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tv   Lunch Money  Bloomberg  January 31, 2014 7:00pm-8:01pm EST

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>> welcome to "lunch money," where we tie together the best stories and interviews in business news. i am adam johnson. take a look at the menu today. time warner cable says charter bosch bid -- charter's bid is a no go. we will hear from the ceo. it is the first time he has spoken publicly since charter made that bid publicly. cam newton tells us how he stays financially stable. chairman bernanke's last day as the chief. what words of wisdom does he have for us? in world investors moving money , into the bahamas. we will explain why. and media super bowl ads.
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denny for many dollars for 30 seconds. -- spending the $4 million for 30 seconds. is it worth it? we will kick off with what everybody is talking about. could it be? a break for the microsoft ceo? the board is prepared to name satya nadella as the ceo. he has been running the cloud business. >> satya nadella, responsible for building and running the company's computing platforms, developer tools, and cloud services. >> they had to go where they felt the person would take microsoft into the future. that is the cloud and the third platform. that is what we are seeing here. i think it's a bit of a safe bet, but i also think it is an acknowledgment that microsoft is not going to be the company that we have known them to be in the past. >> the challenge is making the transition from microsoft of the past to microsoft of the future. >> what microsoft is struggling with is a post-pc world. their entire business has been
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developed on the back of windows. microsoft office, a dominant product. developed because their windows operating system is so powerful of a monopoly. you have a world where the entire computer industry is going away from the pc. he is a cloud guy and also an enterprise guy. they recognize that this is more likely their future. >> enough talk about satya. let's hear from the man himself. this is up the web conference in paris. this is a bloomberg exclusive. you won't hear this anywhere else. >> it's an exciting place to be at right now. you look at broadening what we're doing, our devices, our services. what we're doing with cloud computing, it is an amazing spot to be. both innovating and taking it to market and having a broad impact across an industry at large. you look at what happened in the last quarter in the sense of our
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cloud, google it when a hundred -- over 100%. we have over 50% of the production. that is the kind of new growth that we are seeing as the money we're spending is going towards a fundamental shift. >> everyone is waiting for the new chief executive to be named. what your chances of getting out role? >> steve ballmer is the ceo and i am actively engaged in running our enterprise engineering. >> do you want the lead executive role? >> i have said everything i'm going to say about that topic. it's an amazing spot to be. both innovating and taking to market and having an impact across society at large. that is what is exciting about being at microsoft. >> so you are in it for the long haul? >> absolutely. >> that is not all our reporters at bloomberg have uncovered.
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>> the board is also considering replacing bill gates as chairman. possibly with lead independent director john thompson. he was the former ceo of symantec. >> let's talk about thomson first. a longtime ibm exec joining symantec in 1999. he took the company from $600 million to 6 billion dollars in sales. the company makes software is -- software that tracks performance. he has asked some tough questions for top executives, including ballmer. this is according to people who know him. let's talk about bill gates. he has been spending most of his time focused on philanthropy. we asked him about his role in the company. this is an exclusive interview earlier this month. >> i'm on the board. the board is doing some important work right now. the foundation is the biggest
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part of my time. i put part-time work in to help as a board member. >> how involved are you in the search for the new chief executive? >> the board is working on that. there is nothing new to say. it is a good board. >> do you feel a sense of urgency at all? >> i think you always feel that way. then again, you want to pick the best person. they will move at the right pace. >> we have the fortune of having the mayor come back to this company. we are very happy to have him back. bill, has that ever hit your vision of the future? ever going back to microsoft
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full-time? >> my full-time work will be the foundation for the rest of my life. linda and i are enjoying that. i get to do it in depth. i'm not going to change that. i will help part-time. >> that is the word from bill gates. what do the management experts have to say? >> he has done a really and job of what he has done in health care. i have a a great admiration of his philanthropy. it is amazing. will he go and do that? he says he will. he says that his is a full-time job. or will he be in their two days a week looking at product? it's time for a total makeover. i have great respect for what bill did but i think it is time for a new generation to come in. satya nadella is in his mid-40's. let him run the show for the next 10 years and give him the support to do it. >> what about the big picture? >> they need a major transformation. balmer has been there too long. 14 years has been too much.
