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tv   Bloomberg Markets  Bloomberg  August 25, 2016 2:00pm-3:01pm EDT

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david: we are live in new york. we are we continue to monitor the follow-up of carson block announcing his short of st. jude medical on television earlier today. st. jude denies the allegations but what are the real risks of packers breaching its products? vonnie: [indiscernible] could result in the permanent ousting of de la rue said. can the country handle political instability? david: tim cook has led the tech giant for five years. how much he has been compensated as shares have doubled. two hours left in trading, markets have turned negative. ramy inocencio is standing by. ramy: markets are now in negative territory.
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turning negative in the last half hour. we are seeing a fall in energy shares. right now we have these negative across the board. we are seeing it have a leg down .ight now actually, now it is up by half a percent. the saudi oil minister said no discussions of substance in terms of production on the table. now we are up about half a percent. earnings, inok at terms of the discount retailers. dollar general, dollar tree stores down today after they missed their most recent quarter. dollar general down 16%. part of the reason for this, has beent in snap
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falling, hurting dollar store chains. also a knock on effect with walmart and target. so many investors looking at what is happening at jackson hole. what are we seeing in the bond markets? anticipation, of not so much movement in terms of the ten-year year yield, up by one basis point. for much of the day it has been flat. chart in show you this my bloomberg terminal. equities are moving in a tight trading range. the same could be said for treasuries. for ast time we saw a low trading range for treasuries was just after the post brexit vote. vonnie: thank you.
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let's get to first word news. mark crumpton has more. mark: donald trump met with minority campaign volunteers at trump tower in new york city today trying to reach his outreach to black and latino voters, saying his economic policies would help them. democrats have been disrespectful to minorities and have taken them for granted. hillary clinton will speak today in reno, nevada. she will push her view that mr. trump is taking a hate movement mainstream and will try to link his candidacy to the so-called alt right wing of american politics. brazil's senate was temporarily suspended today after lawmakers engaged in a shouting match during deliberations over whether to permanently remove president dilma rousseff from office. she is accused of illegally shifting money between government budgets to mask deficits. rocephin denies any wrongdoing and says her enemies are conducting what she describes as a coup.
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there will be a final vote next week. in switzerland, former fifa president sepp blatter is .ppealing his sentence an global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. kansas city federal reserve president nestor jordan spoke to michael mckee at the economic symposium in jackson hole. her view thatted it is time to start normalizing interest rates and economic policy is working to stimulate the economy. she also said we are going through a difficult time to tell what is keeping inflation low. it has been more
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difficult to explain what is pressing down on inflation. i think the oil price shock we had, the strong dollar, a number of things have influence that. whether that is a permanent ay.te, i'm not ready to s it looks like longer-term inflation expectations have been anchored and we are seeing wage growth move in a way that would reflect a tighter labor market. i don't know the things have fundamentally changed. once again, your staff has come up with the permit and topic, looking at what monetary policy should be like in this new world going forward. a number of members of the fomc have come up with theories lately about this. do you think a fundamental change, re-think and how monetary policy is conducted is necessary at this point? i'm not convinced but
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that is why i'm interested in this conference. there will be some good papers coming forward. one of the keys to this conference is looking at the issues from both sides. i will be interested in the discussion and to what, if any, consensus comes out of the meeting about a different framework will be needed going forward or whether we can again go back to the kind of monetary policy that looked more conventional to us. say thison't want to the runway, but do you think policymakers need to be more humble about what they can a congress with monetary policy? esther: i have always thought that. again, we have gone through a terrible crisis. it did damage to the economy. we know that can take a long time. i would not want to rush to assume that we know what the future will look like. i think it's an appropriate time to raise some of these questions, but yes, all of us feel a heavy dose of humility when we think about these issues. mike: i have to ask you about
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fed communications. in the minutes recently, suggestions that members of the open market committee have not been happy with how they have communicated with the markets, or how the markets have interpreted things. this is an opportunity for a lot of members of the open market committee to talk to the markets . what are you doing wrong, if anything, do you have a credibility problem, do you think? esther: i don't know, mike. inall come at these issues different ways, in terms of a policy prescription. i think the minutes are a good communication tool, and i think we are at a time, as you often are, in inflection points around raising rates, that there will be different views around that. more we talk about how we are each thinking about it, and the minutes show how the committee forms consensus around that, it is probably the best tool for communication. there are concerns the fed
