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tv   Trending Business  Bloomberg  April 20, 2016 9:00pm-10:01pm EDT

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♪ rishaad: it is thursday, the 21st of april. this is "trending business". i am rishaad salamat. ♪ ,ishaad: live in melbourne tokyo, beijing this hour. the markets building on the rallies, global equities at their highest since december, 16 percent from this year's low. output,st u.s.
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$40.bove says itubishi president is a shameful issue, the falsification of emissions data. ,ollow me on twitter @rishaadtv include #trendingbusiness. big selloff in china on wednesday. we are looking at the boards. we are seeing gains on those markets opening up. taiwan up, coming back. singapore up to tens of 1%, a pretty flat day in malaysia. driving the nikkei 225 the region higher. holding on toex those four month highs. holding on to
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those seven-week highs. is up for tens of 1%, and the oil price helping out austria market, new zealand weaker. we will have china's open at the bottom of the hour after that big selloff yesterday. the shanghai composite recovered after beinglosses down by almost 4%. good gains from the basic material players and oil and gas up by a 10th of 1%. consumer goods looking strong. we are monitoring mitsubishi. it is expected to fall by the daily limit when it starts trading. we've had numbers coming through from australia's third-largest sydney, now has a
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positive cash position. thanks. oil trading near five-month highs. talks may restarted be in the frame. let's get more. oha, butoke up in d of what about the prospects a new meeting, or is it all bluster here? at the highest level in five months yesterday. today, around $44 a barrel. the first factor is that iraq said yesterday that there will be a renewed push for a meeting among some of the world's largest producers, including saudi arabia and russia, to cap output. the talks on sunday broke up after saudi arabia insisted all
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opec members and iran agree to the freeze. is returning to international markets after sanctions were lifted in january. they have been explicit that they will not freeze production. that is the first reason. we will have to see if the next toting will allow producers agree to anything, but it is giving the market a sense of optimism. the production fell to lowest level last week since october 2014, falling for the 12th time in the last 13 leaks, so we are seeing some higher cost producers cut back on production. there has been a couple of outages locally, kuwait, nigeria, so were getting closer to supply and demand getting back into balance, helping the with a bullish sense of where prices may go in the second half of the year. rishaad: thank you a lot for
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that. we will have a detailed look at that story later in the show. tweet us your thoughts at @rishaadtv, and include #trendingbusiness. mitsubishi motors in the spotlight after admitting it manipulated fuel and on many cars in japan, also saying its methods do not comply with official standards. scandal,uto industry how many cars will be affected? 625,000 cars affected. they were marketed as being 10% more fuel efficient than they were. three quarters of those cars were supplied to nissan. the president yesterday admitted that the deceit was intentional. listen to this. wrongdoing was intentional.
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it is clear that the falsification was done to make the mileage look better, but why they would resort to fraud to do this is still unclear. also acknowledged a bigger issue, their method to test cars has not complied with japanese standard since 2002. unablemaker says it is to estimate the impact on its business at this point, but there is the potential for massive fines and lawsuits ahead. an executive vice president said the violation could result in mitsubishi having to pay back a government tax rebates that cars should have been eligible for. the company is checking to see if overseas models have been affected. mitsubishi motors is the most cash-strapped among automakers, so this could have big repercussions on its finances. had the lowest level
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of cash and equivalents among japan's automakers, $4.4 billion at the end of december. that is about one 10th of toy yard's balance sheet, so this balance of toyota's sheet, so this means they are stretched thin, not to mention that this could have a huge impact on its reputation, still a decade ago,m when the company required two rounds of bailouts to survive, and it could now be déjà vu all over again. mitsubishi still not trading in tokyo right now, but that is after falling by the limit yesterday. free market bids show it could plunge by 20%. rishaad: thank you for that. of course, we have diesel gate.
