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tv   Trending Business  Bloomberg  August 27, 2015 10:00pm-11:01pm EDT

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foreign and u.s. treasuries. facebook says that one in seven of the world's population used of that site on monday. that is a billion people during the day. you can follow me on twitter. the trading day is just joining in jakarta. we will be indonesia later. cracks up 1.5% on the jakarta -- >> up 1.5% on the jakarta index. gain coming through from lenovo shares.
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it's the most since july 9 and the yuan is also heading for its biggest gain since april. by 1.7 of 1% in japan. focus and theyn have confirmed that they are in talks about a potential tie up in southeast asia. they have climbed to the most in 10 weeks. in japan, they have climbed about 2.3%. big gains coming from the energy players in japan. unemployment is at 3.3%. great gains coming and particularly from those energy players. that is all about that oil story. and doing wellg
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again today. there have been a litany of accusations against a lamb -- olam. grexit mitsubishi is investing a billion dollars to take stake in olam. it has been around for 25 years. is a major player in the global food business. let's take a look at what's happening to the shares. they are up on the order of 10% today. a very significant move. the singapore market is one of the leading stock movers today. the company is saying the investment singles mitsubishi's
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interest of the food demand in asia. coreis olam's business. it always has been. asia'sg food to feed growing population needs is the key element here. olam has been looking to diversify its supply base from all over the world, seeking new sources of commodities to process and markets in which to sell them. since we have asian trading houses spending billions of dollars in the agriculture space. they are betting that the fast-growing population in the region will need diversified access to food. company we spoke to the 's ceo. he told us about the strategic relevance of this deal and he said it reaffirms olam's continued diligence in the face of these investor accusations. olam is a major company but not
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a household name. $3.3 billion firm and supplies to all kinds of companies all over the world like pepsico. rishaad: we'll have more on that story later on in the program. do give us your views on it. tweet us your thoughts. accelerated and the pboc devalued currency, it was expected that china would have to dip into the treasury. it has. david is watching this one for us. david: bloomberg learned yesterday that china has been the treasury.
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it is not surprising. there has been a lot of speculation. as a replenishing process. that is a chart of china's holdings of u.s. treasuries over the past five years. we don't how much china has reduced holdings by. the latest data that we can gather from the u.s. treasury was as of june for the recent chaos. that being said, the holdings of treasuries have been drawn down anyway which signaled what many know already anyway, that china has been dealing with capital outflows. why are we talking about this? china is still the biggest holder of u.s. debt which is white it is gaining so much potential. they are trying to did start -- dead start at a faster pace. that would snowball and interest rates would rise rapidly. it would derail the game plan of the u.s. federal reserve. it can happen but it happened.
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we have to emphasize that -- it hasn't. we have to emphasize that. points right basis now. you could also argue that we should be much lower if china was not in the market selling. right now, worst-case scenario that many people have warned us of has not happened. we also don't know how much china has been disposing. the nearest educated guess is by looking at how much it needs. how much will the pboc need to intervene in the currency market to defend the currency? we know they have been dumping u.s. dollars to stabilize the situation. the median estimate suggests that they will need to go through 40 billion every month of the reserves for them -- for the remainder of the year. month, china releases
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similar data. another similar story is the follow from this week's market movements which have problems in shanghai that spread around the world. will the next global recession be one made in china? this is a very good read on bloomberg.com. china's slowdown is becoming evident in the results posted by the country's to banking giants. an increase to 25 and a half billion dollars. the jumping bad debt was more than double the same. last year -- the same period last year. to abandon itsve target of keeping its non-loan ratio at 1.45% this year. the level at the end of june of
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1.4%, agricultural bank of china also saw a 28% jump in bad loans. they both reported zero profit growth in part due to a doubling of physicians -- provisions. the slump that prompted the central bank to cut interest rates may make it harder for china banks to revive earnings growth. increasing speculation that the fed will hold off hiking rates until december. saysed el-erian policymakers are watching the big picture and will delay the anticipated rise on concerns about china. there are worldwide concerns over weaker chinese growth. on wednesday, new york fed president william dudley talked about the possibility that
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market developments might make a december rate increase less likely. odds of an increase in september have fallen to 30% from 40% at the end of last month. the fed now says wouldn't want to add to the uncertainty. if you are on facebook, you are one in a billion. data shows that last month, one person in every seven on the planet logged on. the figure is different from the numbers facebook discloses when it distributes data every month. facebook had 968 million active daily users in june. overall, they have nearly 1.5 billion users who login at least once a month. mark zuckerberg commented on his facebook page, saying that this is just the beginning of connecting the whole world. he said that a more open and connected world is a better world and it brings stronger relationships, a stronger
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economy, and a stronger society. rishaad: coming up later, we will be headed to mom by -- mumbai with new priorities for india's national bank. we will be discussing the global turmoil sparked by the evaluation of the yuan and what is next for policymakers in beijing. i will ask if china is headed for a hard landing. ♪
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rishaad: we are looking at what's been going on with chinese shares which has -- which have been up for the second day in a row. says the bailout is only delaying the inevitable. independent economist.
