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tv   Bloomberg Markets  Bloomberg  August 23, 2016 12:00pm-2:01pm EDT

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scarlett: we are covering stories from washington and london to beijing this hour. this is what we are watching. the dollar fell after mixed economic data. in federal reserve will be no rush to raise interest rates anytime soon. is leading theto rally as it is closer to a deal. will regulators clear the year for the biggest maker of seeds and pesticides? house is batting away donald trump's criticism the president stayed on vacation. will the visit now quiet that controversy? scarlet: we are halfway through the trading day.
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right now, we are looking at highs, record highs for the s&p 500 and the nasdaq. they are punching above the record highs. they are off of that by about a point. the nasdaq is still above that. it's climbing throughout the course of the day. we are looking at earnings which have come out, especially with best buy which has pushed the s&p 500. we have new home sales or were much better than anticipated. that's a pop of about 12%. take a look at my terminal. i point this out to you because even though we are seeing some of this pop today, it's our smallest trading date of the entire year. the s&p has seen no moves up or down in the past 31 days.
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day.e on pace for our 32nd we are keeping investors somewhat on the sidelines. one commodity i want to point out is oil. wti crude has been on track for its worst two days in the past two weeks or so. we got this pop that you can see in the past hour or hour and half. it is $47.82. it is up be $48 mark. we saw a reports coming out from reuters saying that iran may be open to a freeze. been reporting that. opec has been rumored to be thinking about a freeze in terms of oil production. it's unclear if iran has decided on joining or not. that is according to sources that want to remain anonymous.
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let's take a look at what's happening with some of the biggest oil poppers. is up the most, 4/10 of a percent. let's also move on to earnings and best buy is the one to talk about today. , up see the biggest rise 19% at this moment. we can see the knock on effect of some of the appliances it sells. fitbit gets 12% of its revenue, you can see that pop of 4%. ofrlpool also gets a pop 1.5%. couple of other quick mentions as well as some recommendations, let's take a look at nordstrom's. they are up 8%. square is coming in higher. buy on araise to a growth outlook. onl brothers is up 7.5%
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third-quarter earnings. it looks like it makes sense seen the giant new-home sales coming up. 2007. the most since late scarlet: we're going to be the ceo ofth doug, toll brothers at 1:00. you don't want to miss that interview. matt: it will be timely on a day like today. let's check in with mark from the newsroom. president obama is on his way to louisiana were flooding has left a dozen people dead and destroyed thousands of homes and businesses. the trip comes four days after donald trump criticized him for staying on vacation during at the disaster. louisiana's governor said the president should not visit until after the first few days of the recovery. an american soldier has been killed and another wounded why a roadside bomb in afghanistan.
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the patrol was struck by that device. six soldiers from afghanistan were wounded. it came one day after 100 troops were sent to the area to help defend the city against the taliban and. trump tower is boosting the rent it charges or it the donald trump campaign had paid $35,000 a rent. it began increasing in may. hikeampaign says the rent came as the trump teen expanded. a destructive while her continues to grow in california's central coast. more than 2400 people are under evacuation. miles charred 58 square of brush. the fire is 35% contained. dayal news 24 hours a
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powered by journalists and analysts in more than 120 countries. this is bloomberg. scarlet: talks are heating up with monsanto. a deal could be reached in the next two weeks. both ceos have made progress on issues including the purchase price and terminations. done, when it actually get government clearance? joining us is jeff mccracken from bloomberg's global deals coverage. the price tag was the issue. have either side made any steps toward addressing what they think will be regulatory concerns? jeff: not really. they have concerns about what regulators may do. both the eu and the regulators , they are going to
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take close looks at this. this become the largest seed maker in the world. 70% of thecontrol cotton acreage in the world. there are concerns with asset sales. we have dow and dupont. they are looking at the vesture's as well. these play into each other at all. a $1.5 billion breakup fee is what you are reporting. that's great for monsanto. it's not great for the other shareholders. they were already unhappy about the price at 125. how will they feel of the goes to 135 with a $1.5 billion fee. jeff: the offer was 125 a share.
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the termination fee will go up in the offer goes up into the one 30's. up, though the price goes the shareholders and buyers see the strategic logic. hugh grant sees the logic. he tried to merge a year ago and two years ago. he knows these big agrochemical companies are under pressure. there are consolidations under the big companies. you mentioned a couple of different regulators. how many would be involved. what approval by one affect approval by another? jeff: at least three regulatory bodies would get involved. you would have the u.s. regulators, the department of justice or the ftc. i'm not sure where that would fall.
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you have the committee on foreign investment in the united states. they look at national security issues. they have been more scrutinizing dealshnology deals or with the company in question is selling to the defense contractors. they would still take a close look because monsanto is a very big u.s. company that is highly involved in making our food. i use monsanto products to spray weeds on my sidewalk. there will be a lot of intense scrutiny on any deal with them. matt: i will pull it up again. this will drive the point home. i have annualized it. year, it was a record for deals. we were talking yesterday about the oncology, the medivation deal. this is just one more deal that could spawn a lot more.