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keeps suggesting we will raise interest rates, the market prices in a move, and that it is taken off the table. people who talk to me are starting to say, we sort of have to write them out of the equation unless we are guaranteed because you know they will pull it back again. when you have seen are people watching the data and reacting to that. it is very important that we be data dependent, but not to be immobilized by short-term views. keeping a focus on the medium-term outlook, for me, is where i'm keeping my focus, thinking about what is in the long-run interest of the economy and the ability to achieve sustained growth is where my focus is. mike: this is the 40th year for the kansas city fed symposium. 38 of those years the chair or vice chair came and gave a keynote address that one along
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with the theme of the conference , was not particularly newsworthy. ben bernanke came out here twice and laid out policy and move the markets. janet yellen will be kicking off your conference. the markets are expecting something from her. do you want this to be a place where the fed is making policy pronouncements for the markets? the chair decides what she will address. i don't know what her remarks are for tomorrow, so we will all stay tuned to what she says. has the conference gotten a little too important to the markets, in terms of short-term movements, as opposed to what it was originally designed for? i think it is a function of the time, a lot of attention on central banks generally, and certainly on the federal reserve. i look forward to a time when that is not the key focus. the purpose of our conference is
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not a policy platform. that is what the fomc is for. we will continue to keep our focus on issues that we think are important to central banks. that is my goal for the symposium. david: that was esther george, the host of the symposium. we will have more coverage at the economic symposium throughout the day today and tomorrow. we will write down all of her speech that takes place tomorrow at 10:00 eastern time. don't miss some of the biggest voices tomorrow including james bullard, robert kaplan, and dennis lockhart. coming up, brazil's political landscape is on the verge of massive change as the impeachment trial of dillman set gets underway, and the conclusion to this process. short seller carson block is taking aim at st. jude saying pacemakers and different litters are easily compromised. the company is vigorously
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defending itself this afternoon, saying the allegations are absolutely untrue. this is bloomberg. ♪
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david: this is "bloomberg markets." i'm david gura. vonnie: i'm vonnie quinn. it is time for the latest bloomberg business flash. concorde holdings is seeking to acquire assets from a renewable energy giant sun edison. groupinese clean energy is planning to bid for sun edison's controlling stake in terraform power, which owns operating power plants.
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david: vivendi coated second quarter honors that missed estimates. they now continue to lose money and subscribers in france. vivendi plans to reduce costs by $350 million. the cuts will help the company reach its target of breakeven in 2018. [indiscernible] unusually public criticism from the u.s. which says american companies are being unfairly targeted. the executive commission respond with a sharp denial insisting it is being fair as it goes after corporate tax dodging. in brazil, the last metals have been handed out. now latin america's largest nation must face reality once again. many brazilians are turning back to one of the worst financial crises in decade.
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senate opened up an historic impeachment trial that may result in dilma rousseff's permanent ousting and may give michelle 10 are the legitimacy he needs. our is joel, good to speak with you. we heard from mark that there was some contentious debate, a shouting match erupting as these proceedings got underway. to what degree has the market priced in the fact that dilma rousseff is going to be impeached? >> this is brazil after all, run after the olympics, so there will be some excitement. in the previous vote to begin the process in the lower house was very exciting, let's put it this way. some of the comments will not be politically correct in this process. we need to be prepared for that. the market has priced in much of
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this, we all know the brazilian stock market has done very well since the beginning of the year. the rail has regained some of its lost value. largely as we have gotten closer and closer to this last stretch, which culminates at the end middle of next week with the final of the vote, everybody expects, unlike the soccer final in the olympics, this will not go to penalty kicks. president rousseff will likely be removed from office by more than a two thirds vote required in the senate. once that happens, i think the real pressure will be on then-president michel temer to begin taking the reforms of the country desperately needs. david: you mentioned reforms. market isn the stock doing well, but there are some economic issues still at play here that president temer will have to deal with. main one the government
