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tv   Trending Business  Bloomberg  September 14, 2016 9:00pm-10:01pm EDT

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♪ i am rishaad salamat. it is thursday, the 14th of september. this is "trending business". ♪ in tokyo, sydney, guam this hour. bayer clinces monsanto for $66 billion to create a giant in seeds and pesticides.
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hillary clinton releases a comprehensive health check after sunday's scare. fineoctor says she is in mental and physical condition. follow me on twitter at @rishaadtv, use #trendingbusiness. malaysia just starting their session. we have a look at what is happening so far. yes, mid-autumn festival time. taiwan not online, closed. china closed as well. hong kong closed tomorrow. singapore remaining close. malaysia is flat on the open. we are seeing losses across the region, the sixth session for the regional index, not helped by that makes to lead from wall street. we continue the selloff in the oil market. the nikkei down, the worst
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performer in our region today. we have seen the again fluctuate a little, a one week low. from severalorts sources that we could see the bank of japan push further into negative interest rate territory when it meets next week. a few stocks we are watching, particularly japan. jumping the most in five years as mitsubishi malls a a tenderfer -- mulls offer. we have seen shares rise by as much as 7%. mitsubishi a little weaker. in australia, commonwealth bank doing well. it has had an upgrade from goldman sachs today. down, this as it
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posted a full year b. downarket as a whole, way by commodity prices. new zealand on a long losing by .1%, theoff longest losing streak since the beginning of the year. the jobs number coming through at the bottom of the hour, higher ahead of the data for the aussie dollar. : how this may signal loose monetary policy with home mortgages spiking in china. when we put this in context, the pboc chief economist described the property sector as bubbly.
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the fact of the matter is there was a large amount of loans that went into what you call medium and long-term households. debt of that is mortgage creation. if you compare the number built 30 in that space, 500 3 billion renminbi, more than half created. the headline numbers blowing past estimates. aggregate financing, new loans, all higher than forecast. right or wrong, it was a substantial pickup. perhaps people are buying more money, and therefore it will be oiling the wheels of the economy, but the other side is what about that again?
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debt is a huge burden on the economy. are two things you can do, pay back all debt or use it in the future. reform is taking a backseat to the debt buildup and the need to reach the 6.5% target. if you look at the liquidity ndap, the growth between m1 a m2, that gap is widening. note, wehing i want to have one chart that shows you aggregate financing. the first figure we showed in the bullet points extends -- this is the bond market. let's talk about this. this is part of the reform agenda. it is nowhere near the level in march, but this is the more
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encouraging part of the data we saw. if you want debt, you wanted through the bond market and not the banks. fundraising bond markets also picking up considerably. david: it has. it gets back to the point, aggregate financing, does this mean china is loosening up? bloomberg intelligence are basically saying you take out the events that cause it to , and every now and again the trend is still in moderation regarding the amount of credit created in the economy, so not necessarily signaling looser monetary policy. rishaad: thank you very much indeed for that. let's have a look at some other stories we are following for you today. haidi: thanks. in boj has gained an ally its effort to ease fears over intervention in the stock market. blackrock says fears about in
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crowded out by etf purchases are overblown. jason miller says that etf's account for only 3% of japan's $5 trillion market, critics warning the bond buying program could make some stocks hard to trade. the boj -- target for etf purchases in july. a chinese consortium attempting to buy a seem along looking for finance backing since it agreed to the deal. the buyers are sounding out interest for the 800 $30 million acquisition. -- $830 million acquisition. potential partners have been told they could earn outsize returns if a seam along eventually less and china. the group is considering building a new stadium as part of expansion plans. the statement from the consortium says fundraising will
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be completed and in place by the end of the year. has releasedon what her campaign calls a comprehensive disclosure about her health, saying she is recovering from pneumonia, but vital signs are normal. her medical condition became an issue when she appeared to need help entering a car on sunday. in physician wrote she is excellent condition and that she remains healthy and fit to serve as president of the united states. the clinton campaign has criticized donald trump's disclosures about his own health. he went on day time television to provide a vague view of his health, the first details he has offered since december. bayer will buy monsanto for $66 billion, a 21% premium to the tuesday closing price. rishaad: let's pick up on
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that. finally saying yes. how did this deal, all cash, possibly an offer they could not refuse. offer, is the fourth which they finally accepted. first thought about acquiring monsanto a decade ago. consolidation in the space after the cam china chinafor syngenta -- chem deal for syngenta. rishaad: what is the logic the hind this combination? it is a one-stop shop for everything that farmers need. you have monsanto, a pioneer in genetically modified crops.