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misguided? -- an cannot change in economy by manipulating financial markets. they need to reflect fundamentals. if you do not change the fundamentals, the market will stay levitated for a. period of time. rishaad: you could argue it was misguided to begin with. a rising market needed a bailout of the economy. now, it's the other way around. they're wasting time and money and hurting a lot of people. rishaad: the stock market has to find its own level now as all markets should do. will they be buying up some of these stocks? the economy is joined to prop up the market. they are not giving up. fundamentals are like gravity. you can talk about who is doing what every day and the market
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can go up for some time that eventually, unfortunately, it doesn't last. aboutd: you are talking fundamentals of corporate or the economy overall? reflects overcapacity and overinvestment. as well as misallocation of credit. is the problem misallocation of resources, not the competitiveness like europe or japan. it is really about the government mismanaging the economy. rishaad: i would argue that they are not mismanaging it. that this is going to happen. you have this painful transition -- >> yeah. rishaad: and you're already seeing it now that the manufacturing side of the economy is smaller. because the labor force is drinking.
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even though the economy is weak, the real wage level is still supported. a lot of the high-value added in the service sector is tied up in cycles. i don't see anything going on there. rishaad: what do you see? you have been writing about this for a while. landing is therd concept of bankruptcy. is very, bankruptcy difficult to happen. the banks often sit down with local governments. that's why we see ppi always negative. if somebody is not making money, it keeps going. landing is a good thing but a soft landing is a bad thing. a hard landing would force them to change. hard landing means that you are changing. in the short-term, you are not
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seeing that. when you see a lot of bankruptcies, you will know china is changing. we often talk about electricity being the real gauge of growth. companies are showing their earnings reports across all of these spectrums of the economy. i think the stock market, when you see the companies reporting their earnings, the ppi is negative. you cannot cheat on prices. you can see the prices every day. the prices are going down. the economy cannot be doing well. rishaad: housing. people point to the housing a solid commodity right now. housing seems to have stabilized. has it? developers are
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technically bankrupt. because theling banks are foreclosing on them. from beijing is and shanghai where prices are holding up. cut theause they have price by 70% to 80%. if you have to cut prices by that much, i'm not sure that's a good situation. rishaad: i know you are an economist, but you are saying the right price of the shanghai composite is to and a half thousand or thereabouts. economy, have a good the ratio could be higher. chinex index is down half. the pe is 60 times. companies are overstating their earnings.
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if you are overstating at 30 times, you have to be very high quality. it is really a long way to fall if you look down. rishaad: thank you so much for coming in this morning. >> china has detained 23 people over the explosion at tianjin. they are all being investigated for negligence and abuse of power. the port is a gateway to northern china. the chemical company whose warehouse blew up had help to pass safety checks, giving it a license to handle dangerous materials. india has sent the army into violent clashes where nine people are dead. phone communications were cut in the main cities.
