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tv   Bloomberg Markets  Bloomberg  September 22, 2016 12:00pm-2:01pm EDT

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♪ scarlet: from bloomberg world headquarters in new york, we're to pakistan,ies japan, and australia at this hour. stocks are climbing with bonds after the long-term outlook added to optimism. more think has a pessimistic view. he says markets could fall if governments do not take aggressive action to further the economy. running the risk of missing out on setting the terms for international trade by not approving the partnership. through theay trading day. julie? for the two-day rally
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global stock market after the fed held back on rate and really, it seems, bought investors more time. the expectation is that the fed will raise rates. a lot of the commentary we are seeing this morning. their major averages remain higher. down to some degree at the moment, but we want to mention we are seeing strength in tech. amazon and out for that are trading at records today and apple is resuming its recent rally we have been seeing on expectations for sales of the iphone seven. roleology is playing a here and has been playing more of a role. we have not been talking about the stocks. we were earlier in the year. a breakdown of the industry groups in the s&p 500, , the votest post exit
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low on june 27. you see since then technology is the best performing group, a 18% followed by financials, 11.5%. is playing a big part of the recent rally we have seen. looking at the stock and the other assets here, we have got the 10 year yield at the lows of the day, down four's -- four points. alan greenspan this morning said that over the long term, the yields could rise to as high as 5%. obviously, no signs of that today as the fed is not only pushing back the next rate increase but if you look at its plot, it is looking even more for rateist off increases. also watching the u.s. dollar, tracking with rates here falling for the second straight day. 1%. about
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even if the dollar has been falling, we have seen rising oil prices. the fourth straight day, 2.5% gains today. the weekly inventories report showing an unexpected drop in crude oil inventories specifically and the gains are continuing today. 47 is where we stand today. on theow let's check in first word news this afternoon. mark crumpton. businesses in charlotte, north carolina, told workers to stay at home after a second night of violence following a police shooting. the national guard has called in but officials say so far, they have been relatively quiet today. the shooting happened when a black man refused to drop his gun.
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neighbors say he was holding a book and not a weapon. police say he will -- they will not release a shooting -- will not release the video until after -- and he says he did watch it and it does not give evidence that he was pointing a gun. last-minute scrambling in congress to prevent a government shutdown. to -- aors are trying spending bill passed september 30 good they have not been able to resolve a number of videos including disaster aid, money to fight the zika virus, and budget offsets. his newr will have safety plan for chicago today or this comes after the nation'third-largest city deals with troubling spike in street violence any ongoing justice department investigation of the police department. mayor emanuel has announced for police officer's to
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expand use of body cameras and more training for all officers. india has granted packets -- branded pakistani terrorist state. this was before the united nations general assembly. he came in response to earlier comments by pakistan's prime minister who demanded the u.n. investigation into what he called drew doughty by indian forces. for ablames pakistan rebel attack over the weekend that killed 18 indian soldiers in the disputed territory of kashmir. dayal news 24 hours a powered by more than 2600 journalists and analysts in with him 120 countries. this is bloomberg. back to you. black rock is holding its second annual conference today in manhattan and erik schatzker is there. he sat down with larry thing and asked him what a consistently low interest rate environment means on this political scale.
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>> we are seeing the real impact of persistent low and negative , and we arees benefiting, so my view is this is one of the big reasons why we have such anger in the world, ourted to brexit, in political process, because from my perspective, as you said, equity markets are up. i am sure the real estate market is doing better with the persistence of lower rates. people with r enjoying this environment and people who are to helping every day them build a nest egg for retirement or a nest egg to buy in the -- to build enough to buy a house or a nest egg for their children'future, they are being harmed. we see a real division. >> surely the fed sees what you see and understand what you
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understand. >> i do not think they truly understand this. i actually believe these are incredibly smart, articulate who are trying to re-stimulate the economy. the only bold characters in the whole economics game. seen politicians reengage an extraordinary fiscal measures to get this going again. you do not believe janet yellen, the federal market committee, and federal anchors in europe and japan, do not understand? >> i will not identify one banker or another but generically, i do not think they calculate the cost, the whole global cost of interest rates and what the impact is. >> their congressional mandate does not tell them to. >> but so my view is, i
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understand with the mandate is your you are asking me what my view is on how this is impacting the economy and i think this is a component of what is creating anger. members of the federal reserve are beginning to share some of these concerns. say the committee is beginning to splendor. we had three dissents yesterday for the first time since 2014. what does that tell you? >> i don't know. we are getting at the cusp of higher rates. have, and iing we expect the fed to do nothing, so it is not a surprise to me, despite my long-term views. we have to be worried about the value of the dollar. a desired outcome for the moment . our economy is growing at 2%. we are struggling with the strength of a dollar. our biggest trading partner like --ico or the yen is touching the peso is touching in mexico 22 the dollar.
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just eight few months ago, -- just a few months ago, higher interest rates. it is having an impact in some parts of the world. i think it is hard for our , so asymmetric versus the continuation of aggressive monetary policy in japan, aggressive monetary policy in the uk, and aggressive monetary policy in europe. start --is why you are starting to see the dissent because we are doing better than most of these other economies, but we are not doing well enough. i do believe we are too aggressive in raising rates in front of all of this aggressive policy elsewhere. think it will be destabilizing for our country in the long run. in addition, a lot of political uncertainty going forward between now and our election.