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then you have a real giant leader in pesticides. when you combine those, make the products work together, that is the idea. rishaad: i think the regulators will be looking at this closely. they said themselves there are something like 30 jurisdictions. >> there will have to be divestments for sure. the same logic for the combination is the same reason why they are worried about regulators. will farmers be heard if they increase prices too much? rishaad: it will not take tomorrow to get this done either. >> they are talking about the end of next year, quite a long time, but they have to work through the issues and all the different jurisdictions. rishaad: including the united states. thank you. let's have a look at our website , one of china's most costliest divorce her's, facing forking out over $1 billion to his wife. bloomberg.com/asia, a good read. find out why hamburger prices
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are a cause of concern for bank inflationand the targets. up next, our next guest saying volatility is here to stay in the near term. we get the outlook from deutsche bank asset management. ♪
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rishaad: right. let's have a check of the business flash headlines. china resources here considering an offer for sab miller's assets. they are speaking to potential advisors with the process to begin next month. inbev is the vesting assets. some notesalling seven smartphones and china despite having said none of the
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phones sold their carry the faulty battery that can overheating catch fire. 8 phones have been called back, a tiny number and such a market. recalling 2.5 million phones from other markets, mainly korea and the united states. orders for the iphone seven are up. says it sees demand above last year's level. been business as usual for iphone upgrade rates. to the flagship device to end two quarters of sales declines. back to markets and see what we have at the moment. a continued losing streak, a sixth straight day when it comes to equities. how would you characterize what is going on right now?
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believed that yields just above positive. >> we still think we have a bit more juice left, particularly in europe. at the moment, we are going through volatility. you can see it in the movements of the currencies. it will be quite volatile between now and the end of the year. why? the potential for rate rises, next week or the end of the year , which will increase volatility. if it happens next week, it will get cleared and markets will be in a better state, but i don't think that will happen. also, elections. see the market vacillating on this. clinton victory was penciled in, but that has been drawn back a tad, hasn't it? >> it has. the market is not factoring it
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in at the moment. i think we have to get through the italian election first, and that is a hobby see more important for european assets. one area people are looking at the u.s. is health care. that will bets in, negative for the sector, which has sold off. thesemp gets in, it might slightly more positive, so it has been driven on a sector basis. drivers are that yields continue to come down in the volatility is picking up. we have had a very good risk run in the last couple of weeks, but that is beginning to be questioned. potentially wef might have a rate rise in a stronger dollar, what that does to markets. no one is expecting her position for a rate rise in the markets. i'm amazed at how much central bankers are really influencing the mindset of investors and traders right now.
