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tv   Bloomberg Markets Asia  Bloomberg  December 22, 2016 8:00pm-10:01pm EST

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rishaad: it is a :00 a.m. in singapore. mid day in sydney. i am rishaad from bloomberg's asian headquarters in hong kong. his is bloomberg markets: asia. is bloomberg markets: asia. ♪ rishaad: italy uproots a bailout for banks struggling. but it might be too little too late. raising the stakes. australia's betting drama. -- banks typically cut
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a deal rather than risk trial. china and hong kong in about 30 minutes from now but singapore is coming online. that is one of the reasons why we are seeing a lot of these long positions. people are squaring their positions ahead of the long holiday. a lot of these markets will be partially shut next week or will have shortened trading sessions. for the most part, we will be getting monday and tuesday off. some markets are coming back. japan is over here and south korea is over there. in other words, it it will be very difficult to hold a position ahead of these long holidays. you cannot react depending on where your positions are. with that said, look at the markets opening right now. beenngapore, the index has
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down 0.5 percent for the fifth straight day of losses. new zealand, a shortened trading session. it has been shut for about 45 minutes. we are looking at ending the pre-christmas session on a high. it will trade will be on wednesday. two other markets will be following later on. china will open in about 30 minutes. and watching hong kong philippines. hong kong entered a technical correction yesterday. china may be looking to increase supervision. things including rate position, and inflation forecast being raised. it could enter a their market today. falls 1.5 percent today it will enter a bear market -- worst week for stocks in the philippines.
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it cements the worst week so far this year in 2016. a 5% decline if it falls a further 1.5%. those are the two markets i am watching to open at the top of the hour. rishaad: thank you. , and theminutes government in italy just of the decree giving over $20 billion in state aid to the country's state banks. it willi paschi says take assistance after failing to obtain a private bailout. rome, we are taking you to the story. like christmasit night -- a president for monte dei paschi. -- a gift for monte dei paschi.
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news came at once. we had the auntie bresky board meeting and then a cabinet meeting approving -- we had the monte dei paschi board meeting and then a cabinet meeting approving the degree. were able to seek to request to increase their liquidity. it is not only monte dei paschi. monte dei paschi has been struggling to find investors to bail it out. that is not a good sign at all, is it? >> definitely not. wayss been tried in all find investors. it has been seeking investors for several weeks. that it was not
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able to meet the 5 billion capital increase it was seeking -- and it was needed under the european union request. political situation in his late with the referendum, earlier this month, and the resignation of the prime minister did not help monte dei paschi because international investors saw it as another sign of stress for the country. rishaad: there has been so much tumult. -- political to the reluctance of the investors to invest in the banks, has it not? >> of course, that is the point. was not the last point of transfer for investors
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which had already been running away from the italian banking system for a while. monte dei paschi is the biggest case, the biggest name, the third biggest lender in the country. but of course, it is not the only bank that needs help. there are several other names that come to mind. especially the bank in venice. but monte dei paschi is the biggest case but the italian banking system is suffering. very muchhank you indeed. joining us from rome. getting some first word news headlines. donald trump lighting the fuse. saying the u.s. should greatly expand his -- it's nuclear -- its nuclear arsenal. just hours after vladimir putin reiterated his call for russia to reinforce its
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own forces. donald trump wants to strengthen the u.s. military while keeping costs under control. the u.s. justice department is suing barclays. the lawsuit is rare for big banks. they typically negotiate a settlement rather than risk a trial. the justice department alleges that the bank repeatedly deceived investors about the quality of loans. theeley shares are down in states, 1.8%. the most detailed budget in history showing it is succeeding in reducing the deficit and the country is weaning itself off of oil. it has cut spending by 16 percent narrowing the shortfall by more than anticipated. expects revenue to increase in 2017. president vladimir putin has postponed his annual news
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conference so he can attend russia's murdered ambassador to turkey. the event has been put back 24 hours to allow the russian president to pay his respects. the russian ambassador was gunned down while opening an art exhibit in ingres -- in ankara. australia's betting drama has turned another page with the rejection of a bid from a consortium. the offer is not superior to an earlier agreement. from singapore with what else tatts had to say. kkr made ans the offer but it was inadequate. assumptions that were either incorrect, inconsiderate -- inconsistent.
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page wasthat the overly optimistic. so it is a no go. theontinues to believe that proposal for the merger is in the best interest of the company. it is a unanimous decision by all of the shareholders. tatts in to purchase the past and the merger would alian bettingaustr company. it would then be able to take on online rivals. it would give australians easy access to making bets. rishaad: the biggest obstacle to the deal would be the australian regulator. what are people saying about that at the moment? prevented theion company's from getting together
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fromevented the companies getting together 10 years ago. merger had its way paved for it by the regulator. the eventual buyer would gain a business that generated record earnings in its most recent fiscal year. it operates in almost every australian state. it makes it very attractive. will thethe -- dollar's dominance continue to dominate? look at gold as well. a year to forget but some say it is a solid take for 2017. ♪
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singapore, 27 degrees
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celsius at the moment. 12 minutes into the trading day over there. with what is going on it regionally speaking. let us look at what else is going on. asx falling by about the same as singapore. the kospi is pretty much flat. and turkey is looking unchanged. a quick check of the latest business flash. planes, a deal for that at list price although i run -- iran does not expect to pay more. 46 short-haul planes delivery due to begin early next year. after it came a year was first announced. buy a household paint supply company.