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the general strike is being called in support of demands for a special status to improve things like guaranty places in schools and the government. trying to figure out what caused a section of pavement to collapse in china. four people were injured. all of this is captured on the security camera of a nearby noodle house. one woman managed to cling to an exposed type -- pipe. passersby to the four other people to safety. rishaad: next, we will be finding out how people are responding online. ♪
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rishaad: let's have a look what's going on around the world. we are taking a look at clashes happening in india and malaysia. with malaysia. we are expecting things to heat up over the weekend. there are expected to be rallies in three different cities. that would be because they are demanding the prime minister resign over allegations of corruption that he received
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billions in 2013. not to mention that he got rid of his critics by doing this reshuffle in cabinet. people are pretty upset about this. we are expecting them to rally over the weekend, but the malaysian communications agency is now saying they are going to block any information regarding those demonstrations. they posted on their facebook page saying that they decided to block the website which promotes information and encourage people to participate. they're warning the public to be more cautious about sharing andrmation on the websites on social media. you can just imagine the reaction from the public about these corruption allegations as well. they are saying what's happening a "gamesia is close to of thrones" situation if you will. what we are seeing on the
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streets of india right now, violent unrest. it pits the separate casts against each other. --castes the army has been brought in. the government is also blocking mobile messaging. , thoselike whatsapp services have been blocked. facebook messaging and similar services that we and people in india and all around the world use every day. here is what people are saying there. ,anning internet services social media and whatsapp is one of the best decisions taken by the government. that person is supporting the local government's decision. messages andatsapp hardly any facebook feed. it feels different. no mobile internet services.
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we forget what it is like to for -- to live each day without our dependence on mobile internet. this person writing that this is an opportunity for the media -- that this -- this person is criticizing the media. it's a complicated situation. the army is now coming in to try to quell the violence. shery: it has been going on for a couple of days. i think it started on tuesday so we will see how that situation develops. that is a look at the growing dissatisfaction not only in india but also in malaysia. we are following the situations on social media as well. if you use twitter, it is easy to stay in touch with us here on "trending business." rishaad: thanks for that. let's get to the action as we head towards the lunchtime break in tokyo.
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we do have this global rally at the moment being sustained for the third day. in the case of shanghai, it is the second day of advancing stocks over there. commodities are helping to drive things, too. oil is happiness biggest gain -- having its biggest gain in months. emerging-market currencies are getting a bit of support as well. the u.s. growth number is helping things along very nicely in new york. we have to take a break now, but up next, a japanese company is looking for -- is looking forward to its debut but it's in for a nasty surprise. ♪
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sustaining gains for the third day in a row. is said to be selling off treasury. it is heading towards its biggest daily advance since march. prices areergy
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trying to boost the third-biggest economy in the country. singapore listed there'd -- their trader olam lam surgingrader o after mitsubishi announced they will be buying 20% of the company. let's have a look at one stock which is having a torrid time. images coming through at the moment. metaps, we were talking to the ceo and managing director a little while ago. the share price is down 20% on that debut. the closing stages of
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the ceremony which marks the company's debut on the tokyo stock exchange. let's find out what else is going on. juliette: we are seeing a great day to round out the trading week here in asia. stocks are up for a third day. a very positive sentiment can be felt coming through. also that they rally in the oil price. japan going to lunch is up by 2%. its energy sector is doing very well. 6% at the lunch break. taiwan is up by about 2.5%. the shanghai market doing quite well today up by almost 2%. the people's bank of china today raising the yuan reference rate 15%.5% -- by .