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a few years ago, they were merely wallflowers. >> they weren't driving the markets, in charge of growth. the market was in charge of setting rates rather than being policy driven. i think this will change next year. the market is questioning the sustainability of qe. rates, that. raises will be out of the way. the ecb is recognizing that it is not really working. maybe we get more buying in the corporate bond market in europe. it is a seasonal thing. tactically, european i.t. there is quite a lot of momentum driving net. few negative factors in the u.s. around the earnings season, but for next year, investment grade in the u.s., we are definitely back there. we are switching in our equity
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funds from u.s. dividends, which have done well and are expensive in the moment, to european dividends. rishaad: it is all yield plays, isn't it? >> it is. it is a different type of investor. rishaad: you not buying bonds for the yields, are you? >> you are buying it for liquidity. people who were buying sovereigns are now moving into dividend yields. area we are recommending for risk is emerging markets and equity. we have had a good run, so we are saying lying on dips. we called it early in the year on the china fall. we thinkferent markets that will drive at this time, so we are positive on china. we think the hong kong market is cheap. the h- a lot of southbound money
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coming in. -- the h-share, a lot of southbound money coming in. a lot of money coming in through the connect, so there is potential for the chinese markets to go up and the h-share markets to go up, but wildly have this uncertainty, it will be first quarter next year before sovereigns outperform. rishaad: the shanghai-hong kong connect has mixed reviews. represent aen window into the new economy of china? >> it is definitely high-growth stocks, but you have to be much more select it. i think it will be more retail driven, where is the shanghai connect is government driven. i think the new law allowing insurance companies to buy is
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positive. if you look at the premium, something we have always talked h-share is all, the trading at a 30% discount. if you look at some of the main stocks the high-quality that fund managers by, the insurance companies, the banks, the premiums tell you quite a lot. it is companies you would not want to buy in the a-shares that are trading at the wrong valuations. rishaad: when the fed decides and probably does not move on boj up for a comprehensive policy review coming out. how are you looking at japan at the moment? >> we are not expecting too much out of the boj now. we won the popularity of the government is there, so there is no need for them to act very aggressively.
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they might as well wait to see who wins the presidential election, save your ammunition basically. we are very positive on the equity market. it has had quite a good kick up. it is the only area in the world where we are seeing from a company level, corporate governance, higher return on equity. rishaad: from the lower base. very low base, but we are seeing the return on equity in proof. a lot of things happen on a bottom-up basis. in the u.s., we have reached our share of where we can get profits from the market here it -- market. costs will increase, so margins will go and down. the tricky call on the japanese market is that it is so driven by the currency. rishaad: thank you so much. enjoy the long weekend. up next, japan's aging
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population is changing more than demographics. it is changing the social and economic landscape. we will tell you how. this is bloomberg. ♪
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withad: you are back .trending business" the aging population in japan is reshaping the economy. social where fair, the labor force -- social where fair, the labor force. asia editor joins us now. japan's population is getting older. let's go through some of the effects of this. >> you are right. life expectancy is one of the highest world. for men, 81. for women, 87.
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people are taking care of themselves as they get older. 65 and older, 60% play sport or do exercise, so that is good for fitness clubs in japan. we are seeing more pensioners than there have and playing video games in arcades, so there are some nice little bombs for the economy. withad: what are we seeing the aging population. i just mentioned it in passing. >> that is a problem. were 24,000here businesses that closed in japan, since they third went into bankruptcy. some business owners don't have somebody to give the business to , that the younger generation are not necessarily taking over those instances, and that is
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expected to continue to be a growing trend with the aging population. anything house when it, and's to the young there? -- anything else when it comes to the old and the young there? need andve a growing young people are not donating that at the same levels the population is used to, so that is a potential concern. rishaad: thank you very much indeed for that. our north asia economy editor joining us from tokyo. australia's employment data out in a few minutes. notoriouslymber hard to read. it has been all over the place. seeing declining stocks in sydney, down .3%. the hang seng open coming up,
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pre-market moved to the upside. the nikkei moving to the downside. the market action, jobs numbers, that is next. "trending business"
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♪ rishaad: china's credit expansion rebounding in august. on a property binge in the country's biggest cities. all higher than anticipated. by mortgage lending, with that loans going to property markets due to surging prices in major cities. beenituation has officially described as lovely. the president of 7-eleven's parent has missed his deadline.