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many people at the u.n. in the the political uncertainty in europe is only growing. you were not surprised the fed did not move in a market was not surprised. priced in 20%. a different story. janet yellen all but promised we would see a rate hike in december and there is a 60 plus percent probability this morning that is what will happen. >> what if it doesn't? then the economy is much weaker or we have had other circumstances in the world either politically or economically that becomes more unsettling. >> you can find them and you have done that on several occasions here. >> there is a competitiveness that the economy is not operating as well as you wanted it to. janet yellen has been consistent that we would eat data dependent
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. one interpretation may be different from another, but i think we are at the cost. would be surprised if we do not tighten in december. scarlet: that was erik schatzker speaking with larry think. a lot more coming. blackrock's global chief investment officer will be joining us than. coming up, investors are migrating more and more to lower cost investing strategies like eds. -- etf. does that pose a threat for active fund managers? i will of the father of the index fund explain. traded. are heavily perfectly good uses. i am afraid it is dominated by traders in the long run and traders are a gift to wall street and by definition, therefore, not a gift to the investors doing trading. ♪
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scarlet: the shebang passes problems with regards to its issues are a concern among german lawmakers. we hear there is a close section of finance figures this week. if you look at deutsche bank shares traded in the u.s., you can see that shares have fallen to the session lows even as they are higher now. if you look at deutsche bank shares traded in thestill up abs the light lower file -- following that headline. we will check in with our reporter in germany later in this hour to discuss the story.
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i want to take a deep dive into the bloomberg using this function. man i like to do the slot. there is so much good information. you go to special reports at the there is a can see great story and a great presentation put together by williams called the great cost migration. it talks about how investors are moving funds. story. fascinating even funds that are outperforming the market, they chose the fidelity fund crushing its benchmark index. they chose the vanguard fund beating the etf that invests in the same strategies. even those funds are seeing big outflows because of the cost. scarlet: and you're seeing that across asset classes. funds, 0.7% from 0.9% in 2010.
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that has been the case, a trend line going down. it does not matter if it is at the funds, bond funds, it has all been coming down. the question is is that still enough? those are still higher than the 0.25% average or the 0.1% fee of an index fund. was surprised even back in the 1990's, only 100 basis points for a mutual fund but 10 basis points for an etf, that is a no-brainer. hedge funds have been coming down. big funds like the new jersey pension fund have been saying we will pull out of these because they are too expensive. two and 20 is what we all know. 2% management fee, 20% incentive fee, that was standard for the industry 4, 5, 6 years ago.
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to 17.5ave come down and 1.5%ncentive fee management fee. hedge funds are getting sort of put in line by the big investors. scarlet: and it does not exist in the same way anymore. a lot of people have shares as well which reduce the cost to investors. when you look at performance, that is a different story, explaining in part why people demand and request lower fees. all this great research and with a fantastic presentation. coming up, we'll talk to the seedseed -- the ceo of ups. he is in favor of ttp. this is bloomberg. ♪
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matt:matt: the time is now to pass the transpacific partnership according to the ceo of cbs -- david gora is here now with the interview. let me start by asking you what this means for ups. what is on the line here for your company if ttp passes? >> you have to remember we do not manufacture anything but we ship our customers goods. when we look at trade agreements, ttp in particular, we are looking through the eyes of our customers, who are telling us that they need to be able to hit these markets that are covered in ttp and it is very important to them that they they need somes, of the complexity taken out of international trading rules.
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that is why we are supporting ttp. david: you have got a hub in china, which is pursuing his own trade deal. you have a good vantage point to watch all of that play out. how integral is the fact that china is work in on the other side on a deal of its own? >> that is true that they are negotiating at this point. is a good it opportunity for american businesses and american workers. u.s. is involved in setting the trade rules for that part of the region, we just believe that things that are important to us like labor coverages, like environmental issues and they would -- intellectual property, those are things we think the world is just suited if the u.s. takes leadership in the ttp. you are lobbying at capitol hill. what percentages on the ttp and
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how do you think they might vote on this? >> i could not tell you what percent of our lobbying it is, i could tell you we see a varied amount of interest. a lot of people in washington understand the value of trade. they just need to be convinced that this trade deal is the best deal we could place in front of them. that it is. we just keep talking about the benefits to our customers and especially for us. we have access to thousands of small businesses. those are the people whose voices get overlooked. those are the companies that really take advantage of the trading scheme. david: let me ask you about the way you are speaking out. those who oppose this say it will benefit big corporations and here you are at the head of a corporation. do you worry you are giving that
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to them? thinkhave to do what we is right, for our company, our customers, and our country. we believe this is about embracing the future, about the able to reach these emerging markets, that the economies are continuing to grow, that this is actually a job creator and not the job killer that some people portray this to be. david: your career, you started out as a college student working at night loading trucks. would a younger david have understood the implications of the deal? when i was 18 years old, i absolutely would not have. thatis one of the reasons not only are we having discussions with our customers the advantagesm
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of this, but we are also talking and letting them understand the importance of it. a key fact for us as a company is every 22 packages that we process across the border of the united states, creates another job for ups. so we and our employees can relate practice -- packages to jobs and that is the point we are making. david: are you at all surprised by how politicized this has become surrounding the trade deal? >> i am surprised a little bit with how vocal the opposition has in. it is up to us, those of us who really understand the trade deal, and understand that 95% of consumers, like the united the key to american businesses and american workers to be successful is to find ways to serve those markets.