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the company has missed opportunity after opportunity in the i.t. space. it has relied very heavily on office and windows. in many ways, it is a classic innovator's dilemma. they are latched into the old world that is going away. they have not moved progressively to mobile. yes, facebook missed it, but they came back a year later very strong. it is going to take a major makeover -- five years, maybe 10. it is going to be a major change. the key is, does nadella have the support to make these major changes? to make the painful changes that will have to be done? maybe the investors won't like him. maybe they will have to take a short-term hit on the stock price.
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he is going to find himself one day with the space going away, starting to erode like ibm did. >> how far away are we from that day? >> that is hard to predict. you can see it in the numbers. you can see pc is declining. you can see the rapid rise of the ipad, which they missed out on. the tablets, as well as the cell phone. it seems like a day late, dollar short. i'm concerned that this is not a company that knows how to innovate. it is too political. like when allen took over, it is too political. it is all politics. satya nadella is going to have to deal with it and make some harsh decisions to get rid of some people who are getting in the way. they played a political game instead of focusing on where they needed to go with the clarity that larry page brought to google and steve jobs brought to apple and mark zuckerberg brought to facebook. >> microsoft has gotten a lot of flack for how long the search has taken.
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it had at least 100 candidates at the beginning from inside as well as outside the company. microsoft has also declined to comment on our reporting. we're talking about another company coming up next. time warner cable -- the ceo talks to bloomberg for the first time since charter's takeover bid. you can almost hear him stopping at the asking price. -- scoffing at the asking price. we will bring you that interview, plus the super bowl by the numbers. from the amount of chicken wings consumed to the quarterback's salaries. ?
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>> this is "lunch money" on bloomberg television. we are also streaming live on bloomberg.com, on your tablet, on your smartphone. in company, time warner grew earnings in spite of losing
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subscribers. the ceo says he is still not interested in charter's $37.4 billion bid. >> the bottom line is their proposal significantly undervalues our company. it is significantly lower than the value that we think we can create on our own. >> they are at 132.50. what can you live with? >> when we said we would do a transaction at $160 -- it does not stand on its own. currency matters. when we talked about $160 we talked about $100 in cash, $60 in charter stock. 20% up and 20% down. we have concerns about the way charter's stock will trade tween signing and closing. we believe it is appropriate to get protection around that. >> you are not budging from that at all? >> that is correct.
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>> you can't live with anything less than that? >> we think we can get tremendous value by running this company on our own. if they want to transact, $160 is the terms we laid out. >> he is crystal clear about that. liberty media has a 27% stake. they have a very vested interest in this deal. here's liberty's ceo. >> the operating performance of the company over the last year, losing more than 800,000 subscribers, does not merit confidence in our judgment in their growth plans. our job is to make the case to the time warner shareholders that the merger is worth more. >> your response? >> i find it ironic that charter has charter and liberty spending as much energy as they have bashing the value of our company and denigrating us as a management team. at the same time, coveting like nobody ever has before time
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warner cable an asset that they would like to acquire. let's focus on the go forward plan. we think we have a robust operating plan which we intend to fully execute on that will create more value for ourselves. >> bashing might seem a bit of a strong word. we hear from shareholders to say that they also believe a deal could be done. maybe not at $132.50, but maybe somewhere in between could be satisfactory. >> i think you should assume that we spend a lot of time talking to our shareholders. the views we are articulating is very much reflective of what we hear from our shareholders. >> his position, very clear. now let's turn the tables. would he consider a deal where time warner takes over charter? >> charter has been on and off
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the block for most of the last several years. we had an opportunity to look at it and it is not a company that has particularly interested us. >> companies and investors are headed for sun. why they are looking for the bahamas. super bowl ads. $4 million buys 30 seconds. is it really worth it? we will ask the ceos, coming up. ♪
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>> it is finally the friday before the big game. nfl players from 32 teams have invaded for all the events. the real story -- ticket prices
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and player salaries. here's a look at the numbers behind super bowl xlviii. >> are you ready for some football? 110 million people are. that is how many will tune in to watch the super bowl this sunday. almost as many people as the entire population of mexico. super bowl i was played in 1957. tickets cost just $12 and fans were outraged that they were so expensive. now the face value of premium seats going for as much as what -- $2600 a piece. you'll pay more and stub hub by the way which has a 30 person suite priced at over $800,000. on the field, not all quarterbacks are alike. peyton manning has the highest salary of any play caller in the league. seattle's second-year qb has one of the lowest salaries, making just over $500,000. 37-year-old manning was drafted when russell wilson was just nine years old.
