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tv   Bloomberg Bottom Line  Bloomberg  October 8, 2014 2:00pm-3:01pm EDT

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etc. from bloomberg world headquarters in new york, i'm mark crumpton and this is "online." the business under section -- the intersection of business and economics. releasingl reserve is the minutes of its open market committee meeting. our chief washington correspondent, peter cook, has the details. >> this was the meeting back in september where the fed decided to maintain its forward items, that rates would likely remain low for a considerable time, but
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they also released a new economic forecast showing some fed policymakers were starting to think that rates would be moving higher and faster and at tengion is reflected in the minutes from's number when they discussed their forward guidance. several participants. the forward guidance suggested a longer time before liftoff and perhaps a more gradual increase in the federal funds rate than they believed was likely to be appropriate. there was a concern that considerable language could be monetaryit was clear policy with conditions on the ongoing assessment of the economy. another argument was made that table that they -- some participants saw the current or word guidance as appropriate in light of risk management which suggested it would be prudent to air on the side of haitians progress toward those goals.
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say there'so another ss them -- another assessment and what should happen to the forward guidance going forward. there is disagreement on how it should change other than it should be clarified again. one participant said they were using a new miracle threshold as a form of forward guidance. a few noted that difficulties associated with for guidance as far as numerical thresholds for some set of economic area both -- there is again discussion about what might he the best route forward and it was generally agreed when changes to the forward guidance become appropriate, they will likely present communication challenges and caution will be needed to avoid sending unintended signals about the committee's policy outlook. they are in agreement it will be difficult to communicate going forward to the public will stop a couple of notes from the minutes -- they discussed potential of threats to the economy, the rising dollar and weaker economic growth in other
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parts of the world. exitdid talk about their strategy and the possibility of making changes to the overnight facility they plan to set up and some of the tweaks there, changing some of the numbers tore -- changing $10 billion $30 billion. subject to change as they test that program going forward will peter, thank you. the equity markets are moving after the release of the latest 'smitted will stop bloomberg on the markets reporter joins us with the latest. >> all three major benchmarks extending those games, in particular the dow jones industrial average rising, up stop take a look right -- gold rising after the news, after they
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mentioned in those comments you are going to see the dollar being a risk to the overall global economy and that puts more easily the oldest trading. gold is rising in the current session. >> we will have more reaction to in september fed minutes about 10 minutes. let us get to details on the other top stories we are following. a dallas hospital says the first ebola patient diagnosed in the u.s. has died. thomas eric duncan died this morning. he arrived in dallas on september 20 from liberia and fell ill a few days later. he was sent home after an initial visit to the hospital but taken back to the hospital and was kept in isolation. the first american flown back to the u.s. for treatment of ebola the summer has donated one to the most recent one to return from west africa with the disease. the nebraska medical center says
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kent brantley's what type matches that of a freelance video journalist to arrive at the medical center two days ago. the hospital said he was able to give blood locally that was flown to omaha. the homeland security department is ordering agents at five airports and other ports of entry to observe everyone coming into the united aids for potential signs of ebola infection. customs and border protection agents are handing out fact sheets to travelers out what symptoms they should look for and directions to call a doctor if they become sick within 21 days. bloomberg news has learned federal prosecutors are pressing to bring charges against the bank for currency rate rigging by the end of the year. people familiar with the probe say actions will probably follow in 2015. the justice department may seek guilty pleas from several firms, including one in the united states will stop international
