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tv   Trending Business  Bloomberg  August 3, 2016 9:00pm-10:01pm EDT

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♪ rishaad: it is thursday the fourth of august. this is "trending business". i am rishaad salamat. ♪ rishaad: we will be taking you to melbourne, tokyo, and beijing. stocks tracking wall street gains. recovery, butits haven assets and the klein. up sinceo on the of
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reporting. the goods and sales tax in india moving closer. follow me on twitter @rishaadtv. please use #trendingbusiness. day getting underway and hong kong. we are tracking gains we saw on wall street. we are poised for the first day of gains, hopefully. have a look at what is happening. market inthe hottest asia, followed by south korea, , one point $8 billion net inflows from the start of july.
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taiwan, just under $6 billion. something to watch as we move into the session. thate looking at gains have to do with oil price rebounding. some of the bigger movers in australia down to the oil price. you have a pullback when it comes to the gold-mining stocks. there we go. , mining stocks, and oil and gas. and the the services integrated oil explorers up close to 2%. let's have a look at where we are right now. $1.80 jump since yesterday. have a look at where rent is trading. the rebound is continuing. -- have a look at where brent is
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trading. the rebound is continuing. declineseing continuing with respect to bond prices. have a look at this. chart ofyou the today the yield in the aussie 10 year. a drop three days back into a record low. from there, we are up the most in 14 months. have a look at the 10 year bond. this, a one-week change, from this time last week when the selloff began, up 21 basis points. to zeroushing closer right now. that is something to follow as well. rishaad: thanks. upper house has approved the creation of a national sales
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tax a decade after it was first proposed. victory since prime minister modi took office. as one of seen india's most a significant reforms since the 1990's, first proposed 10 years ago. it is a major win for prime minister modi. theame to office with biggest mandate in 30 years on the back of a platform that promised economic reforms and opening up. indian lawmakers voted bill.ously to pass the it replaces 17 levees, taxed at consumption. it creates a single market of 1.3 billion consumers. aim to ease the movement of goods and services to eradicate the current piecemeal system. goods once at the
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the point of consumption and tax them there. to twould add up percentage points to gdp. the next test is how quickly it can be implemented. it still needs endorsement i the lower house and ratification by th 50% of the state. some states want it higher. the osc cd mean is 20%. eurasia group says the economic and if it's won't come for quite some time. still, seen as a major positive. foreign and indian companies have folk allies to their support as a progressive step and a momentous occasion.
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even greater still may be the boost to prime minister modi's reputation as a game changer somewhat tarnished by the sluggish pace of reforms and the political infighting we have seen that delayed these reforms. have returned to highs last seen in august 2015. assets, and the currency were some of the worst performers in the world. the currency climbing on this optimism. that pushing it through is a major boost to the credibility of the reform process in india. that is what international investors will be looking at now. rishaad: apple, baidu, and google have invested in cars, and now samsung is in advanced talks.
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samsung shares gaining. stromatell us about what is drg these talks here. samsung is looking at a move into the auto parts business as other technology companies are seeing opportunities within the world of all toes. strategic move by the vice-chairman of the company, reshaping the conglomerate as he takes many responsibilities that his father used to control. he has been selling off some assets. this would be a significant move outside the traditional core business of samsung, affectively selling components into the smartphone business, apple and other smartphone makers, chips, displays. this would be a move where they would try to implement a similar approach in the world of
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automobiles, where they could make components and sell to automakers around the world, so they are in talks at this point. the deal could be about $3 billion depending on what is included. what are the opportunities for samsung when it comes to cars here? cars are getting more and more technologically sophisticated. missre seeing upon a driving, new gps technologies, so companies like samsung see the opportunity to implement some of those technologies in cars and sell them to the automakers in the u.s. and asia and in europe and make additional money from this. samsung likes the idea of being able to use its components assets fromold in fiat chrysler, and try to make this into a bigger business for the kalama it as they go forward. they see a slowdown in the
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smartphone business, which has been profitable, but now slowing down quite a bit. out to: we will kick it some other stories we are watching. starting things off with hsbc, now another bank that makes most of its money outside of britain. juliette: that is right. we will be watching standard charters shares open after the ondon listed shares soared wednesday after the linda released first half earnings showing provisions for bad loans declined in a further sign that the new ceo is turning things around at the bank. totax profit was down 46% 994 million dollars, below estimates for $1.12 billion. avoided the plunge and's other banks have made great still, the stock has
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traded at less than book value for less than two years. shares trading tyer after first half underlying profit met estimates. underlying profit fell 47 percent to 1.5 $6 billion in the six months through june. that is rio tinto's worst profit results since 2004. earnings are eroded by low prices for iron or, aluminum, and copper. the dividend fell 58% to $.45 per share. analysts say rio is a victim of its own success, mining more than an used to, but earning less due to weak demand. goldman sachs retirement plan is pulling cash from one of its most famous alumni. almost everything it has in the $350 million fund will be liquidated by september 1.