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financial details will be released later that the nikkei news says the deal could be worth about $600 billion. to purchase an australian painting company. mcdonald's may be selling its outlets in hong kong and china. looking to sell them to a state owned citigroup. announcements good, as early as the new year indicating the company is also considering selling it shouldn't of its shares. equities at the moment on the black -- on the back foot. then -- thin trading. rick joins us now from sydney. what is going on? well, it has been a really
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interesting week in the australian markets. we are a little bit tough this morning but we have been and out performer. the index is up about 30 points. it has been quite interesting. probably the key driver of this interest in the defensive sectors here. ongoing support this week for real estate stocks, utilities, consumer staples, those kinds of things. possibly coincident with the fact that we have seen a bit of a peak at least in the short term in bond yields. a bit of a bottom in a selloff. people thinking there may be a correction. rishaad: where do we go from here? we have seen this rally since november the eighth. have we gone too far with it?
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and if so, what do you do about it? well, i guess i would put it this way. i think we have gone far enough now to make the market very anderable to a correction that includes stocks, u.s. dollar, bonds. we have run out well ahead of any actual improvements in the u.s. economy or in inflation at this stage. for example, on personal income and spending in the u.s. was illustrative of the markets. painting an overall picture of moderate spending growth. that kind of thing will make the fed cautious. if we see more of that. pullwill pill -- that will
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the u.s. dollar back. i think gold is a good contrarian investment at the trading pointdium of view. not a long-term point of view. are therefore a correction and gold will benefit from that. and also, you might get a little bit of a turbocharge in those circumstances. and coin buyers get more interested when prices fall. as soon as it starts to rise, follows.-- the hood that is what we saw at the beginning of this year. it could be a real chance in 2017. gold -- thating at would fit in well with your narrative of there being a bit
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of a dollar depreciation taken place. but let us look elsewhere in the commodities. oil is trading between 52-55 a barrel right now. does that remain in place? how much of that will be contingent on opec keeping to its word on quotas? certainly, to keep oil around here, i do think opec will have to keep to its word. and the safe assumption is that they will. i have a couple of reasons to say that. in the early stages of these agreements history shows that they will heed to it but if you look at the parties to this havement, the gulf states a good record of compliance at least until the whole thing falls apart. and then most of the other parties to this are all small players. libya and nigeria have been
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excluded. have got to be allowed to increase their production. given a limit that is higher than current production levels so they can continue to ramp back up towards its capacity. as a majoreaves iraq , who has todger make a significant cut and they said last night that they would be a hearing -- adhering to the agreement. are of the other players small. it would be politically unfortunate if they fudged but it will not make much difference to the overall supply scenario. and i also think russia has been one of the key architects of this agreement. participating in putting this together so i think they will comply as well. i think we will see production cut next year that will put a
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race in oil. if we get corrections which we year down intow the high 40's, that would make a buying opportunity to me. rishaad: with this talk of the building more nuclear weapons, donald trump wanting to do that and the rhetoric coming out of moscow, how big a part will in tensions between the u.s. and russia and the u.s. and china -- will that be the big story in 2017, in your view? >> it certainly has the potential to be. are very difficult for markets to price. the tendency, particularly in recent years is to ignore the atmospherics and the rhetoric and just wait until you see actual situations developing. the way things look at the moment, we could actually see some sort of escalation in tensions developing and that
8:21 pm an impact on we got a little bit of a taste of that week or so ago when china confiscated the drone. rishaad: absolutely. and we have political risk in the german and french elections on the way also. question will be canned this equity rally continue and for how long? it is always a matter of assessing the probabilities. would bey own view that i am nervous about it now and that is basically just -- that nervousness is informed by valuations. we have seen quite a significant pe expansion especially in u.s. markets which will mean that we will have to see earnings expand to fill that bill. and if anything goes wrong, any sort of setback in terms of that
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news, i think we will see a correction. rishaad: have a fantastic and merry christmas. up next, barclays opting to go to court rather than cut a deal with the justice department over mortgage securities in the lead up to its financial crisis. ♪
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rishaad: let us have a look at what is going on with the bank of america. they do not expect donald trump's election to jolt the economy. expande seeking funds to the stocks by one third since the election. ryan moynahan spoke exclusively to bloomberg. let does be first about our team. we have the number one research team in the world.
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an increase from what they thought this year would be. an increase. in the low threes which would be a step up. their fundamental belief that has not changed a lot since the election. we believe the economy in the us will grow and in the world will grow. and it is more on the upswing. it picked up and selloff this year and we think it is back up your part of the uncertainty has been hampered by the markets and by people predicting outcomes. theh is interesting between brexit, the italian referendum and the french election and the u.s. election. all of that stuff that just happens. they said there would be a huge disruption. disrupted for just a few markets. there is tremendous momentum behind this. with the donald trump election,
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businesses are more active. they are talking harder. you are seeing that go on. and the oil and gas business -- rate cuts are coming up and that is good for capital expenses. our clients and we talked to them about regulatory burden is that it will come down and that will help them do things more quickly. of that ise that all good. there are other serious concerns. labor is trickier than people think. getting the right labor to the right place at the right time is tricky. the right jobs is the issue rather than in the macro sense, the wage pressure. the sole difference that happened -- the big difference in the last six weeks is enthusiasm. if that falls through, it will be interesting. rishaad: quickly.
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deutsche bank. billioned to pay $3.1 civil penalty with the department of justice in the united states. next, we go to the hong kong engineering company and what it has been up to. ♪
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rishaad: just looking at the breaking news. deutsche bank paying $3.1 billion -- a fine they will be paying. a civil penalty to the department of justice. and providing or $.1 billion in consumer relief in the u.s. in the form of loan accommodations. homeowners and borrowers. we will have more on this. we need to see at there is anything else that has come through on the bloomberg. the settlement is in principle in the form of loan modifications. pretax charges at about $1.1
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billion in the fourth quarter. a different is making these headlines. -- ghai and composite unusual whats seem we have seen from italy. europe will open up. asia is not having the best time. pointing to a third straight weekly decline with the exception of japan which just closed today. apart from japan, to a lesser extent australia and new zealand. it is solidifying the downtrend we are seeing in the emerging markets. hong kong, is going through a technical correction as of yesterday. i will get you an update on how they are doing. news that china may be looking to tighten its grip or regulation when it comes to the brokerages there.