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monetary fund officials say some large banks are not possible enough to increase lending. that could hinder the flow of credit needed to lift economic growth, particularly in europe >> we see the risks are building up and we are far away from having another financial crisis or anything like that, but it is important to call attention to these risks which are building up so that action can be taken and then achieve a situation which is good for growth but which gives financial stability. >> the imf says large financial institutions have become healthier after being required to clean their balance sheets and hold more capital. officials say they also carry the burden of nonperforming loans and litigation costs while facing increasing competition. that's a look at the top stories
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we are following at this hour. the united states supreme court is hearing arguments today on whether workers should be paid for time spent going through security lines. a former amazon employee says workers should be compensated for time they spend after their shifts going through security screenings before they exit the warehouse. the screenings are a theft prevention measure. spencer sofer recently as it and amazon warehouse and joins us from san francisco. on howget any indication the justices might be leaning in this case? >> we got an indication they would be divided. probably the harder questions were aimed at the workers lawyer. a stunningto predict argument, you would say the workers would lose their case and not be able to go forward. but there was enough uncertainty
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that it is hard to say for sure. tough mentioned some questions. any justices that were more aggressive in that respect? >> the most aggressive justices are the ones we tend to think of as more conservative -- justice scalia, chief justice roberts -- all there he skeptical of the claims in this case. justice kennedy was a little more in the middle and probably asked tougher questions of the lawyer representing integrity, which is the staffing company that staff these amazon warehouses. >> the supreme court is a branch of the federal government and officials are obviously concerned about security. how's this different from a courthouse ora airport? >> that's a great point will stop the workers acknowledge they had to get the court to distinguish between a security check for the general safety of a community, preventing people carrying weapons or bombs
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versus screening that is ugly for the companies in a fit to her -- to prevent theft and help the bottom line of that company. >> speaking of the workforce, i guess in this case, the worker is claiming what amazon is doing is a are taking away their time. there are off the clock time. >> exactly. workers will clock out and pass through the check and the point of this particular worker and similar complaints of many workers in warehouses throughout the country is that if it's that important that you need to keep me, you should pay me for that time. >> is there a precedent for this type of case? >> this is the first time is considered post shift security screenings designed to ferret out that. there was a case about a decade ago that shed some light on how the court would go. you are putting on protective gear for your shift and taking it off after your shift, you get compensated
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for that time and you get compensated going from the place you put on the gear to the workstation. but you don't get compensated for the time you spend waiting in line to put on your protective gear. this is an area of the law where the court has tried to slice of bologna fairly thin. >> as i mentioned a moment ago, you visited some amazon warehouses recently and spoke with some workers. what did they tell you? >> the workers i spoke to says the lines have not been a problem recently and amazon hasn't spoken to us in detail whenpeculation is perhaps the workers prevail at the appellate court level, that that sends a good message to the company to speed things along. but if you go back a year or so longer, the security lines were quite long. in this case, though lead plaintiff worked there in 2009
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and 2010, so we are talking back in history little bit of stop x how could this redefine our dynamic between workers and employers? >> i think the biggest point is the one spencer made. that we were kept here for a long time and that -- and not allowed to leave all stopped if this were the case about a three minute wait, i would not have a complaint. but here you are keeping me here in definitely without paying me. if the court would agree with them, it would give the employer more leverage to require certain things of an employee without paying them. , some of theask workers you spoke to, is this a question of trust? do they feel the company does not trust him? >> that's a big factor and it's also the straw that broke the camels back. there complaints are not specifically about the line. they have a various list of
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grievances that bothered them, but this is one case where they said there's a case year, i'm going to push back on this company little bit. gentlemen, inc. you. coming up, more on the fed minutes. we will take a closer look at the tone of the report and see if it sheds any light on the fed's interest-rate strategy. dianeswonkfrom -- joins me in just a moment.