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i think it is up to those of us to believe in free trade make sure we get our message across and that is what i'm doing. bit, weivoting here a have at statement from the commission a few days ago and the secretary of the treasury said it could be a turning point in the conversation for corporate tax reform in the u.s. what it means for ups, if you think we are at a turning point here. >> as far as what it means for ups, i do not know it has a direct impact on us, but what i can tell you is we absolutely support comprehensive tax reform in the u.s. forre looking for stability a permanent rate, a competitive rate which we think is about 25% and we are looking for a competitive and territorial tax
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scheme to where companies can bring back profits from overseas. .e believe this is a big issue we understand to get that kind of competitive rate, we would need to have a broader corporate tax base. we are in support of that. a fundamental aspect of working with the u.s. government that we need to change. david: all right. thank you very much. scarlet: still ahead, german lawmakers expressing concern, taking notice of the stock losing over half its italian this year. what are they going to do about it? this is bloomberg. ♪
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matt: live, i matt miller. david: i am's -- scarlet: i am scarlet fu.
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but go to mark crumpton. mark: a second night of violence in charlotte, carolina over a police shooting. the governor called in the national guard. today, charlotte's police chief says he watched the video the shooting. >> the video does not give me absolute, definitive, visual would confirm that a person is pointing a gun. i did not see that in the videos i reviewed. mark: he says he will not release the video of the shooting until after the victims families see it first. some were told they could stay home today because of the unrest but so far, the streets of charlotte have been relatively quiet. donald trump wants to reduce black on black crime in america. plan is to expand the
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controversial stop and first program. he said in a town hall that the program of stopping mostly minority youths on streets worked well in new york. the city has now drastically cut back its youth -- its use. $30 million in digital advertising as she ceased to connect with young voters. the clinton campaign says it is investing in digital advertising during the final stretch of the campaign because young people increasingly get their news online. through live television. they appear on outlets like youtube, facebook, and twitter. a rocket fireys from syria has struck a turkish border town that leaves -- at least six people wounded. last month, turkey sent troops and tanks into northern syria to clear militants from border regions. news 24 hours a day powered by more than 2600 journalists and analysts in over
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120 countries. this is bloomberg. want to get back now to a story we broke for you earlier this hour. -- joining us now, in berlin, how significant is this, the junior member of the , and we all know deutsche bank is having serious problems. >> what i think has triggered this is $14 billion fine that the justice department is to mandate. that has focused minds here in berlin and the social democrats are the junior partner, very wary of commenting on the entire saga and the bank's woes.
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it shows that the matter is now seeping into the political corridors of berlin if you will. and they cannot avoid the topic anymore. feeling thate any in berlin, regulators have gone too far? it is a whopping fine considering the role deutsche bank played compared to other banks that played bigger roles and did not pay such big fines. think there is an expectation among german regulators from what has been reported that the fine will be lowered. in other words, that there will be a settlement. the german finance ministry, which, generally, as you said, has been reluctant to comment on this. the other day, they said we do expect the u.s. to give deutsche bank a fair shake, in other words, a fair outcome that lowers the fine significantly.
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yes, there is that expectation. there is a concern in berlin, a led to a verythat general sort of discussion of the matter. , the concernout for the long-term solvency of almost a national treasure although it is a publicly traded country, is there concern that deutsche bank could actually fall apart? >> i guess that concern is always out there. , and the german government, when you talk to people privately, they are obviously aware of that. it is germany's biggest bank and it is in trouble, so yes, that is obviously an option that is out there. on the other hand, it is not in theublic he discussed
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least. and again, this discussion that ,e got wind of was very much that it came up in the meeting, when other things were under discussion and it was this kind socialnt where democratic lawmakers said, then there is this too. matt: i am trying to get my head around exactly what the general feeling is, not just in the meeting, but you know u.s. regulators, between deutsche leviedd volkswagen, have $30 billion of fines on german companies, at least until some of them negotiated down. of backlash ornd a detriment to the relationship because of that? >> that is not happening, not at the government level. ,here has been some chatter
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media chatter, about, they seem to be, is this, you know, whatever, is it retribution for the eu's fine on apple, or the eu's tax bill being presented to .pple of course, i do not know how that could be substantiated at this point. thatnk it is fair to say the chancellor has no intention of picking a fight with the u.s. over this. to get your thoughts on this. we really appreciate your time tonight. tony coming to us from berlin. we noted, deutsche bank shares are higher in u.s. otherg along with most u.s. risky assets. this is the global macro mover and you can see it is a quick way to check out the moves across these, currencies, bonds, and commodities. for bonds, hotter prices and lower yields. the only red we really see here
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is the insurance policy against the new zealand government defaulting here and creepy up a little bit. otherwise, you see green and everyone is off to the races after the concern that it is not interest-rateaise in what was described as a hawkish hold in policy rates. let's go to abigail doolittle live at the nasdaq with more details. abigail: we have the nasdaq in rally mode from yesterday when it put in a record closing high on pace for a new record closing high. a lot of this has to do with technology. both stocks trading at record highs. amazon at an upgrade to buy and other from the nasdaq today. this is after cisco and salesforce announced a packed. the two companies collaborating with cloud systems and software. this is viewed as a real positive considering cisco
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systems make a real shift toward software and away from hardware. clearlynvestors are shearing the announcement. i am looking at apple firmly associated with the nasdaq. what are we seeing there? higher, the second-biggest right behind amazon today. a lot are bullish, including tim, who essentially called on apple last summer when he downgraded the stock at that time. he has since upgraded today. we also have rbc capital, pretty bullish on this stock ahead of all the bullish reports. he thinks the average selling price could exceed that price.