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a record number of buffalo wings will be either during the game. laid end to end, that is enough wings to stretch between where the seahawks play and metlife stadium in new york 30 times. >> how do they manage their money? we asked them. >> save now and play later. i am only 23. i don't know how long i will be in the nfl. hopefully a long time but it does not last forever. you have to save as much as you can now. >> i stay home a lot. i don't go out too much. i don't spend a lot of money. i have a good financial team. overall, my mother will not let me go over budget. >> a lot of people don't invest, so you have to start small and look at the growth. when you see the growth, then you will start to understand the possibilities of investment. >> i believe saving is something that works every time.
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some people believe investing and buying restaurants and homes -- saving is something i've learned over time. you can't go wrong with doing that. i don't know anybody that saves that has lost money. >> good advice. we also heard from the panther's quarterback. >> you have to know what is going on. people who come in with a large sum of money on a given time often splurge without finding out what's going on. my team does a great job of alerting me on what i have lost and what i did not buy. how can i increase it, as well? >> cam newton is only a few years out of college. that first nfl paycheck is a big deal. we asked players how they spend it. >> my first nfl paycheck, i
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bought my mother a house. i made sure my mother was squared away. i put her in the right spot. >> paying for my sister to go to nursing school. quest once a got my contract, i said i would buy my mama house. that was the first big purchase. i had to make sure he was situated. >> mutual funds was the first thing i purchased. i did a reward program after i saved a certain amount. i save my first $25,000 and bought myself a $400 ipod. that was the very first ipod back in 2003. >> i bought my parents house. about 15 minutes from where i grew up. it got me through my whole life. not just an athlete, but being a student and a good young man. being able to take care of them was everything to me. >> that is really cool. dan marino stopped by bloomberg. we asked him about the super bowl matchup.
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the main matchup is that seattle's defense -- is very aggressive. they get in the receiver's face and get to the quarterback. peyton manning is the most prolific numbers that any quarterback has any put -- any quarterback is put up in the history of the game. can they slow peyton manning down you go -- down? the other thing is marshawn lynch. he has been great all season, getting 100 yard games. one after another. if he can do that it can take a , lot of pressure off the young quarterback, russell wilson. >> peyton manning -- everybody plays their own game. as a veteran, anything that you would like to communicate to him about how he deals with it ?