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shanghai composite down 0.1%. three trading debuts today. let us look at how they are doing. i think they are all up. there we go. 44, and 44%., it is worth checking those out. since augustipo has done that. look at how let us asia is breaking down. retailers in the mining stocks leading declines. hong kong, and the broader reach. see if there is any impact or reaction in the markets from the news after the markets closed. are on much in fact they the way out. have a look at some of these names. we will talk more about this
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story later on. the other thing i want to mention is when you look at the philippines, it might enter a bear market today. based on what we are seeing so far, 0.6%. not quite crossing the threshold. but have a look at some of these gaming stocks. one group we are following. the president, 30 minutes before the markets closed yesterday came out and said all online gaming companies should be pulled in. these three stocks sold 25%. that is one group to watch. broadly speaking, when you look at the philippine composite, down zero point 4%. if it falls 1.5%, it enters a bear market right before christmas weekend. it is the most expensive market
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in the asia-pacific minus japan when you look at it from a forward price earning. rishaad: thank you. let us get to the first word news. lockheed martin shares down in extended trading after another tweet from donald trump. this one said -- tremendous costs and overruns of the lockheed martin f-35's. i have asked boeing to price out a comparable hornets. the cost of the new version of the air force one could come down after a similar tweet criticizing its price. twitter fell after finding a bug on android devices. is shaking confidence in how digital advertising is measured. sources say the bug caused it to
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be overstated by as much as 35%. --th korea's constitutional into the legality of the impeachment of the president. the court will hear allegations that she colluded with a confidant, stole money and favors from companies allowing --. deutsche bank has agreed to $3.1 billion fine in the u.s. and will pay it in the form of a civil penalty. ofis linked to the sale mortgages at leading up to the crisis. global news, each day every day. let us tell you about what has been a year -- chinese
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brokerages seem to be not in a great place. hashong kong shenzhen link had a lackluster start up and investors are pushing firms. what is going on? >> lackluster is an understatement. yuane first day, 3 billion . 50,000 u.s., dollars of the quote that was used up. rishaad: that is it. southbound any better? no, equallyal -- back. this was supposed to be a big brokeragesinese which are the enablers of this kind of trade. since that has not happened, that is not great news for the brokerages.
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shanghai also had a dismal start. what do they say about the future? >> do you believe in chinese stocks? down to.hat it comes that kind of trading has not been great. purchasing chinese stocks has not been great. there has been one and there are more coming because of the peg to the dollar. rishaad: -- >> there is a problem there. chinese brokerages have another problem which is bond exposure. we know where the bond market is going right now in china. rishaad: surging, no yields. >> chinese brokerages have about 40%-60% of their books in bonds.
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that is what they disclosed. recently, we saw a small chinese brokerage say they had some kind brokerage thata had exposure off their books to bonds. they have certain advantages these chinese brokerages in the markets. >> they have a big advantage. withcan underwrite sales ipos and they can create shares. chinese banks it would love to get into this business but they are not in it yet nor are the foreign banks. they have to go in with joint ventures with the chinese brokerages. rishaad: according to your piece , just wait until it starts to bear fruit before dipping a toe in there. thank you so much. chinese central bank taking more steps to encourage foreign investors to invest in bond markets. sparking fresh worries.
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what do we know here? given thising timing comes on the back of a mini tantrum we are seeing in china's bond market in the last week or so. a written statement from an economist -- he wants to say this has no helices setting power. getting more foreign institutional investors involved in china's onshore bond market. they want to create conditions for bonds to be included in international bond indices. in which the reforms can make it easier for foreign institutional investors to be involved in this market. including things like improving hedging currency risks when it comes to the foreign market. and becoming more clear about
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the rules. and tax policies as well as practical issues like expanding trading hours for foreigners to have better access to the market. the reason they are doing this is so the pressure that is reserves china's fx which continue to fall. last month, they felt by the most since january. offshore yuan falling to record lows. continue to depreciation pressures on the currencies. the chief economist at the pboc said having more overseas investors in the bond market should be able to support the and most importantly it can create a more reliable yield curve. we know this is a market that has quite a bit of distortion and fundamentally miss prices risk. and they need a more reliable curve in order to better price fixed income securities. rishaad: the thing is that this
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come -- that this comes at a bad time. >> the tantrum came on the back of the fed hiking. and the self tightening from the pboc. tightening leverage when it comes to the bond market because of the concern over the broader level of leverage that is present because we have had in recent years beijing encouraging companies to go out there, issue debt, reduce reliance on banks and encouraging institutions to purchase that debt and that has created distortion when it comes to the market. the 10 year yield surging to the highest after it hit a 14 year low in sober. quite a bit of volatility. and expecting more in 2017. rishaad: taking a look at goldman. early planning. the public offer in hong kong.
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ben, this is a great story. >> a local engineering subcontractor in hong kong that has been doing business under the name of cornwall engineering. a month ago they changed their name to goldman. the name sounds like goldman sachs both in english and in cantonese. rishaad: why did they do this? strikingly obvious. surely, they cannot hoodwink people. bewhether or not people will fooled, a lot of retail investors in hong kong choose what they invest in based on luck, whether the stock code is lucky, whether the name sounds cool. toyou add a little cachet the name, it may encourage more people to invest. rishaad: what does this company
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exactly do? >> most of the businesses -- most of the business is in the health care system, installing electrical wiring, call buttons, fire alarm systems. hospital may make a reference to doing god's work but never mind. how many companies have done the same thing before listing? >> this is not unusual. they may have a normal business name but their listing name may be a bit more exciting. that is not unusual. adopted thees have name of goldman. just across the border in shenzhen, there is a really -- there is a leasing company called goldman sachs. there have been others called goldman but then they change the name to avoid confusion. they madehis company, less than $4 million profit last
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year and they could use a little bit of help. rishaad: far removed from goldman sachs. opec's production cuts -- will they lifted prices? -- will they lift prices? ♪
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rishaad: getting to the commodity side of things. oil trading with a second weekly gain. expects prices to level off and is looking at a short at $65 a barrel. view is predicated on what happens with the interest rate environment, the u.s. economy, and the global economy also. >> yes, absolutely. no doubt.