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back here in 2013, iphone seven or iphone 5. the stock climbs more than 140%. low expectations though recently on the iphone seven, we have the stock peeking around those resistance levels, suggesting we could see a similar move higher with bullish news and analysis over the iphone seven, with some analysts saying the iphone eight due out next year is going to be a rare -- real super cycle. >> now to the iphone eight. thank you so much. matt: let's get some more insight into apple. vehicle ambitions, a far more
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theresting story with mark, bloomberg technology reporter, covering the story out of san francisco. gearhead, i was super excited to read this scoop and i was a little bummed out mclaren now says apple is not in talks to make any kind of investment haired where did the idea stand? >> apple is looking to make a strategic investment in the automotive group, the maker of a million -- million-dollar race cars and formula one racing back in europe. i think apple is looking at mclaren in terms of investment rather than acquisition. indicative ofs apple's plan for entering the automotive industry and taking on europe and detroit and tesla. >> that might be the case but what we had heard for a self
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driving car, what is the link? a couple oforted months ago, apple has two pads they can forge ahead on it one is building their own car start theinish in partnering with manufacturer. we had the holding big story on the manufacturer called magna, but there is another route they could take. they could build their own self driving platform and market and carmakers.o other i think that is where mclaren comes into play. with the strategic investment, apple would have it in its back pocket. down the road, if they choose to go the route where they build a platform rather than a whole card system, they could sell it, they would already be partners, it would get all of the exposure it gets as one of the preeminent carmakers for customers around -- across the world, they would immediately get into the race car world will formula one, great marketing for them, so
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from investment and apple building their own car system it seemsan entire car, like a safe pick for apple. matt: i do not think enough people in the u.s. understand how big formula one is. more than half of people watch. it is incredibly strong. also that mclaren has a cutting edge innovative design. you guys quote him yesterday, the automotive unit, i can confirm it is not a discussion for apple with any potential investments. did he not know? >> over 50%, it is very possible
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apple is dealing with them correctly. it would be correct for michael to say that his group is not in talks with apple. it could be they are investors instead. matt: it is exciting nonetheless. head to bloomberg.com to check out mark'stories. scarlet: coming up, we will have an interview with the lincoln ceo and emily chang will speak with him on the day of the fall product launch. you can catch the conversation a 1:00 p.m. eastern time. this is bloomberg. ♪
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vonnie: you are watching bloomberg. mark: this is your global business report. the central bank holds off on easing as the economy adjust. we will hear from the bank governor. shipping's. the korean company is getting millions to help unload cargo. a look at the consequences of deforestation in indonesia, one of the world as his worst pollutants. vonnie: the central bank of norway says the key interest rate is likely to stay to 1% in the next few years. the governor spoke. >> there are always uncertainties. refer to the present path, it is rather flat.
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.5%. cessna transportation and energy companies. they fire their chief executive in june. the company says the energy unit will focus on strength thing its position in the oil business. as $100 million of additional funds to resolve a crippling cargo crisis. offering a credit line of $45 million to the -- to help the shipper. this comes a day after the korean airline board approved a $55 million loan to the ocean shipping line. china's group is close to an agreement to collaborate on making movies with sony according to a person familiar with the matter.
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biggest operator of movie screens, the company could finance up to 10% of some sony films. time now for us to provide context and background. deforestation in indonesia or the nation is made up of thousands of islands and one of the world's worst polluters. specifically for farming. >> the thick blanket of snow is known as the hayes. from june to october, indonesia sends massive foreign fires -- the smog periodically develops the southeast neighbors, including singapore and asia. deforestation creates about the same greenhouse gases each year. perhaps unsurprisingly, that fire has made indonesia one of the worst global warming
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offenders. here is the situation. the fires come from palm oil plantations that use illegal/and burn techniques 20 times cheaper for other methods for clearing land. indonesia produces about half of the world's $50 billion palm oil crop each year, which is why they use products like mayonnaise and makeup. thee is good news about world's rain forest. globally, deforestation has slowed by one third. perspective,n twice the size of belgium to the size of denmark. a lot of that improvement can be seen in brazil passes amazon. in 2011, indonesia took over brazil. here is the argument, environmental groups say indonesia can follow lead of other countries by strengthen -- strengthening them or 20. the process of identifying those responsible take time. .hey can take a decade
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you can read more on the bloomberg and that is the global business report. head to bloomberg.com for more stories. ♪
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>> jamaica's new government is counting on more business friendly public-sector. thank you for joining us, mr. prime mister. -- talk to us about this. >> the public-sector needed to
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get on top of the fiscal and we needed to be far more investor friendly than we were. more than anything else, jamaica has a high overhang. we have been getting on top of all of those things. the imf has been a very good .upport along with the bank we have a plan in place, and it is working. get ournot been able to fiscal house in order and now we are moving into other fears, to you the public-sector efficient to create the environment. >> what are some of the advantages jamaica has? of your neighbors like the dominican republic, that you plan to leverage? .> the location of jamaica we are very close to all the shipping lanes.
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logistics and shipping, they present themselves in areas of investment. so jamaica can do many services that support industry and businesses in the u.s. business management and processing can all be done right there in jamaica. tourism, jamaica is a beautiful lovely culture. an area of great opportunity. area we texta new -- intend to develop and exploit. >> i want to start with logistics. au are moving forward with logistics hub that your
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predecessor has signed on. >> china is critical and we welcome them. the chinese have been very good partners. they have built a magnificent investingd they are in more structure, more highways, and potentially a port. we also want more investment. making them attractive enough for u.s. investors to participate. our processes are more aligned to meet a met -- investor needs. something you have been outspoken on is that , rather thanrs hire local spirit what kinds of conversations have you had with the chinese since becoming prime minister in ensuring that would be -- bestve been clear that
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transmission mechanism from benefiting. we'd knowledge there will have to be deportation of chinese labor. the majority of the work kanaan and will be done by jamaicans. scarlet: thank you so much for joining us. matt? still ahead, linkedin launched its fall products today. we sit down first next. this is bloomberg.