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was worth more than $423 million in march, and has plunged 7% over the past year. for the is another blow fun, plagued by redemptions and a federal probe, investigating whether the fund paid bribes in exchange for an investment from libya's sovereign wealth on. ago andre than a decade sass, rising to the top of the u.s. equities trading business, leaving to start his own company. he is worth around $2.8 billion. on our website, why china is starting to lose its taste for mcdonald's and kfc. it is on china may be able to implement a key change to its stock market, a return of volatile times. can japan ever reach its 2% inflation target? will the fed pulled the trigger
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this year? we are putting those questions to i.t. markets. ♪
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withad: right, checking markets and the positive start today, rebounding from the worst decline in five weeks. great to see you. characterize what is going on right now? what are people looking at? people call it silly season when we have lawyers that are nonexistent half the time. >> they are indeed. end ofo get the back u.s. earnings season, the start of asian earnings season, so it is a little bit tough. markets are grinding to this strange level.
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seen an interesting pullback over the last week in the u.s.. asia is also in an interesting time as well. you have to be very vigilant. major strategic change. i don't see any major crash or correction in the next 6-12 weeks. there are headwinds, macro issues, geopolitical issues, but a very strange time. comes back from summer holidays and reassesses where they are at, it is a bit of a holding pattern unfortunately. have really markets got themselves into a bit of twist when it comes to is thats, but the thing 2% inflation target, i bet they regret putting that into place. what a label to have.
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about five going on years, targeting that 2%. optimism andmuch excitement in 2012 when they brought out abenomics, governor kuroda, the boj, all heading towards that level and use started to see signs inflation 1.6%, but that is a thing of the past. there was always that question of continuing to throw all that capital against the markets as they have. meetings,ve emergency the government having to restructure and reassess where they stand. governor kuroda is being increasingabout purchases of the etf's, is there ever going to be enough to support the market and the market working in its favor. the yen is under pressure to the upside. we have that slide instability
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we just talked about. away from 120l against the u.s. dollar, drifting back towards 106, 110, and fluctuates around that level. they need aan target band of between 1% and 2%? maybe that is the next tory they have to start selling to their own people and global markets. rishaad: it is perplexing, isn't it? the strength seems to persist. it seems as a haven bizarrely enough right now. why? it always has been seen as a haven. differentrket is so to everywhere else in the world. the majority of it is owned by their own people. the probability of their debt thing repaid is high.