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volkswagen also making headlines. will stay with the theme of automakers in boreal in scandals. agreed to set aside $10 billion to resolve the in theawsuits under way u.s. over these diesel engines and emission controls. , at least 10 billion dollars, covering claims by the u.s. government and american car owners. has until thursday to come up with a plan for fixing the affected cars. the automaker has been negotiating with u.s. environmental regulators. fixing the cars or getting them off the road would be the first step to any agreement reached. vw has fought to regain customer trust after it rigged the exhaust system of 11 million
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diesel cars worldwide to pass emission tests. the company delayed 2015 earnings until it can better estimate how much the scandal will cost. yum brands beat estimates. with thatn struggling food safety scandal, competition, and the economic slowdown in the chinese market. the company seeing their operations steadily starting to recover. sales rising 6%, topping forecasts by 2%, operating profit rising 12%, up from the previous 10%. they will spin off the china unit, about 7500 restaurants in the chinese market. it things it can grow that to 20,000 restaurants. shares rising 4% in late new york trade. up 12% so far this year. retailer and
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industrial giant reporting march earnings that beat expectations across the board. it gained market share across supermarket businesses. most retail businesses posted sales growth. percent,ets, 4.9 beating estimates of 4.3%. the retail giant has 427 consecutive quarters, but a lot of focus on that troubled unit. sales grew just 1.4%. without retail, coproduction falling 25% on quarter due to significant rainfall and wet weather. looking like this, of about 1% in the sydney session. rishaad: thanks. a warning from george soros on china's economy. have a look at it at coming up, mitsubishi motors may
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need help after manipulating field economy tests. more on the latest scandal with an auto consultant in about half an hour. up next, ig says it is not pricing in a fed rate hike until next year. we get the view from its market strategist. this is "trending business". ♪
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rishaad: our next guest has the federal reserve tightening next year. he is market strategist with ig and joins us from melbourne. what is the thinking here? >> we continue to watch the market price closely with regards to how fed funds are moving. dot plots do not think
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so. the only one showing a sign of rate rise is 83%, but that has some other events that could affect it. they still have not seen any form of inflation. employment is reasonable, but there is the presidential election and issues in europe. that question rings true in the u.s., is china doing ok? are issues to calm in the northern hemisphere in the summer season. it's also interesting to watch what is going on in the u.s. earnings season. yes, at the moment, down quarter on quarter and year on year, but beating analyst expectations, and maybe that is why it explains the u.s. markets are touching an high. rishaad: i want to pick apart
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what you said. i wanted to talk to you about how the federal reserve's moves are likely to be looked that why market participants. is it a situation where bad news is actually good news? i think the interesting thing is that the initial reaction leading up to last december was that finally the good news was good news, u.s. markets moving on positive job numbers, on the fact that the u.s. dollar was moderating, and they were all behaving on a reasonable par. trading through january, but clearly that was there. the u.s. dollar followed history, that it has depreciated after a rate hike. pretty muchthat every single time we have seen a rate hike over the history of the fed.
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is that bad news or good news? the markets are very unsure. rate theyslowing at a don't expect, japan similar, china in a vein that is crowded and ok. that gives the idea that we have seen a rate hike and the economy is moving nicely, but the markets are likely to see that as bad news. we are going up with more and more expectation that we are backing away from a rate hike. good stories coming out of the u.s., and the markets are picking up on that. the earnings season, beating analyst expectations, a lot of these companies, but the earnings are weak essentially, an beating forecasts or estimates, they have been beaten down so much. i think that is what is really crystal. -- ok, we are
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drawing a long reference, but 85% of those companies are beating on the revenue line. is above the norms, and then year on year, we are down 10% on eps growth, and that is a staggering figure. we trading on bad news is good news. if you do look actual's two the fourthe uris has quarter in a row of negative eps growth. has a fourth quarter in a row of negative eps growth. that is something we have not seen before where we do have a possibility where we need the assistance of private firms, but that is why also there is a bit of complacency. the market needs to wake up to
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the fact that the vix is at a level we have not seen since june of last year. it is very much disjointed. rishaad: great talking to you there. commodities, your preference is to be long, short, gold. >> these are the stories making headlines. killer has won his case against the norwegian government. the report says the state had violated his human rights by keeping him in solitary confinement and refusing him to let meet others. he has also complained about prison food and having to eat with plastic cutlery. at a youth9 people camp, and eight more in a car bombing in oslo. india says more than 330 million people have been affected by a
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drought. reservoirs are just 3% full. are known topeople have died through heat havestion, and some areas seen temperatures five degrees celsius above normal. antislavery activists harriet tubman will appear on the front of the new u.s. $20 bill, becoming the first african-american and the first woman to feature on paper currency in modern times. she escaped slavery and helped hundreds of others to freedom along the underground railroad. will replace the slave owning former president andrew jackson. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. next, zero bound,
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record low bond yields in japan don't seem to be putting investors off. we will get the details to you, next. ♪
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rishaad: the bond market and yields on japanese government debts fall to record lows. we saw an initial drop again, but things have seemingly stabilize. expectationsflect expectationseflect that the boj may need more time. >> we are still at record low levels at the moment. the chart shows that you have colors,ng in different everything else has converged within 25-30.