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will try to do is address the fiscal imbalance. the country has a structural imbalance in its accounts. the primary measure they will do that in the coming weeks will be to propose constitutional amendments to cap the growth in government spending to the prior year, plus inflation. restrain a lotld of the growth we have seen in the last year and bring brazil's fiscal spending more in line with market -- with the needs of the country. otherwise, the debt will continue to balloon. that is what we will see as the primary focus will irritate a lot of the base. the other thing is, they have to regain investor sentiment in order to attract the private investment that they so desperately need. what you will see in that effort is a number of additional privatizations and concessions across the realm, and some
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changes in the rules that are needed to attract that investment in brazil. getting rid of rousseff, she was more or less gone anyway. how does that help michel temer there and that these policies? >> first, he has to build credibility. the way the brazilian political system works is that he has to basically bargain. it is a presidential system but it is really a parliamentary system in the way politics works. positions,ive away bring in some of the pseudo-opposition folks. his party used to support president rousseff and now is having to look for folks on the further right to support him. that is going to be driving his ability to govern, his ability to institute reforms. here is clearly center-right. he wants the state to become
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smaller and the private sector larger. every step he makes war that direction, i think he will name -- get market credibility, and investments will return to brazil. david: when you talk to company doing business in brazil, what do they expect the economy to pick up again, bond issuances, more movement in the equity markets? they have been in a holding pattern, i suppose, until all of this is sorted out. the lot of folks on sidelines in terms of fixed investment, large infrastructure projects. the comingect is in year, following this process of impeachment -- we also have to remember there is a municipal election taking place in october that will also dictate a lot of the local politics in brazil. following that, i would expect in 2017 to see an upward trend in large deals and new greenfield projects. recovers, asy unemployment begins to go down,
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we will not this -- necessarily return to the good old days of the last 10 years, but we will be in the to make up time. this will be a long recovery for brazil. for a country of 300 million manye, we will need that -- that much time to recover. david: thank you, john velasco. carson muddy waters' block shorts st. jude on hacking risks. st. jude denies the allegations and says there are layers of security in place. shares still falling on the news. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i'm vonnie quinn. david: i'm david gura. now to a story we had been on top of all day.
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carson block announcing a short position on st. jude medical. he explained his stance earlier today. >> this appears to be a company that, for years, has put profit before patients, when it comes to cyber security. we think it is important, to make sure that users are notified of the risks, but be, to hold them publicly accountable. has a 90t. jude allegations, saying there are several layers of security measures in place. , at onere still falling point down the most in four years, down 5.1% now. another angle to the story is that block's claims may derail their efforts to renegotiate the deal with abbott labs. for more on the deal is michelle cortez, our health care reporter. why would one person's short change anything about abbott labs?
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if they had done their due diligence, why wouldn't they take notice of this short seller? michelle: one of the argument is that cyber security is not looked at very much when it comes to due diligence. they may not be aware of this particular shortcoming. if it is real, if what muddy waters have found is confirmed, and they have to halt sales of the ventilators and pacemakers, which make up half of their sales for the year, that could have a significant impact on the deal. david: this is not the only deal abbott labs is pursuing now. how might this complicate that deal, if at all? michelle: that deal is quite complicated as it is. have announced a number of securities investigations, department of justice investigations, have been slow in releasing some of its sec filings. ott has already tried to get
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out of that deal. a lot of back and forth, messy conversations between the company. st. jude was supposed to be the one that was supposed to be smooth. it got through no problem, until today. in my bloomberg, looking interest that people are shorting shares, it has gone up substantially. it is the orange line. about 3% of the float. you heard of other short-sellers, complaints related to this or other device makers? cyberle: when it comes to security, we know there are all kinds of shortfalls and ways for people to get into it. the medical device companies have not taken it seriously as these cyber security experts want them to. when you are talking about the short position, when it comes to -- st. jude, that deal would have to be derailed.
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hashis point, abbott pledged to buy them. unless they can break the deal or somehow renegotiate with a jude, there is already a top bar for how much the price -- the company will sell for. david: how worried should patients be in light of all of this? michelle: the risks to patients is very theoretical. they need to know their pacemakers and defibrillators are not compromised by this approach as it currently exists. the argument is that people could hack into that. at this point, there is absolutely no risk to the average patient. vonnie: michelle cortez, thanks. still ahead, the commodities close. this is bloomberg. ♪
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>> from bloomberg headquarters in new york. >> commodity markets are closing in new york.