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successful, this month santonio will have to selloff certain units. we will see more m&a. jeff: deals be get deals. that is when you have huge companies come together like the case of this. you've got dow/dupont. the wall street journal reported on hot gas companies coming together. there will be the best teachers as well. see 2016 ever getting there. that was such a monumental year. the regulators have been pushing back on these really big deals. what we have been talking about, they will get clearance and they will get approved. the big insurance deals, we saw the halliburton deal get blocked. fromw pfizer walk away
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their deal with allegan. i think everyone is slowing down a lot of ways. we are not going to get to 2015 doubles. it's not just regulators. you have protesters lineup against this deal. ruffalo isare not going to getk protesting this. he has been tweeting out to say to shut down this merger. does this have any impact on regulators? jeff: i don't think it does. matt: he's a qualified actor. scarlet: it gets people looking. jeff: if a bunch of senators or congressmen who were opposed to the deal, if they wrote letters and pressed regulators, that's when there's interest. i don't think he is going to impact what the regulators are doing. scarlet: jeff mccracken is our
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editor. matt: he is a great actor. i can editorialize in that. spotlight was great. i have not seen the hulk. scarlet: that's normally targeted to 10-year-old boys. matt: i am kind of a 10-year-old boy. new home sales rise to the highest level since 2007. 12% was the gain in july. scarlet: we will speak with the toll brothers ceo. this is bloomberg. ♪
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matt: you're watching bloomberg markets. scarlet: president obama is
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touring the flood damage in louisiana. this is four days after donald trump visited. is myg us from washington morning. donald trump is going off on the president. how has the white house responded? secretary wass asked about this yesterday. donald trump is trying to draw comparisons with george bush and the katrina disaster where he flew over on his way back from vacation. the white house press cap secretary was pushing back and saying there is a big difference this time in the substance. even the lieutenant governor who is a republican is saying the fema is doing a good job on the floods whereas last time both democrats and republicans were
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saying that the administration did a bad job on hurricane katrina. optics and they are doing a good job. president obama is there right after his vacation. matt: i understand the point that the most important thing is do the work they need to do. president as well criticize george bush for not going to louisiana and visiting in making that visit after katrina? mike: he did. case, the flying over louisiana and looking down on federalan emblem for evidence toward the disaster. the inability of the bush administration at the time to recognize that the response was time, theyand this
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are saying that the substance is very difference and they are responding different lipid politics is a game of optics. leadership is a game appearances. that's why he is showing up now. scarlet: there is an article in the art times about how donald trump is tempering the tone of his immigration rhetoric. how does that differ from what he is set in the past? mike: he said he was going to have a fair bit firm immigration policy about deportation. he said president obama and president bush had deported a lot of people. that is different than what he is been emphasizing in the past. donald trump was saying that he would concentrate on people who had been convicted of crimes. this led some people to say that's what president obama
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said. he concentrates on a people who are been convicted of crimes other than illegal immigration. we will find out. mr. trump is about to give the speech in a few days that will layout his immigration policy. the emphasis has been on building a wall. matt: i'm not saying he is , asing off the wall unlikely as that still seems, he is tempering his rhetoric. not just on the immigrant issue but in general, trying to appeal to minority groups. mike: that's important, not just to reduce his losses among night or the groups but it's important to a lot of moderate republican likes in suburban areas is starting toe
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lose support rapidly after the republican convention. to the extent that he is creating a persona that is more appealing to moderates, that will help with minorities. who is advising him on issues like immigration? we know for economic policy he is laid out his and risers. a lot of billionaires. when it comes to immigration, is he speaking with anyone? publicized anot specific advisor. my sense is that he is taking advice from political advisers. what has changed is the political leadership at the top of the campaign and obviously the position on the calendar. long-established electoral strategy in the united states to appeal more to your in thed committed people
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primary phase. as you move into a general election, you try to appeal more to the middle. scarlet: thank you so much. still ahead, goldman sachs is cutting more jobs in your. people tell you where the cuts are coming. this is bloomberg. ♪
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scarlet: this is bloomberg markets. the bank of canada blew past its earnings expectation. i should say, the bank of montreal. they are navigating an economic downturn. the shares are the biggest in
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six months, up 2%. with more we are joined by pamela ritchie. how are investors viewing this in canada? pamela: there was an expectation that there would be a moderation on the losses and credit concerns over energy related loans. the banks have taken hits an earlier quarters. investors were looking for a moderation of loan losses. also, to dividend increases are expected this season. essentially, year over year it was expected that this would be a flat set of earnings. u.s.,with exposure to the the bank of montreal, they had significant exposure to the yes and that is helping them. matt: is that where you saw the
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strength? specifically in this earnings time? pamela: higher profits there. , ay also bottle loan book transportation loan book from ge not long ago. contributions t from that. restructuring benefits comes home to roost a little bit. the banking side is changing for banks. they have laid off and had to make changes. some of those benefits coming faster. cost control has been highly praised. we see this jump in the share price today. scarlet: where was the softness in the quarter? it was the wealth management side of things as well as sluggish growth in the consumer banking side of things.
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the canadian economy is being hit i this downturn in oil prices. thursday, they are most exposed to the domestic canadian market. they all have international exposures. scarlet: good stuff. thank you so much pamela ritchie. it is time now for the bluebird business flash. -- bloomberg business flash. goldman sachs is cutting jobs in new york before the end of the year. the reductions will begin october 3. goldman has had four rounds of job cuts this year totaling 400 dismissals. they are planning to cut management fees for its main funds. will trim the fees by 25
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basis points for asia and europe. the cuts will be for existing investors only and will begin in october. scarlet: sales of new homes rose last month. they rose 12%. that is the bloomberg is the/. we are focusing on the m&a deals and why some valuations are getting so high. we will continue talking about that with the copresident of thomas lee ventures. this is bloomberg. ♪
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tt: live from bloomberg world headquarters in new york, i am matt miller.