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it falls on their own people, so is why it is seen as a safe haven asset, more safe than the u.s. dollar and the hound. pound -- theep pound. structurally, they are that safer bet. they are also very good and a market, a huges current account because of what they do, and their market is strong for that reason. task in terms of actually trying to grow. thing, thee other other haven is gold. rallysaying basically the is pretty much done right now, so i guess that become support for the yen. why do you think olds a rally is
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over with for the moment? , gold is a tricky commodity for those who look at it from a trade perspective. there are so many factors. u.s. inflation is in near where it needs to be, which is is also a 2% mandate did risks on the geopolitical side, briggs it and what happened there. exit and what happened there. gold has had an incredible turnaround, growing almost 20%. that's why i can't see a legitimate reason in the interim to push towards 1400 and less you had some major event in the middle east or another issue around oil. there are no signs yet. beingne inventories are
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drawn down, stabilizing oil, a positive thing. ok growth in the u.s., so inflation may come down the track. at all those reasons, gold 1560 is the top and may moderate back down to $1300 announced. does he leave a mark of cutting rates again, because his successor seems much more hawkish and unlikely to get to a move on the downside with the cost of bar ring. -- cost of borrowing. is our mandate, a target band of 2% to 3%. glenn stevens has one meeting the, then you have statement that continuing to cut
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rates does not pass through to the economy. he still has to honor the mandate, and if inflation does be anck up, november will interesting meeting and whether he has to cut rates further. our banks are now getting to a point where margins are being squeezed, and handing out lending rates at record lows is not stimulating our economy correctly. the people they are hurting the are lendingse who money out. they are starting to move away from the banks. the big conundrum around how banks fund themselves and whether the rba will continue to cut rates. rishaad: great talking with you. a look at the latest business flash headlines now. will savese brewer almost $300 million on the assets it is buying because the yen has strengthened since the deal was signed in april. planning to buy european beers
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for just under $3 billion. that is 10% less than what was estimated. shares declining, 2.2%. tol gross advising investors avoid stocks and bonds. he said the focus should be on assets that are not being bought by central banks. he says monetary policy is reaching its limits and we should expect more measures in the future. the trump taj mahal , the resort operator failed to agree with striking workers after an 18 month long dispute. the fifth of 12 casinos to close in atlantic city over the past two years. looking ahead, a bumpy road and latest ons deal, the
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the right hailing battle is next. ♪
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rishaad: now fresh off its tie joining forces with softbank. then tracking all these developments. sources,ing to our they are raising another round expected more than $600 million this week. they are preparing for a second tranche of $400 million. rishaad: this is a dynamic that will not work in favor of uber.
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it is unclear when these talks began. uber, a grab ceo said they would ship some focus to southeast asia. uber is trying to redeploy 150 programmers into that market. interesting to see how the dynamics play out amongst all the players. thank you very much indeed. under pressure again and southeast asia. lookingd south korea like this, gains after recent declines. asian-pacific stocks, the nikkei turning flat, down six points.
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this does follow the worst today since the aftermath of the brexit vote. ipo's have quietly returned to breaking records. we will tell you why. ♪
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♪ rishaad: they look at our top stories, asian-pacific shares rebounding since the brexit. mining and energy stocks leading the gains. the yen strengthens once more. aussie dollar stronger along with the won and ringgit. earnings getting hit from low prices in iron ore, a
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aluminum, and copper. the rio tinto dividend now $.45 per share. house has passed a single sales tax and replaced more than a dozen levies, a victory for prime minister modi. it still has to be endorsed and ratified by half of india's states. to the market open in hong kong. shanghai getting into this as well. sales, juneetail figures, on the way up 1/10 of 1%, weaker than economists were expecting. let's see how that is playing out. shanghai in the red. david: i will show you the aussie dollar in a moment.
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it's looking like this. we are getting the open right now, hong kong, shanghai, and manila. when you have dollar-yen strengthening, japan giving up all its early gains. what is interesting is that most stocks are on the way out. we're still looking at 65% of stocks on the nikkei in the green at the moment. it comes down to dollar-yen falling. in gm out with a earnings later on. early movers there. mgm at with earnings later on. early movers there. hsbc out with earnings. we will talk about the banks in a moment. have a look at the nikkei.
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it has given up most of its gains. at the drop here. a lot of this has to do with dollar-yen falling to a session low. it has been consolidating at these levels for the past 2-3 days. fairly looking at a tight range for the past 18 hours. as promised, have a look at the aussie dollar. there we go. up a quarter of 1%. mix.lso in the the rally continues across asia. session highs roughly here on prices of brent.