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>> looking at oil as well as natural gas. on the other end up right now, 1.25%. trying to figure out what is happening. i was seeing something on the bloomberg terminal talking about how it is closing one of its offshore oil rigs over in the u.s. pacific coast. it is something developing right now so we will continue to be abreast of this. prior to that, it had been flatlining at about $46 or $47 a barrel. yesterday, we talk about oil falling on top of data showing that there is a surprise to .5 million barrel up tick in terms of inventories in the last reporting week. from oil to natural gas, take a look at what is happening there. it is up by 1.7%. said stockpiles came in at 11 billion cubic feet. less than expected, so we see this uptick.
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you can see in the past two weeks it is up by about 11.5%. and nine of a row the last 10 days, we expect this to go even higher. of course, labor day weekend, we look at potentially higher temperatures than normal across the u.s.. take a look at gold for the week today. especially as investors look to see if it is an actual rate rise on top of the fed. let's take a look at copper. it is now down below the flat line. it is now down for five days in a row. , we see this bump earlier today because investors
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had expected more monetary easing in terms of what is coming out in terms of beijing. close. your commodities let's check on the headlines, mark crumpton has more. mark: using their bare hands and some cases to search for survivors. hundreds more were injured. colombia's president has declared a cease-fire against the rebel movement starting next week. it will begin her and teach
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seats in both houses for a time. voters will approve or reject the deal on october 2. classic zika symptoms including fever, rash, irises, and joint pain. the diagnosis did not come until this week. she hasn't traveled outside the county in months. they talked about the government's results to the -- response to the zika crisis earlier today. >> the federal response has been negatively affected by the refusal of republicans to act on the funding request president obama put forward six months ago. there is more the federal government can and should be doing. of non-traveler related cases stands at 43.
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opening for daily public doors starting in october. runs gracelandt will manage it. it encompasses 65,000 square feet. it is where prince died of a drug overdose in april. news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. both candidates in the requires thetion president to have ratified by a related duck congress in order for it to succeed. in aa great time to bring professor at columbia university. the top advisory position for the wto and the united nations. it's not just middle america.
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there is also a mechanism in europe. why is this happening? >> i think it is happening. income distribution is not very good. in both parts, people just assume that trade must be the cause of this outcome. shows that fate has nothing to do with it. and i think we need to hear it. people that have been arguing these issues should be able to be seeing things clearly. they say that good people in both parties should be able to say that trade is actually helpful and not harmful. they spent years
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negotiating this. it is going against president obama. >> the main problem with tpp is not understood by people in this country or europe. really, it went south in order to have trade with america's. time, people like me were saying if you really want to have regional agreements, don't go south. not an exciting area to go to. but east, asia is the one to go to. because china has been so aggressive, we're taking advantage of that to get
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singapore, vietnam, and new zealand to get us back into the act. aggressiong chinese to look back into asia. i think that is the name of the game. result is that if we are ,utting a number of things inevitably, a variety of things like we were discussing with japan, with thought they were really doing harm to us. and all sortsions of things. they have gone into putting it into tpp.
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>> i think the way out of this is simply to say, if i want to join a golf club, i have to learn how to play golf. but on sunday, i have to join with you. it is not much of the deal. india, china, whatever. the trade barriers is the name of the game. any of do you foresee that happening be a donald trump or hillary clinton? >> some of us have not started writing in this area. i would not be doing policy.
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i think the point is, this can be put across. the protectionism, if you don't allow people to import, you can't officially export. you need intermediates and all sorts of things so that the general notion that they can export with imports taking away jobs. are essential for creating jobs in the export sector. >> a free-trade deal, should it be a zero sum game? should the more developed get more out of the deal? >> that kind of number crunching, who gets what.
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the transaction of trade mobilization. there is plenty of evidence of postwar liberalization of trade that has benefited anybody. have they cost the u.s. jobs? >> i don't think so. but the question of china is very different. i say china is like gulliver. so huge. and unlike japan which also created raises in the 30's. importing tariffs, japan never did.
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then i get into trouble. it allows for trade with china. they have to have advisers who sort through these problems. the republicans have an added problem. they have been arguing.