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scarlet: lets the again with first word news. mark crumpton has more from the newsroom. mark c.: fema has opened does after relief centers -- disaster relief centers in the baton rouge area. so far, more than 115,000 people have registered for federal disaster aid. president obama is in route to louisiana to meet with federal, state, and local officials. the plan would eliminate the need to add up overhead costs like rent and phone bills. clinton will also call for quadrupling of the tax deduction for new businesses. some of that would he paid for by her previously announced overhaul of corporate taxes. calling for as special prosecutor to investigate mrs. clinton. he says that the fbi and justice department cannot be trusted
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because they whitewashed the results of a probe into her e-mails when she was secretary of state. willa says vladimir putin meet with german chancellor angela merkel and of french president francois hall ollande on the sidelines of assignment. tensions are high in the region with russia recently accusing ukraine of using terror tactics in crimea. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: thank you so much. we have seen a number of deals taking place in the private equity space just this year. it is an over 60% increase over the same time last year. alix steel talked with scott
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stirling. has raisedquity firm over 22 billion over the years. >> what really drives valuation in our world is the credit markets. when credit markets are robust and debt is cheap, prices tend to go out. it is more of a micro cosmo affect. what we have seen over the past few years is there has been a significant increase in violation. the technological sector, like public markets, has seen significant move. many deals are priced at level that are a little bit out of rates.ith their growth when we look at a business, we tried to understand, what are the fundamental values that make the business of sustainable grower in the industry. it is the growth rate that
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provides a strong underlying fundamental value for a fundamental that you provide for the country. we find that multiples are exceeding what the math would tell you about the intrinsic value of the country. >> it has been really hard to offload some of the debt from lbo's of the past. where is that now? >> robust. >> can you sell them at par or below? >> it depends on the specific situation. is the risk say premium for the single reads, for example, had really shot up, as you pointed out, earlier in the year. now, that has come down. let's not forget that the base rate upon which the spread is added is at all-time lows. the cost of debt is
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significantly lower than it was for example in 2007, the last time we saw some of the same kind of value multiples and that multiples on these companies. >> to see the big area buyout deals of the past or smaller, more contained deals? >> the answer is more of the latter. it does not mean that there are $2 billion deals or $4 billion deals. we just did a deal with a company, one of the major players in the clinical research business and a business that farm and a phenomenal growth company. we could take it public at a very attractive valuation. instead, we did a deal in which we sold 50% of it to a private who, with us, will
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build upon the value. that was a $3.8 billion valuation. those deals can get done and can get done with very attractive financing and position the company to have flexibility because of its strong coverage ratios to grow both organically and through acquisition. that is what we are trying to do, make sure our teams have flexibility to execute growth plans. matt: that was got stirling. ing.cott sperl joining us to speak is alix steel, in the flesh. topic. timely tal i wonder, how does a guy like that invest in a climate like that? alix: you have a lot of investors coming in, a lot of
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retailers, how do you do that? you have to offer a price plus. we will come in, buy a stake in your company, and help you become a better company. if you don't want that, they will not invest in you. if you want that, you can take a lower valuation, or take their deal. scarlet: of course, everyone needs an exit strategy. at some point you have to cash in on it. what did you learn about the climate for ipo's? have seen a big rise in the past weeks, but we are nowhere near the peak that we were seeing. it comes tog, when tech valuations, yes, you do have a struggle there. times andading at 17 looking at mid to high digit growth. that will not work out for you so well. we have seen companies come in
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and trade at or below the values. he says that in other markets it is a different story. matt: i have the ipo index up up, and see, that this is a chart going back to may. here is a five-year look. we come down significantly from where we were. but, we are climbing back up. look at that. so much information. gong the bloomberg, type ipo , and you will get a really good picture. you see how many came. this is divided monthly. this function gives you so much information when you want to know about the ipo climate. with lizas talking over at jp morgan p or she was
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based the saying that you have to have a good ipo for them to want the ipo. ipo index will keep rising. in terms of stirling, if you're looking outside of tech, you could maybe get some return. heartt: is i radio a tech company? matt: we all use their products. scarlet: this is the debt picture. look at the debt here. this pink bar is the term loan outstanding do in 2019. we are right now in 2015. it is not really crunch time yet for the company. then you have 2021-2022. matt: it is crunch time. this company is trading junk. this is distressed. because,bring this up
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sleek is in this company. they are now able to buy back dead. however, the market wonders, are they going to go bankrupt? are they the poster child of, you have too much on your books, and then you cannot offload it. the response is no, he is pretending that the core business is still good here they went from radio to a virtual visual platform and there is stronger value in the stronger assets. that is where he is staying -- saying going forward. matt: i have heard that from a number of investors. that adoes have businesses lot of us use. it is a business that i think is still highly valued in popular
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use terms, but the question is, will they be able to make enough money to pay off the debt? scarlet: can they survive? thank you so much. bloomberg anchor alix steel, and my former partner in crime. we go now to abigail doolittle at the nasdaq. abigail: we have some interesting stuff going on here. the nasdaq open on pace for a record high. just slightly above the levels needed to make the record closing high. excuse me, i am being dive bombed by a fly. it will be interesting to see if the nasdaq can in fact close at those levels. apple, this is interesting.