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that's the most it has been raised since march. let's look at other stocks we are watching. well,has been doing very up by 6%. they are considering options to restructure its lcd business. confirmed's president that talks are ongoing about a venture. finances are being thought but no further details. they are doing very well. pricesg surge of oil coming through. tetro is doing very well overall china isinese -- petro doing very well overall in the chinese market. certainly a lot more bright spots coming through in the markets for the title -- final
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trading day of the week. olam is surging in singapore shares, the highest in eight months. mitsubishi agreed to buy a 20% stake for more than a billion dollars. a major investment. it is a 29% premium to that 2014 average price that olam had. a lot of questions surrounding this. why is mitsubishi paying so much? >> i am going to say something contentious. people have to eat. mitsubishi has investments all over the place. ore,s investments in iron coal, pipelines, chemical businesses. in the same week we have seen commodities plunged to a 16 year intomitsubishi is buying the idea that no matter what, we will still want to eat, we will still consume a lot of food raw material, and therefore, olam
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still makes sense as an investment. wem says that even though have seen commodity prices fall, we have not eating any drop in demand in food commodities. the prices are down because the u.s. dollar is strong and emerging-market currencies are down. that doesn't mean people in china, india, and the rest of the world are eating any less. have been up to now heavily investing in other raw materials, industrial raw materials. now, hearing a lot of calls from its own shareholders that they need to diverse the fight, the company is really moving into more non-commodity businesses and food is definitely one of them. both companies are commodity traders. what kind of mutual benefits can they see? what are the synergy looking like? sameey are both doing the kind of trading, how are they going to help each other? in reality, the two have very
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different strengths geographically. is really strong in africa and that is where mitsubishi is hoping to expand. olam says that mitsubishi can come bring know how to africa and help boost rice production there. they can also work on flour milling and active food business is taking off in africa. gets asame time, olam lot more entry into the lucrative japanese market. that may sound strange, but japan is very much a growing market for things like nuts, cocoa, coffee, and so on. are definitely various geographical plusses for both companies here. rishaad: is this an isolated deal? is this an industry which is ripe for consolidation? certainly this morning, as i
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think you heard, the ceo said there is going to be more of a continuing push for consolidation in the industry. yet, we don't know which deals could come forward. one thing we should look to is the share price of noble groups. another commodity trading company in hong kong which has been under a lot of attack from short-sellers. was two or three years ago. if we look at the noble share price, it is up something like 14% yesterday and 6% today. people are saying, if olam can get such a great deal for mitsubishi, why can't noble? rishaad: thank you very much, indeed. let's take a look at china. it is sinking in hong kong
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a rise. cheapis benefiting from fuel but expecting a more bumpy ride in the second half due to the currency devaluations. the strength of the dollar is really hurting overseas sales which make up the bulk of tiffany's revenues. tiffany is expecting fiscal 2016 earnings to be 2% to 5% lower. it is one of the world's biggest distillers. the recent improvement in china's spirit market probably won't last. it says the market there continues to fall at a high single digit pace. china's crackdown on lavish the companycausing
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sales- to find its elsewhere in asia. -- woolworths failed to beat its closest rival for the 12th consecutive month. it's also the first profit decline in 19 years as well. their problems are very well documented. the market would have been expecting all of this. it's not a huge surprise. they are up today, 1.77% right now. perhaps the market is emboldened by the fact that there will be new leadership on the horizon. we already knew the ceo was going to head down the road, but he is staying on while the search is on for a successor. therviews will begin under
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watch every new chairman as well. it was announced today that he will be leaving on september 1. there will be a new chairman who will take the reins and he will be leading the search for a new ceo. with a new leadership team in will have oneths eye on the future as they need to. they have been struggling with competition. has been beating them for market share. are addingrs competition as well. managed to deliver a dividend of $.72. it is still a pretty solid dividend despite all of its recent woes. rishaad: thanks a lot for that. the movers and shakers of global finance and business, they are in jackson hole this weekend. the market is looking for some
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clarity on policy in the impending rate rise. >> the question at this your's jackson hole is will the fed raise the federal funds rate in september? it is consistently said it is data dependent. what i keep hearing people ask is what data? one pisa data is volatility. what we have seen in the markets whatthe last week or it -- we have seen in the markets over the last week. >> we should expect volatility from time to time. of somen a period uncertainty. questions about china, global growth. i think we should expect some volatility. for monetary policy, i think it's not yet clear. it's a complication and something we watch. i'm not ready to say it has some particular long-term effect. >> and then there is the
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economic data they came out on thursday from the bureau of economic analysis in d.c. at 3.7%,der gdp growth well above everybody's estimates. also at jackson hole is a group that is staging a counter conference. they are asking the very valid question, whose recovery is it? is notg out that 5.3% the unemployment rate for everyone in america, particularly minority communities. the real question is, who's data are you paying attention to as you think about raising the federal funds rate? -- whose up, china'sing crackdown on lavish spending. ♪
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shery: the bodies of as many of 50 people found in the back of a truck in austria. police open the doors after reports of a foul stench and dripping blood. there was no one alive inside. the truck is thought to be -- they may have been dead for a day and a half. a source has told bloomberg that india may drill in the south china sea looking for oil. the foreign ministry in beijing warned delly against -- delhi against what it called "illegal actions." smog levels in beijing are
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reported to be at a record low ahead of a military parade marking the end of world war ii. the average level of pm 2.5 particles fell to 19.5 last weekend. that is the lowest five day reading since records were released. -- war leaders are expected for the event. the chinese president and president obama will not be among them. the maker of johnny theyr and guinness says expect recovery. >> volatility is something we since theo anti-extravagance campaign. we have seen the bombings in various descriptions -- and the various disruptions. volatility is something we as a
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company are used to. we incorporate volatility into our plans. we can respond to the volatility more quickly. we can develop new products, innovations based on insights coming from markets. >> innovation is great but sentiments play a huge part. take a look at china where measures have been put in place, anticorruption measures. that is impacting business for you. how do you deal with that? how much of an impact? >> the anti-extravagance campaign has had an impact on various parts of the trade. it has had -- >> can you quantify that for us? >> categories have been down by 15 -- 50%. that was our first big shock, particularly as we just supplied funds.