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is today's fed minutes reveal concerns about the potential risk of a global economic slowdown and stronger dollar. fromng me is diane swonk mesirow financial. good to see you again. let's take a look at the fed postulates. what did you see? >> i think most important is the debate not only on the labor market issues but the language of forward guidance. the extended time language and whether the fed would take that out. i think we will see with the december meeting when the fed has a press conference, i'd like to walk through that when they and the tapering. i'd like to have it be a nonissue for the market and have it be very little. in december, they have a chance to explain themselves and i think they are going to have to certain grapple with this issue that was wrought up in the minutes and that is what do they do about potentially inflation
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in people's expectation about it falling below the 2% threshold? do they start being more explicit about that threshold? we know that 2% is their target and they talked about symmetry and inflation. they talk about overshooting -- but will they be willing to put on paper they would allow the 2.20 5%? rate to go to that's the move we have to watch for. >> you talked about that language in the minutes and the concern was raised about a reference to considerable time that could be misunderstood as a commitment rather than data dependent of stop is that what you see? >> it is something the fed needs to communicate. they have clearly been challenged by communicating. part of that is because of the distance in the fed itself will stop they do not often agree,
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but i think that right now it gives more of a commitment because they are data dependent. i think the fed will move later rather than earlier. i'm in the third quarter on a rate hike. it's important the fed start to think about how does it feel with this inflation issue as it begins to raise rates. the pace at which it raises rates will be highly contingent -- they've been out of target for a very long time now. concerns abouted the global economic slowdown, particularly what is going on in europe. let's backtrack and take a sense of what the fed will mean for the u.s. going forward. have we gotten past the headwinds year and could the headwinds in europe have a negative impact on markets in the united states? >> there's no question they already have all stopped we have seen the volatility picked up quite a bit and one of the things coming to fruition, and
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dudley was one of the first ones out on this saying that the dollar matters will stop such that the time the fed is thinking about raising rates, we could the slowing growth. we cannot play the atlas that we did without the back brace of consumer credit to be the consumer of last resort. this is amp orton issue for the federal reserve. they were looking at these issues as risk and now that they have become more of a reality since those minutes were written -- if they had that meeting today, you would hear them talking more about look at the gap on credibility. up what you say and be credible about your communication, otherwise it falls apart. mario draghi not being able to act on his word has shaken things and that's with the fed has to look at as well. >> let's talk about what else that has to look at -- these minutes were from last month and
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came out before we got the september jobs report and saw the unemployment rate has fallen below 6%. for fedht that mean guidance going forward? >> i think you will see it move from the unemployment rate. emphasizing,re like dallas girl reserve president to fisher has emphasized the unemployment rate was the .1%. that did not seem true in september. i think you will see further movement away from that and i think the focus on inflation will be substituted for unemployment and wage gains come a more importantly. not only do they want to see wages accelerate, but they are willing to do that and i think you'll start to see that going forward. the proof is in the pudding. >> one of our top economists who used to work at the new york fed sent out a memo today and talked about topics we should be looking at when the minutes came
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out. one of them was the relationship plot and the market prices. is this something that went up into enough detail? >> they did not get into a lot of detail but it was brought up of stop the gap tween the market expecting much less than the fed is expecting in their consensus, it is hard to tell which people were making those points and some people were trying to push up the dots and accelerate rake s.ights -- rate hike it did different group voting today, but i think this has become an issue -- are those charts really getting through what the federal reserve wants to communicate? are they communicating their central tendency and forecast effectively? the effectiveness of monetary dependentcompletely
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on communication and sometimes there's more confusion than clarity. >> did you ever think of a time in your career where you would be talking about the fed and taught charts? >> no, and i never thought about the fed chair having bubbles on her jacket would become an issue as well opt and other things have become nevers that i never expected, so i'm glad i did not forecast that because it is really kind of crazy. always a pleasure. thank you. we will get the latest from the equity markets right after a quick break. "online" continues in a moment. line" continues in a moment. ♪
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>> welcome back.
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we are approaching 26 minutes past the hour, that means bloomberg is on the markets. >> take a look at those boards will stop after janet yellen's remarks, stocks took off. those markets extending those trades and the s&p 500 up about 1.2% of stop and then nasdaq one point 25%. many speculating interest rates will remain low for a lot longer. taking a look at some of the other movers in the session, we are watching sears -- one of the stocks tanking currently, off about 8%. at one point, it was off by about 8%. this is as insurance companies are mentioning they may reduce coverage. the company issued a statement in response to this, saying they are in a good financial position and have been and shall flexibility and they are meeting all their obligations. another stock i'm watching is monsanto -- a world's largest seed company.