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>> anything i will tell him now he is already been through. he does not need my advice. he has been a friend for a lot of years. >> does he have a particular style of play that when you see someone like that play, you say i know exactly what kind of quarterback this is. >> yeah. he is very cerebral, calls his own plays, is very demanding. a guy that you can tell is in total control. he is not going to need advice from me. my advice would be to enjoy the moment, go out and take care of business. you know that that is all he is thinking about. he is not thinking about his he is just thinking about the ballgame. >> the super bowl effect. we will break down the ad libs ahead of the big game. that is later on. and chairman bernanke's last day on the job. we will hear in his own words his words of wisdom as he heads out on his next venture. ♪ >> this is "lunch money," on
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bloomberg television, streaming live on bloomberg.com and your tablet and smartphone. i am adam johnson. moving pictures -- the video is the story. lawyers for amanda knox and her codefendant, raffaele solleccito will try to appeal the guilty verdict. an italian court upheld a guilty verdict. knox and her boyfriend served time in prison before it was appealed. she has been living in the u.s. since the first ruling was overturned. this is her family, she is
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appealing yesterday's verdict, which is not final. preparations underway in beijing for the lunar new year celebration. the first official day of the new year, the year of the horse, is today. celebrations will run into the 14th of february. authorities are urging people not to use fireworks, there is an issue with smog and pollution in chinese cities that has officials and meteorologists concerned. pilgrims gathered on the banks of the river ganges for a festival in northern india that lasts for 45 days. in nation, ceos are heading to washington. they are meeting with the present as part of a white house initiative to help the long-term unemployed try to find work. 23 corporate and business leaders will help brainstorm ways to retrain people trying to get working again. one washington employee is
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leaving his job, ben bernanke. chairman of the federal reserve since 2006 will be handed over -- handing over the reins to janet yellen. he steered the nation through the greatest recession since the great depression. here he is in pictures over the years. ♪ last year, mr. bernanke spoke at --
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last year, mr. bernanke spoke at princeton's commencement ceremony. those words were aimed at and on jim's -- at an audience of undergraduates. we found them curiously relevant. >> i wrote to inquire about the status of my leave at this university. the letter i got back was "princeton receives many more , qualified applicants." i will make some suggestions. life is unpredictable, any 22-year-old who thinks they know where they will be in 10 years or 30 years is lacking in imagination. whatever life may have in store, each of you has a lifelong project, the development of yourself as a human being.
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from everyone to whom much has been given, much will be required. from the ones to much has been intrusted, more will be demanded. those most worthy of admiration are those who have made the best use of advantages or cope most courageously with adversities. cynicism is a poor substitute for critical thought and constructive action. economics is a sophisticated field of thought that is so -- superb at explaining to policymakers why the choices they made in the past were wrong. a career decision based only on money and not on love of the work or desire to make a difference is a recipe for unhappiness. nobody likes to fail, failure is an essential part of life and learning. if you're in a phone -- if your uniform is not dirty you have , not been in the game. physical beauty is evolution's way of assuring us that the other person does not have too many intestinal parasites.
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call your mom and dad once in a while. congratulations, graduates. >> according to ben bernanke's c.v., when he left to work for the government, he was writing a book called "age of delusion." will he finished the book? time will tell. island hopping to the bahamas, a new safe haven for money. we are breaking down this year's super bowl ads, later in media. >> oops, i did it again. ♪
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>> this is "lunch money" on bloomberg television. streaming live on your tablet and smartphone. i am adam johnson.
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today in world, we are taking a trip to the bahamas. blue waters, pink houses, warm sun. where anyone would want to go this time of year. a lot of businesses want to go there. >> capital finds a place where it is treated the best. the bahamas is kind to capital. >> that is because the bahamas had to reinvent itself after being sanctioned by the oecd in 2000. the island nation had made it too easy for people to dodge the taxman in their home countries. now the bahamas says get your taxes in order at home and then bring your money to be protected. >> clients do not look to diversify their holdings internationally primary -- primarily or solely for tax reasons. we are a tax neutral jurisdiction. they look to the the, as best they look to the bahamas for sovereignty and political stability, mitigating political risk. especially clients out of latin america. >> that was the minister of financial services, he ensures a stable financial framework and
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attract capital. global investors want to hold u.s. dollar assets, not necessarily in the u.s. why latin americans are putting their money in the bahamas, so are the chinese. they have their own project. >> bahamas is the largest single resort project going on in this part of the hemisphere. we're very proud of this investment, $3.5 billion. 2200 new rooms, four hotels. >> while the u.s. economy is bigger than it was before the crisis, the bahamas is still lagging. the people say the project is right for this timing. >> it could not have happened at a better time. the world economy is beginning to show growth. by the time we open in 320 days, the world will be ready to welcome us. >> chinese money is flowing into the bahamas, latin american money.