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scarlet: good afternoon. matt: welcome to "bloomberg markets."
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from our world headquarters in new york, we are covering stories from san francisco to charlotte, north carolina, london and karachi at this hour. 2016 was meant to be the year of monetary policy diversion. instead, major central banks' pa ths are converging once more. can the fed learn something from japan? have an exclusive sitdown with the ceo, jeff weiner. new developments continue to emerge about the hedge fund , who wasleon cooperman accused of insider trading by the sec. we will hear from another billionaire investor who says this is not the leon cooperman
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he knows. let's head over to the markets desk with julie hyman. what's going on across the board? a sea of green? julie: a sea of green as we have that converging, commendation from the central bank in the accommodation from the central bank in the u.s. we are seeing a rally in in the u.s. with stocks hovering around the highs of the session for much of the day. if you look at the breadth of the rally, it is a pretty broad rally. real estate stocks doing the best today. financials doing the worst. they have tended to do worse when we see yields decline. a pretty broad rally we are seeing in the major averages today. we've been talking about technology as well.
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that is the group that has come terms of itsor in contributions to the rally -- apple resuming the streak it's been on recently and that is a part of what we are seeing here. thyssenkrupp that tends to benefit when the economy is a bit on the upswing. group that tends to benefit. the convictionto list at goldman sachs, it was initiated, new coverage there as well. this is the best way to get exposure to timberland. , thevery communications deal the company presented in an analyst presentation today said at the olympics was a bit disappointing. the company may be getting charging fans in europe to watch some sports. we've been watching the yield curve as well in the wake of the fed commentary yesterday.
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we have had a flattening of the yield curve over the past year. it had been widening a bit, now flattening once again. that is a phenomenon we are seeing around the globe. today, we are seeing declines in the longer end of the curve. julie hyman with a look at markets. scarlet: let's check in on the first word news this afternoon. a republican-led u.s. house committee has voted to hold the former state department employee who helped set of hillary clinton's private e-mail server in contempt of congress. the resolution states that brian did not comply with the two subpoenas ordering him to appear before the panel. the vote was 19-15 along party lines. donald trump has cut hillary clinton's lead in virginia. eliminated more than
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half the 16 point margin that secretary clinton had in august. clinton now leads trump in virginia 44%-37% 9% of voters were undecided. plumes of smoke were seen rising in the syrian turkish border today. it comes after the latest cease-fire agreement by russia and the u.s. ended. what exactly caused the smoke in the aleppo area was not immediately known. willcal storm karl strengthen in the atlantic. southeast ofed bermuda moving northwest at around 16 miles per hour. further east, tropical storm lisa is expected to weaken. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.
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i'm mark crumpton. this is bloomberg. scarlet: u.s. companies are more or less sitting on their hands and that is not a good sign for growth. and --john studzinski discussed the global corporate climate. john: they are not spending enough money on r&d. it is not just a question of m&a. companies will be scrutinized by their investors, by the the government has to do not spending enough money on r&d and investment for jobs and for growth. malaisegoes back to the that they are not confident enough to spend on r&d. is this a crisis or is this actually good news to latch onto and say i'm feeling better about the future, we can start
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spending in r&d or investing. john: it is a wake-up call. a lot of big shareholders are they have to less quarter by quarter oriented. you see on the m&a front a lot of endgame m&a. the u.s. is increasingly the attractive market. you are seeing that in terms of the retail investor wanting to go to north america in terms of stocks and bonds. commercial real estate. you also see that in terms of endgame m&a. is a goodanto example. you see two economies looking at ability toca and the establish certain and game options either in energy or ag -- >> in the slow growth low proximity world, can the ceos find investment projects to
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invest in or are they trapped in this world of dividend stock buybacks? how can these guys find these high -- john: it's a question of what time frame you want to look at. if you are looking at everything over one or two years, you will be in the cap you just described. if you look over five or 10 or 15 years and you talk to people in northern california come out for that or amazon or facebook, they will tell you that out of 100 projects, one or two will bear profitable fruit. tom: all the finance and all of business have to confront -- the dawning awareness there may be financial instability because of the artificial construct and non-orthodox desperation for
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negative rights. are you concerned about financial instability next year off of economic uncertainty? john: what do you mean by economic instability? tom: thanks. -- banks. angel instability that affects banks and the ability to do transaction combinations. that's financial instability that affects banks. john: there's a broader issue about the world of monetary policy. perhaps monetary policy has gotten taken too far. every time we talk about a fed hike, it's a bit like groundhog day. are,now what the options you get the groundhog day, something happens and you move on to the next groundhog day. , there question something different going on.
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you are narrowly much stronger. does the uk banks -- the uk banks are narrowly much stronger. matt: still ahead, the two new yorkers debate. trump is being advised to aggressively go on the attack. this is bloomberg. ♪
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matt: you are watching "bloomberg markets." let's head over to san francisco justhere jeff weiner
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announced his companies fall product launch. that is company prosperous product launch. h. .mily: thank you for joining us you unveiled a slew of new products today, you are redesigning the desk top product, improving the feed come adding in bots. you expect these things to fit into the roadmap of increasing user engagement? jeff: the feed is one of our central valley propositions. that is at the foundation of our flagship application, both mobile and redesigning the desktop as well. we continue to invest aggressively in creating the most relevant news be possible within a professional context. it makes it much easier for people to keep in touch with their networks.