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they issued a statement that trailed analysts asked -- analyst estimates. they say they're leaving farmers with less money to spend and worsen their ability to raise seed prices. we are on the markets again in 30 minutes. ♪
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>> welcome back to the second half-hour of bloomberg "bottom line. jcpenney shares are falling the most in months. the retail company cut its sales forecast for the third quarter. this comes on jcpenney analyst day. julie hyman was there. she's back with the details. >> i am back with the details as the company cut the forecast will it's not being terribly specific but it had forecast an increase in comparable sales and is now looking at again in the
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mid-single digits now but still sticking for the -- sticking with the forecast for the holiday season. jcpenney should be relatively strong. over the longer term, they have growthential for sales over three years, including a billion dollars for market share gain. shoes, $750 million from home and $800 million from what they call on the channel. opportunity to talk to the senior vice president of its omni-channel, and he talked about why it is important in particular to have this mid tier customer jcpenney is catering to. >> we look into some of the socioeconomic barriers -- socioeconomic areas of stop they
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may not have a desktop but they have a mobile phone and that has everything you need on it. they can research, they can buy, they can save it for later. jcpenney, like sony retailers is emphasizing that area. according to bloomberg news reporting, sears seems to be having issues with it suppliers. the ceo of jcpenney today loss could besears' jcpenney's gain. >> julie hyman, thank you so much. other news on this wednesday, the world health organization says the ebola virus has killed more than 3400 people in west africa. tells theficial associated press that given the size of the outbreak, we can expect to see more cases in different countries, including in europe. karen bassdemocrat
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is the ranking member of the house subcommittee on africa's global health, global human rights and international organizations. she joins me from los angeles. line." >> "bottom thank you for having me on. constituentsyour than asking you about the ebola virus? and as a former physician's assistants -- assistant, how are you assuring them everything they can be done is being done to keep americans safe? >> i'm very comfortable giving those reassurances. , i work in the nation's largest emergency room here in l a county and i have seen this before. it's very frightening but i'm far more concerned about enterovirus. is hit 5 million people, many children and 43 states. the odds of ebola really
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becoming a problem in the united states are next to none and that's because we have a very good, strong health infrastructure in the united data and african countries that have been impacted you not. >> let's talk about the enterovirus for just a moment will stop a lot of parents expressing concern because it is one of those things where, as i mentioned to our health care healthent -- correspondent, i told the kids to wash their hands of basic hygiene is very critical. >> absolutely. that is why it is so important for parents to recognize the symptoms and then there is a category of kids who are far more at risk will stop those are kids with respiratory problems like asthma. parents of children with problems like that need to be extra vigilant. at the sign of any problem, make sure the kids are well cared for, but to keep them at home and do not send them to school. >> go back to ebola.
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the department of homeland security announced agents at airports and other ports of entry have a gun observing travelers coming into the united states will stop if a passenger does not display obvious initial signs of the disease, how can the screening be effective? person is not displaying signs, they are not contagious. they are only contagious when they are symptomatic, so it is appropriate to have professionals at the airport looking for people who might be symptom at it all stop >> my colleague has a story on that says the hospital bill for mr. duncan, the patient who died in dallas was about $1000 an hour. i ask this question respectfully, given the gravity of his passing and the toll it has taken on his family. can the u.s. health-care system handle the enormous cost of treating ebola, especially for patients who do not have health insurance? >> i think the united states
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absolutely can because there are going to be so few cases that come to the united states, if we were worried about a massive out rate, we would need to be concerned, but i do not think that is a concern. you are talking about three or four cases. mentioned a few moments ago that you are the ranking member on the subcommittee on africa. how would you describe america's response to ebola and what more needs to be done to prevent a humanitarian and economic catastrophe not just in west africa, but haps the entire continent? the don't think it will be entire continent. we're talking 54 countries. we can take the united states and fitted onto africa three times. i'm very proud of the united response. i think we have been leading the world but we are not the only country that has been involved.