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it can be done efficiently. vonnie: thank you, professor of economics at columbia university and international trade expert. david: up next, the controversy over the epipen has reached capitol hill. enough. cost is not chuck grassley joins us. this is bloomberg. ♪
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david: it is time now for the bloomberg business flash. a look at the biggest stories in the news right now. subsidies are adding up to losses according to people familiar with the matter, the right healing giant lost $1.2 billion in the first half of the year. the good news is it won't see any more losses from china where dropped at least $2 billion in two years. barclays will announce the sale of the italian retail unit in the coming day. banks is also on the market. is for the egyptian franchise. it jcpenney is looking to be the king of them all. just four years ago, it was brought to the ground by the former ceo. merchandise, services for shoppers, and rivals like sears and macy's are closing stores.
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and that is your business flash update. apple is looking to capitalize on the power and popularity of social media. it is testing features for the operating systems. tim cook marks the 10th anniversary. me ask you. the quantity he has reached. >> is five years at apple. gave them onethey million restricted stock units back in 2013. they retooled that so some of them would be to the s&p 500. he's got one half of the one the sevenits after for one stock split. it's worth $373 million for five years on the job.
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>> at the s&p, certainly tim cook's apple looks different from steve jobs. sales have slowed. some of that is by back in dividend increases. from way of viewing it prior to 2011 but they are still doing it. take us back to tim cook coming to this job. could the board of expected apple to do as well as it has and the package to be what it is today? >> they've only gotten half of that. and that is equal to the new package. is a pretty remarkable increase. another.e yet
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this is a video editing app that apple is going to be releasing, a great surprise to a lot of people. >> generation of users that have grown up in this generation where facebook, instagram, snapchat, they are redolent. edit video and share it under one minute. david: that is a 6:00 p.m. eastern. lawmakers say the high cost is not enough. chuck grassley is upset about this and will join us. this is bloomberg. ♪
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david: let's turn to the epipen controversy. cost,ers are curbing the a public relations maneuver. chuck grassley joined democratic lawmakers saying the company's actions are not enough and senator grassley joins us on the phone. , but we have seen this movie before. expressed concern about the high cost of drugs. you've written a strongly worded letter. is this different to you? >> i think is different from the standpoint we are talking about a product that has much general use and increased use with young people in the last 20 years. it doesn't seem to be a
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scientific analysis of why that productened, but this is easily used when people have that allergy and get that attack when their windpipe closes. it's a pretty important life-saving thing. it could fall into the same pattern of any time you have a monopoly. $90,000 a year for a cure. cure, it is a a life or death issue at that moment and in the case of this particular product. something where there is a monopoly and life-saving. there was to be hearing and
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they have said they will lower the price again. >> if you are asking if we are going to have a hearing, i will wait till i get an answer from the company. i want their answer in writing. the company tried to contact me through my chief of staff and we told them we generally don't talk until we get an answer in writing and so that's where we are right now. and if we were to have a hearing, would it involve the whole thing? the ingredients and the middleman. woulds something that we wait at a later date to make that decision. >> they would help them. can you for see them introducing or backing legislation that
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would compel us. >> we go through that with the v.a.. the government dictates. you have a market base competition. i think more consumer choice and dr. choice and prescribing is a greater need than having less of a formulary. not introduceld legislation, but i am working on things to get generic drugs to the market faster. on another piece to that it has recently come to our attention.
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what we are asking is to hopefully bring embarrassment to mylan. -- they said they have a 300 delegates are to figure. one just reduce the price? if it does solve it for some families that have the need for it, it surely isn't going to help the american taxpayers. 40% of the people are going through medicaid. david: i know you're on the agriculture committee. they are close to coming to a .eal and we have news are you happy with the news this week? >> i think i will pursue that when i know that the office -- the offer has been accepted or
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you telling me it has. >> it is close to being accepted. >> we will wait until it goes in and i will do the usual thing of writing a letter to the justice department expecting the merger to be looked at from the standpoint of antitrust laws being filed. but i have also announced a hearing this week. so you'll have a hearing on those. the senateir of judiciary committee, thanks for joining us. transportation secretary anthony of theins us to talk all m&a activity and how washington is handling regulation. this is bloomberg. ♪
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david: it is 8 p.m. in london. vonnie: welcome to "bloomberg markets."
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we are live from bloomberg world headquarters in new york. at a sanstories francisco, london, and chicago. a short position as well as shocking allegations of security gaps. >> there seems to be no love for hedge funds. redemption monthly since back in 2009. will the industry see glory days once again? be joined bye will anthony foxx who has all of the m&a activities through tech.


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