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let us see how the macro picture eu vaults. you have the trigger point for more supply around the $60 or $65 price. a my mind, it is more of bifurcation around $68 a barrel. if it gets to $65, that is where i would like to establish some shorts. the price will not move on unless there is something we have not forecasted. rishaad: we are still waiting to see what donald trump comes up with. and expectation rather than reality we are seeing across the markets in every class. >> the donald trump factor has been a phenomenal. whether it has more to do with unseen expectations and demand. thekey take away is commodity prices have been firm and so has the u.s. dollar. they work in tandem.
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but the dynamics of this rally are predicated by donald trump coming to office and what policies had to do. it will be interesting to see the first 100 days in office for the president. how much he can actually swing and how much he can support these commodity markets which as we know is looking to push the u.s. and the domestic economy. rishaad: let us drill down a little bit into what it means for the individual commodities. i am presuming you think the dollar will end its recent move. you are turning bullish on gold. >> absolutely. one of the things that i am trying to edge out for 2017 is a fact that if donald trump is looking for domestic policy make america great, it is hard to do it when you have a dollar that
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is so strong. look at the dollar index at 103 -- will it get to 110 or 115. if you look at where he feels the economy should go, and where he will support the domestic economy which means supporting exports, there is not a lot of room in his quiver for a strong dollar. the dollar should come under more pressure if he will push for a lot of the policies that he is looking at. if that is the case that we do see a weaker dollar, that will support commodities and if we see a little risk or inflation coming through because of the infrastructure spins, that in itself will support gold which has been a dog. i think it is worthwhile having a look at. is it worth looking at? >> when you look at the correction -- but you are also
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starting to see things elsewhere. the issues in china. there is a lot more physical buying coming out of china as a result of what is happening to those yields. interest rates are pushing up. we can see oil pushing up as well. when you look at inflation, they do work hand in hand. it is worthwhile looking at the chart and overlaying oil and gold. as a result of that, i can see that more people will look at gold as a hedge moving into 2017. it is a year which we are not sure how it will pan out particularly with the donald trump factor. it is worth a look. rishaad: quite a ride. we started the year at about $50. at $75.nd we have traveled a long way between those points. >> it has been an incredible rally because at the beginning,
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no one saw that it had any legs in a. you could see the sense of people getting frustrated as it was moving higher. when we see the amount of supply that is coming out, we look and say -- there is still a lot of demand. hasave had a market that swung around from a buyers market to a sellers market and we see china as the main purchaser. and also perhaps more out of the u.s. now that donald trump is in there. iron or is interesting. a lot of speculation. a lot of trading. whether or not it will move on is different. interest --ite an beijing said because of the air quality, they will stop producing. the oil up north and that caused a shakeout in the market. more take-home for 2017 on the back of more policies out of beijing for air quality and that might affect the demand for iron ore.
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it will be interesting to watch that space. rishaad: and copper is under pressure recently. >> absolutely. the whole base metal complex has been under pressure. see it as anand i opportunity to buy. when i look at the macro picture and we are seeing things move at the moment with infrastructure. copper is a litmus test for economic recovery. foras been lagging sometime. we had a massive breakout on the technical side. copper isrection or worthwhile but at the end of the day, i think we will still be purchasing because i see it looking good. rishaad: have a very merry christmas. hadext, china's diplomatic tricked. how it is using its power to nations-- to bend other to its well -- its will.
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rishaad: a quick check of the latest is no splash headlines. uber is taking its self driving cars to arizona and have pulled them from california. it began testing the cars. california threatened legal action because rupert did not apply for the proper permit. those cars will be rolled out in arizona in the next few weeks. sprint is the only city where the -- pittsburgh is the only city where the service is offered. enthusiasm for pokemon go has died down since the summer trampe but it has another with super -- triumphant with super mario. the most in five years --
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largest u.s. chipmaker. seeing revenue at 4-7 billion dollars. look at that and compare it to the average forecast. the company is getting out put -- output and costs titans. -- tightened. one of them is just off the coast of africa. >> the diplomatic had trick three countries on three continents. i diplomatic freeze -- a diplomatic freeze.
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on tuesday, mongolia's foreign minister told local media he deeply regrets the decision to leader, theritual dalai lama to the country. and he said it will never happen again. even on religious grounds. formedsame day, sao tome diplomatic recognition. beijing is getting better at exercising its economic leverage to push for international interest to achieve its diplomatic goals and asserting its interests and giving the message out there for other countries to consider. you have to balance your demand for observation of human rights and religious rights and also
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against the pressure china is under. $21aad: we are looking at billion bank bailout. ♪
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>> let's talk about some recent news. have then, there was speculation about you going into the administration as treasury secretary. did you turn that job down? publicve always been about the fact i'm not suited to be secretary of the treasury. i can add value to america doing what i am doing. in september, when you were talking about what you thought the next administration would be. would beyou thought it difficult for wall street guys to get confirmed. now we look at the landscape we have. we have several wall street , steven rex tillerson
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mnuchin, what do you think they will bring to the administration that is different? i was dead wrong that you will not see a wall street person in washington anytime soon. are in charge, and the republicans have not been antibusiness. be au were going to president, you should have the best people sitting around the table. thatnk it is a mistake working for an oil company makes you bad. you want the best team. a lot of these people are qualified people who are patriots who want to help their country. these are people with deep knowledge who hopefully will do a great job. when you look at that shift
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in terms of wall street, this is a reset moment for the industry more broadly and terms of what the american people are expecting or will see? >> 145 million people work in for private million companies, 20 million work in government. business is a huge positive , i think it is a good reset. a perfect example of government and business working together to improve the lives of american citizens. has the chance to do the same thing. if you can duplicate that around the country, you will have a huge renaissance.