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+++ prior inbox we've seen -- 20% year-over-year growth there. these all compound to lift engagement. emily: you've been rolling up your sleeves, digging in with the team. let us in on what it's like to plan for integration like this. jeff: there's a lot of clarity in terms of the value that can be generated in terms of leveraging linkedin's unique assets, some of our business applications. to integrate that as seamlessly as possible on top of microsoft handfult -- it's only a technology companies that reach a billion users on a routine basis. we are working with the office team, the dynamics team to think about what is possible and prepare so that once we close, we can hit the ground emily: running. emily:what integrations can we expect to see first? jeff: i would not predict first
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in terms of chronological order. some of the areas that make absolute sense come integrating linkedin identity assets within outlook, for example. when someone send you an e-mail, you know who they are. you see if the job changed, the boxpany -- it brings the ins b x to life. more deeplye to integrate our learning assets into windows come into office and the dynamics with regard to continuing to differentiate the business applications that are generating real momentum through leveraging sales navigator, things we can do with recruiter in terms of human capital management. emily: i understand yet it is for linkedin to remain largely independent. how do you expect this to work in practice and how will it impact the culture of linkedin
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that you worked hard to build? from day one, they said it's important that we continue to focus on growing linkedin. both teams are completely a line that objective. that makes it a lot easier. it's made easier by the fact that -- that's where m&a goes off the rails. disparate cultures. the underlying cultures are already naturally allied in terms of being mission driven. has been very mission and purpose driven since he has taken on the role of the ceo. terms of being innovative come in terms of trying to create a sense of openness. we are seeing a lot of alliance. mintingow do you your independence and stay focused on the synergistic goal? jeff: we thought about how to
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naturally align the strategies. it becomes intuitive. it does not require a lot of disruption. one thing i would like to see us get to is we get to a point where it is no longer considered adequate vision integration -- acquisition integration. the team responsible for the profile, profile apis, thinking through that outlook integration , that is something they're are looking forward to doing because it accelerates the utilization of the teams objective. this deal surprised the market. m&a,s kicked off a wave of a wave of speculation about more m&a. have you had executives coming to you rethinking their desire to stay private? same companies that
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were thinking about staying private previously have very specific reasons to stay private. i don't know that consolidation played a role in that. -- thishe pros and cons debate goes on cyclically over many years. in terms of the increasing consolidation, we will continue to see that trend. it's less about public-private and more about how the competitive landscape continues to evolve. the importance of scale over time. emily: where do you see more consolidation? you are the first big social network to go for m&a. there was a lot of speculation about twitter. jeff: i would be looking more from the acquirer front than the companies being acquired. you have a lot of activity taking place. business applications will increasingly be used to differentiate these huge offerings.
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wee of the consolidation will see will be good for all customers of cloud infrastructures. emily: what do you think are the benefits of remaining small and lean versus going -- and vice versa -- jeff: the smaller you are, the easier it is. there is fewer things that add complexity. the larger business becomes the more people you up to manage, the more businesses you are in, it naturally increases the difficulty through complexity. the companies that have the most initial success are those companies that remain focused on their core for as long as possible. everything about reinforcing that core and reaching critical mass. over time, businesses one to grow. that's want to grow. at times, they will have far greater scale and far more resources to continue to invest
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and continue to innovate. when example would be a i. you see the critical mass of the expertise required to really ish the envelope in ai increasingly in the hands of a smaller number of companies. scarlet: linkedin has seen a lot of success in china. you have traveled there many times. how these he linkedin helping microsoft in china? jeff: microsoft already has a well-established position there. microsoft's global footprint is very impressive. we were just in india and had a chance to rollout products. has met with the prime minister on multiple occasions. microsoft has a huge presence in japan. that's a market where we have not invested in as aggressively,
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but we think we can jumpstart that. microsoft's global footprint could have meaningful impact on the way we think about global. emily: you have a new learning product building off one of your biggest acquisitions -- how do you expect the education and learning part of the business to be relative to the whole? jeff: it can be a meaningful contributor to the top and bottom line. there is the enterprise part of that business where we are leveraging our multi-partner and customers where we can sell into those businesses beyond the recruiting tools we've been telling historically. on the consumer side, we are able to seamlessly integrate linkedin learning into our premiums and packages without charging an additional fee. that can help her attention. -- retention. there's a lot of
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excitement around bots. they take a while to hit the mainstream. when do you see them going mainstream and how do you maintain the quality of the interaction? you maintain quality by being focused. not doing bots for the sake of doing bots. in the valley, there seem to be these new introductions of new technologies and people get really excited and they become very buzz word oriented and you have to get past that and think about how the new technology is creating value for people. the example we should today's how-to members connecting on linkedin through messaging can schedule a meeting. something people want to do through linkedin. you have to go in and out of multiple applications and this really accelerates that process, makes it much more seamless and intuitive that is something that will create quality. you have to focus on getting that right before you move on to the next one.
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over time, you will see some platforms evolving. microsoft is investing aggressively in a platform -- that's where you can see a lot of innovation on the east. -- unleashed. emily: jeff weiner unveiling some new products today. matt, back to you. , jeff weiner. ceo this is bloomberg. ♪
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scarlet: this is "bloomberg markets." matt: time now for the bloomberg business flash. an update to its autopilot system will disable automatic steering if the driver does not keep his hands on the wheel.