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the only international -- we are the only international company that has a footprint in china. >> when you take a look at 1% ofe, china has only total revenue. the target of 5%. how you get there and when? the timeframe is important. >> china has various roads we need to travel. it is a medium to longer term goal. >> give us a number. >> medium to longer term, haslinda. [laughter] 10 years. we will continue to invest in johnny walker houses and we know that longer-term, all of those are going to pay back and deliver.
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>> indonesia. very challenging to be operating in a market that has become so nationalistic. it has imposed limitations on the sale, especially for smaller shops. minimize theged to damage? >> there was some disruption in our indonesian beer business. we are recovering from that now. we have adapted our strategy and guinness without alcohol so that people can enjoy the taste of it there. we welcome the opportunity because we have joint interest in seeing our product consumed
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responsibly in the market. we are still investing. we are still innovating. we are developing ready to drink products. our guinness and developing mainstream spirit opportunities. cleaning upnext, the system. india's's central up with a new three-point plan. we are headed to mumbai for the details. ♪
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rishaad: nikkei to 25 is closing out it's morning session with a rise of about 2.8%. -- 225 at the momenton
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in sydney. the australian market is getting a boost from commodity producers. up more than it has been in six years. as gains are not quite finance there. live images in singapore, one play 56% into the upside. 6%.1.5 market moving to the upside as well. it's the third day of rising equities as far as the asian pacific goes. shanghai is having its second day of gains at the moment as well. andave commodities emerging-market currencies getting support. that is as china comes in to try to stabilize its yuan at the moment. it's also trying to stabilize its beleaguered equity market as well.
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new york got a surprise as we had growth coming out as more than we expected. have got the release of an annual report for the r.b.i.. clearing out the banking system is a priority. >> the r.b.i. is outlining three priorities to lower inflation which continues to be it's top priority. anding with the government banks and speeding up projects and cleaning up bank balance sheet as well as ensuring that banks have the capital to make provisions and support new lending. it's crucial to really and sure this is possible -- and short -- possible.s is
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inflation has declined faster than initially predicted. the monsoons have had an impact. it has beenelieves offset by the steve fall in crude prices and they suspect it will soften inflation. -- steep fall confident, logging a deficit in the gdp by 2016. the governor is highlighting the fact that this spike in rates, -- theave been unwilling r.b.i. has cut rates since jay wright 2015. it also added that this stage is -- set for an shackling star
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store investments. -- since january 2015. rishaad: let's have a look at some of these other stories we have been following. with ans coming out antitrust demand. google to change the way it displays its results. responded by saying they will not consider the demands. invitations have been sent out for an apple event that may include an update for the apple tv top box. also allow steve cook to address concerns about
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apple's growth outlook, particularly in china. that is it for this friday edition of "trending business." stay tuned. andy and i will recap the biggest stories for today -- angie and i will recap the biggest stories for -- from today. ♪
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mark: i'm mark halperin. john: i'm john heilemann. with all due respect to donald trump, you are not the only one who knows how to escalate a situation. ♪ mark: hello -- hello from trump tower in new york city. today we are the first reporters to get a two or from the campaign headquarters in this building. first, our guest joins us right now. the man of the hour, and the man of the tower, donald trump. thank you for joining us.

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