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he took over on may 26. shares have fallen 7% since then. they have widened the decline to 20%. the conglomerate lost more than 10 and a in dollars says customers spend less and competition rises. released anton has comprehensive health disclosure after she appeared needing help to enter our car on sunday. her doctors says she is in excellent physical and mental condition. hillary clinton criticizing donald trump's health disclosures. he went on television to provide what some are calling a vague view of his health. breaking news crossing the bloomberg. taking a look at what is going on, the own strain jobless rate 5.6%, 3900 jobs lost in august. another tour is the difficult
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set of numbers to fathom through and predict. let's get you more on that in a moment. let's look at the market open in hong kong. expect haitians were for 15,000 jobs to be created, seeing unemployment remain at 5.7%. were for 15,000 jobs to be created, seeing unemployment remaining at 5.7%. it is flat now. it was higher before the numbers came through. it is now down .5%. in terms of the markets, hong the trend,cked opening higher by .3%, some good moves from casino stocks, galaxy up 2% as is sands china. worst performer on the hang seng, but we have seen
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renewed pressure on crude oil, nigeria and libya ramping up production with iran, pushing more of a glut into the overcrowded market. nikkei is lower by 1%. we have seen the yen fluctuate a little bit here at there is still concern over what the boj will do next week. there have been reports today that they could push further into negative interest rate territory. two stocks we have been watching , rising the most since march 2011 on reports that we have actually seen, mitsubishi -- up byng buying its 6%. we will check out a bit later. having a look at the philippines, down .2%. singapore winker by .1%. malaysia being sold off. a number of markets closed today. china is one of those. rishaad: just getting you back
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to those australian employment news, data showing full-time jobs, employment falling by 3900 and august. it is so difficult to predict this number. we were estimating a 15,000 gain. the unemployment rate 5.6%, a fraction below the anticipated rate of 5.7%. worse than expected on one side, better than expected on the other. boj under pressure to stimulate the economy, now it is fast food becoming a pain in the life of boj governor corroded. kuroda. why are restaurant chains cutting prices? so what has been happening
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within the consumers is there is this sense of deflationary mindset that has taken place. the fast food chains have to catch up to that. consumer prices fell in july, household spending falling, up, anden't catching consumers are very wary to spend. analysts have said cutting but itis not a strategy, is for survival. if they can't catch up, they won't be able to be competitive and survive within the industry. is you have thing this policy review taking place by the boj, a decision on what they do next with monetary policy. how does it affect their thinking? isn't probablyis the only issue the boj is mindful of, but at the same time, the boj is definitely keen
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that the inflationary mindset has taken place. they will conduct a comprehensive review next week. the next step for the boj would be to decide on how they can thisback -- reel deflationary mindset back. rishaad: some are saying out the picture for deflation is likely to get worse before it improves, so what gives? of course this is just one industry we are looking at, but at the same time, this isn't the first time this deflationary from thehas taken on fast food industry. in the 1990's, when mcdonald's cup prices specifically strategically, it also triggered other fast food restaurant chains to cut prices.