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the company says automatic steering will not resume until the car is parked. the new version of autopilot relies more on radar than on camera. bluebell creameries devastated by the mysterious outbreak last year is now calling some that is recalling some flavors distributed across the southern u.s. no illnesses have been reported. cuts appear to be on the way at airbus. they plan to cut costs to streamline operations. having a significant impact on headcount. airbuss less demand for 's helicopters. bnb is gearing
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up for a fight with andrew cuomo. they said earlier this month they would sue cuomo if the measure becomes law. that is your business flash update. matt: the sec accuses leon cooperman of insider trading. we will dig deeper into his relationship with the family that managed alice resource partners for more than a decade. this is bloomberg. ♪
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matt: you probably will not want to miss monday night's debate. hillary clinton and donald trump will go head-to-head for the
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first time. bloomberg politics has special coverage with mark halperin and john heilemann, hosting a predebate and postdebate show, that starts at 8:00 p.m. eastern bloomberg television. partnership with twitter, you can stream bloomberg's coverage and debate itself alive on that platform -- live on that platform. scarlet: clinton in the league with 43-37 percent. is sahils now for more kapur. ,s we look ahead to that debate it will be a clash between style versus substance. do we have any sense on whether clinton is working on style and donald is working on substance? clinton is preparing for a somewhat more restrained version of trump and the highly
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aggressive brawler. she is not as good at branding herself as she is at talking about the issues. is preparing to aggressively if he saystrunk something dishonest or untrue in the debate. matt: have you seen any indication that donald trump toned down his rhetoric? has he become more presidential? has he been sticking to the advice given to him by his handlers? sahil: the short answer is no. there are moments where he does appear more restrained. the joint appearance he did with the mexican president some weeks ago, that was a much more even keel tempered donald trump.
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he has his moments and then reverts back to what his natural aate is, the bluster to be straight shooter and say what comes to his mind. he has moments and then he reverts back. we don't know which one will show up. there is a debate within the trunk campaign about how aggressive he should go. or if you should go straight -- and attack clinton. himself is conflicted because he put out a fundraising e-mail a couple hours ago where he asked his supporters to say -- answer questions like, should he call her crooked hillary? sure it will depend
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on what transpires on stage. how he feels in the moment. hillary clinton is familiar with presidential debates. how much catch-up is the trump camp doing as a result? sahil: the trump campaign has a lot of catch-up to do. if you gets a question about an could stumble, he and that could end up looking really bad for him because one thing he needs to do is pass the commander in chief test. not have theoes experience to be president and they worry about his temperament. that is a big sticking point that hillary clinton will do everything she can to try to exploit. anil: hillary clinton has advantage when it comes to women or minority voters. i saw this morning that
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she didn't between two ferns with zach galifianakis, and very tongue-in-cheek interview set up. onshe did an interview between two ferns with zach almanac is. galifianakis. sahil: this is the way the world works today. people get their information from various nontraditional sources and that's one of them. hillary clinton does have a very real problem with perennials this millennials. they view her as this honest. withal problem millennials. they view her as this honest. -- dishonest. pullingurrently
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in the 30's whereas obama exceeded the 60's. matt: is there any chance that debatehnson gets in on a before the election? he is not hitting the 15% threshold. that, but heit doesn't hold well with active military and looks to be the poll welle with active military and. sahil: it was a real blow to gary johnson that he did not cross the 15% threshold. a gooddid, there is the mostat he could be successful third-party candidate
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since ross perot. the consequence of the polarization we've seen since the 1990's when ross perot ran is that people dislike the other party so much that they are more for their side, even if they don't love their candidate. sahil kapur from bloomberg politics in washington. has beenleon cooperman accused of insider trading by the ftc. years ofit took me 50 hard work and playing by the ands to get me where i got i won't let these people destroy my legacy." >> i'm pretty shocked. i have notably on for a very long time. leon for a very
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long time. whether something was wrong in this particular case, god only knows. on, i would be very surprised -- knowing leon, i would be very surprised. david: how blurry does the line get? how difficult is it to draw that line whether it's insider information or not? wilbur: leon is mainly in public securities. we are more in private investments. we are generally on the boards, we play an active role in the company. our whole relationship with the company is very different. we get into blackout periods
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where you can trade at all. we are quite scrupulous about that. leon is very good at guessing what companies will do. very clever you are and you know the company pretty , youand you know them think about it, most actions are logical. if you know the company really well, you ought to be able to put yourself pretty well in the manager's head and say i think it is logical for them to do this, that or the other thing. if you guessed this right, that should not be called insider information. whether there was some sort of supplement to it, somebody said something over the phone, i have no way to judge that. is not a guy digging around looking for insider trading. alix: is this a different sec?
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are clearly being more aggressive than it has been for a long time. have they gone too far? is it just right, was it to lose before? you have two deal with that situation by situation. everyone is shocked at the allegations against leon. -- you have to deal with that situation by situation. int: for more, let's bring caleb melby. you found cooperman has a long-standing relationship with the management of atlas, the family of executives there. how does this play into everything? caleb: we wanted to know who atlas pipeline was. complaintthrough the and the whole family of companies.
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edward cohen and his son jonathan are involved in a lot of these companies and we were able to go all the way back to at least 2000 to see how leon and his son, wayne, had invested with the cohen family. thing cooperman pointed out, he has lost money on a lot of his investments linked to the cohens. caleb: in two instances, we can these cohenle of family companies fell 80% or more. , leon filed for the spinoff of atlas where he sold a .unch of shares matt: we did hear from one executive that he was shocked and appalled that leon cooperman
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allegedly called him after he found out about the sec suit and try to make up a story. he is referred to as executive one. caleb: we have no idea who that executive is at this point. anrlet: if you liken this to episode of billions, it is the sec, not the doj. why is that significant here? caleb: it is significant in the sense that -- if you read the complaint and leon's defense, what you are getting into is some pretty esoteric trading stuff between options and realized gains versus unrealized gains. follow you hard to and if you want to go point by point, you read leon's letter to investors yesterday.