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the new york post is reporting part inle could take the right share company, lyft. just moments ago, we were fortunate enough to speak to an git.yst at beach ye they have the right people and this could help, this potential opportunity in the future could help to make up for the slowing iphone. scarlet: part in the right one of the stories today is best buy, which has been a big winner here. what sort of ripple effect to say for the nasdaq company? abigail: this is gopro, shares are sharply higher. let's take a look at the bigger picture. when we take a look at the 14 month chart, we see a huge downtrend. the maydown but up from
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low. andpoke to someone earlier the question here is whether or not a turn on is -- turnaround is in play. next year, he thinks that they will lose money. they are putting out a new camera later this year. that could be another reason to .top sharing higher the question is whether or not this move above the 200 moving day average suggests a turnaround. matt: it is awesome to see you work that bloomberg chart into your nasdaq wall. very cool. abigail doolittle
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reporting live in the nasdaq. matt: coming up, if life in the big city is not as exciting anymore, week can tell you how to live like a cowboy for $35 million. this is numbered. ♪
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scarlet: you are watching bloomberg. i'm scarlet fu. matt: this is your global business report. here's what we are watching. british home buyers are shrugging off the brexit vote. the country's largest homebuilders says that they are gaining steam. scarlet: don't blame the weather. we will take the biggest cause of airline delays.
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matt: in today's quick take, chinese companies break the record for overseas deals your do they have an unfair advantage? scarlet: we begin in the u.k. with the country's largest homebuilder appears to have shrugged off or is about the brexit vote. a person reported a boost in the profit. ceo jeff fairburn talked about by back behavior. >> people are still very keen to buy and loners are keen to lend. affordability is there. the fundamentals are still there. the underlying markets are very strong and we have not seen any particular change in buyer behavior. matt: meanwhile, banks have a problem. banks are not taking out
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mortgages. the bank of ireland says they gave twice as many loans in the u.k. than it did in ireland. meanwhile, down under, shares of the australian airline qantas have more than tripled in the last three years. their light has not paid a dividend in seven years. the ceo has been on a cost-cutting mission which has more than $1f it million. you can claim the airlines and not the weather for the most flight delays in the u.s. the u.s. department of transportation says that late arrivals were mostly triggered by mechanical problems, lack of factors.ews, and other that is only the second time that weather has not topped the
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list since they started taking stats. scarlet: time now for our bloomberg quicktake, where we provide context and background on issues of interest. corporate china is on an unprecedented spending spree. here is the situation. chinese companies now own assets . aey propose the purchase of pesticide company. that deal cleared its biggest u.s. approvedhe it. globally, u.k. lawmakers have expressed concerns over chinese investments. australia's government also blush the sale of the largest cattle rancher and rejected bids from china and hong kong. here is the background.
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emperorsries, chinese that they were self-sufficient. foreign trade on the open up when the reporter started to be unlocked. more recently, they have encouraged and overseas push. businesses certainly have an incentive to spend cash sooner rather than later. here is the argument. they should give companies the acquiringom when acquisitions. others argue that chinese investment should be embraced. one report said that the chinese takeover helped firms from bankruptcy. the u.s. closed more than twice as many deals in 2015. you can read more about china and all the quicktake on the bloomberg terminal. head to for more
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stories. ♪
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matt: for those who feel that trading in the comfort of city starryfor a life under skies is for you, today's pursuit is for you. $35 million for a home on the range, just a vacation spot. is it just a vacation spot or would i have to work their? >> you would not have to work that if you owned it, a lot of people do, there are four full-time cowboys. this is in montana, kind of the southern part of the state. this is big sky company. matt: literally, close to big sky, montana. scarlet: this is a single-family
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home? >> yes. this was a working ranch that a venture capitalist, the former brother-in-law of tory burch, he and his wife kind of bought this property for less than $10 million. they set about landscaping it in building this massive, very beautiful house, and expanded it to a 30,000 acre property which they are now spelling -- selling for a $35 million property. matt: i imagine this is where .ike mckee is who does hang out here on a regular basis? >> there cowboys, literal, full-time cowboys, who all have houses on the property. salariesobviously paid
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and what is standard cowboy composition -- compensation, half a cow every year. they manage these 1000 cattle. raise calvesy until they are around 800 pounds and then they sell them and that is held the ranch sustains itself. scarlet: that is a lot of long to mode. >> he talks about having these atvs, motorcycles. you cannot get around the property in one single day. it is 12 miles long. this is massive. matt: it looks like literally, for me, the perfect place to live. why would he want to sell it? >> he says he wants to downsize
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to a smaller ranch. scarlet: maybe down to 15,000. >> yeah, something modest like that. matt: is the market right for selling? >> that is a good question. this is kind of a unique proposition. matt: there are not many out there. beautiful not with mansions that have been professionally designed with landscaping. there are lot of ranches, but not like this. scarlet: what do you hear about the level of interest and the types of buyers this would appeal to? >> this could appeal to someone who had commercial interests. there is space to increase the operation to where it could be significantly affable. the way this is currently broken on nature.ed