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end on west texas. rishaad: thank you a lot for that. standard chartered shares opening, two point 8% of, provision for bad loans declining. the is a further sign that new ceo is turning things around. miss when it came to the revenue side of things. that theye positives market hopped onto are the provisions. bylysts were also excited the fact that cost controls seemed to be in play. one analyst pointing out the ratio is down and the capital position for standard chartered remains basically unchanged, which is good for its positioning,
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losses, and so forth. rishaad: it makes 90% of its money outside of britain, similar story to hsbc. like hsbc, could we argue that similar.chartered is banks walked away from their return on equity targets. was veryers publicly cautious about the outlook, warning about uncertainty with the regulatory environment, political environment, and we see the open in hong kong today in the stock market is relatively muted. rishaad: we are climbing, 3.2%. came out innumbers london yesterday, the stock was up as much as 6%.
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after the analyst call and so forth, people started to ratchet it back down the little bit. positives fort of the stock, at least as far as the restructuring program goes. there are still a lot of obstacles for the bank to overcome. gaining, riosydney tinto, up 1.8%. this coming about despite it delivering its worst profit since 2004. paul allen is with me now. , not a bign profit surprise given the businesses they are in and the prices they are getting for their product. 1.5 billion was banging in line. back in 2000 four, rio tinto was
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shipping 60 million tons of iron ore. million tons, so a glut that has driven prices down. 14%, aluminuml down, and copper as well. rishaad: the dividend down also 58%. the former ceo was talking about the fact they would essentially be an atm for shareholders. ago, that was two years calling rio tinto a cash machine. all gone out the window now, the dividend down $.58. notainly the markets mourning the passing of this progressive dividend.
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it was not sustainable. 47%,though profit was off shares up one and three quarters percent. rishaad: thank you very much indeed for that. let's check some other stories for you. in histrump says unity campaign is perhaps greater than ever before despite reports of major tension between the nominee and republican party looters -- leaders. donald trump refused to endorse republicans in upcoming republican races. mike hence has issued his own endorsement of paul ryan. shinzo abe cap the big hitters in his new cabinet, but also sprung some new surprises. the chief cabinet secretary and finance minister retained their positions. they have held those since december 2012. >> fulfilling our responsibility
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for the future is the biggest mission for this new cap netgear there is only one thing to do, challenge, challenge, challenge the future. we will continue our efforts tirelessly. this cabinet should be called the future challenge cap net. rishaad: china's market for the ipo's is the hottest it has ever been, stocks soaring 420% in their first month. tom mckinsey joins us with more on this story. what is going on here? it is unprecedented, 62 ipos. they have seen on average a rally of more than 400% to that is a record for a rally of this type. value has been very
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low, around $88 million on average, the lowest since 2005. the regulators have played a big role, restricting the number of ipos and they have pushed companies to keep deal values low, worried about oversupply of it is, volatility, so really the regulations that have led to this rally and the few ipos we had, also a registration system that many hoped would be in the play at this stage. it has been delayed. fewer ipos and lower values of deals, both leading to this. restrictions, the how many companies have been able to list so far? 800 companies have planned registered for ipo, but
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only 78 have started trading. 200 19 fores to 2015. in terms of the values, they are 25% of what they were in 2015, so a significant drop. if you were or weren't one of the companies lucky enough to have listed, i will point to one example. it listed in june and raised $39 million. by the end of its first month of trading, a rally of 550%. upce its ipo, the stock is .80%, so it can be profitable for retail investors, you have just a fraction of a percent chance of getting in early on an ipo like this. leave, in thee we
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chance regulators will ease up on all of this? are there any signs off that? the signals we have seen over the last few months are that regulators will continue to have firm control over the ipos in china. in fact, they have been putting pressures on brokerages to improve their transparency. is the also heard there possibility of measures or curbs on these so-called back door listings, where chinese firms listed in the u.s. look to return and read list over here and take advantage of conditions here. stillgistration system, no date for that. however, analysts say that if
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volatility remains at a decent level and sentiment market improves, we might have higher value deals being approved, if not, some countries may look to hong kong as an alternative. rishaad: coming up, record returns, perfect timing for chinese companies to go public. we look at whether that can last in more detail when "trending business" returns. ♪
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rishaad: right, you are back. businesst bloomberg flash. trials of and saying a rate rise could be warranted as the economy picks up. he affirms non-until inflation become stronger. we should overshoot the
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2% inflation target. goldman sachs fined $36 million over allegations former employees gained confidential documents from the federal reserve. it was used in presentations to solicit business.mi has decided to stop selling equipment. it will continue to offer shoes and clothing. nike drops gold as interest falls. interest in golf has slumped in recent years.