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can we get a close-up of these yields. this is where you want to pay attention. 15-year tofrom the the 40-year. .3% at theis below moment. a lot of people have been focused on the yield curve in japan, showing the magnitude of the drop. we have the sovereign yield curve before the stimulus in japan, you have it now, this is the difference or the spread between these two. the biggest drop was over the 40-year. this is where we are, much lower. it indicates demand. we will get a better sense of where we are as far as demand is bond resultth up midday. that is something to watch.
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,he last time we got something the bid-to-cover level was high and drove yields lower. arguably this recent leg came after that, so that is something to watch. one other thing i want to watch and you might win to keep your eye on is the spread between the u.s. 10 year and the japanese 10 year. a summary ofally where we are at the moment, range bound and nearing the upper in of a two percentage point spread between those two. rishaad: u.s. tech companies battle, and drugmakers go the obvious way. says it is ready to cooperate with beijing. that could give the chinese government a global network of virtual spy planes. >> hovering outside an office
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china, this is one of the best-selling drones in the market. company behind it dominates the drowned sector, but safety scares, including the release collision at heathrow airport has put the industry under scrutiny. they say they know the risks involved in these machines and are taking steps to mitigate that, for example stopping them from flying in no-fly zones. mightre also saying they develop software that would allow the authorities to know exactly where these drones are at any given time. china's government could also data, including location, flight records, and even video. toin china, we ready cooperate with authorities when
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it is necessary and legal, of course. >> ultimately, they have access to the data from the drones. >> they claim to have cornered 70% of the market, expected to be worth almost $11.5 billion during the next decade. it has seen growing demand and sectors as diverse as agricultural, real estate, and sports. government agencies are tasked with regulation, others are keen to make use of them. dji says armed forces are interested in using them for crime-fighting. break,: before we go to some dramatic xers from space. nasa releasing these beautiful , ats of the northern lights time lapse film taken from the international space station. the high definition video borealis asaurora
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the lab moved north across the earth. the light show happens when waves from the sun cause charged particles in the earth's magnetic field to collide in the upper atmosphere. ♪
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asian equities hitting a four month high health to buy oil recovery and better than anticipating earnings in the u.s.. higoff its five-month h. mitsubishi motors set for another plunge today after yesterday's 15% tumble, hot on the heels of admitting cheating on emissions tests.
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600 25,000 cars affected, three quarters of which were supplied to nissan. the owner of kfc and pizza hut a share,mates, $.95 beating estimates of $.83 per share. china operations have started to recover, same sales rising 6%. planning to spin off its china unit this year. let's look at the open, how is it all playing out? selloff during the wednesday session. how are we doing? >> let's spin that wheel. we were expecting a positive start, but the shanghai market down, sd plunge yesterday.
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a number of stock still coming under pressure. that have been a few hit that daily limit of 10%. in hong kong, a three quarters of a percent gain. banking stocks back in favor. hsbc up by 2%. casino stocks lower. rebound ineing a china on the open. driving the25 gains, seeing the regional index hold onto those four-month highs. it is holding at its highest level since february 3, and we are seeing that stronger crude price help the australian market as well. speaking of australia, south32 has come to its numbers, now saying it has eliminated its a debt and has a positive cash flow, up 3.5%. a 11.4%ers sales up by
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on the quarter, and santos among energyains players. here are some of the big losers from the session yesterday in china. rishaad: taking a look at oil producers, now failing to se seal those output talks. soared in the run up to the fruitless meeting last week in. news joins us now from singapore. help us break down this rally, if you will. >> sure. back in january and early february, speculators had built up huge bets that oil prices were still going to fall.
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something like 200 million barrels worth of bets. when russia and saudi arabia freeze,his idea of a those traders got a little worried and thought that if these guys are committed to something, maybe we should get out. the amount of short bets are less than half of what they were. country like russia or saudi arabia, we are making 10 billion barrels a day, every dollar increase is annexed to $10 million a day. months, leading up to those talks, that added up to something like $3.7 billion for russia, $3.3 billion for saudi arabia. we had kuwait, the strike there, definitely in the mix. >> absolutely. you are totally right.
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in fact, there were a lot of people who were wondering whether the talks were affecting supply and demand. they were talking about freezing from levels that were the highest they had ever done. could boosture they production from those levels, and then you had five line allges in nigeria and iraq, these things which took supply off the market and help to balance fundamentals during that time, also helping to boost prices. in this what next oil-freeze drama? it just keeps on going. just this morning, bloomberg reported that iraq's deputy oil minister said that opec countries and some non-opec major oil producers will try to get together again, maybe next month in russia, to put together a more successful freeze deal. the story will keep continuing, i guess. rishaad: thank you for that.