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>> what we are seeing in terms , when youc populism look at this, what is your diagnosis from your travels and experience about what is going on and what is driving this explosion we have seen, this economic angst that people feel, what do you diagnose it as? >> a lot of people have tried to diagnose why it happened. if you dig into the numbers, it was an anti-immigration per se. , butsn't even anti-trade at the core of the matter was a frustration and an anger because two things. incomes have not grown for 15 years. facts, howt analyze things happen, but this happens
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to be true. the second one is that low skilled and unskilled are growing over time. those two things are true, but you need to diagnose why it happened. it did not happen because business is bad. there are solutions. there are solutions around , expandingork skills the earned income tax credit so if you're making eight dollars , think dollars an hour of it as a negative income tax. we do it for mothers and babies, but not single men. it helps small businesses. it is not necessarily good for big business. it is a wonderful thing to do for society. fixing corporate taxes, immigration, trade, all done
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properly will promote growth. they think that by beating up on business, that will make it better, but it will not. >> you will be chairman of the business roundtable and on a group advising the president-elect on business policy. when you look at those two roles, which are separate, what are the issues you think he wanted to tackle first? president, i'ms a patriot. i'm in a group of 15 people that has not met yet, think of ceos and a bunch of other folks, and he wants it to be about jobs and growing the economy. the business roundtable, america
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has the chamber of congress, who advocates on behalf of business large and small with 25,000 members. this is 119,000 companies. , half ofge companies all capital expenditures and the united states, and a tremendous amount of growth. .hey are philanthropic everybody gets medical benefits. we take care of our veterans, education, schools. i think the business roundtable can take a proactive approach to be part of the solution. that's why i took on that challenge. we need corporate tax reform. we are driving capital overseas every single day. to government made a mistake act like an version with the problem.
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the problem is our tax rate is higher than the rest of the world, and because of that, companies are leaving it overseas to reinvest it overseas and by companies overseas. the only question is how much damage will be done before we change it. reducing the corporate tax rate helps people and wages. to me, we should solve the problem and hope the new administration can do that. >> just ahead, jamie dimon sounds off on populism world wide. >> they want change. >> and what he expect to see on american immigration policy. >> we are not going to kick 11 million people out. ♪
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talked about education, immigration, and infrastructure, and the parts those will play.
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jamie: one of the greatest isgraces in this country that 50% of these kids don't graduate in high school. they are not necessarily job ready. that is a crime. that is a disgrace. that is america at its absolute worst. we are allowing it to happen. they don't have the opportunities we all had, and we have to fix it. when you hear the government say make this free. it's not whether it's free, but whether you are properly trained for a job. to germany, kids go to vocational schools that work with local businesses and they get a certificate that leads to a job. in new york city, there is a called aviation high school. kids from all of the city are trained and how to maintain
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small aircraft, electronics, hydraulics, a lecture go systems. graduate, $60,000 a year, everybody gets a job. you can do that in computing, coding, health care fields. that is what we should be doing. it doesn't mean you should not go to college. it just means you get an education and get a job. if it works, local businesses will pay for that. do thatsomething we can can create jobs for people, and that has a huge amount of social benefit as well. infrastructure, you mentioned it, and immigration, there is a great hill passed by the senate, proper border controls, allows educated individuals who went to , got advanced degrees here,
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stay. i think we should let them stay and let them build their careers and homes. 40% of the companies in silicon valley are immigrants, russian, and then have, some kind of path to citizenship. a takes 15 years if you are good law-abiding taxpayer here, but not a documented immigrant, then you have a path where you become a citizen behind everybody else did we are not going to kick 11 million people out. i think it is rational, reasonable, and responsible thing to do. all these things could be done, but just haven't been done, and it is a shame. megan: when you talk about immigration, and you said we will not kick 11 million people out, some of the rhetoric has talked about these types of things. in you and other businesses the roundtable going to be the voice that says we need a much
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more pragmatic solution underway to keep the people, particularly for the job's need, and frame this as an economic argument, and argument, jobs argument? if you're black, jewish, lgbt, african-american, woman, we will support you the way we have before. the rhetoric seems to have gone away, even the rhetoric about immigration. president-elect trump has now said if you break the law, we will deport you. they estimated that only 800,000 of the 11 million undocumented broke the law. president obama deported 2.8 million people for breaking the law, but absolutely. the business roundtable has already supported immigration. and alsoro-jobs respectful.
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most people get worried about immigration. it's not that they don't like immigrants. they are more afraid that the american way of life is changing. you can be multicultural that still support the american way of life. , we are abe lincoln toe to rededicate ourselves a nation conceived in liberty and dedicated to the notion that all people are created equal. sowas a vision, a value, and a lot of people want to make sure that does not change, and some people are confusing multicultural with somehow we we won'tge, that tolerate different opinions, free press. when you travel in europe, where this is also a
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deep phenomenon, we see it in italy, germany, france, the u.k. to be sure with brexit, do you think this is a temporary phenomenon in terms of how people are feeling? do you think it will weed itself out or you think this is a permanent movement of people are focused on redraw eying national borders, national identity, regrouping around that decade ofas in a constant disruption across so many stabilizing forces in their lives? there were completely different forces pre-brexit, anti-immigration, open and free trade, all these people voted for different reasons. , think if you go to europe there is the same frustration on income inequality, growth in wages. if you go to parts of europe, u.k. or germany,
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but 25% between 21-35 hard-working. is that a sustainable thing if you have another generation of that? there is a legitimate frustration. why is that and how did it happen? america and saw in overseas, i want change. they want a wrecking ball brought to these governments. they want change. they were not necessarily voting for what people said. they want something different from what they have seen. we want to see something different, things to be better. ultimately you need detail to make that happen. populism itself can be very destructive. venezuela, argentina going the other way. keep in mind we talk about all this disruption, europe since world war ii has had keys. they did not have peace for 2000 years before that. these are the benefits people are reaping.