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the president has ordered troops over and i think that is google. one thing that's important is those troops are not there in a military capacity, they are there to build hospitals. very few will come into direct contact with people who have ebola. when the president went to the united nations called on the world to really step up all stop i absolutely think more needs to be done but i think i am proud of what the united states has done so far. the ambassador to liberia said liberia is in desperate need for someone to take charge and fight against virus stop is it the responsibility of the united states to take charge question mark >> i don't necessarily think it is the responsibility of the united states? i have not heard the president of liberia make that request, but it is hard to conceive of nations that have very little
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infrastructure. that's the problem in west africa, and it is my hope these economies that had been moving forward, that this won't be such a blow that we move into negative growth. >> karen bass represents teleported' seventh congressional district will stop ranking member of the house committee on africa joining us from washington. thank you for your time. -- joining us from los angeles they wille nfl says have a new policy in place on the mystic abuse by the super bowl. that story is next. ♪
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>> it is time for today's latin america report. brazil's inflation last month accelerated faster than forecast, pushing annual inflation to the fastest in three years. the report comes less than three weeks before presidential elections.
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the challenger says the president has mismanaged the country and is promising to bring everything into place in two years. that is your latin america report for this wednesday. breaking news from carl icahn -- he sent out a tweet saying he will send an open letter to cook , apple ceo tim cook. apple shares are rising. trish regan is trying to get carl icahn on the phone. as wel get to her as soon can. stay with us. "bottom line" continues in just a moment. ♪
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>> the sure to catch bloomberg coverage of the vanity fair summit today and tomorrow. emily chang and stephanie ruhle will be live on site at vanity fair with a great lineup of guests, including shane smith, ceo and cofounder of vice media,
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and the former ceo of viacom. 3:30 newrview is that york time right here on bloomberg television. american banker has released its 2014 edition of the most powerful women in banking. that is the october issue. the president and ceo of citizens bank in admin is among the 25 women to watch. she joins me in the studio. thank you for your time. we should mention, edmond, oklahoma. the bank said its own course since you have been in charge. you have embraced new technology. however customers reacted to that new technology and has it helped you compete against the bigger financial institutions? >> our customers are fortunate to be in a community that's very technologically savvy. they have a great demand for us to be innovative and love to connect with a community bank that's going to push the limits. we have to maintain our
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regulatory bubble and maintain our soundness and not be too creative with some of our projects. but we can be creative and we have implemented technology and collaborated with local tech firms to provide something that was not available in the market lace for banks that was affordable for us. >> you use the term regulatory bubble. does the new technology help you escape from that? >> it is a communication method. if you are able to provide accessibility to the bank and not necessarily get into the actual product and services, you are able to escape the regulatory scrutiny. it's basically providing another method for customers to talk to the bank and does not get into interest rates and other things that can get you into trouble. saying ire quoted as believe in taking measured risks when it comes to things that can promote your rant and are true to who you are. how have you been able to
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promote the citizens bank rant and have there been setbacks along the way? authentic ande genuine and provide a level of accessibility for our customers will stop we utilize facebook and twitter especially to create conversations our customers and community -- we started cash mobs where we provide money to our staff to go to a particular business on a particular day. >> they put it right back into small business. >> you develop these advocates for community banking and our personal rant and are looking at communities and creating a sense of we are all in this together will stop >> you mentioned social media because you are a big component of that. there is the instant feedback you get from your customers and clients because you are on social media. how does it help the bank become
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you wonnsparent and how over the trust of some people who were skeptical about banks, whether a big bank or community bank. you're able to put your own person out there and whenever they are able to tweet at the bank president and i'm responding, that creates an additional level of trust. >> you respond personally. >> yes. i have a team that helps with the bank account. >> why is that important to respond personally as opposed to delegate that to someone else? >> it's a market differentiator for me. is on the first floor of the bank and anyone can walk in and see me anytime. i give my personal cell phone number out on social media and egg goes along those same lines. people are very spectral of my time, so i don't get inundated with late-night home calls or messages.