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you can make it more of an operation and put a lot more money making facilities. matt: you can make it a legit cowboy business. >> exactly. then again, you could turn it into a bona fide resort also. there is interest from both angles. scarlet: it houses at least 20 guests. matt: it is amazing. i assume the story is on pursuits. you can find this on the bloomberg or go to miss ourdon't interview coming up in the next hour. this is bloomberg. ♪
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grexit is 1:00 p.m. in new york. it is 1:00 p.m. in new york. >> welcome to bloomberg markets. ♪
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matt: good afternoon. i am matt miller. scarlet: i am scarlet fu. los angeles to washington to toast ill in this hour, here is what we're watching. .il prices higher iran might be more willing to club rate with other producers. matt: best buy shares our surgeon today. thanksgiving investor confidence that the ceo can return the largest u.s. electronics retailer to can is to throw. >> new-home sales, onyx actively jumping to an almost nine-year high. thiswill join us later hour. matt: we are halfway to the trading day. ramy has the latest. we are falling away from
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the records we had earlier in the trading session. 2190 is where our closing record high stance. at the end of the day. the nasdaq is just a point off. thisow never went into territory. selling off in terms of the games you had earlier, comparing wins you saw earlier as well. let's take a look and see what is happening over the day with the s&p 500, right now at a session low up about one quarter of 1%. we hit the session high right when the new home starts came out. happening at what is
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in terms of some of the day's losers. down by about 1%, it is down for the third day in a row coming under congressional scrutiny. smokers is down by it percent here. it did not beat first-quarter earnings in terms of one it is six, but it missed revenue. cleveland research cut it from a buy to a neutral because july sales are slowing. weekst: we're talking since the s&p was more than 1%. tell us about the other movers. days.has been about 31 the miners have been basically down today.
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today's hovering just of flatlining in positive territory. copper futures are down 2.5%. you can see the knock on effect in terms of minors. 5.5% there. is not just metals, it is agricultural commodities we're seeing following today. down the most by 1.1%. reason is because cross inspections are starting to happen. yields are expected to do better than last year, three or four percentage points. in terms of the effect with suppliers, 1.8% down.
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as well as in terms of processing. scarlet: i am looking at breaking news here. spiking, the line goes up. the police unit had ordered the finance minister to report to his officer thursday. the finance minister may be replaced. he was your -- informed he would receive a warning date meant. matt: this is a one-day chart here you can see right now, before the snooze, you could only by 13.4 for the dollar. that is why you see the charts
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go up. you could see it has been getting strength, or a five-year there isning strength a longer-term look. headlines on this as they come across. right now, i want a check on the first word news. newsroom with mark crumpton. mark: thank you. american killed her -- soldier was killed and another wounded during an operation in afghanistan. attack game and that -- came a day after 100 u.s. troops were sent to help defend the city against the taliban. federal government approved more than $121 million in assistance or residence affected by the flooding in louisiana running to josh earnest, who says some of this has already
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been paid. he also says it is too early to know whether a separate funding will he needed to help the state. obama is in louisiana, he arrived moments ago and is expected to survey. stein says she could win the presidential election if she could just get more public exposure. she says voters deserve to hear from all the candidates. the supportust have of at least 15% of voters to be included in the three debates. far, joel stein has been pulling in the lower single digits. global news powered by more than twice as hundred journalists and analysts. a federal judge ordered the u.s. state department to accelerate almost 15,000 previously undisclosed documents by the fbi.
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the cochair of the clinton transition project -- waited on how clinton should proceed. to answer all of the questions there are about the e-mail's. , you look at the public opinion polls, 60% of the public and upwards thinks they have heard too much about the e-mails already. this is just part of it. i think people are really focused on the two candidates be theves and who would best president and the best commander-in-chief. >> one of the most recent batches of e-mails saying they show a dubious connection between the clinton foundation and hillary clinton. if you look ahead to the potential hillary clinton
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administration, you're looking do youo that, what role see the clinton foundation playing? how do you see it, laying out steps on how it would be different. would it be possible to continue if she was in fact elected president? >> i think president clinton discussed yesterday. at the end of the day, we have to remember the clinton foundation has spent the last decade. provided via the clinton foundation. a -- anthat is important aspect of the story. in order to solve the problem.
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they have outlined steps to take to pull back fundraising. a lot has been done but it would pick -- it would be a pity to lose at the end of the day. matt: on the other side of the aisle, betsy mccoy makes the for republican presidential candidate donald trump. she told bloomberg surveillance team this morning why he is the better candidate and how he can turn around the u.s. economy. >> met with hispanic issues on issues of immigration. he addressed african-americans on how they could participate in a trump economic turnaround. he went to louisiana to help flood victims. tom: could you take his phone away so he does not tweet out? i am serious. >> i think these other issues
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are more important. kaori economy is limping along at 1.2% economic growth despite consumer demand. three quarters of declining business investment. lower corporate tax rates. thelinton is crisscrossing country wagging her finger at corporations saying they cannot pay their fair share. that is demagoguery. we know they pay the highest of the tax rates in the world. tom: the economic policy tangential to the debate is the idea of the transpacific trade deal. mr. trump is against that. how can a republican candidate the against free-trade? that is un-american. >> it is not un-american but it is a major turn in the republican party.