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maybe they forget about it, but it is important to have peace in europe. back, a looke come at detroit's turnaround. jamie: this is a train wreck coming for 20 years. megan: and how the lessons of the motor city can benefit others. ♪
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hown: we've talked about getting things done and government policy is in structured to get things done. with aook at detroit $100 million investment over two and a half years. when you talk about it, it is a lot about nonpartisanship. how is that working, how does it work here? was it a situation where it able work? do you see that
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to be replicated on a national level. jamie: the detroit started when i went to see lee saunders, who was saying bad things about j.p. morgan. i asked him why he was saying that. he said he didn't know why he was saying it. startedt off and he telling me about the problems in detroit. the people in this room who did all the heavy lifting. he had a mayor, door to door, a white man and a mostly black community got elected, and he was talking about what you need and to troy. .e need the streetlights on we got them on. we need jobs. we need housing. we need housing for commercial markets. we need training, skills. last night, we did something for
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the entrepreneurs of color fund. some are in this room, and they're doing training. one of them worked on your light project here. this mayor had this huge set of problems. he had to focus on all of them. it doesn't work to do one. he had to get help back, businesses back, training, schools, police, sanitation. this man with a smile set up all these things, the war room for the lights, the sanitation, tracking it all, and it is working. and the governor, a republican and democrat, and i don't care about democrats or republicans, ok, but what is going to work. we were all in. we did not just come here and throw money at it, which is easy to do.
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the team came up, and we ask what do you need. to geteded for example rid of 70,000 blighted homes. we funded it, take a picture and geo-locate every home. now 10,000 blighted homes have been shut down. so we want to be an accelerant. we want to get things moving so you can build here and get people into it that helps the whole community. that helps the whole community. think more of venture capital that helps us get going, working with the governor, the mayor, all the civic unions, the non-for profits. there are a lot of things that we could not also be due but with partnering with you, we also had our people come
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through, 68 people working on projects for 20 non-for profits. data, analytics, money, advice, consulting, all the things you need to get these things off the ground, so it has been a fabulous effort. without a mayor like this, it would have been a total waste of time. it is quite an achievement. why is doing something like this good business, a business issue, good business, why is this good business for j.p. morgan and detroit? , we aret is not that the largest bank in detroit. forere the national bank generalstarted by nationa motors in 1934.
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we are the largest bank in consumers, small business, middle market, all major institutions, hospitals, companies, and the government here . had ather major cities renaissance, so this has been a train wreck that we knew was coming for 20 years. it shows you the worst part of bad public policy. you can throw money at it, and to happentrain wreck to bring in the mayor with the skills to get this done. we can help the city, and it helps our business. it could be a shining example of the right way to do things for society, and for us, if we can do this here, remember, we bank here. we need a healthy, vibrant bank. andan do it elsewhere too
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help these communities, and it is good for business. at projectsyou look in detroit, the projects have been designed to center around economic opportunity, expanding revitalization where people can walk to work or they have easier access, starts with families, homes, jobs, is that able on a larger scale? jamie: if you travel around the world and see all these things, singapore does it. it is a country. it was part of malaysia, but when it was formed, it was partially chinese, malaysian, and the primate or came in with vision and strength to get it done. its gdp is higher than the average gdp of the american. he made sure the streets were clean. they have a lot of affordable
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housing. he made sure that there wasn't an india building, chinese building, not just by building, by floor, buy apartments, he wanted them to know each other's kids, smell each other's food. can't force people to live where they don't want to live. you can't punish people for spitting on the streets. you can't make people learn english. that is what happened. you have to make people think about what works and what does not work here it same thing for other countries, germany's vocational schools, germany doing well in europe when most countries aren't. you learn about what works and what doesn't. venezuela, ecuador, argentina, cuba, north korea, what did they do?
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south korea, no natural resources, unbelievable story. singapore, no natural resources, unbelievable story. i can go on and on about what works and what dozens. public about bad policies causing constant damage out there. in america, you keep hearing that productivity is low, secular stagnation is the new normal, it is just not true. .e have had multiple wars we are not educating our kids. government shutdowns, failures in the health system, an extreme amount of regulation, that is why we are going slow. it is not the economic model. people are looking for simple answers, and sometimes there aren't. all these things are fixable. megan: up next -- jamie: business has to have a seat at the table. megan: the role business can
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play in the push for change. ♪
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megan: in a new administration with a cast of characters that is very different to what we have seen in past administrations, is it possible, do you believe it is possible to unite given this extreme division and particularly on issues like infrastructure that we have tried to get in this country for two decades, tax reform, regulation as well, do you think you will be able to lead and business will take a bigger role in saying this needs to get done? jamie: business needs a seat at the table. is not going to happen if businesses don't work with schools about what kind of jobs they really need. be a hugeess can positive aliment and infrastructure plan.