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let's go to some other stories we are following for you today. the earthquake that occurred last week is estimated to cost insurers and $3 billion. people were killed and two powerful tremors and aftershocks, road, rail, and air links disrupted. the quake was the most particle to hit japan since the fukushima disaster five years ago. george soares says chinese economy resembles the united states in 2007, before credit markets seized up and triggered a global recession. china'soares saying recent credit growth should be seen as a warning sign. billion last month, far in excess of what economists had been thinking. he is concerned that the government is prioritizing growth over debt. jackson'sichael musical publishing business has
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drawn offers from rivals. labels have told the european commission that the deal would give sony too much power. the party owns half of venture, including beadles, taylor swift, and bob dylan. it wants to buy the rest from the jackson estate after per luminary discussions in march. -- after preliminary discussions in march. first-quarter profit hurting china due to sands rising competition. we keep on talking about this turn around, and there is to some extent, with comparatives. of ofeed, down a couple percent is better than it was a couple of quarters ago. if you look at the overall nature of the business, sheldon
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adelson was using the word stabilization during the analyst call this morning. mass-market, and the ip revenue number they have had since the second quarter 2015. has improved. i think one of the items that is playing into the stock is performing better as of late here there was concern on the call of progression through the quarter. that might be a little to fine tune, but it is something to consider here. stack up?ow does wynn it is a different model, isn't it? isone is premium and one court mass, but both of them did see a sequential improvement in mass revenue. that is quite important to the future of macau. market, thehe total results give the opportunity for
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some of the others, such as galaxy macau, with resorts and expansions to improve even more. we will see when they report soon. the biggest issue with these two guys, you have the parisian, you , a lot of mass appeal will come in august and september, and there will be a debate. , but too much all at once we will be debating that for the next few months. rishaad: tell me about singapore. we have the big players there. >> wynn was up to a quarterly record if you look on a normalized basis, but the results look bad because their vip business, which is famously volatile because of some big bets, had the worst win rate that they have ever had.
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it could reverse massively next quarter. it is a one off. if you look at the core mass-market and retail business, it is a rock star. gained more market share this quarter. rishaad: who goes to the casinos? it is an interesting thing. the core of their mass business is malaysian and indonesian, and they are doing well, even though currency is a real bear for them. week singaporehe dollar hurts, but it hurts those people coming there, so it is a double whammy, and they still did well. let's take a look at china mobile, jumping after it added as many subscribers as the entire population of the united kingdom. let's have a look at the numbers. grace joins us from tokyo. what else stood out in these
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earnings? addition was 64 million new 4g users. it means that they have more people who are willing to spend more on data. despite the increase in the tower leasing fees, which increase, but they still managed to maintain their profit level and ended up with $3.7 billion in profits. it is pretty much what analysts in the market have been expecting, and it is in line with what people are expecting it to be so far. rishaad: right, well it does
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seem to be a pretty good start for china mobile. what are people telling you are about the trend? yeah, this seems to be a nice start for china mobile so far. the trend seems to continue as china mobile now has the broadest 4g customer base. networks, and the advantage will continue throughout the rest of the year, but at the same time, the second ier markets are trying to catch up in terms of networking services. they reached an agreement last year, and that will come up with some pressure for china mobile this year. right, tell us about
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the mobile space there and china. there is so much going on, so many players, anything which you have been finding which has piqued your interest? year, another thing was watching the competition, and also chat mobile apps eroding income of their messaging. is another topic that is worth investors to look at. china's government is about to issue a license to the cable tv operator, which people in the industry are guessing will boost development, more streaming programs available and more revenue from broadband for telecom carriers as well. rishaad: thank you for joining
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as. next, mitsubishi apologizing for the latest scandal to hit the auto industry. it is the wider impact on that. ♪
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welcome back. it is 945 in hong kong. these are the stories making headlines around the world. taiwanese officials have flown to beijing for talks on 45 citizens. they were acquitted of wire fraud, but ordered to leave the country. beijing claimed jurisdiction because they were chinese. tie one says it wants to ensure that they receive proper legal protection and hopes the two sides can cooperate. and therain mother
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television crew detained in lebanon for two weeks have left the country after kidnapping charges were dropped. they were arrested over an attempt to snatch the mother's children from the lebanese father's family in beirut. for men remain in custody. thea reports say that network eight more than $1 million compensation to secure their release. the news on the great barrier reef keeps getting worse with a study finding 93% is affected by coral bleaching. scientists flew over more than 900 individual reefs along the formation to check for damage. bleaching is caused when warming water kills the colorful algae that lives in the coral. avironmentalist feared that coal mine and port expansion will further threaten the reefs. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news.