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republicans are listening and they have set for many decades that free trade promotes growth. in theory, it does. too many workers are getting whacked on the back of free-trade. tom: that is a fair statement. are we sure don't from wants to be president and is not only working on his rant? >> these repeat that. tom: does he want to become president? >> yes. he does. more portly, people who need jobs want him to be president. people more are positive destin poverty than one barack obama took office. they have suffered disproportionately from the poor leadership of the democratic party. betty mccoy,s former lieutenant governor of new york. breakingt to revisit
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news out of south africa. the was performing currency along the expanded -- dropping more than 2% versus the dollar, its weakest in weeks. the daily maverick said a police unit ordered to report to his offices on thursday, speculation resulting that perhaps chiefs may be replaced. matt: right. if you take a look, bloomberg, you can see expanded majors and the swiss franc is doing quite well. most of the other currencies i see doing poorly. >> change it to today. ont: i have got it there historical ranking. >> i have got it on mine. if you do a one-day return, come inside here and you and see it is down 2.2% versus the u.s. dollar. this is bloomberg.
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matt: breaking news, dropping in value, now worth just about 14 to the dollar. the finance ministers south africa, calling to a playstation and given a warning statement, which authorities will give you ahead of arresting you. the story points out, they have said in the past there is concern the finance minister could be arrested on espionage charges because he set up a
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south african revenue service to spy on politicians, including the president jacob. a lot of intrigue and hearsay going on that is definitely affecting the currency market today. scarlet: we will keep an eye on that. shares are soaring. a turnaround finally taking hold. matt joins us now. what has been done that is actually bearing fruit now? >> the initial part of the turnaround was cut costs and basically focus the business on the u.s. we have done that and basically the story now is show us some topline growth. happened this quarter is relatively weak, a lot of categories are down, can market share and boost shares. strength relationship with key suppliers. apple and microsoft, samsung.
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service better customer and people are still choosing best buy over a target or a storet to do in purchases. matt: there is no new thing that everyone has have. flatscreen tv a has been a commodity so you go likethe big box store costco to get some and sheep instead of going to best buy. collects someone said the other day, you do not need to beat amazon, you just need to be able to stay alive to compete with them. best buy, they are doing a good job of it here in online sales in the u.s. are up 25%.
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highly unlikely they're taking market share from amazon. retailers, that is what looks like it's happening. last weekn came out and set our electronics sales where we actually claimed apple. all of our relationships with our vendors are strong. matt: positive surprise tuesday just baumol's 16 today. scarlet: pretty imperfect -- incredible. ist: still ahead, google hurting web stars as a appears to rollout out a dream, it's virtual reality service, something else that best buy is very excited about. this is bloomberg. ♪
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matt: google is set to be investing hundreds of thousands in virtual reality
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films and programs including the recruiting of popular stars on the web, all part of the new day james service rolling out in the neck couple of weeks. it bloomberg tech reporter joins my colleagues on bloomberg radio. that and theye of are amazing but they do not necessarily have a lot of content. twice i want to all of our bloomberg television viewers right now. we are talking about a rollout of a virtual reality, google. here to tell us more is lucas, telling josh -- joining us from our bureau. describe what exactly is google doing in the virtual realities days because they have got competitors, facebook as well as samsung and sony. priority is aain hybrid store and operating service.
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ios, thatandroid or will be gauging for the headset that use google vr. you want to download an app or watch a movie, you will -- through today gm day dream. google is going through your mobile phone. it wants a lot of different phones that run the operating system or are requiring those who make songs to date their dayes so they can handle dream so anyone with an android phone could i headset from a lot of different makers and plug in the android phone and access that. >> i am looking at projections that augmented or virtual-reality revenues could hit $150 billion in 2020. are we talking about virtual-reality video games? what could possibly's or the revenue generation?
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>> contents of some kind. it seems everyone believes video games will be the first way in, the first thing to attract people. a lot of virtual-reality headsets have been designed and created by gamers. there are investments being made in short films, 360 degree videos, and all sorts of industries that are more of commercial businesses people vr could be useful for, whether it is retail, real estate, medicine. there are a lot of different applications. >> if they are looking for a phone driven virtual-reality experience, you're talking about had it, will there be a headset attached to your phone? >> yes, you plug it into your headset. you can take your samsung galaxy and put that into the samsung has set to use it.
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samsung is a partner to google. he will take that phone and plug it into a head set either made by google or made by any number of other companies. the bloomberg tech reporter speaking here you can continue listening on bloomberg radio. . listen to it on serious >> i use the radio app. matt: that is a good way to listen to it on the train as well. en route. >> yes. let's talk about the markets and impotent oil, which has resumed its rally. yesterday declined for the first time in about eight days. skeptical of how long this would run -- how long this would last, take a look at this map for oil. notice for the month of
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september, oil tends to decline. dropped 8.4%. oil tends to rise in the month of august. three of the last five years, oil gained. is fascinating. i love using this as a shortcut to get to that. etf.looking at an it is interesting that on friday, we achieved a bull until a cap -- a 20% gain friday. they took that as a selling signal. arrow is $299
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million being pulled out. each bar represents one week in the last bar shows investors pulled three hutch million dollars out for oil. >> speculation that opec may agree to some kind of production freeze. we know what happened earlier this year with that speculation happening. matt: we turned around today because it is possible -- that is the sentiment. >> coming up comitatus monthly trading range. ♪
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you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. scarlet: this is bloomberg markets p let's begin with the headlines.