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is the u.s. next? i asked the prime minister. >> we look forward to having even stronger relations. relations where americans could just come in and do something for us that i think -- i am talking about us in the region, not just the bahamas. >> sounds like there is a fine line between cooperation and partnership and the fact that there are global investors who want to keep u.s. dollars outside the u.s.. the bahamas has to walk a fine line. >> we have to walk a fine line. we have to truly argue strenuously that whatever we are doing is backed by legislation. and backed up by practices that we call best practices. >> and those best practices are? >> ultimately the goal is to be
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able to have a country that is stable and a country that is run efficiently and to have people who come in and know that they are in a very stable environment . >> back to the investors. is the strategy working? >> we are putting money towards the bahamas for a few reasons. the regulatory environment, the industry is becoming more robust with regards to the service offering. that is more long-standing and a more robust business model. >> outside money is key. financial services are 15% of the bahamian economy, tourism is 60%. the point is no country is an island. super bowl xlviii is almost here. talking about the ad blitz. coming up next in media. plus, new ads and how they are affecting the super bowl rates. >> what do you think boys? time to go to bed? >> don't you think it's time we all get our own places?
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>> no. ♪
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>> in media, the ad blitz for the super bowl. 30 seconds, $4 million. the biggest day of the year for some advertisers. is it worth it? >> this will be the most watched super bowl ever. >> why? >> the nfl ratings have been up this year, the championship games were up 20% from last year. the playoffs were up 10%, regular season up 5%. fox had its best season in 20 years, they are broadcasting the game. two number one seeds playing each other for only the second time in 20 years. it will be a very competitive close game that will keep , viewers engaged throughout. it is in new york. i think there will be a there will be a large market, questions about the weather and playing outdoors. it will be a very festive, quasi-holiday.
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>> it is a male and female audience. i think the numbers show that more people actually watch the ads than the game. it is a family event, like a christmas party. the whole family is doing it. the advertisers do not have to specialize or say i am advertising perfume for the women or beer for the man. it is the whole thing. >> the complete mixture of different kinds of companies, everyone wants a piece of the audience. >> putting a lot of news ads online before hand. people are sharing them. >> 30 seconds, $4 million. >> if you are spending $4 million, you want to make sure you are hyping the fact that these are the best ads of the year, making sure people watch these. >> how does the industry decide whether the $4 million was worth it?
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>> first, we do see advertisers trying to milk as much out of it as they can. you saw a really fabulous ad from volkswagen several years ago. they were one of the first marketers who released their spot early in order to generate the buzz on social media and advertise that. >> genius move. >> genius move, we have seen a lot of marketers copy it. this is the first year that we are seeing teaser spots, ads for the ads. they are going all out. >> one of the companies that released a teaser ad, dannon. yes the yogurt company. , think 1990's. >> that was a good game. what do you say boys? time to go to bed? >> don't you think it is time we get our own places? >> no.
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>> "surveillance" team spoke with their vp of marketing. >> super bowl used to wait until the big day to unveil the ads. with the advent of social media and youtube a lot of the roi is , in the leadup. we released our ad on sunday and already have 2 million views. >> how much of your budget are you blowing? the average cost for 30 seconds to advertise on the super bowl is $4 million now. >> it is a big investment, we were the first yogurt maker to invest two years ago and we saw great results. we still think super bowl is a good investment. it is the largest advertising platform. and the second-biggest american food holiday behind thanksgiving. >> how do you measure the effectiveness? >> effectiveness? sales. at the end of the day, it is all about sales, that is the metric that matters most. >> sales is all that matters.