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analysts and economists say this triggered other industries to lower their prices, worse than the deflationary pressure, so only time will tell if this price cut will affect other industries as well. right.: thank you very much joining us from tokyo. right. let's look at some other stories we are following. president obama lifted u.s. sanctions with myanmar after talks with the de facto leader aung san suu kyi. he praised the country's transition to democracy as "a good thing." the asian development bank expects the economy to expand 8.4 percent this year, making it the best performer in asia. as the first u.s. president to travel here, i could see the enormous potential that was about to be unleashed and nobody
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represented that better than aung san suu kyi. the european commission says the next 12 months will be important in defining the european role after britain voted to leave the block. used hisde young girl address to say the european union is as relevant now as it was back in 1950's. he called for resolve among member states and says the new in union must protect its interest. -- the european union must protect its interest. decision,et the u.k. but the european union as such is not at risk. we would be happy if the request for brexit could happen as quickly as possible so we can take the steps that need to be taken and so relations with the u.k., which must remain on a
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friendly basis, can take a new shape. yuan smartphone makers under pressure to use batteries to charge faster, slimmer and smaller, but that backfired when it comes to samsung. these batteries caught fire and exploded. technology editor is in tokyo. we know battery technology is not keeping up with other advances in smartphone technology, but how did that result and the massive problems for samsung and of course that note seven? like a combination of issues. the battery is bigger in the note seven by 15% to 20% from its predecessor. ,ompared to the larger iphone on top of that people want these batteries to charge faster. that is partly to deal with the fact that they don't last as long. another factor is a push for slimmer and slimmer phones, and
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so you are trying to cram a lot of power and functionality into a tighter space, and this i think was one of the major reasons why we have had so many issues with the note seven and the recall. here,d: tell me something it is an issue with design, new manufacturing, or technology that has been causing these problems? >> yes, at this point what we was is that samsung sdi making the batteries. there were several reports, but they mostly point towards a membrane that separates the positive and negative terminals within the battery. that seemed to have failed or way,ork properly in some so essentially what you get is a short circuit, and we are talking about volatile sensitive
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chemicals in the battery that causes a chain reaction and an electrical fire, so that is really what seems to be the issue. samsung has said that they are switching to new suppliers, and so they seem to have figured out the problem at the very least. rishaad: right, now what changes might we see as a result of this exploding phone episode? atthe reality is that we are the limits of battery technology , the material sciences is just coming up against some very hard physical rules, and unless we see a lot of new materials or new ideas come into this space, we will not see an improvement anytime soon because a lot of these technological advances with batteries take 10-15 years to develop, so what we will probably see our other ways to deal with the issue, better software, and processors that use much less power, essentially
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trying to squeeze more life out of what is limited technology in terms of providing electricity to the tablets and smartphones that everyone seems addicted to. rishaad: thank you very much indeed. joining as from tokyo. a look at the u.s. military, holding its biggest wargames yet in the pacific, operation valeant shield is held every two years, 22,000 personnel. comes as china and russia conducted drills in the south china sea and north korea having tested a nuclear device. stephen engle's is at andersen air force base in guam. tell us all about it. we are outside the gates of andersen air force base. just had a bunch of f-15 eagles swarm around our head. now,nk they have gone off
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but they should be back. lots of activity, as you said. right, well, ok, trying to get steve engle back. >> you are absolutely right. it is against the backdrop -- rishaad: don't worry, steve. carry on. >> sorry. against the backdrop of what is happening in the south china sea. russia and china are participating in joint military exercises of their own. korea has recently conducted a nuclear test. a b-1 bomber and his squadron did conduct a fly over of the korean peninsula just a couple of days ago. absolutely.
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we have these regional tensions with china, the south china sea. you mentioned north korea as a diary or this calendar event? it is held every two years. it is an opportunity for the u.s. military to get its own forces, the various branches of the military, to work together and work off the same page. instead of inviting other nations or partners -- rishaad: a couple of technical issues there. we do apologize for that connection. up next, a tough time for wealth aregers, how banks rebalancing their strategy. this is bloomberg. ♪
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rishaad: let's get to the business flash headlines. the world bank says its current president is the only candidate for its next elections. will be interviewed ahead of the decision at its annual meeting next month. by thee was put forth obama administration and is widely acted to win. the world banks top job has always been held by an american. inting office space singapore is getting cheaper. fell by 7% in the first half of this year to $775 a square meter. hong kong went close to four times that and still rising. the biggest gains are in shanghai, where rents are up 8%, driven by demand from technology and creative industries.