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mark crumpton has more from the newsroom. touringesident obama is louisiana at this hour. the catastrophic flooding has left at least 13 people dead and destroyed thousands of homes and businesses. the trip comes four days after donald trump criticized him for staying on vacation during the disaster. you're looking at live pictures right now from the baton rouge area. the president is leading that, walking amongst some of the neighborhoods that has suffered the wreck of a cold -- irrevocable harm. the governor said the president should not visit until after the first few days. a tropical storm is getting stronger as it moved over the atlantic. wind speeds of over 50 miles an hour. forecastgthening is and expected to become a hurricane by when they.
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hillary clinton leaves donald trump by 16 points in virginia. 36%.n a 65% and trumpet 40% to the libertarian nominee gary johnson getting 8%, and the green party of chills by -- jill stein getting 3%. andident francois hollande anglo merkel spoke today with vladimir putin. he says he is concerned about the growing number of cease-fire violations in ukraine accused russian backed rebels of attack. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 100 and 20 countries. this is bloomberg. matt? matt: thank you. shares of a u.s. luxury homeowner told shareholders thereof. an 8% increase in third-quarter
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earnings, a sign that demand -- remains robust. for joining us. let me ask about the luxury climate. we are not seeing it do well for other companies but toll is doing well selling luxury homes. what is it doing differently than others? rand, great locations, great architecture, great communities. we have a national footprint. every region for us was up this quarter. .8% growth in the first quarter 3% growth in our deposit for the first three weeks of august and it is nationwide. our luxury business is strong and we are excited about it.
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we love the diversity. we have the traditional suburban market, the second-home a smaller operation of city living, our city business. with the great variety of product and most poorly, this brand. matt: a lot of people suggested you are in the right place and geographically made the right decision. i wonder about resale value. i think one of the reason the porsche brand has done so well is because they are so good in the retail market. the same experience in the retail market? >> our homes absolutely have a great reputation and i have seen many advertisements i realtors reselling our homes that specifically mention a toll brothers home.
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the premium when you saw the first home to the client, i believe there is a premium associated in the resale market. it is the brand and the quality of the location and i'm happy with how we are going about it. scarlet: the overall environment is very supportive. home sales jumped unexpectedly when economists were looking for a decline at home sales are now at a nine year high. compare and contrast this with the booms we have seen in the past. boom of twost thousand six, there is no comparison. we are in a strong and solid improving real estate market. mortgage money is not easy. builders are not building too much inventory. we do not have buyers coming in
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who are investors. this is a steady and solid toket that does not compare the market of the mid to thousands. that was completely overheated and that fundamentals. this market, there is limited supply and great demand. the company is not building as many homes as it has for decades . it is beginning to catch up and those that land in the right locations in the right brand are doing well and i am really proud our 18% of this quarter was at the top of the industry. scarlet: there are global headwinds that everyone needs to be mindful of airtran opposes effort to limit capital outflows or the brexit vote in late june. what effect to those headwinds popular withs
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foreign money and it totally based on what you have seen? >> very little pair it only popularabout 4% of the buyers nationwide are foreign nationals. the number is obviously higher in california and the adult in new york city but we have seen no change in the last three years in the percentage of foreign buyers. it is a small part of the business and it has not affected at all how we are doing. push inave made a big california in 2014. what does the demand picture look like there? you have got tech buyers in the area making affordability really difficult. of the best markets nationwide are southern and northern cal. we have pricing power in both markets, fabulous locations. homes hereing luxury and we are in coastal locations, not in the inland empire.
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minutes from the pacific ocean, east bay of san francisco, right in the heart of the employment sectors and we back on the east coast, we
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are hearing a lot of things for single-family homes, difficult to find, as one of the reasons there is a shortage, it appears. how do you see that in your markets here, like new york city or around it? >> our home base is philadelphia and we built company two decades ago in the washington dc to boston corridor. very difficult to find and it is very hard to get a title. new jersey, it may take five approved thefully is gold.get it, it
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supplies are so limited. northeast mid-atlantic, they did well for us this order and are an important part of the biz is. supplies are so limited. northeastmost of our growth is f mississippi and we have made a conscious. effort to be out there to continue to grow. we love the east. it is hard to find land. new york city, it is always hard to find land. there are not vacant lots lying around manhattan. you have to be creative in how you buy the land. we have high margins in new york has softened a little bit from where it was a year-and-a-half ago. 2002 $2500 a foot. not in the rich building is where there is more pain and we are very happy with our operations there. we continue to look for opportunities but we are of course being very careful. scarlet: the construction workforce is still not back to where it was. because you tweak your growth
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margin forecast a little bit, talk about the challenges of locking in workers and not having it way too much on growth margins? of 30 basis tweak points was not related to labor shortages. about $2600 of cost thisase to build our homes quarter. half of that was labor and half of that was materials. the small reduction in growth , we have a, we have a few less that we believe will deliver in the fourth quarter coming out of new york city that will now deliver next year, but the labor market is getting better as we get further into the recovery and more labor is coming back through the industry and we are managing those much more than we were able to a few years ago. >> have you had to delay any product -- projects to get around the labor crunch?
