about the u.s. market being close to peak. sergio: i don't think it's going to do a lot more than it currently is. i'm not calling it to fall flat on its face, but i'm talking about total u.s. car sales. when you start getting into 18 million, you're not going to see 20. we have seen a huge recovery.
during the crisis, we dropped it to 10 and went right back up to 18. we have gone from the bottom to the top now. >> finally, this is a secular shift. the market does not get any bigger? sergio: it's highly unlikely that you will see big increases in numbers going forward. i think the question is to one it will resettle on a secular basis. butave yet to have it, based on what i know, i do not think we will see three frenchmen to the calendar -- refringement, but i do not think it will be draconian. it's good news for the auto industry that we will survive the event without damage. david: that was an exclusive interview with fiat chrysler ceo sergio marchionne.
vonnie quinn is in today for betty love. : great conversations coming up as we are going to be speaking with don arborist. china asking about softening data and also the chinese renminbi. we will talk about the global environment. the last time he was on, he was sentimentthat skipped o should be so low. super tuesday -- he has the idea that millennials are voting against why. and i lastinterests will ask why. he is in charge of the security brief and he will be in the middle of the cyber security brief. that's all coming up. stephanie: one more topic we is valiantt yet pharmaceuticals. i'm now joined by siobhan enough
ultra. you still have a buy on this company after all this bad news. you have a price target of 175. what am i missing? >> i would say upfront that we started coverage of this company and perhaps we missed how investors would react to the bad news. subpoenad the original when it was issued with hillary clinton's tweet. it has not been our best call, but we as analysts have to look at fundamentals. as a lot of noise around the company. their own is doing. there's a lot of things we can do to analyze in terms of prescription trends, etc. no matter how we look at valiant pharmaceuticals, we cannot get to current valuations. for us, it's still a buy. stephanie: bill ackman would argue it's a pr problem. shibani: i agree with him that
pr is a good portion of their problem. in the past three months, we have found ourselves -- and has been no emotional roller coasters for analysts, investors, and even the media. it is not something that investors like dealing with. there are situations where even if you believe the stock is worth a lot more, nobody wants to wake up in the morning and go through 18% downsize because of a presley. anphanie: when it was independent company, a traded 20 times earnings. valeant trades at five times. italy takes credit from 30% of valeant. 70% in the dark. dachshund loam is not the biggest driver for valeant. to us, it's products like that dyphaxim and we know this
market very well. investors are not looking at the fundamentals and products like that, which will drive the company going forward. stephanie: that was a huge acquisition in terms of price tech for them. if they cannot raise prices, they are not going to make money off of that. shibani: you understand that in the past that valeant's business model was dependent on price. stephanie: that is why everybody liked it. shibani: people maybe didn't know it was dependent on pricing since we have found out you have to think about how analysts build our models. there was no way we were putting in 20% price increases. we had standard pricing in the pharmaceutical sector. the products that they did take price increases on, they were going generic anyways. if you run your valuation and , 30% year on year growth, which i don't think people were actually doing, i do
not know how you will get to a low number. stephanie: how do you account for the holders? we saw lots of hedge funds sell out of their positions because they owned in the high 100. at the beginning of this year, we saw hedge funds piled back in. they're not going to fit in this trade if it's want to be dead money for the next six months at least through sec investigation. shibani: that's the thing. one would be whether it's dead money. the second is do they want to go through the emotional roller coaster? stephanie: the answer is no, they don't. shibani: they make us look like idiots every time we defend them and the press has already seen it. you have to look back at the fundamentals. mike came back and that was huge for the company. there is no way the board would have let him come back after four months of looking at what was happening in the company. there was no way howard schiller would stay on the board. that is one. second, he just came back.
he needs time. he has to sign off on the guidance. yes, we were all expecting an update. we were harsh when we wrote our note, but it makes sense. stephanie: yes what? you never look like a twit or an idiot and you will not say that on air. there are a lot of people in the story that might, but it's not you. david: as we go off the air, jean coming will be testing in front of congress today and he privacy andng that security should coexist and there is more evidence being found on these iphones. i want to thank ashwin for being with us today. that does it for "bloomberg ." ♪
>> i am mark barton and you are watching "bloomberg markets." vonnie: we are going to take you from new york to london to geneva and the next half-hour to hear his what we are watching. investors are shrugging off weak manufacturing data out of china , bucking the trend on stimulus measures. market snap it today losing streak. mark: it is super tuesday. the race toy for the white house. hillary clinton and donald trump looking to maintain their momentum. is there anything that can stop them from locking up their party's nominations tonight? vonnie: a bloomberg first interview with the ceo of aston martin. andy palmer unveils the automaker's newest model and looks ahead to producing its first electric car.