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reports from the usa world fun investigated up to ring fined 180 $5 million for opening 2 million unauthorized accounts. journal sayset federal prosecutors are looking into wells fargo's practices, which could lead to an inquiry. the bank settled allegations that it opened accounts for customers without their approval. asia, it does continue to grow, but this is one of the most difficult times for the wealth management industry. our southeast asia correspondent joins us now from singapore. how are private banks looking to reposition themselves? it is tough. you talk about repositioning. that is what they are doing. that tax amnesty law tighten scrutiny, and dampening the industry. j.p. morgan is maneuvering itself, finding relevance in
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this environment. andrew cohen joins us this morning. a tough environment. we are seeing wealth grow in asia, yet one of the most difficult times. what are you doing and focusing on? >> the wealth market is just going to grow. markets are always difficult, particularly in the last 12 months. a lot of people this morning talking about a move in december. that brings in volatility. there has been volatility in china, the oil price, so we are constantly faced with that. what are your wealth clients doing? what are they asking you to do? what are you asking them to do? >> our clients are always asking us what to do and trying to position themselves in the best way. we believe in diversification. currently we are stringy comfortable -- we are extremely
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comfortable with the u.s.. we find pockets, but obvious he there is concern about what will happen with the interest rate environment. >> where exactly are the opportunities? the greatesten withdraws from hedge funds since the financial crisis. there is huge concern there is little risk appetite. ofwe take a long-term view clients and have been interesting in asset classes for a long time. we have a very our belief in the allocations of our fund managers, hedge funds managers, and real estate managers. an example of that in a low rate , which i think was mentioned on one of your programs. >> are you expanding? possibly one of the best times to expand. >> over the last five years i
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have been in asia, we have doubled our work and continue doing that. we look at different marketplaces. >> at what rates? >> at the moment, you have a huge amount of activity in the and inogy space here taiwan, korea, japan, china. all those places represent opportunities, so we put ourselves where we feel there are the best resources. that you cutying 5% of your workforce in asia? is that an accurate? >> we look at different businesses. we are always looking for the right talent. we will continue to hire talent across the region. unfortunately, that moves people in the firm and sometimes out of the firm. >> is tight scrutiny adding
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cost? >> definitely. the regulatory space has changed in or mislead. cross-border, specifically southeast asia. we meet our regulatory requirement to the best we can, and will continue to do that. cost that you have to program into your strategic model. we have been around for 170 years. we hope we will be around for 170 years or more. private bankers advising clients to do? >> there is a new regulatory regime. we now have common reporting standards. we will meet those requirements and the clients understand that. they realize this is the right thing to do. >> we thank you for your insights. that is it from us.
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back to you. rishaad: thank you for that. we have to take a break. barbecue,e on the while an austrian company is causing investors a new kind of shrimp. ♪
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rishaad: a massive project , to startn australia a race of super shrimp that taste better than ever before. uild thee plans to b world's biggest shrimp farm. tell us about the scale of this project. as you said, this is an
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enormous project, the largest shrimp farm in the developed world, $1.5 billion. this is australia's most ambitious attempt to domesticate a super shrimp. in northe on a site australia that is almost as against business world -- disney world. right.: how will this all come together? a few things have to fall into place first. a lot of that has started in the science labs across australia. we have teams of two dozen or so scientists to create this shrimp. about unlocking the genome of a black tiger shrimp. task,a pretty complicated
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because that genome is 10 times more complicated than the human genome. it needs approvals. they expect to get them this year, and then catch the first , the mommies and daddies, as soon as this month. rishaad: when you throw your shrimp or prawn on the barbie, tell me what they are trying to achieve with that. >> that's right. this is an animal that is a part of australian culture, isn't it? they are trying to create this super prawn, the size of a man's fist, growing at twice the rate, tasty, and higher levels of omega-3 fats. we will see if they succeed. rishaad: thank you very much
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indeed. joining us from sydney, the super shrimp or prawns they are developing. we will see what gadgets are creating a buzz. this is bloomberg. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: foreign policy. you have been to north korea. they now have or are increasingly look like they will have the capacity to deliver nuclear warheads on intercontinental missiles that can meet the united states. can we allow that to happen, or can secretary clinton allow that to happen? bill clinton: we going to have a debate soon. we are going to have the commander-in-chief debate. i want her to speak for herself. i worked very hard to avert this when i was president. and my former defense secretary,

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