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let's have a look at these lines from the bank of japan. board member saying he wants to have a productive discussion about the cpi and cpi targets. the yen breaking through the 101 level to trade 100.94. that itrs saying differs from helicopter money and they won't hesitate to add stimulus. supportive, and they did not want it to two b. to be. -- they sayeverything talks the yen up when they want to do the reverse. >> they have tried everything.
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is no helicopter money or stimulation package announced by the japanese government. investors feel very disappointed. the yen will further appreciate against the u.s. dollar. rishaad: was putting a 2% target in in the first play something they regret now? >> the japanese yen is appreciating. i think there will be zero inflation for the economy. i think 2% is too far away. have this ipo market on fire right now in china. are you seeing evidence of this? tell me your take. the chinese market has been a hit among investors. go. have nowhere to
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the secondary market, general , noet sentiment, just so-so breakthrough, no turnover. theipo market seems to be only way for investors to make money, so they pour all their money into the ipo market. is that sucking out some of the liquidity there? a lot of liquidity has been sucked into the ipo market. the chinese government seems to of thesehe supply producers as well. secondary affects the market. will get the government to do something to improve liquidity as well. the market activity there is really low. is that also by doing that h-shares closer
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together and getting rid of that price differential? >> when you look at the price difference, it has been narrow ring the past few weeks -- narrowing the past few weeks. i think the chinese government would do something to improve it. we heard they're going to relax the rules in the futures market. you need a strong secondary market. right, tell me about the risks to this, the challenges, they are numerous, aren't they? , less controll does not mean no control. we need to take a closer look at the market.
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if the rules cannot allow them to catch market positions, i don't think future changes can bring anything significant. look at asat do you a fund manager? what is the strategy right now? people say by with the structural reform program going on in china. we are seeing some overcapacity being taken out, some capacity also. chinese-asia market is still largely policy driven. we have to look at it all. a government policy as to whether there will be a rate cut for new infrastructure plan, fixed assetee that
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investments have been slowing down, so the government needs to rebalance. everything will be policy driven. rishaad: right, that's just it, is in a? how does the pboc figure and all this. ? >> they are trying to improve market liquidity, but they cannot do much right now. they can't cut interest rates. policies will be adopting a monetary policy. rishaad: we are under stimulus right now and china, aren't we? i think they are taking a wait and see approach and they will take every step cautiously.
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rishaad: great talking to you. up next, looking at why investors are certainly feeling the love for taiwan. this is bloomberg. ♪
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rishaad: this is "trending business". taiwan the hottest place in the asia-pacific for investors come of billions of dollars pouring into equities. give me an idea why the popularity. >> it is all about low expectations. thattors were very worried it would hit the local supply chain and the new resident would rock in the boat with china. so far, she has not done that. , saleseported earnings
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that fell less than projected. we all know the iphone seven is coming up. if you compare that with low valuation and high yields, it's looking better for taiwan. rishaad: the numbers are looking pretty good as well. one year high in terms of the amount of money pouring into taiwan. these things tend to have a herd mentality, then stop and the herd goes elsewhere. >> there are things you have to watch out for. thailand's economic growth only turned positive last quarter after three straight quarters of contraction. there are definitely some headwinds on the horizon. rishaad: thank you very much
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indeed for that. a look at taiwan as it becomes the hottest destination for foreign investment. right, let's tell you about what the future of public transport could be. it apparently has arrived in china. it is an electric elevated us. it has gone on trial. it does not say if it will be used countrywide. it straddles the road and let's other cars has been need. could replace buses at 1/5 of the cost of a subway there. let's tell you what we have in the next hour. light, india's sales tax passing in the upper house. we have reaction from mumbai as
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country gears up for a goods and services tax. this is bloomberg. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: john dickerson is here, moderator of "face the nation," and a columnist from "slate" magazine. so many jobs. he has covered six presidential campaigns. his new book is called "whistlestop." let's talk about the book in a minute. where are we in this campaign? john: each party has gotten theibest four days to get


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