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the democrats, spend money, just been money, and we do a lot of that. even larry summers wrote about the bridge in cambridge, a little bridge five years being rebuilt, corruption. buying up their local unions.friends, the democrats are right, we need infrastructure. to create jobs. you remember that old milton friedman story? usings why are shovels? jobs. he said, and that case, why don't you use spoons. [laughter] jamie: that is the democratic mentality. it will create jobs, but if it is a bridge to somewhere, it's
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conducive to growth, so the republicans are right to question how the money is spent. if they are going to do it, they want to say who is doing it, is it properly done. this mayor knows how to do it. e knows what street lights he needs. i think business can bridge that. going back to that milton friedman story, do you think we have done a good enough job explaining to people that part of the fundamental disruption is this move to automation, that some of those jobs, many of those jobs, including detroit and places where we saw a heavy swing in the election, pennsylvania, ohio, michigan, wisconsin, that those jobs are gone and likely not coming back
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and training people for the kind upper skill jobs, next-generation jobs, are we doing a good enough job explaining that to people and equipping them to succeed? is thetechnology greatest thing that happened in mankind. until we had agricultural, we would still be hunting buffalo and living in tents. specialization created a knowledge, knowledge built on top of each other building institutions, and we went from fire, we'll, steam engine, wonderful phones in our pockets. mankindthe reason that -- i'm not going to deny the problems we have, but we would not be living where we are today. when my grandfather was born, there were no cars, no planes, no health care. you got sick, you died.
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it it is 120 years later and is pretty good over the time, and mankind has gotten better and better. it analyze things like people who were murdered at the hands of other people, and that number has been coming down every single century for the last 20 centuries, including last century. far isve this entry so better than last century, despite what you read in the paper, so mankind is slowly learning how to get better. technology drives it. yes, it is scary, changes things, disruptive. is not hold to do back technology, people are worried about autonomous driving. 40,000 people a year die and cars, 40,000 people. driving,ave autonomous it will probably be 5000 people. it will be a good thing, not a bad thing.
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warren buffett talks about 11 main people working on farms 50 years ago, and now it is a million. that is a good thing. you want people to go back picking corn? would that make society better? not really. mankind has gone from seven days a week, six days a week, and five days a week, and i think we are down to four as we speak. we will adjust if we need to adjust. if you and i are running the goingment and there are to be 10,000 jobs lost, we would do something, slow down, retrain. this is not about youth. it is about good paying jobs. how do you do with that? he loses a job, he doesn't want to go back to earning seven dollars an hour. he has a family and wants to live with dignity. redevelop, train, and do things to ease that issue and make jobs available and stop like that.
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-- and stuff like that. this is why, and i'm glad up trade, people who feel global trade has hollowed out their community, their manufacturing, the industry and their part of the world where they grew up. it's hard to explain to people lists boatszation higher, but may not have lifted your boat. factories in mexico, labor cheaper, and you can get the products done just as well, that see in thee we election cycle everywhere across the world and people are saying that resisting globalization, that is a trend that if it deepens will be bad for business and your business? jamie: there are issues where globalization was unfair. you could say steel or something like that. there are issues where we did
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not deal with disruption properly. hugely beneficial to mankind, the united states, maybe 2% people are hurt, cheaper sneakers, but now most manufacturing jobs, everyone automation has generally been a good thing. these are tough jobs. adjusts. i would be in favor of having thatr trade, fair trade, helps american net-net-net, but where it is negative, in the tpp, there was trade assistance adjustment assistance where people can say this hurt my community or my business and relocation, redevelopment, retraining, assistance, all those things. concept is very good. we just need to find a way to
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say,en it out so people fine, i understand society will take care of me too because i am a net loser. megan: coming up, jamie diamonds take on minimum wage. ♪
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megan: let's talk about regulation, which you have mentioned as one of the issues. when i talk to people on the street and regulation in the financial sector and we see the rolling back of certain parts, thererank, other stuff, is concern it will go back to a less regulated, and that means more risky, and that there will be no way to control the more esoteric corners of the world and the risk will migrate there. i know you think they have gone too far in certain respects.
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idc that playing out over the next four years? jamie: it is a legitimate, j.p. morgan did not cause the crisis. we have more capital than we had back then. how much do think we lost in the nine quarters after the lehman crisis, we may $20 billion. we save 30,000 jobs, and in doing so, help governments, cities, schools. i understand the concept. the american public saw a disaster, and it wasn't their fault. it was generally wall street and washington. they have the right to say we won a safe banking system that does not take down my economy. that does not mean there for all these rules and regulations are good. the american public has been told that. strengthen dodd-frank, that is
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not accurate. a lot of these things had nothing to do with the crisis, zero, just certain democrats who put things in because they felt like it. if it had the name of a senator on it, that was the bad part. any time you have done major legislation and major regulation , and they are different by the way, it is perfectly reasonable for people to look back, re-analyze, recalibrate, talk it through, talk about what good it did, what damage it did. folks, we have not solved the housing market and mortgages. because we have not sold that issue among seven agencies, banks and others are afraid to make mortgages to first time buyers, self-employed, and people with a prior bankruptcy. there is nothing wrong with them.