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>> know, we will bring a project online as soon as we can. land development really dictates how quickly a community can come online. we have no markets where labor is so tight that we do not believe we could deliver the homes we sell and their early should not open. it may be that certain markets, if we sell a whole bunch of houses out of the gate, then the back logs grow to a point where the next sold may not be able to deliver for 12 months, in which case we will raise the price. but generally, labor is no longer the issue. we have worked through most of the problems. matt: thank you so much. pleasure to have you on their today, ceo of toll brothers. lunging against the u.s. dollar. this is bloomberg. ♪
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matt: let's head over to the markets desk. looking at homeowners. there.ry good interview let's look at what is happening in terms of u.s. homebuilders today. up when more than 7% here, this is the biggest jump since april of 2013 here. also of 3% there as well. these are's anger highest it's about may or july or so. let's also look at what is happening in terms of new home sales. atr since those came out
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10:00 a.m. eastern time, they are now at their highest 2007, -- nine years ago in october of 2007. meanwhile, if you're buying new homes, you need to furnish them. there's seeing a kick in furnishing companies. july,ghest since restoration hardware up 4%, its highest since june. when you build homes, you need lumber so those thoughts were also rising here. delta got 2% here. this is its biggest since march of 2013 here. this is its biggest jump in five weeks. all the suppliers are up because of july new-home sales.
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>> thank you for that. ramy inocencio. scarlet: playing the waiting game i have janet yellen'speech on friday. stock in its tightest monthly trading range is 2006. you are looking at the yield there. all they need is some kind of clarity from share yellen according to deputy cio michael buchanan. he called the credit rally back in january. here he is on bloomberg with alix steel. >> have got conflicting statements coming out of fed president last week. williams papers sounding, little more than that longer-term monetary policy. andey actually coming out questioning or doubting that the bond market is fully embracing the likelihood of rate hikes for the remainder of 2019.
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the bond market is a little confused right now. we're looking to share yellen to clarify some of that. >> was it all that confusing? short-term, most fed president you heard from want to see a rate hike. it is the longer-term dovishness and the lower interest rate coming down. it seems to be a prevailing team . >> i think there is an issue of timing there for sure where the comments were short-term in building andobably some of his view or prospects for growth that would pick up in of 2016, where think a lot of these other comments are dealing with a reality of a lower new normal that is really the source of new conflict right now. consensus that the market, if
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there is not one, known as a take away from last week, then there is a breakdown in communication. the market does not understand what you're trying to say, then the communication has failed completely. people do not get what is going on with the federal reserve at the moment. my question to you is how do you shape any conviction in the bond market when you do not have a who, seemingly, as to what the fed will do. >> you have to look at fundamentals here that is where we come out on this. the fed will pass 30 look at growth and they just cannot have enough conviction that growth will be where they needed to be. asymmetricalk about risk when it comes to policy and they're well aware downside comes with the upside in terms of what they want to do with race going forward.
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>> we also talked about what would it mean for the markets when you do see a backup in yield and with the yield would have to be. said 2%, the markets did not like that on the 10 year. we are in a rough trading environment. what level do you see? rates, weure path for are clearly going higher. >> the yield on the 10 year. what have you seen? >> probably you get to one and three quarters and 2% and that probably does it. if you are the fed, you have to member, just look at the reaction in the market. it has to be weighing on the minds of committee members now. they will be very careful and very thoughtful with first hike in 2018. why we think they will pass and to ember, we think they will wait for more clarity with
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respect to growth and inflation expectations. matt: that was mike buchanan who also says stay the course, stay long on corporate credit. watch the rest of that interview on report that the south african finance mr. has been summoned by the police. this is bloomberg. ♪
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matt: i am matt miller. i am scarlet fu. the south african rand is declining, plunging after the country passes finance minister received correspondence from a special police unit. theokesperson confirmed trimester's getting legal advice on the matter. joe weisenthal.
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start with you. what details can you tell us and what you know so far? mentioned, the finance minister has said he is currently taking legal advice and reserving comment according to a spokeswoman at the treasury and basically says the finance minister to reserving comments at this point in time. this basically dates to a time when he was hitting up the tax revenue collection agency. he may have implemented a rogue spy unit which may have spied on politicians. >> we wanted to mention we spoke on june 30, june, jon ferro spoke with him and asked the finance minister at the time what did he think about the rest of ports -- arrest
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reports. here's what he said. >> i am in the job, i have the confidence of cabinet. the president requires me to be in the job and i have explained we have had many interesting successes in the first half of the year and more interesting things to do in the interest of the country and its citizens in the country more generally as we move into the second half of the year. >> i recall there was a time when there were several different finance ministers in one weekend. how does the market view the finance ministry these days and what would be the longer-term response to a shake up? >> we have already seen the immediate response to the news that the finance minister has an summoned by the police unit. response is coming through 14. strongly, close to that
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the lowest that we have seen in three weeks. the markets were pretty happy about it. what we know is it is a man trusted by the markets and he forefront,he possible credit rating downgrade. the reports of his possible forst is not going to be local investors as well as international investors. trust him or is he legitimately worried about a spy in it? it is a little paranoid. is that a possibility? >> at this stage, it seems as though it keeps coming back and forth. the prime minister denied any allegations that he established
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a rogue unit. there has been speculation that the lack of political encouragement the finance minister has had since the isegations have come about creating a rift in and to allegations or possible belief there may be a swing toward more political experience or earned --for state currently under the -- matt: thank you for joining us. york.isenthal here in new you can see him again at 4:00 p.m. on bloomberg. ♪
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