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it seems like a pretty staunch defense. matt: how bad could this be? when the sec brings charges, you end up with a fine -- no admission of wrongdoing. caleb: for him, this is about his reputation, which is thrilling and massive in the industry historically. he will fight it all the way. investors can return to worrying about the fun metals. julie hyman's chart of the outlook for earnings. this is bloomberg. ♪
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scarlet: this isscarlet: "bloomberg markets." let's head over to julie hyman who has our chart of the day. julie: it has to do with earnings and valuations. now that we've heard from the fed and people have pushed out their interest rate increase expectations to december, they are focused back on earnings and whether the valuations we are currently seeing are justified. you are looking at the top, the trailing and forward price-to-earnings ratio of the s&p 500. the forward price-to-earnings ratio on the bottom, the trailing on the top. if you have an outlook for the s&p 500 and you are looking ahead at earnings, the s&p looks cheaper. the e is bigger, so to speak. 20.520 trailing basis and 18.5 on a forward basis.
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if you look at the s&p in aggregate, that would mean an increase of 13% next year. which the s&p has not grown earnings like that going back to 2011. there is a lot riding on this earnings growth that will be a determinant in the valuation in the cheapness or pricing is of the s&p 500. this is something we will be watching in the coming weeks as we start to get more and more earnings reports. earnings are projected to have fallen in the quarter we are about to learn about. going into next year will be important here. i wanted to mention a few of the companies that have come out with earnings today. or earnings projections as well. a bit of a mixed bag.
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the stock is down 6% after the electronics maker reported fourth-quarter results that beat estimates but did not give that detailed forecast for 2017. analysts pointing to a potential loss of market share. we have the maker of the lenexa operating system come of that company raising its forecast for 2017. linux operating system. came out withond some statements, had its conference call and we informed -- reaffirmed their forecast for next year and said to calm sales would be relatively flat to up 1%. sales would be relatively flat to up 1%. matt: coming up, we will speak
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lincoln ceo. the luxury car brand is teaming up with the dallas cowboys. we will tell you why, next. ♪
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matt: the ford motor company is working to expand its luxury brand, lincoln motor, announcing plans to partner with the dallas cowboys and open and experiences center in dallas, texas. tell me about this partnership with the cowboys. i tend to think of them as america's team, but not very popular opinion here in new york.
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what do you do with the experience center there? >> thank you for having me, matt. dallas is a great franchise. the cowboys know how to take care of their customers, their fans. they are developing this fantastic sports luxury shopping complex. are going to open an experience center at the star. a very relaxing sanctuary like space where our customers can come in and explore our products and everything else lincoln has to offer in a no pressure environment. matt: lincoln has incredible history, very closely linked to dallas with the iconic continental of the 1960's. do you feel any pain or pressure on your brand from the attacks that donald trump has led on your parent company, ford motor company, for producing smaller cars outside of u.s. borders?
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>> we are very committed to the united states. we are the largest automotive employer, automotive manufacturer -- we export more than anybody u.s. else. numbers of investment come in the last five years, we have invested over $12 billion in the united states. and we have created nearly 28,000 jobs in the united states. all those metrics show we are very committed to the united states. with this move you are talking about, we are not going to lose any jobs because we will be replacing those products and that playing with other products. matt: -- that plant with other products. matt: lincoln is hugely popular
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in china. i don't think americans understand how popular this brand is in china. the new be making continental for the chinese market as well as the u.s. market. will there be a difference in the specs? the chinese would perhaps rather an americanereas would rather focus on the driving experience. -- it'shinese consumers changing a bit more and more. the people who wanted to be driven are now also driving. the backseat reclines, the backseat has all the amenities you would want, a lot of controls those customers want. the backseat was very much design with the chinese consumer in mind. the brand is held in very high regard in china.
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we opened our first store in november of 2014 and last year was our first year of operation there and we sold more than 10,000 cars. this year, we have already sold more than 17,000. huge progress and huge growth happening for us and china. i know you're a ceo is aiming to get a self driving car on the market as soon as possible by nearly 20 20's. will he can beat him putting towards that kind of technology? putting people will be a car that way. >> we are working very actively on the autonomous car. we will have a commercial model available by 2021. the commercial models will be the first ones in the marketplace. -- could be a ride
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healing service, package delivery, those applications, a big portion of the cost is driven by the driver. if the driving can be autonomous, there is a much stronger business case for that. improves -- asgy the scale of the technology improves and the cost drops, they will be coming into the personal use area and link it would be perfect there. -- lincoln would be perfect there. matt: a couple weeks ago, mark fields said it does not have a blank check. you have to make it look like you did have a blank check to consumers. how do you square that circle? >> we scrutinize all of our investments very carefully. that's what we mean by no blank
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check. we have a very well thought out and our results speak for themselves. our sales are up substantially this year. 10% in thebout luxury market that is down 1%. the luxury market was up a present and we were up 16%. up desktopd we were 8%the luxury market was up and we were up 16%. matt: you can read the latest luxury stories on our bloomberg pursuits, the destination for the finest things in life. ♪
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david: i am david bureau. vonnie: i am vonnie quinn. welcome to bloomberg markets. ♪
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vonnie: washington, san francisco, puerto rico, and hong kong. climbing higher, post-fed meeting. from the blackrock shares, in new york. it is time for central banks around the globe to act. >> what i would like central bankers from around the world to foris that it is time aggressive fiscal policy.

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