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death, divorce, disease, loss of it anot in one case was bad person. they deserve a second chance. i look at the rules and regulation reducing credit available in the system, but do not create more safety. dodd-frank is in the bible. chuck even chucky schumer said to me, recalibrate it, reducing, while still a comforting the ultimate goal, so it's perfectly reasonable to look at these things and think about what you can do better. megan: do you think the days essentiallydustry is feeling effects from the crisis is over or fading? happened, second tarp and that was a scarlet letter. the rhetoric was the banks were
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all bailed out. they were not all bailed out. that is not true. that became a scarlet letter, and i don't think that will go away anytime soon. strides to earn your every single day with every single client in every single city around the world, and that is my job. i am a proud of j.p. morgan chase. we help society. if we make mistakes, we admit it and try to fix them. megan: as we approach the end of the presidents eight years and office and look at what he has accomplished and his relationship with business. you had an up-and-down relationship with the administration. what a great letter would you give him on what he has done for business? jamie: i will not do that. [laughter] jamie: i wish they had spent more time having conversations about what works and what doesn't work's working with business and not acting like
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business with the opposite. democrats for often, i'm going to take care of you, you, you. i'm going to give you free education, and it is almost like , i just think it is wrong. i think that whole attitude is misguided. sounds good, but misguided. i listen to bernie sanders, insurance for everybody, pension benefits for everybody, good paying jobs for everybody, education for everybody. a trait is wage and $15. we pay people well. everybody who works in jp chase gets medical insurance. year and $33,000 per get insurance worth $10,000, and a 401(k) match. we do all those things. we train our people, take care
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of our people. we are doing exactly what you want a good company to do. somehow bernie and i are together on that. [laughter] megan: i'm sure bernie will love to hear that. americanre in the press, no one asked bernie sanders or a supporter, what is socialism? how is it done? there are two answers. it is never done well elsewhere. it has been a disaster. and socialism is when the state owns all private enterprise. that is what it is. you think somebody would ask, do you think people would have voted for that? megan: next time i see him. talking about minimum wage, that as been one of your big pushes.
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we now have a nominee for labor secretary who has been one of open advocates against minimum wage and has been firm about that. jamie: i don't think so. he said the government should be careful about raising its minimum wage to high. it should be a decision made at the local level. , californiainesses and new york can afford $15, but new york probably can. he's againstng state raising it thoughtfully. i am in favor of that. favor of thee in government doing it and imposing hardships. if you can do it, raise wages. spread the wealth little bit. there more worried about pay of our lower paid people down our higher paid people. my example is, that will help small business.
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if you are a small business and need wages at $10 an hour to get ,y, then this will help you attracting better people, paid more, and allow benefits over time, but there are solutions to this. legislation is a key piece of it. i want to make the place better and i will give it everything i can. the future asinto jamie dimon talks about his legacy and j.p. morgan chase. that is next. ♪
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megan: when you look at the world as it is shaping up right now and this administration, what are the things that concern you and the possible black swan events that could be truly disruptive? we made at a list of all the big one since world war ii,
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korea, vietnam, afghanistan, iran, iraq, china, india, pakistan, vietnam, i am missing a bunch. the globalrailed economy. the at phnom had a huge effect, but only 1, 1973 crisis, roiled the economy. geopolitics is always noisy, but with little effect. there are more wars in the middle east, uncertainty around the nuclear risk, iran, russia, north korea. north korea has a bomb and will soon be able to deliver it to california. that is the assessment of people in the government, two years or so. that is a serious issue for the world. i worry about that and peace in ,he middle east, but in reality bad policy, doing things to make
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it worse, government shutdowns, not fixing the school system. you want populism and want to get worse, don't fix the school system, grow the economy slower. the would be worse for world than anything else. the world needs a strong america. in the military, god bless you for doing it. it is directly related to our economic might, but we better be careful about the fiber and see if this economy and make sure we have that. megan: if the world needs a strong america, does the world need an america closer to russia? jamie: when you say that, it's like we will go hug russia. there are serious issues with russia. a should be dealt with seriously. i think they can be resolved. i don't know that. i've am not an expert in that.
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,e obviously do business there but i would put that on the list of things that need to be done. my own view, we should have a very strong relationship with nato. should beroops side-by-side in the middle east to defend europe, side by side with british, french, german, italian troops, not just american boys out there. that is exactly what donald trump is talking about if you listen to him. that transatlantic group should offset putin. all that means is that he can't go anywhere that is in the eu, and my own view and i've listened to henry kissinger, you can have a negotiated settlement of ukraine, and it is probably doable at one point. after that, i don't think putin wants to take a fight. i think he want's to get rid of the sanctions have become important in the world and be an excepted leader around the world
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, so we will see what happens with russia, but i think it is a serious issue now. you are not going to be the treasury secretary now. when you think of your own legacy and looking forward, detroit very much part of it as well, what is it that you want to be remembered for? what is it you want to have achieved? jamie: when i was a young ceo, the company came to me and said leave your legacy, do one big thing. i said, what you're talking about? whatever, and i think if a ceo talks about one thing, selby stock. we have to do it all right. i have to do it right in every country. mosaico get the whole right or i've fail. the one thing i will say is that we are going to miss that son of a --
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hopefully he made this a better place. i'm not looking for any thing else. i am so proud of my company. i want you to know that. i am proud of my people. i want to make sure this is still one of the best banks in the world in 20 years, so i am proud to be part of the place. megan: will there be a second act after you leave? any hints? jamie: one of my great friends and partners said to me one day, you need to do one last thing. i said, are you kidding me? i live in brief j.p. morgan chase. i wear this jersey. , i really meand it. it makes no difference to me. i want to make this place better and will give it everything i have got while i am here. if i cannot give it what i have got, then i should move on.
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if you're going to be the quarterback or head coach, you have to give it your all. there is nothing else you can do. when i leave here, i may teach, write a book. i have a lot to share. business.ed in i have been on board's. s. going into non-for profit. i'm lazy, so probably will go to new york city. i will have a gas. i would do a lot of stuff. megan: if donald trump did call you up in a year or two years and we did see the economy teetering a bit and you felt things were slipping back into recession, which you take that call? i would never not take a call from the president of the united states. again, i don't think i am suited for it. if you can convince me, i would consider it a patriotic duty. i doubt that will be the case.
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i would take the call. again, i don't think it would happen. ♪
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>> from our studios in new york city, this is "charlie rose." charlie: christmas, jon stewart, thanks for doing this. >> thank you for having me. charlie: this is the today show. chris, why an oral history? >> come on. >> the title, "if i did it," was taken, so we had to go with the other title. >> because it is an oral history. >> and the voices of the people who wrote and performed this


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