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i can help someone if they're having trouble with their internet banking. it is the bank resident putting themselves in the picture to create a solution. >> we talk about american banker addition, most recent there was the question does gender matter in banking and here was part of your response -- we need to be well-liked and seen as a warm industry. women bring that to banking. how does that impact your bottom line and give you an insight your male colleagues don't have or understand? >> i am married to the warmest person on earth, so it's not just one thing exclusive to our gender. level ofnk that connectivity makes people more loyal to my in the tuition and allows me to offer services -- maybe i don't have to compete as much on price which ultimately impacts my bottom line because i have that relationship will stop
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they want to bank with jill. we have 50 banks in my community and mine is located downtown in a historic area without a lot of parking. someone who wants to bank with citibank drive past and come into our institution. he has to want to bank with me and that impacts the bottom line. i'm not doing it by a teaser interest rate, i'm doing it because of that interest rate. my nextgoes right into question. used to work at the federal reserve bank of kansas city. the consensus seems to be the fed is going to raise rates at least i the middle of 2015. given that unemployment is below 6% and inflation is still below the fed's 2% threshold, should policy makers raise rates sooner rather than later? >> i have great respect for the federal reserve bank. i got to be around the greatest economist in the world and got to watch them analyze interest
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ites and from my perspective, think we should be looking at increasing interest rates. i'm in an area of the country performing exceptionally well. we have the energy sector that really boosts our economy. in my perspective in my region and oklahoma, an increase in interest rates would be beneficial. >> the president and ceo of citizens bank in admin, and honoree of the 25 women to watch from american banker. >> enqueue so much. >> tonight, another edition of our umber politics forecast -- two nights guest is martha redish, chief foreign correspondent for abc news. the new bloomberg politics site with more content, new articles and videos every day at "taking stock" with pimm fox is now at 5:30 new york time. another check on the market
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movers is on the other side of this break. ♪
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>> get the latest headlines at the top of the hour on bloomberg radio, streaming on your tablet, and on that is it for this edition of "online." i'm mark crumpton, reporting from new york. "on the markets" is next. is 56 past the hour, which means bloomberg television is on the market. let's get you caught up on where stocks are currently traded eight. thank you, chair yellen, that is what people are saying today --
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after the fed minutes which indicate the fed is in no hurry to raise interest rates, the s&p, nasdaq and dow jones all up over 1%. it has been a wild ride or metals and mining industry -- gold down 20% this year. more than 4% in october alone. joining me for today's sector report is the senior metals and mining analyst or bloomberg providing research on the industry. what is behind this rob smart >> the problem is the dollar. the dollar has had an incredible ride since august and the problem with why is the dollar is rising, the reason is the rest of the world is having all sorts of problem's. year's steel demand this will probably down from last year. forget about 7% growth, they're having all sorts of problem. europe is having problems and why the u.s. dollar is the
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tallest midget year, if i am a metal producer and i look at the world, things suddenly looked really bleak for these guys and that's why they are having all sorts of problems this year. ore gave themron a chance to go after rio. with the deal on hold, if they could turn to other targets, what does the deal activity mean for the rest of the mining sector is to mark >> because you have seen metal market so week for the last two or three years, all the mining companies gearing themselves for this endless chinese boomer are trying to restructure. to spin off bhp try its assets and a lot of different companies trying to sell off their assets. glencore is trying to take advantage and look at other assets, but now they have sort of said maybe we should do something here. i think every major minor is trying to figure out how they will deal with the china
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slowdown and how will they be ready for the next up turn in the market. >> if you are a bull in the mining sector, what can you pray for at this woman is smart >> is cyclical for a reason. we have a downside, the companies starve the industries alwaysh will stop minds deplete, so you see a huge decline in capital expenditures, which means in a year or two, you will see very little metals come onto the market. that's generally the way this industry has always worked all stop then you see the next upswing and that's with the bulls are looking for -- for the industry to starve itself of cash and hopefully the rest of the world can take advantage. >> starvation diets work with celebrities. we will see if it pays off in this sector. "street smart was quote is up next. ♪
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>> welcome to the most important hour. this is "street smart." the first person diagnosed with ebola in the united states has died of the virus. thomas eric duncan had been in isolation in a dallas hospital. airports began at jfk this weekend. they expand next week to ,ashington, chicago, atlanta hartsfield. in washington, according to minutes from the federal reserve


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