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i am shery ahn. so, it is the auto industry reeling from another scandal. vwst the airbag crisis, then emissions cheating, and recalls by several manufacturers. that itubishi admitting manipulated feel economy tests. thank you for joining us. you know, how bad is this? can we compare it really with vw? >> good morning. the first thing when i heard this yesterday was another day, another carmaker confessing. so this is really bad. first of all, it is a mitsubishi crisis. ands mitsubishi's fault
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harks back to the date when mitsubishi had the scandal in 2004, and apparently the around that time they started cheating on the fuel consumption. so first of all this is a mitsubishi scandal in japan, but -- createve wider more waves around the world because it leads to the perception in the end that many are cheating. so it makes you wonder what will happen next. well, it is clearly not as bad as vw. that is for certain. whichever way you are dressed this, it not? >> yes, it is fraud. you are right, of course, it will not be as big as volkswagen's scandal, but it is fraud. i don't know how the japanese
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regulators will handle this, but regulators around the world will look if self certifying is a good way, because this is what happened with mitsubishi. they were doing their of tests and certifying themselves, and everybody said we trust, so i think that part of the trust will go away and this will not only be in japan. i think this will be the u.s., europe, japan, and probably also china, which is also a large market where the regulator is looking at these kinds of things. rishaad: so can we expect more bad news to come out of mitsubishi? as of late, we have seen these other companies with incredibly poor crisis management skills. we just get this drip feed of bad news without actually getting everything kitchen sink, as it were. >> yes, i think that in this case mitsubishi confessed pretty fast. having said that, it only came
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through nissan, because they supply these cars to nissan as well. and they went to the regulator, ,nd only after that fact mitsubishi confessed, so they should have done it long before. it is fraud and bad crisis management. mitsubishi should know better. absolutely. mitsubishi was building these cars for nissan. you have to question nissan as well. constructing products under the name, you'd think they would check feel consumption figures and whether they held veracity. i you would think so, but guess they really trusted to be she on that, but their trust among the industry will be gone, just another stepping stone in losing trust in each other, and also the regulator losing trust
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in the carmakers. this is bad news for everybody, not only mitsubishi. >> is the regulator putting too much pressure on these carmakers, if you will, to get these fuel consumption figures down, and particularly to get emissions levels down as well? ati think we have to look the regulator and how do we reduce the emissions, how do we improve the environment, but we also need to make sure that the carmakers can follow-up, but in this particular case, mitsubishi's case, it was not a rocket science -- it was not rocket science to come up with a better fuel consumption, so in this case i cannot fold the regulator in this case, as far as i can see. it is the carmaker. when looking forward, of course, there are big discussions for the next regulations levels coming in 2020.
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these will be pretty hard to reach, except the cars will become much more expensive, so the regulator and the government also has to look at what that will mean for unemployment in case people will buy less cars because they are getting more expensive, so we will get into a much bigger discussion here than ever before. rishaad: great talking to you as ever. automotive. coming up, another carmaker, why hyundai has seemed to it erases profile in china. ♪
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rishaad: we are having a look at what is going on in social media.
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forles boom in china hyundai. >> hyundai does not know the exact monetary effect after being featured in this season's latest hit serial drama out of korea. it did sign a placement agreement because they knew the drama would be exported to china. what you are seeing in the scene are the two protagonists, a korean special forces captain and surgeon who fall in love, and this demonstrates the impact of the hyundai genesis, which has a self driving function. you see hands off the wheel, they make eye contact, a very romantic scene as the car continues to safely drive. rishaad: never mind. exactly. --s is a buzz that hyundai
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boost that hyundai really needs, isn't it? thens, they have not terribly competitive with preference to smaller cars. whoconvert, a 23-year-old does not own a car, saying she because own a hyundai it is just so cool and likes how it looks in the show. they are expecting 110 billion yuan in advertising benefits from this program. there is a korean cosmetics and skin care brand, and sales have gone through the roof. rishaad: the power of product placement. >> very popular in korea and china. rishaad: thank you very much. we have to take a break. coming up, looking at what is going on when it comes to
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commodities. oil, for one thing, getting a bit of a lift after speculation that freeze talks could be resurrected. we are next with the black stuff. ♪
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: tonight, a conversation with president obama. he traveled to saudi arabia, united kingdom, and germany. our relationships with those allies, the role of russia and iran will be key items on his agenda, we will also talk to him about he sees america's role and lessons he has learned. what he hopes to accomplish in his last year in office. the interview took place monday afternoon in the blue room at the white house. here is that conversation. thank you for letting us be here. it is a great pleasure to see you.


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