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does it make sense for every company to advertise in the super bowl? >> they work for certain types of advertisers with certain goals. we talk a lot about advertisers who need to generate awareness. broad awareness amongst the entire country. they are a great opportunity for that, you do not get anything else like that today on television. they work for some of these big advertisers who have owned the game and become synonymous, you mentioned budweiser, the clydesdales. one of the challenges is that you want the advertisements to be entertaining and you want people to love them. you need people to associate them with your product. how do you create an ad that is both? budweiser is a great example, you have the fabulous ad from last year with a horse trainer and the clydesdale, one of the best ads. one of the most effective ads, when you asked people about it after, what did they remember? did they remember the brand that
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the ad was marketing. that one really worked. >> they know they are going to have to drop the duo on the super bowl, if they are not there -- >> their competitor will be there. a few years ago, hyundai used that -- one of a longtime advertisers dropped out of the game and decided they were not going to be there. i think it was pepsi. suddenly, the most prime real estate in the game, the first spot -- >> it was up for grabs. >> right after kickoff. hyundai snuck in and launched a campaign, a marketing play that really fueled hyundai to really incredible sales. >> the ad agency behind brands like cheerios, running its first ever super bowl ad, here is the
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chief strategy officer. >> it is about super stories. tell a great story, great writing and a great insight. not necessarily about big production values. i think more and more you will see heartwarming stories, funny stories. that is what people tend to share and that is when something tends to go viral. >> today's mystery meat, can he correct the winner of the super bowl? >> it is the new york giants, according to teddy. well, according to teddy bear, it is going to be the baltimore ravens. ok, teddy. time to tell everyone, who is going to win super bowl xlviii? the seahawks or the broncos? [porcupine squeals] ♪
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is 56 minutes past the hour. that means a bloomberg television is "on the markets." i am mark crumpton. let's get you caught up on wall street's activity. a rough end to the week and a rough into the month. stock ended the day sharply lower after disappointing result troublezon.com and more
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from overseas markets. the dow industrial is down nearly 150 points. the s&p 500 was down .67% and the nasdaq was down nearly .5% at 4130. we are joined from st. louis. scott, always good to see you. the slowing kind -- chinese economy resulted in nearly two twin dollars being raised from equities worldwide. you are still telling your clients that this volatility is a good buying opportunity. why? >> i think it is. we have look for chinese growth to maybe stabilize over the next year or so. a half, i think that is what you will see as far as chinese gdp. i think there has been an exit is in the emerging market, the
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currencies as well as the stock market. both of those things have been going on for a couple of years. you are seeing in acceleration of asset managers that have been hanging around too long starting to bail out. overall we are going to see better things out of europe. you'll see a better gdp here in the states. that is why we are positive. violations are not stretch. -- valuations are not stretched. >> the msci emerging markets index dropped 6.7% this month. for people that are not regular market watchers, explain why this is causing so much turmoil around the globe. >> i think it is fear. he world has gone from a very low-interest-rate type of scenario to where some of the central breaks -- banks like the u.s. are starting to tighten up a little bit.
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what currencies devalue we see a ton of currencies flow into emerging markets and now they're coming out. when currencies devalue you get into a situation where they see inflation. they have to use more of their currency to buy things that are based in dollars, like food or fuel. a higher inflation over there, slower economies over there. we do rely on the rest of the world. 50% of the revenues of the s&p come from overseas. we are tied into what the world does and that is why people fear what is going on over there. it is reflected in our stockmarket. >> there has not been a stockmarket correction, a drop of 10% or more, in over two years. are we do? -- due? >> i think we could see the s&p 500 trade down near 700 -- 1700. that would put it just shy of 10%. we have been looking at a 8%.ting percent -- 5% or
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we want our clients buying on the way down. they are not able to pick the bottom. we want them to leg and. scott, good to talk to you. thank you for your time. for on the markets, i am mark crumpton. ♪ .
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